National Center for Smart Growth

Permanent URI for this communityhttp://hdl.handle.net/1903/21472

The National Center for Smart Growth (NCSG) works to advance the notion that research, collaboration, engagement and thoughtful policy development hold the key to a smarter and more sustainable approach to urban and regional development. NCSG is based at the University of Maryland, College Park, housed under the School of Architecture, Planning, and Preservation, with support from the College of Agriculture & Natural Resources, the A. James Clark School of Engineering, the School of Public Policy, and the Office of the Provost.

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Housing Market Impacts of Inclusionary Zoning
(2008) Bento, Antonio M.; Knaap, Gerrit; Lowe, Scott
Many communities across the country face affordable housing challenges. An increasing number of communities are considering inclusionary zoning as a response. Inclusionary zoning programs, which require developers to sell a certain percentage of newly developed housing units at below market rates to lower income households, are politically attractive because they are viewed as a way to promote housing affordability without raising taxes or using public funds. Standard economic theory, however, suggests that such programs act like a tax on housing construction. And just like other taxes, the burdens of inclusionary zoning are passed on to housing consumers, housing producers, and landowners. As a result, inclusionary zoning policies could exacerbate the affordable housing problem that they are designed to address. Although debate over the merits of inclusionary zoning has continued for nearly three decades, there have been no rigorous studies on their effects on housing prices and starts. We offer such an analysis here, estimating the effects of inclusionary zoning policies on single family housing prices, single family and multifamily housing starts, and the size of single family housing units in California over the period from 1988 to 2005. In our analyses, we are able to isolate the impacts of inclusionary zoning programs by carefully controlling for spatial and temporal conditions, such as the neighborhood or school district within which the house is located, and changing market conditions over time. We find that inclusionary zoning policies had measurable effects on housing markets in jurisdictions that adopt them: the share of multifamily housing increases; the price of single family houses increases; and the size of single family houses decreases. These results are fully consistent with economic theory and demonstrate that inclusionary zoning policies do not come without cost. Overall, we find that inclusionary zoning programs had significant effects on housing markets in California from 1988 to 2005. Although cities with existing or new programs during the study period did not experience a significant reduction in the rate of single family housing starts, they did experience a marginally significant increase in multifamily housing starts. More specifically, we found that in municipalities with inclusionary housing programs, the share of multifamily housing starts increased seven percent. The reasons for this shift are relatively clear when viewed in the proper context. Housing markets in California expanded rapidly over the 1990s as pent up demand exploded following the 1991 recession. The imposition of inclusionary zoning requirements was not strong enough to slow the overall rate of housing production but did cause a measurable shift from single family to multifamily housing production. We further found that the magnitude of this shift varied with the stringency of the inclusionary requirements. We also found that housing prices in cities that adopted inclusionary zoning increased about 2-3 percent faster than cities that did not adopt such policies. In addition, we found that housing price effects were greater in higher priced housing markets than in lower priced markets. That is, housing that sold for less than $187,000 (in 1988 dollars1) decreased by only 0.8 percent while housing that sold for more than $187,000 increased by 5.0 percent. These findings suggest that housing producers did not in general respond to inclusionary requirements by slowing the rate of single family housing construction but did pass the increase in production costs on to housing consumers. Further, housing producers were better able to pass on the increase in costs in higher priced housing markets than in lower priced housing markets. Finally, we found that the size of market rate houses in cities that adopted inclusionary zoning increased more slowly than in cities without such programs. Specifically, we found that housing in cities with inclusionary zoning programs was approximately 48 square feet smaller than in cities without inclusionary programs. Further, most of the reductions in housing size occurred in houses that sold for less than $187,000. These findings suggest that inclusionary zoning programs caused housing producers to increase the price of more expensive homes in markets where residents were less sensitive to price, and to decrease the size of less expensive homes in markets where residents were more sensitive to price.
Smart Growth, Housing Markets, and Development Trends in the Baltimore-Washington Corridor
(2003) Frece, John; Holler, Elisabeth; Knaap, Gerrit; Sohn, Jungyul
Maryland is a dense and rapidly growing state. For this and other reasons, Maryland has been a national leader in a movement known as smart growth. Smart growth has many objectives, but concentrating urban growth in well defined areas while protecting rural land from development are perhaps its primary goals. Though public support for smart growth continues to rise, so do concerns that policies used to promote smart growth could have adverse effects on land and housing markets. To evaluate these concerns, this study provides information on housing markets and development trends in the Baltimore-Washington corridor.The study finds that housing demand in the nation and in Maryland is strong, as revealed by rising prices and homeownership rates as well as by falling vacancy rates and housing-to-jobs ratios. In general, the housing market in Maryland exhibits trends similar to those in comparable jurisdictions, such as neighboring Virginia. The performance of specific housing markets in Maryland, however, varies widely, with strong growth in the suburbs, variable growth in rural areas and persistent weakness in Baltimore City. Further, in the Baltimore and Washington suburbs, housing prices are rising rapidly while housing starts remain sluggish. Though this study does not prove that housing markets and development trends in Maryland have been adversely affected by land use policies, there is evidence to suggest that state and local constraints on development are contributing to problems of housing affordability and deflecting growth to outlying areas. The result could be more, not less, urban sprawl. Moreover, neither the state government nor most local governments in Maryland currently have adequate policies in place to monitor or address this problem. While the Maryland Smart Growth initiative has been successful in protecting natural areas and agricultural lands from development, it has not had similar success in assuring a steady, future supply of affordable housing. Local governments, meanwhile, appear to have little incentive to address this problem. To address this problem the state needs to assure that local governments address development capacity and housing affordability issues. This does not mean it should eliminate or immediately expand Priority Funding Areas. It does mean that the state should require local governments to include housing elements in their comprehensive plans, provide periodic estimates of housing and employment capacity, and develop modern and publicly accessible data on the location and capacity of developable land. Local governments must be active and willing participants in this process and the Maryland Department of Planning should provide whatever technical assistance may be needed.
Transit-Induced Gentrification: Who Will Stay, and Who Will Go?
(2014) Dawkins, Casey; Moeckel, Rolf
Transit-Oriented Development (TOD) has been promoted by planners and policy advocates as a solution to a variety of urban problems, including automobile traffic congestion, air pollution, and urban poverty. This paper addresses the question: How do TOD-based affordable housing policies influence the intra-urban location of low income households over time? This paper examined historical descriptive evidence along with land use forecasts generated by the Simple Integrated Land-Use Orchestrator (SILO) land use model to examine the impact of housing policies on patterns of sorting by income within the Washington, D.C. metropolitan area. The historical evidence suggests that in most decades when Metro stations were opened, census tracts near transit stations saw higher increases in median household income than other census tracts. We also find evidence that income growth around stations constructed in the 1970s and 1980s persisted over time, while income growth around stations constructed during the 1990s was largest in the following decade. Consistent with other studies (Kahn 2007), we interpret these findings as evidence that some degree of transit-induced gentrification has been occurring in the Washington, D.C. region.