Speaking of the San Francisco Bay Area, as the Antiplanner was doing yesterday, the California legislature may be on the verge of passing a bill that will make that crowded region even more congested. Assembly Bill 2923 would allow, even require, that the Bay Area Rapid Transit Authority to overrule local zoning and impose high-density housing on neighborhoods within a half-mile of BART stations.
Not surprisingly, many cities including Fremont, Hayward, Lafayette, and Pleasant Hill oppose this preemption of their local authority. More surprising is opposition from the California chapter of the American Planning Association. While the APA supports minimum-density zoning, it doesn’t believe that transit agencies should be allowed to preempt local cities. Apparently, more APA members work for cities than for BART.
The bill’s advocates argue that high-density housing will be more affordable, a myth the Antiplanner has addressed before. Mid-rise construction costs 50 percent more and high-rise costs 68 percent more per square foot than low-rise housing. Land in areas with urban growth boundaries can be hundreds of times more expensive per acre than areas without boundaries, so densities would have to be that many times greater to get land costs per unit of housing down to reasonable levels.
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As shown in the chart above, which has appeared here before, denser means less affordable, not more. This was affirmed yesterday in the story about Hong Kong, one of the densest and least-affordable urban areas in the world. The San Francisco-Oakland region is already the second-densest urban area in the United States, with San Jose being third, and their densities have both significantly increased in the last several decades, which has only made them less affordable.
Proponents also claim that people living in transit-oriented developments reduce their driving by 40 percent. They fail to account for self-selection — that is, people who want to drive less choose to live in such developments — but even if it were true, doubling density (and TODs do more than double density) while reducing per capita driving by 40 percent still results in more local driving and therefore more congestion.
AB 2923 has passed the California assembly and has reached the floor of the senate. If approved, it will lead to more congestion but it won’t make Bay Area housing more affordable. Relief from congestion and high housing costs will come only when the urban-growth boundaries that confine 99 percent of the population to 29 percent of the land in the six-county area are abolished.
Define low rise? Is adding another story to an apartment for the sake of affordable housing a huge construction fiasco? 3-4 stories, 7?
If California were a person, it’d have a mustache to twirl with Penelope Pitstop tied to the rail road track
The Antiplanner wrote:
They fail to account for self-selection — that is, people who want to drive less choose to live in such developments — but even if it were true, doubling density (and TODs do more than double density) while reducing per capita driving by 40 percent still results in more local driving and therefore more congestion.
Or alternatively … people that can afford to live in such developments and want to drive less …
Has anyone considered (for example) what it costs to own or rent a home in transit rich areas of New York County, New York (otherwise known as the island of Manhattan)?
Seriously? Your argument that density causes high prices uses a single non-US city? What about pretty much the rest of the world, where housing is both denser and more affordable than in the expensive US metros? Paris, for instance, has no urban growth boundary and yet it’s much denser than San Francisco, LA, etc (whether you compare the cities themselves or urban areas as a whole).
Also, the point about high-rise construction is a strawman. High rises are expensive because they are often luxury units and because the land itself is expensive – that doesn’t mean using the same plot for a single-family home or low-rise apartments will make it cheap. Anyway, neighborhoods around the developed world manage densities of 50k or even 100k per mile with 5-6 stories so why would high-rise housing be necessary?
In fact both Paris (defined as the city of 10 million) and Tokyo (the city of 14 million) don’t even fit in the density chart you posted. Even the Tokyo metro area as a whole, with 38 million people, is essentially at the upper bound in the chart – 7k per mile. So Tokyo housing must be crazy expensive, then? But it’s not.
You may argue that if urban growth boundaries didn’t exist nobody would want to live in high-density housing. That sounds dubious, looking at the experience both of US states without UGBs and other countries. But whether one eliminates UGBs or not, allowing greater housing supply on a given piece of land will make housing prices lower than they would otherwise be. Studies again and again find that what matters for housing affordability in a given market is the amount of housing, not whether this housing is built up or out – see eg Ed Glaeser.
LazyReader,
Low-rise is 1-3 story; mid-rise is 4-5; high-rise is 6 plus. Different construction techniques are needed for each category. Converting a 3-story into a 5-story would be difficult because the 3-story probably wasn’t built to support two more stories and probably doesn’t have the fire protection (such as concrete floors) required for taller buildings.
BehindYou,
Not sure what you mean by using a “single non-US city” as I don’t believe any non-US cities are reference in this post. But most European cities have limits on outward expansion due to farmland protection zones and as a result have expensive housing.
While it seems to make sense that increasing housing supply by building up would make housing more affordable, I can’t find any examples where this has happened. Instead, housing tends to become less affordable as regions grow dense.
I thought an earlier version of this article mentioned Hong Kong – maybe my imagination.
‘most European cities have limits on outward expansion due to farmland protection zones’
Other than London, I can’t think of any major European city surrounded by a greenbelt. Of course there are some ‘untouchable’ green areas, e.g. Madrid’s Casa de Campo. You can find those areas in ‘low-regulation’ US cities too.
‘and as a result have expensive housing.’
A four-bedroom in Berlin usually rents for less than $1,500 / month. There are of course housing affordability disasters in Europe – but mostly in the UK, which strictly restricts housing supply both through height limits and greenbelts. (Cheap Berlin has twice the population density of expensive San Jose, about 11k per square mile vs 5.5k – though one must say Berlin is not dense by European standards).
‘While it seems to make sense that increasing housing supply by building up would make housing more affordable, I can’t find any examples where this has happened.’
Other than perhaps Detroit, I can’t think of any major US city that has become more affordable over time. Just the other day this blog discussed affordability in Texas; it’s declining slightly in Houston and Dallas, and not so slightly in Austin. Does this mean that ‘building out’ is a failure, too?
Of course not. Increased supply is supposed to match increased demand, so that housing prices (hopefully) remain stable. Also, with the decline in interest rates over the last several decades, it would be strange if home prices did not increase relative to wages (as a higher price is now relatively more affordable).
The question is not whether increased supply makes cities more affordable than before; that’s very difficult so of course you’ll find few examples, regardless of what kind of supply you’re talking about. The question is whether increased supply makes cities more affordable than they would otherwise be. The answer is yes. Guangzhou is perhaps less affordable today than in 1980, but then nobody thinks that restricting building heights would have made today’s Guanghzou more affordable. What’s happened is that the city has become far more economically valuable.
Also, the building up vs out dilemma is a false dichotomy because many regulations prevent infill development – that is to say, housing supply that would build neither up nor out. The same goes for lot sizes, setbacks, parking requirements, etc. In Boston’s suburbs sometimes the minimum lot size is 2 acres – obviously that leaves a lot of empty land. Do you seriously believe that allowing more than 0.5 homes per acre would make housing more expensive?
Even talking about building up, the idea that allowing greater heights will increase housing costs is economically absurd. If a small town allowed buildings of 10 stories nobody would build one because it’s anti-economic. The expensive high-rise would lose out to more affordable low-rise apartments and houses. One can allow high-rise housing, but it will only get built if the land is expensive enough as to justify it.
You may of course argue that expensive land is a problem caused by greenbelts, but even if that’s the case, what is the logic in restricting heights? How are greater heights supposed to make housing less affordable?
If one kind of housing supply reduced costs, while the other did nothing or even increased costs, economists would have found out. It would be just about the biggest exception to the law of supply and demand ever described. It would be massive news. But economists have looked at this up, down and sideways, and that’s not what they find at all.
http://www.nber.org/papers/w23833
I just realized infill development is precisely what Bill 2923 is about. BART-owned land is mostly parking lots. So this bill would allow mid- or high-density housing not instead of low-density housing, but instead of no housing at all! How is that supposed to make housing less affordable?
Yes, the reason why denser cities have higher housing prices is because the demand for housing is greater. Nobody will build a 80 floor condo tower in Detroit because there is no demand for such a thing and housing demand is low in general. The density versus affordability graph is a clear example of correlation does not equal causation. The Antiplanner has never identified areas in the Bay Area that he thinks could receive new low density housing, or explain how this new low density housing would be affordable. There is plenty of affordable housing in Stockton.
Probably the only way to lower housing prices in San Francisco or Los Angeles is to drive enough of the high paying jobs out so that housing demand is decreased, something that Santa Monica and San Francisco may be trying to do through increased taxes and regulation.
Apart from that, building more housing is the only thing you can do. Assume a land parcel is worth $2 million. It can hold a single family home that sells for $2 million, a duplex that sells for $1 million each, a 4-plex that sells for $500,000, etc, not counting the cost of construction. But the cost of construction will be amortized over 30 years.
To be fair a lot of cities do have contraints on suburban expansion. The Bay Area has basically a greenbelt to its south and west. Same for all cities in Oregon, plus many in Canada and the UK.
But I never understood this claim when talking about LA. Looking at a map of the city and its suburbs, if there’s a greenbelt it must be very loosely enforced! Likewise in New York. Of course you could build more stuff, both in the cities themselves and in their suburbs, but most of the additional construction would be better described as densification or infill development than greenfield development.