Minorities Impacted by Smart Growth Policies

By Jim Hauser

November 25, 2002

WASHINGTON (GOPUSA News) -- For several decades, environmental organizations such as the Sierra Club, have advocated the use of "Smart Growth" policies in urban areas in order to prevent urban sprawl and extensive automobile usage. A recent study of urban areas that have implemented these polices shows that not only do the policies fail to achieve their stated results, but that they unfairly impact minorities and the poor when it comes to home ownership.

The study, conducted by QuantEcon for the Center for Environmental Justice of The National Center for Public Policy Research, took a close look at Metro-Portland Oregon to see how the policies implanted there over the past ten years have affected urban growth, land availability and housing prices.

Restricted growth policies are designed to preserve open space and reduce motor vehicle usage through limitations on the geographic expansion of metropolitan areas. However in the Portland area it was found that while light rail struggles to attract riders, residents of that area still drive nearly as often and nearly as far as their counterparts in auto-dominated Los Angeles. Restricted growth policies in Portland are not replacing cars nor are they reducing congestion.

According to the report, "The notion that concentrating development will somehow reduce the dis-amenity of regional congestion has poor theoretical and empirical foundation. Traffic congestion rises approximately in proportion to population density. Portland's population density, for example, is approximately 45 percent higher than the average of the largest 200 metro areas; its VMT per square mile is, correspondingly, 42 percent higher. The resulting traffic congestion levels, of course, are higher still in a concentrated setting, with the implication that forcing higher densities actually degrades housing-related amenities like congestion. Indeed, statistical analysis of a cross-section of metro areas reveals that VMT per capita increases with density."

Another goal of "Smart Growth" policies is to increase the construction of multi-family dwellings within the urban area. In theory this was supposed to afford less expensive housing for lower income families while at the same time eliminate the flight to the suburbs by those looking for affordable housing. This is not what happened in the Portland area. As it turns out, the cost of urban construction has increased the cost of living in these types of units and forced prospective homeowners to turn to the countryside in the search for affordable housing.

"In essence, regional planners in Portland have been holding the line on the UGB by assuming away housing market responses, and by opportunistically redefining the concept of capacity," says study's author, Randall Pozdena, Ph.D. "This has been done in the face of fairly clear evidence that the housing market in Portland (and other Oregon cities) is being severely distorted by the site supply restrictions inherent in the UGB-smart growth concept."

Smart growth advocates are generally in a state of denial about the relationship between anti-sprawl policies and home prices. However, the data in the report demonstrate clearly the close relationship between site supply constraints and home price inflation at the local level. Most of the states that have embraced smart growth stand out as having higher than-expected home price inflation, including Oregon, Washington, Tennessee, Kentucky, Pennsylvania, and Colorado.

In the period ranging from 1990-2000, Oregon anticipated a housing inflation rate 67.4%. As a result of land restrictions and smart growth policies, the actual inflation for housing during that period was 124.2%.

The effect on home ownership of such price increases is significant, about two percent fewer minority households would have been able to enjoy home ownership, and slightly more than this percentage of non-minority households would have been unable to afford homeownership. In 1996, there were about 56 million families living in metro areas. Black households comprised 7.3 million of the total, and Hispanic households comprised about 6.0 million of the total. Hence, more than one million urban families, in total, would have been unable to afford their own home had smart growth policy been more widespread. About 260,000 minority households would have been affected.

"Insidiously, the burden of site-supply restrictions will fall disproportionately on poor and minority families," concludes the study's author. "Families who already owned homes at the time that smart growth policies were embraced, of course, enjoy some immunity from the effects of smart growth on housing costs. However, for new or young families, and families that rent their homes, the impact of higher home values and rents is a significant burden."


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