All across the U.S. (and Canada), planning commissions are struggling with competing interests: lack of quality housing and concerns about new housing.
Employers, school districts and health officials say there isn’t enough quality housing for their workers or the people they serve, while residents who live near a proposed development often voice their concerns about the impact the new housing will have on their quality of life. This is especially true if the proposed housing is not relatively identical in size, type and character to the existing housing.
Homes that are too large or too expensive are referred to as “McMansions,” and their developers are accused of gentrification. Homes that are too small or too close together are labeled as property value thieves, traffic generators and local public service drainers – or worse, hotbeds of criminal activity.
There should be no wonder why, despite all the evidence to demonstrate how financially and ecologically unsustainable sprawling new subdivisions across former farmland and forests are, it’s the easiest political decision. We simply continue to build housing where the fewest people complain about its impact, regardless of the true cost to the broader community.
Why are we so afraid of change? What is driving all the concern about any type of land-use pattern that isn’t identical to what we’ve already accepted?
I’ve written before about how our pre-World War II neighborhoods have a broad diversity of housing types and sizes, and how many of those neighborhoods continue to be some of the most economically diverse and vibrant parts of our state, with property values climbing faster than most suburban neighborhoods over the past decade.
I’ve also written about how the GI Bill and Federal Highway Administration of the 1950s and ’60s effectively goosed the suburban housing market, while the Homeowner Loan Corporation made financing in urban neighborhoods difficult or nearly impossible to obtain.
Root of concerns
Let’s now explore what happened in the subsequent decades when these federal policies and investments contributed to a wealth drain in urban neighborhoods, a significant decline in property values and an influx of primary investors who were much more likely to be landlords than owner occupants. Knowing property values in these neighborhood were on the decline, landlords had no financial incentive to make investments and allowed historic structures to fall into disrepair for as long as they could continue to collect rent.
What followed is what has shaped the opinion of so many homeowners today and has turned them against anything other than single-family homes on larger lots. Disinvested neighborhoods understandably had higher rates of crime, lower investment in local schools and poorer educational outcomes, and higher rates of transience among residents. However, it was never the density that drove disinvestment, it was federal lending policy that was the culprit.
Federal lending policies of the 1930s took nearly 50 years before they became starkly apparent in the neighborhoods most effected by them. It took another 20 years of social science research to truly understand the root causes of urban disinvestment that lead to local crime and poor educational outcomes. As a result, we had nearly 70 years of cultural assimilation to the idea that neighborhoods with more density were synonymous with higher crime, lower property values and less general neighborliness. Not because there is any real cause and effect between density and disinvestment, but because that was the most visible correlating factor.
So, it makes sense that a reasonable person who has not spent hours reading about the history of urban neighborhoods in America makes some assumptions about what may happen to their neighborhood if housing types that are even slightly dissimilar to their own are permitted. While entirely understandable, these assumptions are false.
Changing of urban neighborhoods
Residents who have called urban neighborhoods home all their lives – and others outside these neighborhoods – have understood the power and attractiveness of diversity in community long before the rest of us. Far too many of these residents have seen changes in their neighborhoods over the past 10 to 15 years that have been economically disastrous for those who are earning less than the regional median income.
Starting in the 1990s, new(ish) federal policies made loans for low- and moderate-income homebuyers more accessible in these neighborhoods. Despite all the negative outcomes of federal policies from previous decades, many people found new ways to build community in older, urban neighborhoods – and much of that community was centered on households with limited economic means but lots of cultural diversity.
By the early 2000s, city centers and some urban neighborhoods were “cool” again. Decades of disinvestment created opportunities for investors to acquire land at a significant discount and generate value for a new generation of young adults who were excited to live in more diverse communities with access to bars, restaurants and shops. This generation liked the walkable urban fabric and found there were increasing job opportunities downtown.
The result is what is often called gentrification – investors see an opportunity to attract a new market to an undervalued neighborhood and, over time, the complexion of that neighborhood changes, literally and figuratively. As new investment occurs, more demand is generated. More demand supports higher prices, and those higher prices slowly – or sometimes quickly – price out many of the residents who have lived in the neighborhood for decades. Local businesses begin to cater to the new, wealthier and often whiter demographic, while longtime neighborhood staples lose much of their core clientele.
Residents in these neighborhoods are understandably exhausted after living through a long period of disinvestment and struggling to keep their community intact despite declining schools, homes falling into disrepair and local businesses closing only to see the tide shift and everything turned upside down.
After years of calling for more investment in these neighborhoods, it’s clear more investment brings an ever-increasing pace of change – and this change is happening so quickly, those with the least income can’t afford to stay for the benefits. Those who can afford to stay no longer recognize their neighbors. Once again, their community is dismantled.
Roots of new sprawl
That’s why both groups – wealthier homeowners in traditionally white neighborhoods and renters and homeowners in more diverse neighborhoods – are resistant to any more change. It all feels like too much, with both groups preferring someone else somewhere else bear the brunt of regional population growth.
This is the new impetus for urban sprawl.
Building an adequate supply of new housing to support regional growth isn’t politically viable where communities already have the roads and utilities to serve new neighborhoods. Instead, new growth is pushed out to the urban fringe. Large lot subdivisions pop up in former cornfields and forested areas.
The problem: The cost to buy the land, build the infrastructure and construct homes on these large lots is significantly out of reach for the average homebuyer. These homes tend to be priced at $350,000 and up, requiring household incomes of $75,000 or more to be within reach, or roughly 140% of the average income in West Michigan. And as many as 60% of millennials seeking to buy their first home and 50% of empty nesters looking to downsize say they don’t want a large house in the suburbs.
These neighborhoods also generally aren’t served by public transit, which means the only mobility option is a car for every working adult in the household. This adds at least another $300 per month in living expenses for each driver in the home.
There is another way. It doesn’t have to be complicated, but it does require a community to work together toward shared goals.
In an upcoming blog post, we’ll explore how West Michigan communities can begin to look for opportunities to grow the regional housing supply in a way that creates more affordability and more choices, preserves the majority of our farmland and open space, and continues to maintain stable, predominantly owner-occupied neighborhoods.
It sounds like a panacea, but it doesn’t have to be.