Smart Growth C’est Bon! — Blogs

Plan­ning is chal­leng­ing but reward­ing because it often involves new issues and per­spec­tives. For exam­ple, when ana­lyz­ing urban unaf­ford­abil­i­ty and inequity prob­lems, some of my friends like to apply Marx­ist analy­sis: they want to blame rich for­eign­ers, Big Finance, and glob­al cor­po­ra­tions for dri­ving up hous­ing prices and squeez­ing low­er-income fam­i­lies out of attrac­tive and eco­nom­i­cal­ly suc­cess­ful neigh­bor­hoods. This video, titled Push, is an exam­ple. It argues that hous­ing prob­lems are caused by “fis­cal­iza­tion,” and should be solved by declar­ing hous­ing a human right.

I am per­fect­ly hap­py with such dec­la­ra­tions, pro­vid­ed that the result­ing poli­cies are based on sol­id plan­ning and eco­nom­ic the­o­ry. How­ev­er, ide­o­log­i­cal-based cri­tiques sel­dom pro­vide guid­ance for prac­ti­cal solu­tions. I am par­tic­u­lar­ly con­cerned that they the idea that unaf­ford­abil­i­ty and inequity are pri­mar­i­ly caused by nefar­i­ous out­side forces, which dis­tracts us from con­sid­er­ing how local poli­cies affect afford­abil­i­ty, inclu­siv­i­ty and eco­nom­ic oppor­tu­ni­ty.

Blam­ing investors con­fus­es cause and effect. Hous­ing only earns exces­sive prof­its if it is arti­fi­cial­ly scarce, that is, if mar­kets can­not respond to increased demand. If the num­ber of peo­ple who want to live in a com­mu­ni­ty increas­es by, say 30%, effi­cient and equi­table devel­op­ment poli­cies would allow den­si­ties to increase by 30% to accom­mo­date that growth. Oth­er­wise, wealth­i­er house­holds will out­bid poor­er house­holds for the lim­it­ed num­ber of units, dri­ving up prices, which makes hous­ing an attrac­tive invest­ment for spec­u­la­tion. Increas­ing allow­able den­si­ties dri­ves down hous­ing prices.

Typ­i­cal Smart Growth Poli­cies

  • Increase allow­able devel­op­ment den­si­ties.
  • Allow more diverse hous­ing types (town­hous­es and mid-rise apart­ments)
  • More mixed devel­op­ment (com­mer­cial near hous­ing).
  • Reduce park­ing min­i­mums and more effi­cient park­ing pric­ing.
  • Com­plete streets poli­cies.
  • Low­er devel­op­ment fees for afford­able infill.
  • More mul­ti­modal plan­ning (more sup­port for walk­ing, bicy­cling and pub­lic tran­sit).
  • Com­mute trip reduc­tion pro­grams.

Elim­i­nat­ing park­ing min­i­mums also helps increase afford­abil­i­ty, and reduces traf­fic prob­lems that are the main objec­tion that exist­ing res­i­dents have to infill. Elim­i­nat­ing park­ing min­i­mums does not elim­i­nate off-street park­ing, it sim­ply allows devel­op­ers to deter­mine how many park­ing spaces to pro­vide based on mar­ket demand. This results in park­ing unbundling, park­ing rent­ed sep­a­rate­ly from hous­ing, so instead of pay­ing $2,000 per month for an apart­ment with one off-street park­ing space, occu­pants pay $1,800 per month for the apart­ment and $200 per month for each park­ing space. This typ­i­cal­ly reduces hous­ing rents by 10–20%, par­tic­u­lar­ly for low­er-priced apart­ments in areas with land val­ues, and no longer forces car-free house­holds to pay for cost­ly park­ing facil­i­ties that they don’t need.

Smart Growth responds to chang­ing con­sumer demands. If you ask peo­ple to describe their pre­ferred hous­ing type, most (typ­i­cal­ly 80%) will choose sin­gle-fam­i­ly homes, but if you ask them to make real­is­tic trade-offs between hous­ing and neigh­bor­hood attrib­ut­es, more than half of respon­dents in the Nation­al Asso­ci­a­tion of Real­tor’s 2017 Com­mu­ni­ty Pref­er­ence  said they would pre­fer to live in an apart­ment or town­house rather than a detached house if it is in a walk­a­ble and acces­si­ble neigh­bor­hood. Described dif­fer­ent­ly, most peo­ple’s hous­ing needs vary dur­ing the course of their lives: they want cheap rental apart­ments when young adults, sin­gle-fam­i­ly or town­homes while rais­ing a fam­i­ly, and apart­ments or con­do­mini­ums when retired. Diverse hous­ing serves these diverse needs.

Plan­ners now use the term 15-minute neigh­bor­hood to describe a neigh­bor­hood where most com­mon­ly-used ser­vices, such as an ele­men­tary school, a local com­mer­cial cen­ter with a gro­cery store and restau­rants, fre­quent pub­lic tran­sit ser­vices, and local parks. Accord­ing to my arti­cle, “Deter­min­ing Opti­mal Urban Expan­sion, Pop­u­la­tion and Vehi­cle Den­si­ty, and Hous­ing Types for Rapid­ly Grow­ing Cities,” main­tain­ing these ser­vices typ­i­cal­ly requires 20–40 res­i­dents per hectare, which is equiv­a­lent to 2,000–4,000 hous­ing units per square mile, which is easy to achieve with a com­bi­na­tion of small-lot sin­gle-fam­i­ly, town­hous­es and low-rise apart­ments. Smart Growth can pro­vide the best of all worlds, afford­able hous­ing in walk­a­ble, acces­si­ble neigh­bor­hoods.

My pre­vi­ous columns, “How Fil­ter­ing Increas­es Hous­ing Afford­abil­i­ty” and “Don’t Miss the Mid­dle: The Role of Mod­er­ate-Priced Hous­ing to Afford­abil­i­ty” sum­ma­rize exten­sive aca­d­e­m­ic indi­cat­ing that allow­ing more com­pact, infill devel­op­ment tends to increase afford­abil­i­ty in addi­tion to oth­er ben­e­fits.

How­ev­er, many peo­ple are skep­ti­cal. They point to exam­ples in which a par­tic­u­lar par­cel is upzoned but the result­ing homes are expen­sive. How­ev­er, this the point. To mod­er­ate prices it is to upzone large areas in order to cre­ate a com­pet­i­tive mar­ket for devel­opable land. A typ­i­cal res­i­den­tial par­cel will be sold about once a decade, so if a city wants 10 infill projects annu­al­ly in a neigh­bor­hood, that area needs at least 300 upzoned parcels, so each year there are at least 30 parcels already pre-zoned to the desired den­si­ty, result­ing in three suit­able parcels for each project desired. That com­pe­ti­tion mod­er­ates land price infla­tion allow­ing devel­op­ers to find afford­able parcels suit­able for infill: a sin­gle-fam­i­ly home that can be replaced by three or four town­hous­es; two or three sin­gle-fam­i­ly parcels that can be replaced by a ten- or twen­ty-unit apart­ment build­ing; or a two-sto­ry apart­ment that can be replaced with a four or five sto­ry mixed-use devel­op­ment.

As evi­dence that Smart Growth can increase afford­abil­i­ty in attrac­tive and eco­nom­i­cal­ly suc­cess­ful cities, look to Mon­tre­al, Cana­da. Although it is con­sid­ered plus belle ville au monde (the world’s most beau­ti­ful city), its hous­ing prices there are 30% low­er than in the peer cities, such as Toron­to and Van­cou­ver, as indi­cat­ed in this recent com­par­i­son:

Pad Map­per Apart­ment Prices

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Mon­tre­al rental prices are 30% low­er than peer cities such as Toron­to and Van­cou­ver despite it being eco­nom­i­cal­ly suc­cess­ful and un belle ville au monde (one of the world’s most beau­ti­ful cities).

 

Why is Mon­tre­al so afford­able? Cana­di­an cities all face the same glob­al mar­ket pres­sures, but they vary sig­nif­i­cant­ly in their local devel­op­ment poli­cies. Accord­ing to A Visu­al Guide to Detached House Zones in 5 Cana­di­an Cities, Mon­tre­al allows mul­ti­fam­i­ly hous­ing on 54% of its res­i­den­tial land, about twice as much as com­pa­ra­ble cities, as illus­trat­ed below. The city also elim­i­nat­ed park­ing min­i­mums

A Visu­al Guide to Detached House Zones in 5 Cana­di­an Cities

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Mon­tre­al allows mul­ti­fam­i­ly hous­ing on about twice as much land as com­pa­ra­ble Cana­di­an cities, and elim­i­nat­ed park­ing require­ments in cen­tral neigh­bor­hoods. This helps explains why it is attrac­tive, eco­nom­i­cal­ly suc­cess­ful and afford­able too.

As a result of these flex­i­ble devel­op­ment poli­cies, cen­tral Mon­tre­al neigh­bor­hoods are full of miss­ing mid­dle hous­ing types, town­hous­es and low-rise apart­ment build­ing, which cre­ates an abun­dant, com­pet­i­tive mar­ket for inex­pen­sive homes. These neigh­bor­hoods are com­pact and mixed, very walk­a­ble, and well served by pub­lic tran­sit, which makes them tru­ly afford­able for both hous­ing and trans­porta­tion.

Com­pact devel­op­ment also reduces envi­ron­men­tal impacts. Com­pact infill con­sumes much less land per capi­ta, par­tic­u­lar­ly if it reduces vehi­cle own­er­ship and there­fore the amount of land that must be paved for roads and park­ing facil­i­ties, and it great­ly reduces pol­lu­tion emis­sions. The fig­ure below shows a map pro­duced by the envi­ron­men­tal group, Green , based on analy­sis of the dif­fer­ences in emis­sions between walk­a­ble and sprawled neigh­bor­hoods. Com­pact neigh­bor­hood res­i­dents typ­i­cal­ly pro­duce 30–60% low­er emis­sions than the same house­holds types would pro­duce liv­ing in sin­gle-fam­i­ly hous­es locat­ed in con­ven­tion­al, auto­mo­bile-ori­ent­ed sub­urbs.

Car-ori­ent­ed Sprawl Increas­es Dri­ving and GHGs in Greater Mon­tre­al

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Res­i­dents of cen­tral Mon­tre­al neigh­bor­hoods dri­ve only about one-third of the region­al aver­age, pro­vid­ing finan­cial sav­ings and envi­ron­men­tal ben­e­fits.

Because it is acces­si­ble, afford­able and effi­cient, Mon­tre­al is an excit­ing, cre­ative and inte­grat­ed city. It has a dynam­ic art scene, fan­tas­tic food and , great the­ater and music, incred­i­ble cul­tur­al diver­si­ty, plus plen­ty of inno­va­tion and . There’s some­thing for every­body, and new­com­ers are always wel­come. The key is to this suc­cess is build­ing lots of mod­er­ate-priced hous­ing in walk­a­ble urban neigh­bor­hoods.

This is very good news for any­body who cares about afford­abil­i­ty, eco­nom­ic oppor­tu­ni­ty, and joie de vivre (“love of life”)C’est bon!

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