URBAN PLANNING AND HOUSING AFFORDABILITY

10th Annual Demographia International Housing Affordability Survey: 2014

Introduction by Alain Bertaud, Urbanist, Senior Research Scholar, Stern School of Business, New York University, Former Principal Planner - The World Bank

This year, Demographia is publishing its 10th Annual International Housing Affordability Survey. It ranks 360 metropolitan markets in nine countries.

Are planners in the worst performing cities paying any attention?  And are they drawing any conclusions on how to improve the situation? Or do local governments conclude that the best way to increase the supply of affordable housing is to impose new regulations that will mandate developers to build housing units at prices, standards, and in locations selected by the government?   The last approach, under the name of inclusionary zoning is unfortunately the most common response, as recently seen, for instance, in New York and Mexico City.  

Urban planners have been inventing all sorts of abstractly worded objectives to justify their plans for our future cities – smart growth, livability, sustainability, are among the most recent fads.  There is nothing wrong, of course, for a city to try to be smart, livable, or sustainable. But for some reasons these vague and benign sounding objectives usually become a proxy for imposing planning regulations that severely limit the supply of buildable land and the number of housing units built, resulting in ever higher housing prices. In the name of smart growth or sustainability, planners decide that densities should be lower in some places and higher in others. Population densities are not a design parameter whose value depends on the whim of planners but are consumption indicators which are set by markets.  

Even the Communist Party of China recently declared that resource allocation is best achieved through markets; why can’t urban planners in so-called market economies reach the same conclusions and let markets decide how much land and floor space households and firms will consume in different locations?

It is time for planners to abandon abstract objectives and to focus their efforts on two measurable outcomes that have always mattered since the growth of large cities during the 19th century’s industrial revolution: workers’ spatial mobility and housing affordability.... 

Soon-to-be major metropolitan area Honolulu was the least affordable in the US, which at 9.4. In the international rankings Honolulu trailed only Hong Kong and Vancouver. Santa Barbara was second least affordable (9.3) San Francisco (9.2) ranked third, with nearby Santa Cruz as third fourth least affordable, at 9.0. San Jose was the fifth least affordable market (8.7).

Eleven of the twelve most unaffordable markets in the United States were in California, including five in the San Francisco Bay area (San Francisco, San Jose, Santa Cruz, Napa and Santa Rosa)....

United States: The United States continues to be home to some of the most productive land use regulation in the world, which has resulted in its superior housing affordability (for example, Atlanta, Dallas-Fort Worth, Houston and Indianapolis). The United States is also home to some of the most counter-productive land use regulation, which is evidenced by severely unaffordable housing (for example, San Francisco, San Jose, Los Angeles, San Diego, New York and soon-to-be major metropolitan area, Honolulu).

NOTE:  Honolulu could exceed 1,000,000 in population by 2015, at the current growth rate.

read ... 10th Annual Demographia International Housing Affordability Survey: 2014

Bloomberg: Oahu No. 3 on global list of least affordable homes