Urban-growth Boundaries, Smart Growth, and Housing Affordability

Executive Summary ore than 100 cities and counties have adopted some form of a growth boundary—a limit on land development beyond a politically designated area—to curb sprawl, protect open space, or encourage the redevelopment of inner-city neighborhoods. Statewide mandates for growth boundaries exist in Oregon, Tennessee, and Washington. Urban-growth boundaries, however, have potentially negative, if unintended, side effects. By reducing the supply of developable land, for example, housing and land prices could increase, reducing housing affordability and production. Local policymakers and citizens need to understand the nature of these tradeoffs and impacts before they adopt growth boundaries. Growth boundaries, in fact, have not achieved many of their supporters' objectives. Their effectiveness has been constrained by: ƒ Persistent preferences for single-family, detached homes by prospective home buyers; ƒ Poor coordination among local public agencies; ƒ Housing-price increases; and ƒ Political manipulation by antigrowth interest groups. This study explores the experiences of four cities and regions to more fully elucidate the intended and unintended effects of growth boundaries. The growth boundary, encompassing 24 cities and three counties, has hemmed in development as Metro, the M elected regional government, attempts to foster higher density development and redevelop urban areas. Meanwhile, housing prices have increased dramatically. In less than a decade, Portland has transformed itself from one of the most affordable to one of the least affordable housing markets on the West Coast. While inflation as measured by the Consumer Price Index increased by 52.5 percent from 1990 to 1995, lot prices in Portland more than doubled. ƒ Boulder County, Colorado has had urban-service areas in place since 1978. Combined with the county's strict growth controls to protect open space, an effective urban-growth boundary exists. While housing prices in Boulder County are 13.2 percent higher than nearby Denver and 23.9 percent higher than Fort Collins, price increases have not been as rapid as in Portland. This appears to be a result of aggressive city-level annexations that bring new land inside the service areas and mitigate housing inflation. If the growth boundary becomes an effective limit line, however, the county will face a deficit of over 20,000 housing units by 2010 at current rates, and the boundary would place significant upward pressure on housing prices. ƒ Lancaster County, Pennsylvania has one of the nation's most aggressive county-level growth-management programs. Fueled by a desire to protect the rural character of the county and the flavor of …