The government’s housing plans – and, I presume, the Labour Party’s – seem to make great play of squashing more people, and more dwellings, into much the same space. And it is certainly true that many of the older state houses seemed to sit on ridiculously large sections, (especially incongruous when the sections themselves are in otherwise very valuable locations).
Increased density appeals to planners, and perhaps even to people in certain demographics. I wouldn’t want to stand in the way of people who prefer to live more densely. But that is rarely enough for the enthusiasts. Instead, much rhetoric is aimed at so-called NIMBYs, people who might be reluctant to see a change in the character of their neighbourhood pushed through by bureaucratic fiat. There was an article in today’s Herald along exactly those lines.
As I’ve noted here previously, over history, as cities have been richer they have tended to become less dense, not more so. Space seems to be a normal good.
And so I was interested to stumble this afternoon on an article in the New York Times, with a couple of interesting graphics on changes in density in 51 metropolitan areas (population in excess of one million) in the United States over the last few years. 2010 to 2016 is quite a short period, but – given history – the results shouldn’t really be surprising. I can’t cut and paste the graphics (click through to have a look), but what they highlight is two things:
- only a fairly small number (10) of US cities saw increased density during that period, and the increases in density were typically small (although Seattle stands out with by far the largest increases)
- the remaining 41 cities (metropolitan areas) saw a shift towards less density over that period, and many of those falls were quite substantial.
In the chart, there is also some suggestion that areas with faster population growth were more likely to have become less dense over this period (Dallas, Raleigh, Houston, Nashville, San Antonio and Austin stand out).
It looks a lot like a case where cities spread – people want more space – when land use restrictions don’t stop them doing so. It isn’t obvious why New Zealanders’ preferences would be that much different from those of Americans. And it is hardly as if New Zealand is short of land either.
Land use restrictions may actually stop cities’ populations growing much – at least in the US where there are many big cities to chose from (some with tight restrictions, others without). That would seem to be the message in the latest Hsieh and Moretti paper , which highlights how little population growth there has been in the US cities with some of the tightest land use restrictions (San Francisco, San Jose, and New York) relative to other cities. By doing so, those restrictions may have imposed substantial real economic costs (lost opportunities to take advantage of high productivity opportunities in those cities). The case that such restrictions might have had a large real cost here is less strong – numbers in Auckland has grown very fast even with the restrictions. Perhaps here the cost is “simply” the shockingly high cost of purchasing house+land, a systematic redistribution against the young, the poor and the credit constrained.
UPDATE: For anyone interested, John Cochrane has a nice post explaining clearly, and in more detail, what is going on the the Hsieh and Moretti paper, and commenting on a couple of other papers in a similar vein.