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Why Height Limits Aren't the Right Answer to High Land Prices

Informal settlements often consist of fairly incremental and modest buildings of the type that Marohn discusses, but in dense forms not usually allowed by modern American zoning. Rio de Janeiro is so dense that the only transit solution to moving people up and down the hillsides was to put in these ski-lift style transportation centers the streets are too small and steep for anything else).
Strong Towns founder Chuck Marohn has started an interesting discussion of Portland Oregon that is worth reading. The discussion builds off of other pieces Marohn has written about height limits in the past (for a good reply, read Alon Levy). Portland is having growing pains, and Marohn says that the cause is too liberal a zoning regimen. From the article:
On a walking tour there, we strolled through blocks and blocks of gaps -- empty and underutilized lots -- just off of their core downtown. I pointed out a nice little home as an example of what the city should be striving for to fill in these gaps and then pointed to the adjacent vacant lot as the perfect place to start. That was when I was informed that the vacant lot was zoned T-5 Urban Center (2-5 story multi-family housing) and that the owner wanted $600,000 for it, making my proposed modest home financially impossible. 
I asked why this land was zoned T-5 when there was so much underutilized property in the area, so much dead space. The answer was exactly what I heard in Portland and exactly what I heard in Austin: we're growing. 
Supposedly there is so much demand for housing in San Marcos that T-5 zoning is needed -- all that high density development is necessary -- to meet the demand. I walked around for hours and experienced an endless amount of underutilized property, just as I had outside the cores of Portland and Austin. It was more property than would ever be utilized as T-5 and it was sitting there, high priced and waiting for the right buyer to come by and make the owner rich. 
The highly-planned city of Brasilia, which became the capital of Brazil in the 1960s, has this tower-in-the-park style that people found entrancing and beautiful at its inception, but which has proven to be extremely auto-oriented and alienating (where can you walk?). But would you solve this problem with height limits, or would you open up access to development of the kind that happens in Rio?

Marohn says that this problem is caused by zoning for high density. The areas that are underdeveloped have the right to put in taller buildings, but that process of zoning them for higher use means that the land prices spike. Therefore, it makes no sense to develop something that is less than the highest use. You won't pay $600,000 for a small plot to put a single-family house on. It only makes sense to do so if you're going to build something that can house a lot more people. Hence, you get a binary effect: either you get really dense development, or you get nothing.

I agree with the core of Marohn's diagnosis, but not his prescribed treatment. According to Marohn:
The simple answer is downzoning. 
What if along all these rail corridors and at all of these rail stops, instead of being able to build an eight-story condo unit, all a developer was allowed to build was the next increment of intensity? For most of that area, that would mean single family homes. In that case, what would happen to land prices? They would drop. They would crater, in fact. This would free up an incredible amount of land for cheap, affordable development while also taking a substantial amount of pressure off of the existing single-family neighborhoods.
Marohn is right to say that cities should be okay with accepting smaller buildings in place of high rises, with the assumption that over time those buildings will gradually upzone themselves as demand pushes for those changes. In a way, I feel vindicated to hear a national leader say this, because in Providence at least I've heard a lot of urbanists propose that the Jewelry District has to spring into fully-formed high rise status from the starting point of being a parking crater, and to my mind it would be much more realistic to expect fairly small buildings to pop up first, like the succession of a forest.

GCPVD's "parking crisis" captures the problem of vast stretches
of un-used land in Providence's downtown. Would a land tax fix
that problem?
I think the better way to fix the problem would be to institute a very high land tax, and to lower property taxes with whatever revenue that tax raises (why this isn't front and center in Marohn's proposal isn't clear to me, since he does make strong arguments elsewhere in his web writings). If someone has a very expensive piece of land, what makes them hold out on that property until the perfect high rise comes along is the calculation that there's no downside to that speculative bet. Putting a high land tax in place would fix this. Down-zoning is silly, because it tries to force what development does come to spread itself out along a whole corridor. If land prices were lowered, it would not necessarily lead to people not being willing to build high rises. It would just increase the amount of other development options that were available. So, in that way, I think Marohn's solution doesn't really attack the roots of the problem, and it creates a lot of other ones.

Dense places like Philadelphia can be built as mostly two- and three-story places, but that doesn't mean that requiring cities to follow that pattern is a good idea. The streets of Philadelphia are mostly very small (sometimes almost Medieval in scale; more often just "normal" scale streets at 10' with a parking lane beside it). Philly does have height limits, but I don't think height limits are what produced this effect (and now that Philadelphia, like Portland, is growing, those height limits could actually worsen gentrification).
Bringing it back to Providence, this issue of speculation is one reason I propose a really high parking lot tax, which in the case of the Jewelry District would be a tax on most of the underdeveloped land, and using that funding to lower property taxes. A parking lot tax is essentially a land tax, except it's a somewhat more targeted one. It hits the development style that is by far the "lowest use"--parking-- but it doesn't try to prescribe a "highest use" (in most cases, high rise development). That way, the neighborhood can grow more naturally, sometimes producing large buildings, but probably more often producing what Marohn calls "the next interval" of development.
Dense cities can be made up of relatively small buildings. The oldest residential
block in the U.S. is Elfreth's Alley (the 100 block of Cherry Street) which is just
made up of the preserved working class rowhouses of the 18th Century. But these
houses are very expensive now. Requiring entire cities to stick to height limits 
does not allow the city to grow with its population.

Being "density obsessed" in the way Marohn describes is a problem. The city I was most aware of growing up was Philadelphia, which despite being the second largest on the East Coast and one of only a handful of truly dense, transit-oriented cities in the country, is basically a two- and three-story city almost everywhere but Center City. The density of Philly is based on every space being filled, and on the walkability that that creates, rather than on towers in the park. So I think that this discussion of how to build middle intervals of development is really important (and all the more so because I agree with Marohn's fear that having only the extreme ends of development worsens sprawl and/or gentrification). But the way to fix it shouldn't be through down-zoning, which I think just adds one more spiral to the Rube Goldberg machine.


1 comment:

  1. Thanks for focusing on this very real problem; it's a very common situation across the country. Setting the proper development expectations for a neighborhood may result in "down zoning" OR in "up zoning"; neither is inherently good or bad. More likely the solution is a combination of downs and ups in a single package that carefully avoids under-utilization of land while also avoiding the kind of speculation that keeps land vacant. Too bad high land taxes aren't legal in most states -- it would be a great solution, but sadly it's rarely a legal option.