By now, the urban development policy debate has so many bogus talking points that, together, they can feel like the construction materials for one big house of cards. For example, anti-development activists, upon hearing of the housing shortages in their cities, often counter with the fact that there are a few construction cranes downtown, as if those alone will satisfy demand across regions with 5-figure annual population growth. Other times, activists will note that all the new housing is too expensive, and thus shouldn’t be built, having apparently never heard of “filtering” — or the way in which building new luxury units frees up older housing for lower income groups. Activists will also use the “induced demand” argument—that building new housing attracts rich people to cities—ignoring the fact that the rich often gravitate to cities, such as New York and San Francisco, with disproportionately older housing stocks.
But perhaps the most ridiculous straw man is the one which posits that certain U.S. cities are destined to remain expensive because they are “land-constrained.” Although the argument is used by Nimbys as a reason to just stop building, it has curiously been adopted by many pro-growth urbanists as well. In a 2016 Citylab article titled “Blame Geography For High Housing Prices?”, urban economist Richard Florida argued that affordability was a matter of being an “expansive” versus “expensive” city. Newer cities like Atlanta were expansive, adding lots of peripheral suburban housing and thus remaining affordable. Older coastal cities like San Francisco, he wrote, once grew like this, but couldn’t anymore because of geographical constraints, and were thus expensive.
“Cities such as L.A., Seattle, and San Francisco face hard physical boundaries like coastlines and mountains, which in addition to policy decisions that may limit height or density, can also serve to limit capacity for expansion.”
Todd Litman, executive director of the Victoria Transport Policy Institute, a smart growth organization, also invokes this argument, claiming that “the least affordable [cities] are attractive, economically successful and geographically constrained coastal cities, while all those that expanded their residential areas are unconstrained, inland urban regions.”
A similar distinction between cities that are geographically elastic or inelastic was drawn in this paper by MIT economist Albert Saiz.
But the land-constraint argument for high home prices is wrong in two ways. The first way is one freely acknowledged by Florida, Litman and other urbanists: cities can always just grow up. Even if a city is geographically constrained—take the 277-square-mile island city-state of Singapore—it can tear down low-intensity uses and build higher. This goes for U.S. cities, too, such as San Francisco, where most land is zoned either for single-family residential homes or low-density multi-family apartments, and where changing these codes is difficult. In this respect, constraints against new housing are political, not geographical.
But the second big flaw with the land constraint argument is that U.S. mainland cities are not, in fact, geographically constrained–in almost any way whatsoever–and the tough topography they do have is irrelevant to home prices. In fact, the land constraint argument, upon further review, is sheer fantasy—the type of thing someone would say if they’ve never been to these cities, nor even glanced at them on Google maps. A place like San Francisco might have a small municipal boundary; and some parts around it are consumed by ocean, bay or mountains. But there is still plenty of space to grow — including right around the city.
I noted this recently for Forbes in an article titled “How Would San Francisco Develop Under An Open Market?” There is much raw, developable land north and south of the city, as well as east of San Francisco and the East Bay cities of Oakland and Berkeley. According to a San Jose Mercury News report, 75% of the Bay Area is open space. The two counties with the most preserved acreage sit, respectively, just south of San Jose and just north of San Francisco. All this land not used for housing is instead preserved as public parks or open space, or zoned for agriculture. In other words, similar government regulations that prevent San Francisco from growing up prevent it from growing out.
Cordoning off this land means much of the Bay Area’s new development gets pushed into further exurban municipalities — which, of course, further destroys the notion that the region is land-constrained. Some Bay Area commuters even arrive nowadays from Stockton, a city 83 miles east. Much of that land between San Francisco and Stockton is perfectly flat, but is also forbidden by the government from development. Given these facts, to complain about the region’s geographical constraints is frankly ludicrous; San Francisco is little different than Atlanta, Houston or Dallas in the amount of housing development it could theoretically handle.
The same goes for New York City, DC, Boston, Miami, Los Angeles, Seattle or any other coastal U.S. city that Nimbys and urbanists alike claim are land-constrained. None of them can grow into the ocean, true; but they can grow vertically, and they can grow outwards in most any direction. And they often do — at least when the government allows this.
[This article was originally published by Forbes.]