Failing to expand cities will come at a cost

(written by lawrence krubner, however indented passages are often quotes). You can contact lawrence at: lawrence@krubner.com

This article does not do much more than remind us that automobiles have been the primary transportation mechanism of the last 100 years, and therefore growth and autos are linked. A different technology would generate different results. But we should also the cultural and political paralysis that contributes to this. Ideas about private property work well when we discuss unsullied fresh ground way out in the middle of nowhere. Ideas of private property break down when we are discussing Manhattan. Or rather, the fiction of private property becomes more obvious when we talk about Manhattan. If private property is suppose to suggest some autonomous unit, then what does it mean to “buy” a condo in New York, knowing that the owner will always have to pay fees, and engage in politics, regarding the upkeep of the building that the condo is in? Any attempt to build healthy cities has to result in a redefinition of property.

Also, there is a finite distance that people can travel in cars, from home to work and back, so there is a finite limit on how much land can be consumed by cities in this process:

Housing production’s skew towards low density areas is important, because it is consistent with the notion that a greater inflow of undeveloped land helps cities produce more housing, through both initial development and subsequent rounds of densification.

This is the most important issue:

An important development of recent decades is the increasing paucity of densification. During the first post-war decades, it was fairly common for areas to grow more dense through construction on vacant lots, and in particular through the replacement of older structures with new ones containing more dwellings. The data show that densification has grown far less common over time, especially in the expensive cities.

On the bright side, “slum clearance” kept our cities healthy, back in the 1940s and 1950s and 1960s. But “slum clearance” was extremely racist, almost genocidal. “Slum clearance” was carried by governments that were willing to treat African-Americans as the enemy. As with so many of the political failures in America, the central problem was the racist viewpoint with which certain white leaders moved forward with their plans. Robert Moses is a famous example. Although he did great good in advocating for infrastructure projects that helped get the USA out of the Great Depression, he also advocated for racist infrastructure — for instance, he did not want black people going out to the white beaches on Long Island, so he designed bridges that were too low for buses to go under them. He was aware that whites would mostly drive cars to the beaches, whereas blacks would mostly have to take the bus. He did great evil.

Despite the above reservations, this is interesting:

In the earlier study I labeled U.S. cities as either expensive, expansive – with an a – or as legacy cities. Both expensive and expansive cities are economically vibrant and face pressure to grow, but whereas expansive cities like Atlanta, Houston and Phoenix continually provide ample new housing at affordable prices, expensive cities like San Francisco, New York and San Diego do not. Since the 1970s, expensive cities have failed to produce enough new homes to keep real housing costs steady, and as a result they have curbed their population growth and sent real housing prices on a long-run upward spiral. Legacy cities are ones whose economic power has faded, and no longer generate population growth or housing price growth.

Expansive cities are easy to identify in the chart. They pervade the upper-right quadrant, showing both an increased rate of outward expansion and of housing production. Expensive and legacy cities, on the other hand, are jointly clustered near the origin and in the lower-left quadrant. They can be distinguished by their colors, which correspond to the real changes in cities’ housing prices from 1980 to 2010. A housing stock that cannot accommodate demand has driven up housing prices in expensive cities, rendering them red, whereas legacy cities show up alongside the expensive ones in cool shades of blue. There, the demand for housing is stagnant and easily accommodated by the existing stock, resulting in modest (if any) increase in the real cost of housing.

Not all cities fall into the upper-right and lower-left quadrants. Some are clearly located in the upper-left quadrant, indicating that they have increased the rate of housing production without increasing the pace of outward expansion, or even while slowing it down. Portland and Seattle are good examples. But such cities send an ambiguous message. On one hand, they offer encouraging evidence that cities can undergo meaningful densification while curbing their outward expansion. On the other hand, they have failed to avoid escalating housing costs – as indicated by their color. Moreover, the increase in such cities’ rate of housing production pales in comparison to what similarly-sized cities like Phoenix and Atlanta have achieved through outward expansion.

Why does housing production correspond so closely with outward expansion? There can be many possible reasons, but two of them stand out as particularly important:

Undeveloped and low density areas produce a disproportionately large share of cities’ new housing. Restricting the flow of undeveloped land “into” a city chokes off subsequent rounds of densification, because low density areas add new housing more readily than denser ones.
Cities which curb their outward expansion are also likely to curb densification within the existing footprint, e.g. through more restrictive land use policy.

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