Compact cities not cure for house prices

• Zoning restrictions increase land supply shortages and dramatically reduce housing affordability.
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• Less restrictive planning regimes in the United States and Europe have consistently nurtured affordable housing markets for decades.
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• High public transit investment is unlikely to meaningfully reduce traffic congestion levels in the long term.
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(Wellington) – Local councils looking to tackle housing affordability and congestion by limiting land supply will only make the problem worse, according to the latest research report from The New Zealand Initiative.

The report, Up or Out? Examining the Trade-offs of Urban Form, comes as an increasing number of the country’s councils are in the process of adopting compact city development strategies to address high house price inflation, congestion, and declining liveability in urban areas.

The compact city ideology is built on the belief that cities should be sustainable in their use of resources. These policies take many forms, but are principally concerned with restricting the outwards spread of the urban footprint.

In short, compact cities seek to build up, instead of out.

Yet an international examination of the historical and academic record shows this planning ideology failed to deliver any meaningful improvements on these measures, and in many cases exacerbated the problems it sought to solve.

“The evidence is plain to see, especially in places like Auckland, where urban development limits and building restrictions have significantly contributed to the price of land,” said Executive Director Dr Oliver Hartwich. “Yet many councils, like Tauranga and Wellington, appear to have missed the link between land supply and housing affordability, and are pursuing their own compact city agendas.”

The report also shows that the ideology, with its focus on high public transit investment, was unlikely to meaningfully reduce traffic congestion levels due to the utility that private vehicles offer groups in society, such as working parents and those who do not work in the CBD.

Furthermore, evidence cited in the report by the US Environmental Protection Agency shows a strong relationship between high population densities, traffic, and pollution concentrations.

“We’ve seen the same trend of high house prices and congestion again and again when examining the track record of compact cities,” said Hartwich. “These are facts that are hardly ever discussed by city officials when they take their development strategies to voters, which are instead coached ‘clean-green’ platitudes. We hope this report will change that.”

The report found that:

• Zoning restrictions have been quantifiably shown to increase land supply shortages and dramatically reduce housing affordability.
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• New Zealand’s main cities are characterised by severely unaffordable housing markets.
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• Far less restrictive planning regimes in the United States and Europe have consistently nurtured affordable housing markets for decades.
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• US cities that have chosen to pursue compact development strategies tend to be more congested than dispersed urban environments (urban areas in North America most resemble New Zealand cities).
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• There is a weak relationship between high population densities and low obesity rates.
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• Topology and climate have a bigger influence over walking and cycling activity levels than urban form.
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• quantitative research in Vancouver, a compact city, shows urban areas with high walkability are exposed to significantly higher primary pollutants than suburban areas.
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