[sustran] Home Location Preferences and Their Implications For Smart Growth - New VTPI Report

[Todd Alexander Litman]

The following report is now available free at the VTPI website.


"Where We Want To Be: Home Location Preferences And Their 
Implications For Smart Growth" (http://www.vtpi.org/sgcp.pdf )

Summary
Smart growth consists of more compact, accessible, multi-modal 
community development. This can provide numerous benefits to 
residents who live in such areas and society overall. Critics claim 
that most consumers dislike this type of community and so are harmed 
by public policies that encourage it. This analysis suggests otherwise.

Although market surveys indicate that most North American households 
preferred single-family homes, they also indicate strong and growing 
consumer preference for smart growth features such as accessibility 
and modal options (reflected as short commutes and convenient 
walkability to local services). Twenty years ago less than a third of 
households preferred smart growth, but this is projected to increase 
to two thirds of households within two decades.

This reflects various demographic and economic trends, including 
aging population, rising fuel prices, and increased health and 
environmental concerns. In addition, suburban lifestyles and 
automobile travel have become less glamorous. An increasing portion 
of consumers now aspire to urban lifestyles for at least part of 
their lifecycle, and the housing market correction in 2008 spoiled 
confidence in suburban real estate investments. Households are likely 
to be more rational and cautious in the future.

Described differently, for a few decades consumer housing and 
transportation decisions seemed to defy basic rules of economics. 
Housing location decisions seemed insensitive to transportation cost 
factors such as commute distance and fuel prices, resulting in 
dispersed housing and automobile-dependent lifestyles. Walking, 
cycling and public transit were dismissed as inferior and undesirable 
modes, even where they are efficient and cost effective. Increasing 
congestion, fuel prices, health and environmental concerns causes 
consumers to be more rational. Some embrace this opportunity while 
others react with fear.

This is not to suggest that automobile travel and suburban living 
will end. Under even aggressive smart growth policies most North 
Americans will continue to live in single-family houses, although a 
greater portion will be small-lot, attached housing such as 
townhouses. However, the demand for new housing is likely to shift 
dramatically. The current stock of large-lot, single-family houses in 
exurban locations currently exceeds demand, causing prices to plummet 
and foreclosures to rise. At best, it will take years for such homes 
to regain their 2005 market value (in real, inflation-adjusted 
terms). More likely, consumer demand for such housing will never 
fully recover.

On the other hand, the market for small-lot, attached housing in 
accessible, multi-modal communities is strong. Such housing has 
maintained its value and demand is projected to increase 
significantly in the future due to structural demographic and 
economic trends. Communities and developers that respond to these 
market shifts can succeed. Those that continue past policies are 
likely to fare poorly.

This is good news overall since more compact, accessible, multi-modal 
housing can provide many benefits to consumers and society. It gives 
consumers better options and greater efficiency. Smart growth 
residents benefit directly from time savings, financial savings, and 
increased safety and health. Society benefits from infrastructure 
cost savings, improved opportunity for disadvantaged populations, and 
improved environmental quality.

Claims that smart growth deprives consumers of preferred housing 
options are clearly inaccurate. Sprawl housing is now abundantly 
available at discounted prices, while smart growth housing is scarce 
in many regions, which drives up prices, making it unaffordable to 
the lower income households that need it most. Sprawl results, in 
part, from planning and market distortions that favor dispersed 
development and automobile travel. There are many reasons to correct 
these distortions and support smart growth. Such reforms will result 
in land use development patterns that better reflect consumer preferences.


Sincerely,
Todd Alexander Litman
Victoria Transport Policy Institute (www.vtpi.org)
litman at vtpi.org
Phone & Fax 250-360-1560
1250 Rudlin Street, Victoria, BC, V8V 3R7, CANADA
"Efficiency - Equity - Clarity"