This article published by Ivan Turok in Local Economy looks at South Africa’s new urban agenda. One of the dilemmas at the heart of the new urban agenda globally is whether population growth should be accommodated by extensive or intensive urban development. Both approaches have gained support in South Africa in recent years, albeit in different parts of government. The paper provides a critical and constructive assessment of what lies behind these contrasting agendas. It considers the positive and negative features of mega-projects and urban consolidation, with an emphasis on their implications for urban efficiency and social justice. It concludes by stressing the need to reconcile these policies in order to avoid wasteful duplication and damage.