A couple nights ago, I once again got into a discussion on Twitter about the soundness of upzoning, or the increase in the allowance of residential units in cities, as a rational and reasonable response to the lack of affordable housing in our nation’s large cities. Anyone who’s been reading this site for some time knows that I’ve disagreed with this for quite some time, and tried many ways to articulate my views and reach some understanding. As of last night I learned two things: 1) Twitter is a really poor vehicle for debate when nuance is critical (OK, I really knew that already), and 2) the orthodoxy of the upzoners is so strong that my views on this might put me on the pariah end of the urbanism spectrum.
It started innocently enough. Ramsin Canon suggested upzoning major streets in Chicago for more residential units. That brought several supporters, including City Observatory writer and fellow Chicago blogger Daniel Kay Hertz, who (gracefully, I might add) noted my objections. I then chimed in, and shortly thereafter I found myself swimming against the tide of upzoners hoping to prove that upzoning helps improve housing affordability.
Look, upzoners, I understand the problem and the sentiment. I understand the desire to find the right policy response to address the issue. But I remain unconvinced that upzoning will help any more than a handful of American cities. Here’s why.
An Abstract Argument
Surely a big part of the appeal of upzoning is its abstract simplicity. Increasing the supply of housing units in extremely tight housing markets can unleash market forces that drive home prices and rents downward, making cities more affordable to affluent and poor alike. And in housing markets that have an almost even distribution of high priced housing within them, like San Francisco or New York, this makes sense. Allowing more units will have the effect of bringing prices down. (I’d also add parenthetically that the tightest and most expensive housing markets nationally also tend to be the most geographically constrained, by either water or mountains, and that constraint does not hold for all cities nationwide. This escapes many people.)
The reality, however, is that nationally gentrification is just a pittance compared to the expansion of urban poverty. As Carol Coletta of the Knight Foundation put it in a speech last month at the Congress of the New Urbanism:
“In 1970, about eleven hundred urban Census tracts were classified as high poverty.
By 2010—40 years later—the number of high poverty Census tracts in urban America had increased from 1100 to more than 3,000. (3165)
The number of people living in those high poverty Census tracts had increased from 5 million to almost 11 million. And the number of poor people in high poverty Census tracts had increased from 2 million to more than 4 million.
So over a 40-year period, the number of high poverty Census tracts in America’s core cities had tripled, their population had doubled, and the number of poor people in those neighborhoods had doubled.
Given that record, I’ll bet a lot of people are hoping for a little gentrification– if gentrification means new investment, new housing, new shops without displacement.
The idea that places might benefit from gentrification runs against the popular narrative. But here’s the really startling fact: only 105 of the eleven hundred Census tracts that were high poverty in 1970 had rebounded to below poverty status by 2010. That’s only ten percent! Over 40 years!”
Most American cities are not like San Francisco or New York, where the high prices and rents cannot be avoided and the return-to-the-city demand remains very high. Most cities have greater variance in prices and rents, from very high to very low. This takes away the first layer of abstraction for prices and rents and allows those with money to rationally widen their consideration when choosing to live in cities. On the surface this sounds great.
But — and this is where the second layer of abstraction is shed — people don’t make housing decisions or neighborhood decisions rationally. They take in all sorts of information and put it to subjective use, and justify its rationality later. Historical perceptions of neighborhoods linger far longer than their reality. Media perceptions can distort the reality of neighborhoods. Egos can get involved and people select neighborhoods that have a certain cache or brand. For urban neighborhoods in most cities, we find that affluence clusters in certain areas and moves outward slowly. Poverty expands quickly, as those who have the ability to escape it do so, and further destabilize a neighborhood in the process. The end result, again for cities that do not have the same strong return-to-the-city demand or the uniformly high home prices and rents, is affluent enclaves surrounded by expansive and increasingly impoverished neighborhoods.
Upzoning can accelerate this process. If a major city undergoes an upzoning process and allows a substantial increase in the number of housing units, what do you think the development community’s response to that will be? My guess is that they will work hard to fulfill the market demand where the demand is strongest — in the most desirable neighborhoods or in the areas immediately adjacent to them. Only after that demand is tapped out will developers move into other areas, and most will elect to build in areas that are adjacent to the newly saturated neighborhood. Those who live in the path of development will see prices and rents remain high; those away from the path of development will likely see prices and rents crater, and lament the lack of investment in their community.
The Need for Investment
TAt one point in the Twitter discussion. Daniel Kay Hertz asked me, “Would there be more or fewer Latinos in Logan Square if there was more new housing in Lincoln Park?” For non-Chicagoans, Logan Square is the rapidly gentrifying neighborhood immediately west of the quite-gentrified Lincoln Park neighborhood on the lakefront. My response was that Logan Square would indeed have more Latinos in that scenario and that it would have no discernible impact on other neighborhoods outside of the “hot zone” as well. But that sets up the scenario I cite above — an affluent neighborhood next to an eternally poor/working class one, possibly lamenting the lack of investment in their midst. And the further one’s home or neighborhood is from the “hot zone”, the more that lament turns into angst, frustration and resentment.
It’s worth bringing back a portion of the quote above from Carol Coletta:
Given that record, I’ll bet a lot of people are hoping for a little gentrification– if gentrification means new investment, new housing, new shops without displacement.The idea that places might benefit from gentrification runs against the popular narrative.
Despite the growing problems of affordability in select neighborhoods in major cities across the nation, there are many more neighborhoods that wish they had that problem. Many people rue the fact that maybe one-quarter or one-third of a city is priced beyond their means. That leaves two-thirds to three-quarters of a city to explore and find a place worthy of investment. Upzoning can have the impact of further concentrating development within the “hot zone” and drive a deeper inequality wedge between urban haves and have-nots.
Upzoners are not doing cities a favor more broadly by addressing an issue that helps them directly.
Ultimately I see high prices and rents as being demand-driven and not supply-driven. Prices and rents are high because there are too many people focusing on too few neighborhoods — and squandering the opportunity to take some of that investment to other neighborhoods that could use it.