In the last couple of weeks I’ve been trying to dig into the data around transit-oriented-development. I first looked at the demand for housing near transit how that affected homes prices. After that I took a look at whether supply for housing near transit was keeping up with demand – the answer is ‘no’, by the way – and whether the excess demand could be used to create new transit lines.
This time I’m looking at what might happen if not enough housing is built to keep up with demand.
The obvious effect of demand growth exceeding supply growth is that prices for homes near transit will rise and people will continue to sprawl out to far-away exurbs. Ryan Avent explains it perfectly:
Imagine two areas: Gotham and Pleasantville. Say the demand to live in Pleasantville increases a little while the demand to live in Gotham soars. And say that due to differences in land use restrictions, housing supply responds dramatically in Pleasantville and very little in Gotham. Then what we’ll observe in Pleasantville is a rapid increase in population and slower growth in prices, and what we’ll observe in Gotham is rapid growth in prices and slower growth in population. And this is exactly what we observed in the real world. Suburbs have seen massive housing growth and rapid population growth, but prices in central cities have soared, even in many places where population numbers are level or falling
Rising prices are a first-order effect of demand outpacing supply, but there a couple of second-order effects that emanate from price increase.
One major effect is a demographic change. This American Radio Works project, “Back of the Bus“, focuses on minority issues when unequal transportation access occurs, but I think we can consider race a proxy for class in this particular program. The story is essentially that the Interstates allowed wealthier and middle class people to move out to the suburbs, leaving many urban cores more to poorer people. Now that the demand curve is changing and prices in the urban cores are going up, poorer people are being priced out of the center city even when transportation costs are rising.
[Former Denver Mayor Federico Pena] “The day you sit back and say I don’t care, just let the economic market forces dictate who’s going to live where and what’s going to happen to your city, then I do think we run the risk of having almost a push out of low-income, minority communities away from our inner cities, and pushed out 20, 30 miles or 40 miles.”
This could become a vicious cycle. If the poor and middle class are pushed out of cities and transit-friendly places to make way for wealthier people, urban agglomerations could become even more deeply divided places. And as people who’d like to live near transit are forced to live farther and farther from it and from walkable neighborhoods, it would become more and more difficult to build transit to where they are. This is partly because they are farther out so it would cost more to get to them, but it’s also partly because they might not have the money or density in their communities to afford to build the line anyway. Even then, if transit gets built and that drives up housing costs because new buildings aren’t constructed, the situation isn’t improved any.
This report summarizes (with lovely pictures) a number of strategies that cities around the country have been using to maintain or increase the amount of affordable housing near transit. Sadly, there’s a limit to what can be done with affordable housing programs. Denver has one of the most aggressive light rail expansion programs in the country, with 120 miles of tracking scheduled to open this decade. There, the Denver Enterprise and the Urban Land Conservancy have a plan to invest $15 million for affordable housing near stations, but in the grand scheme of things $15 million isn’t much. Portland has had a similar land acquisition fund, but its budget was only $10 million.
Really the only way to ensure affordable housing near transit is to increase the supply of housing. For obvious reasons, developers in general only build when prices are high, but new development eventually becomes old and an increased supply of new units can keep prices down on older ones.
One policy suggestion is to reduce the emphasis on building “green buildings” and instead focus efforts on getting the cost of building new transit down. According to this study (via here) focusing on residential buildings, even buildings with the most energy efficient-designs and construction are outperformed in energy conservation by transit-oriented construction. Focusing on getting transit-oriented-housing built at all is a better goal for reducing energy consumption (and green house gases if you care about that sort of thing) than rewarding new buildings that are built “green”. Some ways to carry out this policy suggestion could be increasing heights, floor-area-ratios and decreasing parking requirements near transit.
Another suggestion is to investigate the sort of housing that people want near transit. The multi-family zoning codes in Seattle have instituted a one-parking-spot per unit requirement for units with two or fewer bedrooms, but the requirement increases by half a spot per bedroom from there. Because building parking is expensive, this means at the margin a lot more one-or-two bedroom units compared to three or more bedroom units.
In a similar vein, demand for multi-generational housing has been increasing in recent years, which generally means more bedrooms per unit. Building good multi-generational housing could mean a net increase in affordability for the residents and an increase in ridership as senior citizens also make up a large portion of transit users. Not building enough could mean more seniors without access to transportation and also more demand on para-transit systems.
In all, the situation is not as bleak as I had first thought it was. A lot of rail transit is getting built in this country right now, and a lot of housing is going up around it. Cities and regions have been innovating new ways of ensuring some affordable housing is included when these lines are built. Though it might not be enough – in areas like this nothing ever seems enough – it’s a lot of small steps and some big ones in the right direction.