A walkable street in Tennessee.

#196 Fall 2019 — Transit

Blame Zoning, Not Public Transportation, for Displacement

As long as there’s a shortage of transit-rich, walkable neighborhoods, piecemeal solutions to address affordability issues won’t be enough.

Main Street in Erwin, Tennessee, is treasured among residents for its walkability. photo by Brian Stansberry, via Creative Commons, CC BY 3.0

A walkable street in Tennessee.

Main Street in Erwin, Tennessee, is treasured among residents for its walkability. photo by Brian Stansberry, via Creative Commons, CC BY 3.0

We are told that the free market will fill needs we didn’t know we had. But when it comes to housing, the “free market” is an empty promise: we make it illegal to build the places where people want to live.

In the past 60 years, the United States has abandoned the only urban development pattern humans have ever known—walkable urbanism—in favor of hastily built, spread-out, low-density cities and towns where the only reasonable transportation option is a personal car or truck. We call this sprawl. This drivable suburban development pattern can be found across America’s metropolitan areas.

Most real estate developers and investors, government regulators, and financiers are intimately familiar with the drivable suburban model, having made it the default development formula and macroeconomic driver throughout the mid- to late 20th century. In addition to amplifying the real estate market, this model fueled demand for automobiles, drove road construction, and boosted the finance, insurance, and oil industries. In short, this development model appeared to provide a solid foundation for the U.S. economy for the better part of a century.

But while businesses have turned sprawl into a somewhat viable commercial product, sprawl has taken a toll. It has wrecked our environment, harmed public health—through air pollution, sedentary diseases from sitting in vehicle traffic for hours, and increased social isolation, stemming from physical isolation—and undermined upward economic mobility. How can families expect to get ahead while paying exorbitant sums for the “right” to drive their depreciating cars for hours every day just to get to work while wages are stagnating? (AAA estimates that it costs more than $8,000 a year to own a car, with expenses including fuel, maintenance, insurance, and more. An annual unlimited transit pass in New York City costs $1,500.)

Sprawl doesn’t just lower our quality of life: it kills people. Every year, more than 35,000 Americans die in car crashes (as motorists, passengers, pedestrians, or bicyclists), and this number is rising. While cars get safer for people inside them, the number of people killed while walking or biking has risen by 35 percent over the last decade, according to Dangerous by Design, a report by Smart Growth America, the parent organization of Transportation for America, where I serve as director.

Given sprawl’s staggering toll, it’s no wonder that people want to live in walkable and transit-served areas—the type of urban development that has characterized human society.

Smart Growth America defines walkable areas as a clustered development that contains a diversity of housing types (like apartment buildings, duplexes, and single-family units), important destinations (jobs, services, and retail), and connections through multiple transportation options, such as bus and rail service, cars, bicycles, and walking. For residents of the walkable, transit-oriented urban place, many destinations such as work, school, stores, and restaurants are within about half a mile of home, and others are easily reachable without a car.

Placing life’s daily necessities within a half-mile walking distance is how we built cities for thousands of years. From ancient Mesopotamia to the 19th-century United States, cities and towns were compact and usually built with a street grid and public spaces—all qualities that today’s sprawling cities are lacking and that are often illegal under modern land use codes.

In a return to human nature, walkable urbanism is surging in popularity, according to Foot Traffic Ahead, which ranks the 30 largest metropolitan regions in the U.S. by the amount of existing and potential walkable urban real estate. As our findings demonstrate, and previous metro-level research has shown, walkable urbanism is emerging as a rising or even dominant factor in real estate development across U.S. metros.

This trend is not confined to coastal cities, those with pre-World War II roots, or economic superstars. Walkable urbanism, also known as areas where walking to work, schools, grocery stores, and other destinations is possible (think Greenwich Village), is on the rise in the Rust Belt, the Sun Belt, tech metropolises, government centers, and millennial magnets. And the trend is dramatic. In the most highly ranked walkable urban metros, 72 percent of 2010-2018 office and rental multifamily real estate by square footage is now walkable urban. Walkable urban real estate generates substantial rental premiums, indicating a tsunami of pent-up demand for walkable urban development. For example, for-sale housing in walkable urban places in the 30 largest metro regions is appraised nearly two times higher than the remaining for-sale housing market in the largest 30 metros. Foot Traffic Ahead also shows that the demand for drivable suburbanism in certain real estate product types, like single-family housing, has been satisfied in many metro areas.

However, the growing market value of walkable and transit-served neighborhoods has one surprising similarity to the boom in suburbs, where certain industries profited: not everybody benefits.

Growing Interest in Walkable Neighborhoods

Because walkable, transit-accessible areas are scarce (they make up less than 1 percent of the total land mass in the top 30 metropolitan regions) as demand for them increases, the law of supply and demand takes hold: living in these neighborhoods is becoming more expensive. Rental premiums for multifamily housing, office, and retail space in walkable areas increased by 19 percent between 2019 and 2018.

Interestingly, as the middle and upper classes abandoned the cities for new suburban communities, many of the existing walkable communities were left to low-income people and people of color. Due to explicit government policies from the 1930s through 1960s that denied people of color the right to benefit from federal programs that would allow them to also leave cities, as well as redlining in many suburban communities, they had no choice but to remain in areas that may have been walkable, but had crumbling amenities. Low-income people and people of color are now being displaced from their homes as walkable and transit-served areas grow in desirability. In fact, the premium placed on these neighborhoods has caused many residents of low-income neighborhoods to fear or resist increased transit service and density, because of the short-term cost effects. According to a recent report from the University of Minnesota Law School’s Institute of Metropolitan Opportunity, around 464,000 low-income people have left gentrifying neighborhoods in the 50 largest U.S. metro areas since 2000.

Everybody—no matter where they live or who they are—deserves to live in a place that is healthy, prosperous, and resilient. But sprawl’s legal legacy, more so than its physical legacy, makes delivering this right nearly impossible. We’ve made the organic places where people want to live—and have lived in for millennia—illegal through our development rules. By not allowing multifamily dwellings—even forbidding the simple duplex over 70 percent of most cities’ land area—we create artificial scarcity that makes real estate in the few walkable, transit-served areas incredibly expensive. While we need to mitigate the affordability effects of adding transit and designing for walkability in the interim, that affordability problem is a matter of supply and demand that won’t actually be solved until there are enough walkable, transit-rich places for everyone who wants to live in one.

In the mid-20th century, all levels of American government used regulatory, tax, and subsidy policies to remake the way America got built, like our federal transportation program that still prioritizes building high-speed roads that hasten sprawl, for example. But the biggest culprit has been zoning.

Zoning’s origins are not nefarious. The idea of separating different real estate uses, like residential buildings from industrial ones, came from the dangerous pollution and overcrowding in turn-of-the-20th-century American cities, starting with setbacks in 1916 New York City to ensure that skyscrapers let sunlight down to the street below. In fact, separating housing from commercial development was encouraged by the federal government through the commerce department under the leadership of Herbert Hoover.

Zoning became a tremendously powerful tool in shaping new suburbs to accommodate cars in the early 1900s. Towns and cities wrote new zoning rules that required communities to be built so that where people lived, worked, and played were far apart. Replacing the age-old mixed-use development, suburbs took zoning to an extreme, and a hierarchy of roads—meandering, circuitous residential streets, lined with detached single-family houses—replaced the traditional street grid, thus ensuring that no one living there could walk to the store.

Suburbs’ lack of a walkable street grid also makes providing a reliable, convenient, and affordable public transportation network impossible, thanks to simple geography. Street grids cut down transit costs—making it possible to provide frequent transit services at a low cost to riders—by reducing the number of routes needed to serve a larger number of people. “Cities or districts with labyrinthine local street patterns that obstruct pedestrians (Las Vegas, most of Phoenix, much of suburban Southern California) will have a harder time becoming transit-friendly even though they have a grid pattern of major arterial streets; pedestrians can’t get out to the grid arterials easily or cross them safely,” writes transit planner Jarrett Walker.

Suburbs are not designed to be walked or to be navigated by public transportation. But there’s something real estate developers, investors, government regulators, and financiers boosting the suburban boom failed to consider: people like to walk, and many don’t want the expense and trouble of owning a car.

“You can find ‘illegal neighborhoods’—as in illegal to replicate today, despite that many are stable and prosperous and well-loved places—in Portland and Somerville and Lexington and Milwaukee and pretty much anywhere you could throw a dart at a map,” writes Daniel Herriges in a Strong Towns article, “Making Normal Neighborhoods Legal Again.”

“Upzonings [the movement to increase housing density] have been portrayed, especially by opponents but sometimes by supporters, as a radical experiment or a novel strategy for solving pressing problems. They are neither radical or novel. They’re better understood as a partial return to the historical norm: neighborhoods that are free to contain an eclectic range of housing types to match the eclectic range of households and needs that exist, and neighborhoods whose composition and physical form might evolve over time.”

Changing zoning codes to create the communities that the market wants—more walkable and transit-served neighborhoods—could prevent displacement by increasing the housing supply. But what is sure to generate displacement is perpetuating government regulations that make it impossible to build the neighborhoods most people are seeking. If we continue to do this, these neighborhoods will only be available to those that can pay the premium to get this rare gem. But living in a walkable neighborhood and enjoying the health, economic, and quality of life benefits that come with it shouldn’t be a luxury good; those benefits should be for everyone.