The last three months have demonstrated just how closely Smart Growth and Sustainability are related.  My last post was pre-Wall Street meltdown, but we now live in a new world – at least financially.  If we’re smart we will give some thought to how our planning policies and decidedly “un-Smart Growth” have contributed to the financial crisis and what we can do to avoid a repeat in the future.  Poor planning did not “cause” our current financial hardships, or course – part of the reason this crisis is so serious is that it was not caused by any one thing.  But poor planning and land use controls did contribute to it. 

My hometown of Denver, Colorado, was one of the first to see the real estate bubble start to pop earlier this summer.  After years of building more new homes than we had families to fill them, and without a significant price drop, we knew it was only a matter of time.  As interest rates rose the fastest growing moderate-income neighborhoods soon became some of the nation’s leading grounds for foreclosures — particularly to the northeast around Denver International Airport.  While southeast Denver had also enjoyed very robust growth, prices there were higher because of proximity to the Denver Tech Center and its tens of thousands of jobs.  To the northeast the airport was the only major employer, but convenience to the airport and less expensive land were powerful draws for new development.  Starter homebuilders often have to focus on areas where lower land costs translate into lower sales prices, and these become the “drive-til-you-qualify” corridors.  If you can’t qualify for enough loan to buy these houses, drive a little farther out and see if you can qualify for the slightly less expensive homes in the next subdivision.  But even when they did qualify, many buyers didn’t factor in the higher gasoline costs of driving back into town for work each day, and when gas prices spiked the combination of rising interest rates and commuting costs put them over the financial edge.

This is where Smart Growth and Sustainability come together.  Smart Growth advocates have long criticized the sprawl, high land consumption, and extra commuting that “drive-‘til-you-qualify” residential corridors represent.  But it turns out that those corridors were not only environmentally unsustainable, they were financially unsustainable as well.  Planners focused on the former, because the long-term financial success of buyers was not their concern, but it is important to realize that the effects of poor growth management turned out to be not only environmental damage but a very heavy dose of personal hardship as well.  In September and October of 2008, over half a million American families faced new foreclosure proceedings, many of them in these sprawling low-density corridors.

Our planning policies contributed to this failure in at least four ways:

• By failing to incorporate Smart Growth policies encouraging compact growth, and by allowing leapfrog development along major transportation corridors;
• By driving up housing costs through higher-than-necessary minimum lot sizes and very expensive road and infrastructure standards;
• By failing to remove barriers to redevelopment and higher densities in central locations already served by transit systems; and
• By failing to address the causes of NIMBY-ism, which tend to push new development out to the edges of our metropolitan areas.

Each of these failures is addressed, and alternative approaches discussed, in Chapter 7 of A Better Way to Zone.  More specifically, to avoid a repeat of these un-smart and unsustainable planning decisions, we need to focus on:

• Attainable Housing:  We need to allow a wider range of more efficient and creative forms of housing, and avoid trying to solve the affordable housing problem primarily through single-family detached units.

• Dynamic Development Standards:  We need to adopt development regulations that allow neighborhoods to densify and parking requirements to adjust automatically as the surrounding areas change and transportation systems evolve.

• De-Politicized Final Approvals:  We need to structure approval process that reduce opportunities for late-stage NIMBYism that discourages redevelopment and densification where new housing can be accommodated efficiently.