The Price of a Little Piece of Paradise

A report has been released by the research firm Demographia on the relative expense of home-ownership in cities across Australia, Canada, New Zealand, the UK, and the US. The major cities in Cascadia were rated as some of the most unaffordable in the study, which based its rankings on median home prices in each city relative to its median income.

The report concludes that the cause of unafforability of housing in the high-ranking cities is what they call "land use planning excesses." These include:

1) Land Use Policies that Produce Unaffordability, such as land rationing (urban growth boundaries and infill requirements), extravagant amenity requirements, excessively high infrastructure fees and approval processes that are unnecessarily lengthy and complicated.

2) Ignoring the Economic and Social Dimensions, by which they mean governments imposing restrictive planning policies without fully considering the ultimate impacts on the economy and quality of life.

3) The Emerging Costly Reality of Land Use Planning, by which they mean that restrictive land use policies compromise the competitiveness of urban areas, leading to less economic growth.

Their conclusion is that land use planning erodes (or, as they stated, "destroys") housing affordability. Demographia is self-monikered as "pro-choice" with respect to urban development. This is another way of saying they are a property rights advocacy group. So, the conclusions should be looked at carefully (skeptically?), based on the implicit mission of the organization's work. And, although the research seems to be sound, the scope of factors they consider are very narrow. Cascadia Report highlighted some factors omitted by the report that should be considered when calculating affordability, such as interest rates and robustness of economies as well as other considerations such as efficient public transportation that frees residents from the need for private cars, thus lowering their living expenses.

Further, although the findings of the report may be accurate, the benefits to the long term health of a city through policies and codes to contain urban sprawl, protect environmental health, and maintain cautious review of building and development applications for safety and quality of life standards are effectively dismissed as beside the point.

Yes, living in the cities of Cascadia can be expensive. Part of the cost does have to do with urban planning demands and development restrictions, and the report makes many valid points. However, there are great benefits that come with many of the expenses incurred by urban planning and oversight. If Cascadia were to focus on affordability to the exclusion of concern for the environment and other assets, the livability would erode and with it the economy of the region as its attractiveness to residents and business alike would be "destroyed" over time.

As a final consideration, it should be noted that lowering government-imposed costs on development in a region with a robust economy and high livability would not necessarily make the area more affordable. It is a supply and demand world, and the developers here would likely just reap a greater profit on development leading to equally "unaffordable" homes that are less sustainable and degrade the livability of the region.