Following World War II, American cities and many other parts of the industrialized world began to experience the beginning of a phenomenon known as urban sprawl--the development of periphery lands on the edge of a metropolitan area. These lands were cheaper for developers to purchase and thus it became a lucrative practice for firms to develop land solely on the periphery.
The impact of urban sprawl has--in part--led to the gutting of the downtown cores of many American cities, such as Detroit. Beginning in the 1990s, cities across the United States began to pass laws limiting urban sprawl, as well providing incentives for developers to build and restore land within the downtown core. Urban consolidation has been strongly tied to the green movement, which argues that urban sprawl leads to longer commutes and therefore more carbon emissions.
Supporters of urban consolidation cite numerous benefits associated with the phenomenon. Urban consolidation is assuredly more environmentally friendly and provides more plentiful and higher quality housing close to places where people work. Urban consolidation has been controversially argued to lead to a more sociable and cooperative society; however, as Jan K. Brueckner observed, there is no empirical evidence proving this.
Urban consolidation has many downsides as well. Individuals who wish to live in a suburban setting will find it harder to do than in the past because of laws limiting the supply of suburban housing in a region. In addition, the demand for downtown properties rises as a result of urban consolidation, raising the value of office buildings and thus raising the rent individuals and corporations pay.
Jan K. Brueckner argues that while a thorough cost-benefit of analysis of urban consolidation projects proves inconclusive, the popular demand for urban renewal will force politicians to enact legislation assisting urban consolidation. Some cities, such as Melbourne, Australia, have stated that they wish to cut their metropolitan areas and concentrate individuals in the core of the city.