Urban sprawl and local fiscal burden: analysing the Spanish case

Abstract

Urban sprawl is rapidly occurring in many Spanish urban areas. The objective of this paper is to evaluate how the trend of building dispersion of new residential areas may be affecting the fiscal stability of local governments in Spain. The wide diversity of the characteristics of Spanish urban areas as well as the existence of very similar local fiscal structures make this case particularly interesting. After delimiting the urban areas and the spatial unit of analysis, a precise index of urban sprawl, calculated with geo-referenced digital cartography, is used. Using the spatially disaggregated information of taxes from the Spanish National Institute for Fiscal Studies allows for a measure of fiscal burden by local areas and the ability to distinguish among types of taxes. Control variables are also available at the local level from the Spanish Census and other databases. Two methods, quantile regressions and ordinary least squares, are used in order to measure not only the average change but the heterogeneity across the distribution of the local fiscal burden associated with the changes in urban sprawl, whilst controlling for other explanatory variables in the model. The results indicate that higher levels of urban sprawl imply higher local fiscal burden. By tax categories, the phenomenon of urban sprawl particularly affects both local indirect and direct taxation. These results suggest that local decision-makers should consider urban planning as one of the fundamental tools to assure longterm local fiscal sustainability.

Long-term changes in 3D urban form in four Spanish cities

“…The highest urban growth rates in the period 1995-2005 were heavily reliant on low interest rates of the loans for the construction sector, deregulation measures that allowed Spanish municipalities to increase their income by creating new buildable land, and the overall world economic situation. Together, these conditions yielded unprecedented urban development in Spain (Díaz-Pacheco & García-Palomares, 2014;Serra, Vera, Tulla, & Salvati, 2014;Varela-Candamio, Rubiera Morollón, & Sedrakyan, 2019), consistent with our observations in changes in building volume in this period. The subsequent crash of the real estate bubble was the major cause of a reduction in urban growth during the period 2005-2015, which showed the lowest increase in built-up volume in the entire study period.…”

Recent Literature about Urban Sprawl: A Renewed Relevance of the Phenomenon from the Perspective of Environmental Sustainability

“…Again, this situation is prevalent in North American urban regions. New York City, for example, imposes a higher tax burden (on income and on real estate) on its inhabitants than most of the surrounding municipalities [20].…”