The Changing Location of New Housing – Part 1

An article of faith among urbanists is that the housing mix began to shift about 2005, with walkable urban gaining ground on drivable suburban.  With housing starts virtually stopped by the recession, the only remaining question was whether the movement was the beginning of a sea change or only a small adjustment in response to temporary market enthusiasm.

The final answer to that question remains uncertain.  But the past few days have offered various takes on the question.  More than can be covered in a single post.  So this will be the first post of several.  In the divergence of opinions, we can hopefully find light.

As reported by the Daily Beast, the Housing Commission at the Bipartisan Policy Center expressed concern that there wouldn’t be many buyers for baby boomers’ drivable suburban homes when the boomers decide to cash out.  The report doesn’t rely solely on the increasing interest in walkable urban lifestyles, but also notes factors such as higher energy costs, fewer nuclear families, and the reduced availability of mortgages in explaining why drivable suburban homes are becoming less desirable.

The Housing Commission suggests that the biggest problem with boomer homes will be in Midwest where little population growth is occurring.  In other regions, particularly the West and South, there will be sufficient growth that changing housing preferences can be accommodated by adjustments in the new home types.

But not everyone sees the same walkable urban preference in their crystal balls.  As reported by the Wall Street Journal, the Harvard Joint Center for Housing Studies, after looking at the accumulated data between 2001 and 2010, points out that the almost 80 percent of housing growth occurred somewhere other than in cities.

They admit that growth in the exurbs, the furthest reach of drivable suburban development, slowed late in the decade, but believe that the slowing was strictly related to the economy.  They note the greatest amount of bare land remains in the suburbs and exurbs, so expect that to be where renewed growth will occur when the economy allows.

The Joint Center also notes that the demand for new housing, when the economy has fully recovered, will average 1.6 million units per year, which they speculate is beyond the capacity of existing city and suburban infrastructure.

Atlantic Cities was among the first to weigh in with a more balanced look at the Joint Center report.  Among other points, Emily Badger notes that report was based on accumulated data for the entire decade and may not have reflected trends that were beginning to emerge as the economy slowed.  But the key point is made when she quotes Joint Center Research Director Chris Herbert.  “We’re not saying that this is the desirable outcome.  In order to see a change you really need to change land-use regulations, you have to change the pricing structure."

Exactly.  Much of the current residential land-use is the result of land-use regulations and the pricing structures.  What we have isn’t the result of a hypothetical free market.  It’s the result of rules and regulations that were put in place with good intentions, but have worked out far differently than anticipated.

I’ll soon return with additional perspectives on this question about where the housing of the near future will be built.

Followups … The City of Stockton filed for bankruptcy only days after I described the city’s flawed approach to redevelopment.  Atlantic Cities includes the arena/ballpark redevelopment as a key factor in the bankruptcy.  Meanwhile, the Economist draws parallels between Stockton and Greece.  Stockton’s egregious missteps aren’t an argument that redevelopment shouldn’t be revived.  Only that any rebirth should include controls regarding the types of projects and financial justifications.  Redevelopment likely remains a crucial element of urbanism. … The Corkscrew Wine Bar in Petaluma was approved by the Planning Commission on June 26 by a 5-1 vote.  After the vote, I spoke with the police officer who represented his department at the hearing.  He assured me that the department opposition was based solely on the number of current alcohol licenses, not any concern with the particular application or applicant.  He also said that he’s a regular reader of this blog.

Exactly.  Much of the current residential land-use is the result of land-use regulations and the pricing structures.  What we have isn’t the result of a hypothetical free market.  It’s the result of rules and regulations that were put in place with good intentions, but have worked out far differently than anticipated.

Schedule Notes … Wednesday, July 11, 5:30pm, Petaluma Urban Chat will again meet at the Aqus Café.  We’ll continue our conversation about summer travel to urban destinations.  We’ll also talk about different opportunities for future meetings. … Thursday, July 19, 6:00pm, the Petaluma Station Area Plan Citizens Advisory Committee will meet at the Petaluma Community Center.  The topic will be the continued review of proposed changes to the SmartCode.  I‘ll be on vacation, so won’t attend the meeting, but encourage others to participate

As always, your questions or comments will be appreciated.  Please comment below or email me.  And thanks for reading. - Dave Alden (davealden53@comcast.net)