I recently attended a lecture on Smart Growth strategies, implementation, and implications, where the speaker discussed his work analyzing eight cities with varying degrees of implementation of Smart Growth measures. At one point, he showed a graphic ranking these cities 1-8 in several categories. Portland, a city chosen for the study due to its highly touted Smart Growth plan and strict Urban Growth Boundary (UGB), ranked high on several measures related to growth management, but lowest of all in housing affordability. This got me thinking: is Smart Growth actually a smart strategy for our cities, which are typically home to many low- and moderate- income residents?
Since the 1970’s, UGBs have gained widespread popularity, have been instituted in over 100 cities, and are required by the state governments in Oregon, Washington, and Tennessee. Essentially, a UGB is a line drawn around a city, outside of which development is limited or, in some cases, prohibited. UGBs are used as a strategy of directing higher-density development into the cores of cities, thereby controlling growth and acting as a strong antidote to suburban, low-density sprawl. Sounds great, right? Well, it seems as though they are a little bit more complicated than they initially appear.
The Affordability Argument
Many people argue against UGBs on the basis that they result in a loss of affordable housing within the boundary. The crux of this argument is that, logically, when growth is constrained, development will slow, and housing demand will rise disproportionately to supply, resulting in an increase in housing costs and a decrease in overall affordability. This case is argued by Samuel Staley and Gerard Milner, who oppose the implementation of UGBs due to this negative effect upon affordability. Between 1985 and 1997, they demonstrate a 158% increase in average values for single family homes in Napa, California; this time period corresponds to Napa’s implementation of growth controls. Along similar lines, in Portland, Oregon, between 1995 and 1997, 80,000 units previously deemed “affordable” were lost to rapid market appreciation.
Staley and Milner argue that even the successes associated with UGBs are double-edged swords. The UGB in Portland has achieved its goal of downtown revitalization: the lack of vacant, developable land within the boundary has led developers to build new construction within the city core. This achievement, however, has an unrecognized downside: with revitalization has come gentrification, and Portland’s low-income population has nowhere else to go.
The logical argument connecting growth constraints and decreasing affordability may not hold water, however. A recent paper prepared by Arthur Nelson, Rolf Pendall, Casey Dawkins, and Gerrit Knapp for the Brookings Institute claims that it is not actually land constraints, but rather market demand, that have led to the increases in housing cost in Portland. In fact, they claim that, since a spike in housing price in the mid 1990’s, Portland has seen housing prices rise at approximately the national average. On top of that, they make the case that traditional land use regulation can have this effect on affordability as well, for many zoning codes have minimum lot sizes and maximum density requirements that allow only for more expensive development, effectively eliminating low-income individuals from participating in the housing market. Looking at the issue in light of these counterarguments, UGBs don’t seem to negatively affect housing affordability any more than typical land use management, implemented across the country.
How To Proceed?
Both sides of this debate have logical and legitimate arguments, making it difficult to determine which has it right. It’s a fact that Portland has problems with affordability: the city has recently risen into the top ten least affordable cities in the United States, with an average housing cost to income ratio of 4.2 (anything over 4.1 is considered “seriously unaffordable”). Ultimately, I’m not sure there’s enough research to say definitively whether this unaffordability is due to the city’s UGB, or just the fact that Portland is apparently an incredible place to live, and therefore must attract a large number of people, and, subsequently, housing demand. In case Smart Growth is to blame, though, to make sure that it really is a smart decision for our cities, cities should make sure to pair UGBs with the following strategies:
- Make sure to increase density. Some possible ideas:
- Incentivize density: Cities can upzone their districts all they want, but without incentives, they may not be able to achieve the high levels of vertical growth required to offset the loss of horizontal growth.
- Minimum density standards: Metro, Portland’s regional planning body, has instituted a minimum density standard of 80% of the maximum density, for all new housing development (with a few exceptions).
- Promote hidden and invisible density measures, such as alleyway housing and accessory units. These are strategies that can be used to increase density, especially in neighborhoods dominated by single-family detached homes. These units are often much smaller than the home they are associated with, and therefore provide a more affordable option in otherwise unattainable neighborhood.
- Create an inclusionary zoning plan. Inclusionary zoning can be used to set minimum requirements for affordable housing in all developments. Portland’s ordinance allows for reduction in development fees, priority permitting, density bonus’, and reduction in parking requirements in exchange for the development of affordable housing.
- Promote transit-oriented development. If homes are built in areas that are accessible to public transportation, the necessity of owning a vehicle is reduced. While this does not reduce housing price, it can offset this cost by reducing commuting and vehicle maintenance costs.
Guest Contributor: Margot Elton