If anyone deserves the title of antiplanner, it is Wendell Cox. Wendell has challenged rail transit plans in Atlanta, Denver, Charlotte, and many other cities. For this reason, he has been called an anti-transit zealot, which is a typical tactic of the rail nuts to assert that anyone who doesn’t favor their particular flavor of transit must oppose all transit.
In fact, Wendell helped plan the Los Angeles rail network, and became a rail skeptic only after those rail lines went way over budget and, when finally built, ended up carrying far fewer riders than predicted. Now he insists that transportation funds be spent cost effectively, which greatly annoys people who think nothing of spending a $200 million a mile on a rail line that will carry fewer people than a $5 million lane-mile of freeway.
In the last few years, Wendell expanded his work to include smart growth and its effects on housing prices. His recent book, War on the Dream, discusses transportation policy, but really homes in on the latest land-use planning fads.
Urban-growth boundaries, greenbelts, and other land-use rules drive up land costs and housing prices and reduce homeownership rates. These “have the most negative effects on low-income households,” says Cox. Moreover, because most business start ups in America are initially financed by a second mortgage on the business owner’s home, reducing homeownership effectively reduces long-term wealth production. Thus, the antisprawl movement makes war on the American dream in more ways than one.
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Cox shows that land-use restrictions are responsible for the huge differences in housing affordability across America and around the world. In Houston, which has no zoning or planning, you can buy a very nice 2,200-square-foot home for $155,000. The same home in San Jose, which imposed a strict urban-growth boundary in 1974 and has numerous other planning restrictions, would cost $1.4 million.
While differences in incomes are responsible for a small part of the difference in prices, most is due to land-use rules. For example, Cox calculates that a median house in Houston costs less than three times median household incomes. A median home in San Jose is close to ten times median household incomes. War on the Dream provides similar data for cities all over the world and shows that those with the most land-use restrictions have the highest price-to-income ratios.
This book should be read by everyone who has to live in unaffordable housing markets as well as anyone living in a region where planners are talking about curbing urban sprawl.
Note: The Antiplanner has a limited number of copies of this book available for $20 including shipping to any U.S. address. If you are interested, email the Antiplanner.
Urban-growth boundaries, greenbelts, and other land-use rules drive up land costs and housing prices and reduce homeownership rates.
1. Randal, can you explain why the conclusions of the literature disagree with this statement*? Namely, how your conclusion isn’t necessarily supported by the literature? That is, the assertion is simplistic at best and neglects intent by governments and demand by agents?
You continue to assert this yet give no empirical evidence for your readers (a polemical book isn’t empirical evidence) that explores intent. Explaining that your broad-brush description is incorrect, and has too many dependencies to be supported in such a generalized way is a good way to inform your readers (as opposed to giving them ideological statements).
2. Can you also explain to your readers how the vast majority of people demand open space for themselves and land controls on their neighbors, and thus The Vaunted Market won’t buy a house in, say, a sea of roofs with no greenspace? And how there is this little thingy called a tradeoff that arises out of reg’lur folks’ demands?
3. Lastly, can you tell your readers why the folks who hold up Houston as an exemplar don’t live there?
DS
* CA has employed UGBs specifically to limit supply and thus growth, as explosive growth was identified as a problem.
can you tell your readers why the folks who hold up Houston as an exemplar don’t live there?
And why the Antiplanner chooses to live in the state with the strongest land use planning system that produces the horrendous quality of life (e.g. unaffordable housing, congestion, fire hazards, etc.) he laments on a daily basis? It’s strange that he voluntarily subjects himself to life in the worst, most expensive state in the union, when he could have everything he ever American Dreamed of in Houston, at a fraction of the cost.
Also, if UGBs have a 20-year supply of land inside them (as they are supposed to have, at least in Oregon), then it seems to me that they by definition don’t cause a land shortage, and thus shouldn’t drive up land prices.
Also, if UGBs have a 20-year supply of land inside them (as they are supposed to have, at least in Oregon), then it seems to me that they by definition don’t cause a land shortage, and thus shouldn’t drive up land prices.
Yes, exactly. They “forget” to bring up that issue. As I often point out here, focusing only on this ‘supply’ argument allows one to neglect the demand side, which is a major driver of land rents on the west coast.
UGBs are a reaction to unfettered growth that threatens a locality’s QOL. CA explicitly did this to constrict supply, which is a great opportunity for ideologues who use the affordability ruse in place of “no ding-dang gummint”. The majority likes land-use rules, as it prevents their neighbor from doing something annoying and ruining their property values and QOL.
I challenge any ideologue who believes this stuff to run for office on the affordability issue.
I’ll make a bet with any of them that they won’t get 6% of the vote if they run on the affordability platform, and that you’ll develop that nasty green open space and gut land use laws (thus letting your neighbor do crazy stuff) and drive down everyone’s home prices.
Tell us how you do. I won’t contribute to your loser campaign, however, just bet. Name your betting terms.
DS
Population increases (i.e. Demand increases, i.e. Demand curve shifts up), Housing prices increase due to increased Demand, local governments respond with growth controls, Antiplanners blame housing price increases on growth controls.
It’s one thing to claim that restricting the supply of land increases land prices. That’s Econ 101.
It’s another thing to say that UGBs restrict the supply of land.
It’s also another thing to say that all or most of housing price increases are due to the supply side of the housing market, implicitly assuming that demand has remained constant.
D4P said:
can you tell your readers why the folks who hold up Houston as an exemplar don’t live there?
I will hold up Houston as an exemplar. I am 41 years old and I have lived here 35 of my 41 years. I have watched as the housing industry here has added enough new housing starts, both single family and multi-family, over the past 10 years to absorb the entire population of the city of Portland while the median price for a single family home has risen from $85,000 to $155,000. I bought property about 3 1/2 years ago and have watched it appreciate a mere 15 percent (including inflation) since that time, even as we absorbed scores of thousands of Katrina evacuees and have had around 150,000 housing starts since the start of 2004.
I have traveled to about 20 countries on 5 continents and have seen a lot of cities. I’ve been to Paris, London, New York, Tokyo, Beijing, Bangkok, KL, Singapore, Shanghai, Guangzhou, Hong Kong, San Francisco, LA, Chicago, Rio de Janeiro, Buenos Aires, and lots of others in between. I spent 9 weeks in London between December of last year and April of this year and listened to my colleages there express their fears over not being able to afford housing anymore. I know that it takes 20 minutes on the London Tube to get from the Strand to Paddington station, a distance of about 2 1/2 miles in a straight line. I also know that London and Paris have street after street of housing and estates that all look as cookie cutter as any American suburb.
New York City is probably my favorite place outside of Houston. London and Paris are nice places to visit for 5-10 days, but quite frankly I got rather tired of them after a while. Most cities do not have too much that Houston cannot offer in some way or another.
As for that much bandied about term, QOL, my desires are rather minimal. I do not like too much noise near my home, ergo I live about 300 yards away off of the busiest street in the city. That way I can walk to my grocery store, dentist, and nearby restaurants (yes, you can do those things in Houston!) while getting a decent night’s rest because I am far enough away where the noise does not reach me. I can put up with a fair amount of air pollution – I have enough frequent filer miles to send any readers to China if you want to behold what real air pollution looks like. If I can find a neighborhood where I can run workouts, a good bookstore nearby, and has high speed internet access, then I am set. I can do all of those things in my city.
Antiplanner, you are welcome to come to Houston anytime and join the hundreds of thousands of others from places like California and elsewhere who have kicked up their boots and bought their own haciendas here. The summers are hot, humid, and long. There is little in the way of a summer breeze to cool things off. Many locals joke about our insect population. Flooding and the occasional hurricane are big issues here. On the other hand, many have marveled about how nice Houstonians are and that we welcome newcomers with open arms. The winters are mild, the March / April and October / November months are wonderful, and I know that while I might buy vacation property somewhere in Asia when I get older, I really would not want to live anywhere else for the rest of my life.
Using the trick question of if it’s so bad why don’t you leave or if it’s so good why don’t you live there is dishonest. Those who ask those types of question know the answer. Many of us choose to live here and make it an even better place while recognizing the legacy we leave to future generations. In my case I was born in Oregon and have spent the majority of my life in southern Oregon so I’d rather fix what I see as wrong rather than move to a place like Houston. You guys know that so why play the games?
Working with my city planning department they do indeed try to keep a twenty year inventory of land in the UGB. This would include residential, commercial and industrial. The problem is who decides what is a twenty year inventory? History has shown the planners underestimate the needs and prices have confirmed that mistake.
Many of us advocate in the ways we can rather than run for elected office. The time commitments of elected positions have become a burden few can deal with. There are other productive ways to serve as a citizen.
Dan points out how people demand open space. I see they always demand it after they have arrived. Public policy needs to look at more than what the most recent transplant is demanding. Constituents are important but there are responsibilties beyond what will get you elected in the next poll.
Those who ask those types of question know the answer. Many of us choose to live here and make it an even better place while recognizing the legacy we leave to future generations.
My point is that location choice is either amenity-driven or employment-driven. If you’re choosing HOU, it’s driven by job over no amenities. If you’re choosing any city on the West Coast, you are choosing amenities in your decision tree. I moved to CA in the mid-80s, knowing I’d find a job in that economy, but I went there for the copious amenities. Very few say that about HOU.
And wrt open space, check how many cities have minimum OS requirements. Lots. Those are the ones with good QOL. People move to these ciites because of it. I’m in one.
============
Lastly, this is yet another post where I ask in vain for someone to present evidence that UGBs drive up housing prices. No one is ponying up evidence. I guess I already know the answer, and according to certain rhetorical tactics, I’m one of those who apparently are dishonest by asking it.
DS
Thanks, Steve Plunk, for defending my decision, as a native Oregonian, to live in Oregon. I’ve thought about moving and may yet. I confess that the part of the state I live in (as DanS knows full well) is pretty idyllic, so the motivation for me to move is low.
There is considerable economic analyses showing that strict land-use planning, including UGBs, drives up housing prices. For example, Oregon economist Randall Pozdena’s study and Harvard economist Edward Glaeser’s article on zoning.
As for the claim that Oregon’s cities have a 20-year land supply, that is not enforced. Eugene has refused to review its land supply. Portland’s Metro persuaded the legislature to allow it to meet the requirement by rezoning existing neighborhoods to higher densities.
Communities in Oregon, California, and elsewhere have learned that, once put in place, it is very hard to move UG boundaries. The creation of such a boundary immediately creates a special interest group that benefits from leaving it where it is. That’s why 1000 Friends of Oregon, supposedly dedicated to the 20-year land supply rule and housing goal of Oregon’s land-use system, could get support to fight almost every proposed expansion of Portland’s UGB (and, in all probability, almost every other UGB expansion in the state).
DanS is not dishonest for asking the question. He is only dishonest in claiming it hasn’t been answered here and elsewhere many times before.
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Randal, my question was can you explain why the conclusions of the literature disagree with [your assertions]? [And that] your conclusion isn’t necessarily supported by the literature? That is, the assertion is simplistic at best and neglects intent by governments and demand by agents? not that no one claim[ed] it hasn’t been answered here and elsewhere many times before. I’m not sure why you would want to mischaracterize my question that way. Anyway,
I note you can’t provide empirical evidence to back your assertion about UGBs, as they disagree with the one paper you provided (which starts with a little story to elicit emotion, rather than starting with evidence and few seem to have read this authoritative paper, as there is a dearth of citations for it) – a paper with a false premise that smart growth = site supply restrictions; smart growth tries to make MORE housing available.
Also, again, as we have repeatedly discussed about the Glaeser, it is homeowners implementing zoning to keep their investments high, and G&G admit While all of our evidence is suggestive, not definitive, which is why I asked about the literature, so you would have a chance to avoid choosing a paper that doesn’t help your argument.
BTW, the Glaeser also disagrees with “your” affordable housing claim:
Anyway, I never said the question wasn’t answered, I asked the question to examine the paltry evidence for the assertion, because the literature doesn’t support your assertion, Randal [viz.: 1.* , 2. **, 3. , 4. ].
DS
* As for housing prices, the effects of urban containment appear to be much more dependent on the style of policy implementation, the structure of local housing markets, the pattern of existing land ownership, and the stringency of other local regulations…[i]t is also important to point out that the demand side of the housing market may be a more important determinant of aggregate housing prices than local urban containment policies. [pp 10-11]
** The common assumption is that by limiting the supply of developable land, all growth management policies reduce the supply of housing. Basic economic theory suggests that if housing supply is low relative to demand, then the price for it will be high, reducing its affordability. While this reasoning may seem logical, it is far too simplistic. Housing prices are actually determined by a hostof interacting factors, such as the price of land, the supply and types of housing, the demand for housing, and the amount of residential choice and mobility in the area. Further complicating this market reality is that growth management policies vary widely by state and by region and are unevenly enforced and implemented.
[…]
We cannot emphasize strongly enough that housing prices depend more on the relative elasticity of demand, especially within metropolitan regions, than on any other factor, including growth management.
***
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