Density or Sprawl? How To Solve the Urban Housing Crisis

Land use regulation is making cities unaffordable. In an unfettered market, how would Americans choose to live?

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The mass migration of human beings from the country to the city started with the Industrial Revolution. According to the U.N., 2007 was the tipping point when more of humanity lived in urban than rural areas. And the trend continues: A projected two-thirds of the global population will live in cities by 2050.

In the U.S., cities have become remarkably expensive because housing prices have outpaced wage growth. Developers don't build enough new supply to meet rising demand because a thicket of regulations artificially drive up building costs.

Is the solution more density in the core or more sprawl in the periphery—or both? If governments were to remove the artificial restrictions and incentives that shape the landscape of American cities, how would urban dwellers choose to live?

"There is a huge pent up demand for density and for urban living that simply is not being able to get met because of the restrictive zoning," says urban policy analyst Scott Beyer, founder of The Market Urbanism Report, which promotes market-based solutions to urban planning issues.

Beyer says that urban residents want to live close together in the center city, but that local and state governments are making that difficult with land-use regulations, citing onerous building codes and environmental and public review requirements.

"It really goes down the list of all the different ways that the government controls the pricing and use of land," says Beyer.

Libertarian urban policy analyst Randall O'Toole, who calls himself "the Antiplanner," agrees that many city governments overregulate land use but disagrees with Beyer's claim that more density is the answer to housing affordability.

"Truly affordable housing would be low-density housing built on the urban fringe," says O'Toole. He blames so-called "smart growth" policies meant to increase urban density for discouraging land outside of a city proper from being developed at all—a goal furthered by the passage of then California State Senator Darrell Steinberg's 2008 anti–greenhouse emissions law.

Eight years ago, Southern California's planners adopted a 23-year regional plan to help realize Steinberg's vision.

"The goal that urban planners have had for many years is not to make housing more affordable, but to pack people into higher-density urban areas," says O'Toole. "And that's a goal that I don't think Americans should support." 

Beyer agrees that cities should loosen urban growth boundaries, but he argues that more density, not sprawl, would still be more likely in cities San Francisco, citing high land values as evidence of the pent-up demand.

Beyer also points out that homeowners typically don't pay the full cost required to get roads, electrical lines, and other city infrastructure out to the suburbs.

"And so I kind of view the suburbs as an outcome of social engineering and government planning to a degree. And I look at urban density as the outcome as a more organic market-based outcome," says Beyer.

The density question can only be answered if the government stops interfering with the housing market, allowing consumer preferences to shape the urban landscape.

And that's something O'Toole and Beyer would both like to see.

"The government control of land use and zoning has caused housing to be unaffordable," says Beyer. "And I think that market urbanism is a way to reverse those trends."

Produced by Zach Weissmueller. Camera by Jim Epstein, Andrew Hinton, John Osterhoudt, Justin Monticello, and Weissmueller. Graphics by Lex Villena.

Music: "Phase 2" by Xylo Ziko used under an Attribution-Noncommercial-Share Alike Creative Commons License; "Hallon" by Christian Bjoerklund used under an Attribution-NonCommercial-ShareAlike 3.0 International License.

Photo Credits: "Jane Jacobs" by Ron Bull/ZUMA Press/Newscom; "Darrell Steinberg" by Joan Barnett Lee/ZUMA Press/Newscom; ID 101299198 © Gábor Kovács | Dreamstime.com ID 111434954 © Jim Roberts | Dreamstime.com ID 131696329 © Ricardo Vallejo | Dreamstime.com ID 12653034 © Georgii Dolgykh.