One of the most commonly held views on cities you will hear is that urban centres need to be carefully designed by town planning regulators in order to be efficient. That is to say, that without trained professionals telling private developers what to build and where, cities will descend into chaos.

It is a view that is often expressed by those who advocate for compact cities, the urban planning ideology that states we should build up instead of out to prevent urban sprawl, and use local regulations as the means to do this.

Alain Bertaud, an urban planner and academic who The New Zealand Initiative hosted on a nation- wide lecture tour last year begs to differ. In his view, if we want efficient cities, we should leave it to a decentralised market process to determine land use.

His market logic is pretty straight forward. Those who value proximity to the CBD the most will pay the highest premium for land in a city. Since this land is expensive, it tends to be put to its most efficient use, namely multiple units built on each parcel of land. As distance from the city centre increases, so land prices and density fall, with the result that nearly every city has a downward sloping urban density profile. This holds true whether cities are monocentric, like London, or polycentric, like Auckland.

Bertaud’s point is a cautionary one: interfere with the nature of the market process and you are likely to produce unintended and undesirable outcomes. That is because cities are essentially labour markets, places where firms and individuals come together to buy and sell their skills. Interfere in the functions and you are likely to add costs and sap benefits to residents.

So who is right? That is a difficult call to make, but Bertaud has taken a stab in a recent paper. The work looked at a number of centrally planned versus market-driven cities, and the respective population densities as distance from the CBD increased.

The focus on the research was on Brasilia, Johannesburg and Moscow, all urban centres shaped by differing ideologies that had nothing in common other than to determine land use by non-market means.

In Brasilia, urban designers in the 1960s planned the city to match the shape of an aeroplane, a sign of industrial progress at the time (no joke – look it up on Google Maps). Land use was, and still is, allocated according to a set plan. In Johannesburg, the Apartheid government determined where people could live based on race. The favoured white minority was allocated land close to the city, while non-whites were forced to live on the urban fringes. Moscow was shaped by three waves of communist development, which resulted in three concentric rings being built around the original city.

The first was a ring of heavy industry one built in the Stalin era, followed by medium density apartments under Khrushchev, and finally a high density residential ring built under Brezhnev. The result of this central planning is that the density profiles of all three cities slope upwards as distance from the CBD increases. This is unsurprising since land use was allocated without the benefit of prices. What was surprising was the effects of this on the population.

Compared with 13 market-based cities ranging from Hyderabad to Paris, residents of the planned cities were on average more likely to live further from the CBD than in unplanned urban centres. The magnitude of this distance was also significant. For example, Brasilia is of a comparable size to Budapest, but the average resident in the Brazilian city was likely to live three times further from the CBD than their European counterparts.

On the same basis, distances from the CBD were 80% farther in Johannesburg compared to similarly sized London. Moscow, meanwhile, is two-thirds the size of Paris, but the average resident was likely to live 5% farther away from the CBD than their Parisian counterpart. Controlling for factors like the shape and size of differing cities, Bertaud found populations of the three planned urban areas were significantly more like to be dispersed than in market-based centres. Furthermore high population densities did not reduce dispersion.

This has real world implications. The higher the dispersion, the longer transport networks have to be to move people to work and back. This increases energy use and air pollution. Bertaud notes this is an economic cost that is seldom factored into the analysis when urban design regulations are being considered.

Those quick to dismiss central design as a relic of the past should note that Bertaud found similar dispersion effects in Portland, a paragon of compact city planning (albeit to a lesser degree). This was largely due to the imposition of an urban development boundary, which pushed up the costs of land. Thus residents who were price sensitive, as well as those who did not want to live in high densities developments, were pushed to the edges of the city. As a result population densities 30km from the Portland CBD were as high as those 8km from city centre. The effect, Bertaud notes, has been to “increase the accessibility of suburban shopping malls at the expense of the relative accessibility of the CBD. This is not the outcome that the planners intended”.

The points raised in this paper are worth considering, especially in places like Auckland. The city maintained an urban growth boundary line for decades, which has only been partially relaxed in recent years. Furthermore, long-standing height restrictions, especially near the CBD, have prevented land markets from operating efficiently. Based on the paper, the city should be highly cautious of any measure that is likely to constrain the market functions of a city.

This is not to say that there is no place for urban designers as distinct from regulators. But Bertaud argues that their interventions should be limited to individual projects, so that the market can sort the ideas that work from those that don’t. Urban planners, likewise, should restrict their work to delineating between private and public spaces. The rest, should be left to the market to determine whether to build up, out, or both. It would make for better and more liveable cities that work.