Gentrification and Market-based Zoning

A few months ago we moved back to Philadelphia from DC. Washington is a very nice place, but we only make a little bit more than the average American household (which makes about $52,000 a year), while the average income in DC is about $90,000, which means that we couldn’t afford anything. For instance, in Philadelphia in 2013, we lived 1.4 miles from the center of town for $1,200 a month. When we moved to DC, we lived 4.5 miles from the center of town for $1,350 a month. There were several reasons why we chose to move back, but largely, it was because


When we came back to Philly, we knew that we wanted to live south of Market Street, and beyond that, we didn’t care too much. We spent several weeks looking all over South Philadelphia and toured a number of apartments including a very nice one in Point Breeze. Several neighborhoods in Philadelphia are experiencing rapid gentrification, but Point Breeze is in many ways at the forefront. If you don’t know what gentrification is, it’s basically when rich(er) people start moving into a poor(er) area, redeveloping it and driving up rents and property taxes, and driving out existing residents. Though this is strictly speaking an economic issue, because minorities in America tend to live in poorer neighborhoods, it often affects them disproportionately.

Planners, architects and developers have a mixed relationship with gentrification, and so do I personally. I mean, I don’t want to hurt poor minorities, but I also want access to affordable housing close to where I work (by the way, we ended up deciding against Point Breeze; we found a cheaper apartment in South Philly). But why do I have to go to neighborhoods like Point Breeze to find affordable housing in the first place? Why can’t I find housing close to my office in Center City? The obvious answer is that because it is too expensive, but why is that the case?

An interesting argument was presented in this article by Kriston Capps of Citylab. Capps points out that tech, a common boogeyman in the discussion of gentrification in San Francisco, is actually not the problem; it’s anti-development/NIMBY residents of rich neighborhoods. These folks hold much more influence in City Hall than their poorer neighbors, so they can get zoning ordinances and other restrictions passed that keep development from happening in their back yards. But people still want to move to San Francisco, developers will still build new housing to provide for them, and since they can’t do it in the rich neighborhoods where they actually want to live, they develop in the closest poor neighborhood. John Mangin, in his article The New Exclusionary Zoning, says, “Don’t blame in-movers or developers for gentrification—they’d rather be in the high-cost neighborhoods. Blame the exclusionary practices of people in the high-cost neighborhoods.” Mangin argues that in addition to zoning, the lengthy approval processes required by many desirable cities increases the cost of building housing, as well as increasing the time to develop it, and privileges large, savvy, politically-connected developers over smaller neighborhood builders.

Capps proposes that development should be expanded in richer neighborhoods, amending zoning laws and making decisions that are best for the city (or the region) and not necessarily for individual neighborhoods. Mangin argues that we need to pursue policies that either increase the supply of housing or decrease the demand for it in poorer neighborhoods. This includes allowing some development (because not allowing any development simply drives up the prices of the existing housing stock until they cost too much for the current residents and are bought up by more affluent move-ins), while at the same time advocating for more development in the high-demand areas where rich NIMBYs are keeping new folks from moving in. Governments could also impose regulations on new development that would help existing residents, such as requiring some of the taxes assessed on new development to go toward investing in the neighborhood; or creating something of a cap-and-trade market for density, where if people want to exclude development from their neighborhood, they have to help pay for it to happen elsewhere.

What is argued by both of these authors is that zoning is out of sync with housing demand, particularly in rich areas, leading to spillover of new move-ins in poorer neighborhoods. So what would it look like if a city’s zoning were rewritten to reflect market demand? Let’s take a look at Philadelphia.

Below we have the existing housing density, in units per acre, of the Philadelphia Metropolitan Statistical Region by census tract. Density is concentrated in the City of Philadelphia, as well as some of it’s suburbs, particularly the string running southwest through Delaware County down to Wilmington, Delaware, and beyond; and running southeast through Camden County, New Jersey. (The land use categories shown correspond to the densities required for different types of transit service, according to the Victoria Transport Policy Institute: 0-2 supports no transit, 2-4 supports regional rail, 4-7 supports minimal local bus, 7-9 supports intermediate local bus, 9-12 supports light rail, 12-15 supports rapid transit, and over 15 supports frequent local bus service)

Density Existing-01

This is our baseline, and lets us know how many housing units already exist in an area. The next thing we need to know about a tract is the median housing value.

Median Value-01

This shows us that housing value is highest along the Main Line; in some of the suburbs of Wilmington; and around New Hope, PA and Moorestown, NJ. Now that we have the median value, we can multiply that by the number of housing units to get an idea of the total value of housing in a tract, which will indicate to us the demand for housing in that area.

Total Value-01

We see a similar pattern to median value, as well as a slight concentration in Center City, Philadelphia (while the median value is a bit lower than in some of the rich suburbs, there are so many more units that the total value is quite high). Now that we have a measurement for the demand, we need to translate that back into housing units. The average value of a home in the United States is $175,700, so we can divide the total value of each tract by that number to get an idea of how many units that area should supply.

New Density-01

What we can see from this is that many of the suburbs, particularly in affluent Montgomery County, are not pulling their weight, and should take on a greater share of the region’s new development. Housing density in Philadelphia remains high; however, taking a look at the change in units per acre reveals some interesting patterns.

Change-01Philly Change-01

Moving from the edge of the region to the center, we see that some of the outermost communities could actually afford to lose a few units per acre. However, by and large, density should increase as you get closer to the city, particularly along the affluent Main Line to the west. At the same time, there are several small cities in the area that are overbuilt, including Pottstown, PA, Norristown, PA, Upper Darby, PA, Darby, PA, Chester, PA, Camden, NJ, Salem, NJ, and Wilmington, DE. As we look at Philadelphia itself, the neighborhoods of Northeast and South Philadelphia should grow modestly, while the more affluent neighborhoods in the northwest should grow more steeply. This is followed by a ring of overbuilt areas in North and West Philadelphia, as well as Point Breeze and parts of South Philly. However, Center City and University City are underdeveloped, and should grow considerably. This underdevelopment is what is fueling the gentrification of areas where the green and the red meet, such as Point Breeze, Mantua, and Kensington.

Percent Change-01Philly Percent Change-01

It is also interesting to look at the percent change, rather than total units per acre, to tell you something about the degree to which these neighborhoods will be affected by change. Some areas, such as Piedmont, DE, and New Hope, PA, would only see a modest change in the absolute numbers, but because their existing densities are so low it may feel like a large shift. Others, such as Center City, would see significant growth in total units per acre, but because their existing density is already high it will not have as significant an impact on the area. And while there was a lot of red on that first map, the area most impacted by a decline in density is actually more limited when you look at the percentage, which the heaviest impacts in Norristown, Darby, Chester, Camden, and North and West Philadelphia.

So, who would support a plan like this and who would oppose it? The most obvious answer is that rich homeowners, both in the city and the suburbs, may not take kindly to a plan like this. They would see this, not entirely inaccurately, as a threat to their property values and their way of life. Mangin advocates several “smaller scale reforms that preserve a space for sub-local [neighborhood] politics while altering, sometimes subtly, the incentives that political actors face and the procedures by which they arrive at decisions,” to try and get richer residents on board as much as possible.

Initially, many residents of poorer neighborhoods might also oppose it, because zoning by demand would mean severely downzoning several poorer areas, which may look to some residents like “benign neglect” or, even worse, the sort of problems that arose with urban renewal and the use of eminent domain in the middle of the last century. This sort of “depletion” or “neighborhood triage” has been strongly opposed by neighborhood groups who want to preserve their communities and see it as a method for removing poor residents to make room for future development. This sort of opposition was seen in the defeat of the “Team Four Plan” in St. Louis (If you want to pay for it, you can read Patrick Cooper-McCann’s recent article on it in the Journal of Planning History here, or if you’re a cheapskate like me you can get the gist of the article by reading his master’s thesis here for free). It would be important to implement this strategy in steps, such that new housing in desirable areas was available early so that anyone who wished to move out of poorer neighborhoods may have an opportunity to do so, while those who wished to stay behind could do so, safe in the knowledge that restrictive zoning would prevent new development from infringing on their community while they would be allowed to stay there as long as they wished.

The people that a plan like this would really be good for would be middle-class people wanting to move in from outside the city or to move up to a more desirable neighborhood. As it is now, the urban middle class is squeezed between neighborhoods they can’t afford and neighborhoods where they are seen as unwanted agents of change and distress. Opening up more development opportunities, both in Center City and in densified suburbs along the Main Line and elsewhere, would provide for more opportunities for affordable urban living without the guilt of hurting those lower down on the economic ladder.

Gentrification is a hard nut to crack, but it’s important to look at it as a problem of restricted housing supply in affluent areas not being able to meet the demand for development, which then spills over into less affluent neighborhoods. Changing our zoning laws to better reflect the demand for housing in desirable neighborhoods would help ameliorate gentrification and allow more options for middle-income families in cities. While efforts like this would face an uphill battle against entrenched interests, bureaucratic roadblocks, and NIMBYism, in the words of John Mangin, “The options are pretty clear: build more, or stand by as low-income and middle-class people get priced out of ever-wider swaths of the country.”

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