09 Feb 2005 Containing Sprawl: The True Cost

National Center Policy Analyst Ryan Balis has a letter in the Washington Post today on the cost of containing sprawl.

As per usual with environmentalist schemes, the cost of “smart growth” anti-sprawl initiatives tends to be borne by those who can least afford it.

As Ryan says in his letter:

The Feb. 3 Metro story on plans by the District and other area officials to control “suburban sprawl” with ever-denser development [“Building Strategies to Map Out Growth“] did not address the policy’s effect on rising home prices.

Suppressing housing development as demand for it grows will cause prices to skyrocket. This is evident in Portland, Ore., long considered a model for “smart growth” planning. There, fewer than half the homes in 2002 were affordable to median-income earners. The city plunged from the 55th-most-affordable city in the country in 1991 to 163rd place in those rankings in 2002.

Is the Washington area going to follow in forcing out thousands of low- and middle-income residents?

Ryan Balis
Policy Analyst
National Center for Public Policy Research
Washington

The National Center has published an econometrics study examining the impact of so-called “smart growth” policies. Based on an examination of the record of the policy in practice in Portland, Oregon, the study revealed that smart growth housing restrictions disproportionately penalize minorities, the poor, urban families and the young.

What’s more, the policies fail to generate the expected environmental benefits, actually increasing suburbanization rates while failing to reduce vehicle miles traveled or congestion.

Our study asked this question: If cities nationwide had adopted Portland’s smart growth policies in 1992, how would America’s most disadvantaged populations been affected by 2002? We learned:

1) 260,000 minority homeowners circa 2002 would not have been able to become homeowners;

2) One million homeowners of all races circa 2002 would not have been able to afford their homes by that year;

3) The average home price in 2002 would have been $10,000 more expensive;

4) The average cost of renting a home or apartment in 2002 would have increased six percent over its actual price.

We dubbed our report “Smart Growth and Its Effects on Housing Markets: The New Segregation” — so named because smart growth policies deter minorities from home ownership at disproportionate rates.

The study is available for download (PDF file) here.