Does Density Matter?

If every challenge is an opportunity, then the housing shortage is a chance to reset the conversation about how and where to grow. 

Suburban sprawl has dominated development since the end of World War II, putting roofs over the heads of millions and millions of people but burdening communities with the consequences of an auto-dependent lifestyle.

“Your car is your prosthetic (in suburbia). Without it you are disabled,” said Ian Lockwood, a sustainable transportation engineer with Toole Design, a transportation design and engineering firm based in Silver Spring, Md.

Given the need to address the housing shortfall and the ills of auto-dependent development, the stars seem aligned for a wave of more compact, efficient and walkable development.

“I think that is a reasonable assumption, but the other part is that people just plain want it,” said Kate Kraft, executive director of America Walks, a coalition of walkability advocates based in Portland, Ore. “The demand is there for walkable neighborhoods.”

The need for more housing and the demand for walkability brings the D word — density — into play.

While density is often a lightning rod for debate over the wisdom of adding more people to already populous places, there’s more and more reason to think it’s a smart thing to do.

“We know from a variety of research ... that you can determine someone’s prosperity based on where they live,” said Christopher Coes, vice president of land use and development at Smart Growth America, a smart growth advocacy group based in Washington, D.C.

“What we continuously find,” Coes said, “is that (places) that bring amenities closer together, that have a mix of housing, have multiple transportation options and have easy access to opportunity — whether it’s jobs, education or medical support — generally outperform those that do not.”

“Foot Traffic Ahead: 2016,” a report published by Smart Growth America and the George Washington University School of Business, quantifies some of the ways density — in the form of walkable urban development — delivers economic benefits.

This analysis of the 30 largest metropolitan areas in the country found that walkable urban locations within each metro have gained market share over sprawling suburban locations in the office, retail and multifamily rental housing sectors.

Walkable urban places aren’t just grabbing real estate market share. They enjoy average rent premiums of 90 percent for office, 71 percent for retail and 66 percent for multifamily over drivable sub-urban products, according to “Foot Traffic Ahead.” They also correlate to higher GDP per capita and a more highly educated workforce as measured by the number of college graduates 25 and older.

“Foot Traffic Ahead” doesn’t address prices of for-sale homes, but a related study, “DC: The WalkUp Wake-Up Call,” found that homes in walkable urban neighborhoods in the Washington, D.C., metro sell for 70 percent more per square foot than those in car-dependent areas.

There is a downside to that, though. High prices put housing in walkable urban locations out of reach for many people.

“Part of the reason it’s less affordable is that there isn’t enough of it,” Kraft said. “It’s supply and demand. If we can find ways to build more, it will become more affordable.”

But that’s easier said than done.

“We had an auto-dependent development pattern for decades,” Kraft said. “Along with that you had the zoning ordinances that make that kind of development easier to do (and) you had banking and financing that was structured to support it.

“Developers now are more interested in dense development, but our zoning hasn’t caught up,” she said. “We’re seeing improvements, but it took a long time to get where Developers we are and it’s going to take a while to get to the point where there’s the same set of incentives to build dense development as (sprawl).”

One of the incentives that communities are waking up to is the higher tax revenues and lower infrastructure/ public services costs associated with dense development.

A report by Smart Growth America titled “Building Better Budgets: A National Examination of the Fiscal Benefits of Smart Growth” reviewed data from 17 previously completed studies from around the country. It found that denser development patterns generate an average of 10 times more tax revenue per acre compared to sprawl development.

The report also found that dense development saves municipalities an average of 38 percent on the upfront cost of infrastructure and 10 percent on the annual cost of public services through economies of scale.

Urban3, a land-use consulting firm in Asheville, N.C., uses technology to explain and visualize market dynamics created by tax and land-use policies — including creating three-dimensional models that depict a community’s tax production per acre as spikes rising out of the ground.

Whenever the model is applied to a city or a region, the tallest spikes always rise from the downtown core and other densely developed sites such as new urbanist neighborhoods.

That’s why Joe Minicozzi, principal at Urban3, rails at the sight of empty asphalt such as parking lots in otherwise dense areas. “That’s a wasted resource,” he said.

When cities and regions grow outward instead of inward, said Minicozzi, they dig a fiscal hole by obligating themselves to maintain infrastructure — roads, water, sewer, etc. — that tax revenues from low-density development cannot sustain.

“When a developer builds a road, it’s not a gift,” Minicozzi said. “It’s a liability that the community has to rebuild some 40 years later. You end up with all of this asphalt you have to deal with. It doesn’t disappear. You’re stuck with it.”

Before the advent of sprawl, there was typically a more efficient ratio between the size of the population and the amount of infrastructure needed to serve it.

During one of his many presentations, Minicozzi cited Lafayette, La., as an example. The city’s population has grown by 350 percent since 1950, but the amount of pipes and fire hydrants needed to serve the population has grown by 1,000 percent and 2,000 percent respectively.

The point isn’t to scold cities and regions, but to help them make informed decisions about how they use their most valuable asset — land — and determine the relative cost of sprawl versus more dense development.

“Let’s just at least account for all of this stuff and figure out whether or not we can afford (sprawl) and identify the subsidy,” Minicozzi said. “These are our communities and our neighborhoods and we need to understand what’s happening.”

Transportation takes a big bite out of both municipal and personal budgets. Density can help reduce costs by making active transportation — walking and biking — feasible alternatives and providing ridership to support transit.

“It turns out you spend a whole lot more money on just getting around if you go with low-density, car-dependent development,” Lockwood said.

Reducing reliance on cars and highways — “the most wasteful, resource-hungry method of conveyance ever invented in the history of mankind” — puts more money in municipal coffers to spend on things like parks and schools, Lockwood said. It also puts more money in the pockets of residents to offset the higher cost of housing in walkable neighborhoods.

“I see more cities getting a better understanding of how to retrofit themselves and become more walkable and transit-friendly,” he said.

One of the best opportunities can be found along old farm-to-market roads that became the arterial roads that feed the suburbs, Lockwood said.

“There’s usually a 300 to 600 foot veneer on each side of the road that is typically covered with surface parking lots and one- or two-story, low-value buildings,” he said. “That’s where you can put density. You can plan centers at logical spacings and create transit-ready corridors. ... that’s what Charlotte, N.C., has done.”

Five original farm-to-market roads that radiate out from the city have been designated for transit — either lightrail or bus-rapid transit — with about a dozen stations sprinkled along each and housing concentrated between the stations.

“That kind of strategy allows density to go where it makes sense — along these corridors where people can walk and take transit easily,” Lockwood said. “The south line was the first to open and for years now it has been a roaring success. The little station areas are like mini-downtowns and they are just thriving.”

In the end, the economic advantages of density will speak for themselves, Lockwood said.

“The cities that embrace the things we’re talking about ... density, better mixes of uses, are going to be more competitive,” he said. “Their taxes are going to be lower, they’re going to have better libraries, better schools.”

And the places that don’t?

“People are not going to live in those places,” Lockwood said. “They’re going to dry up.”

Brad Broberg is a Seattle-based freelance writer specializing in business and development issues. His work appears regularly in the Puget Sound Business Journal and the Seattle Daily Journal of Commerce.

Advertisement

About On Common Ground

A free, semi-annual magazine published by NAR, On Common Ground presents a wide range of views on smart growth issues, with the goal of encouraging dialog among REALTORS®, elected officials, and other interested citizens.

Learn more and subscribe