Does density promote affordability? Economists say yes, public skeptical
By ADAM BELZ
Star Tribune (Minneapolis)
May 31. 2018 9:38PM
A view of downtown Minneapolis. (Dreamstime)
— A dozen people sat at a table in a rec center in south Minneapolis, debating the city's comprehensive plan as a giant fan roared nearby.
A city staffer explained the rising burden of rental prices on poor residents, and gently pushed a central theme of the draft plan — that the city must build more homes in more places — to a group peppered with skeptics.
"If you just let the market promote density, that doesn't necessarily trickle down to affordable housing," said Lara Norkus-Crampton, a south Minneapolis resident. "If it was just density that provided affordable housing, then Hong Kong and New York City would be the most affordable places on the planet, and they're not."
Norkus-Crampton's view cuts to the core of the debate as the city takes public comment on a comprehensive plan that will be finalized before the end of the year. It would be a bold experiment, allowing fourplexes the same size as a large home in every residential neighborhood, and dramatically loosening restrictions on the height and type of buildings allowed on dozens of transit routes throughout the city as part of an effort to drive down rental prices.
Economists agree that cities can stabilize the cost of housing by loosening zoning to allow more construction in more places. But few cities have done this since the 1950s, and those who study the economics of housing admit both that prices won't immediately fall in neighborhoods with new apartments, and that without a regional or even national move to relax single-family zoning laws, the effect of rising density on rents will be difficult to discern in Minneapolis.
"You still see prices that go up," said Bryce Ward, an economist at the University of Montana. "It just means that they may not have gone up by as much as they would have otherwise."
Residential density is politically unpopular everywhere. San Francisco residents have successfully resisted density for decades. A new law passed by the California state legislature that would allow denser construction near public transit was unanimously opposed by the Los Angeles City Council in March.
Seattle, which has attempted to encourage density in some neighborhoods and is trying to levy a tax on big companies like Amazon to help pay for housing for the homeless, still has deeply restrictive zoning. Anything other than a single-family home is banned in 70 percent of the city.
Ward, who has co-authored several papers on zoning and affordability, said the public must understand that opposing density is a choice in favor of either sprawl or high prices.
"If you don't like to densify and you don't like sprawl, then the only other option is to just say, ‘Sorry. Prices are going to be high,' " he said.
A fourth option, Ward said, would be much larger subsidies for housing or imposing rent control.
Heather Worthington, the city's director of long-range planning, said the comprehensive plan is about far more than density. Promoting job growth, expanding access to public transit, adding different types of housing in different neighborhoods and making the city more resilient to climate change are all parts of the plan.
"Building more housing in the city will not drive affordability on its own, but it is necessary as a prerequisite to other affordable housing strategies," Worthington said.
Other tools include more public housing subsidies, along with better rules and incentives as new units are developed, she said.
"Density can be a dirty word in development, especially in a city where a single-family, 40- to 50-foot lot, has been a fairly dominant development type," Worthington said. "So, I think pushback is natural."