The effects of rapid urban development on housing
The effects of rapid urban development on housing are pronounced, with issues like gentrification, housing availability, affordability, and environmental degradation all coming into play.
As you might expect, simple supply and demand principles mean that as urban populations rise faster than the number of housing units, housing costs go up. But there are some underlying processes that exacerbate the trend toward more expensive, limited housing in the country’s fastest-growing cities.
For one thing, the density of existing cities can mean that there’s a limited supply of undeveloped land or space for building new housing stock within city limits. What undeveloped land does exist comes at a steep price, meaning developers are much more likely to maximize profits by building higher-end housing units. In fact, as Leach points out, in some urban areas—most notably in cities on the West Coast—the price of land can get so high that the assessed land value far eclipses the assessed value of any house that might be built on it.
Zoning also plays a critical role when it comes to the problem of adequate housing supply and rocketing housing costs in urban areas. Cities (and neighborhoods within cities) with zoning ordinances that favor single-family housing effectively limit the pace and density of growth and primarily serve the wealthier members of the population who can afford single-family homes as opposed to apartments, condos, or townhomes. In this way, zoning can dictate the way a population is dispersed within cities, often with problematic results (and sometimes with nefarious intent, as exclusionary zoning practices have historically been used to explicitly ensure de facto racial segregation). “Even as some urban regions are growing in population overall, sub-areas within those regions are depopulating because of the lack of diverse housing,” Leach says. “It’s the very citizens of these areas who are often causing the lack of diversity by refusing to allow more affordable options to be built. They have effectively blocked people from moving to their community.”
For example, 70% of the total housing stock in Portland, Oregon, is composed of single-family homes (standalone homes and single-family townhomes), and the size of newly constructed single-family homes is steadily increasing, further impacting affordability at a time when the city already has a severe shortage of affordable housing.
These forces often result in gentrification—or the displacement of existing, lower-income communities by middle and upper class residents moving into a city or neighborhood en masse. Because the back-to-the-city movement is made mostly of highly educated white professionals, this often means that the racial as well as the economic makeup of a city (or parts of a city) changes dramatically as the gentrification process unfolds.