What can US sun belt cities teach us about housing?

Slate columnist Matt Yglesias posted an important article yesterday, In defence of the sun belt, that should be required reading for all politicians and policy-makers who’re interested in making Australian cities better. It reinforces how important it is to find ways to increase the supply of housing within our cities, especially in sought-after established areas.

He asks a straightforward question: why have US sun-belt cities like Phoenix, Dallas, Houston and Raleigh-Durham grown so much faster than old, established places such as San Francisco and Boston, notwithstanding the considerable advantages of the latter?

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Matt Yglesias is a progressive so he’s not really defending the sprawl characteristic of fast-growing cities like Las Vegas. Rather, he’s asking why so many American businesses and workers are heading for new cities instead of old cities where the fundamentals are much stronger:

That’s in terms of wages, it’s in terms of the basic first mover advantage that older cities have, it’s in terms of legacy cultural and entertainment amenities, and it’s certainly in terms of the things that urbanists say make for great communities.

Why would businesses and people forego these advantages? And why, he wonders, would the old cities themselves, which have already “gone through the trouble of building the Metro and the street grid”, be prepared to settle “for a small tax base, a lack of job opportunities and a dearth of affordable housing”?

Many theories have been offered to explain the growth of sun belt cities. The list of possibilities includes a warm climate, weak environmental regulation, low unionisation, cheap air travel, cheap air conditioning, low taxes, sympathetic geography, public subsidies and the conquest of tropical diseases. There are also “push factors” associated with the older cities, like poor public schools, antipathy to apartment living, unsafe neighbourhoods, cold climate and a higher cost of living.

However Matt Yglesias says the key reason is sun belt cities actually want to attract business and population, so they make it easy to build infrastructure and housing. Land is cheap and building houses is cheap.

The older established cities, on the other hand, throttle housing supply, making it very expensive. As Edward Glaeser and Ryan Avent argue, residents of established areas employ a host of devices, including building controls, height controls and heritage controls, to deter increases in residential density.

He observes that the sun belt model is doing something right – it’s clearly working for middle class Americans. The new residents are getting houses that are large by any measure, as well as neighbourhoods they feel are safe and schools they think are good. In the sun belt cities:

Public officials and thought-leaders down to grassroots people in the community take a kind of pride in growth that leads you to sit down and say we want to work this out so that lots of houses and infrastructure get built here……(OTOH) Washington D.C. and its environs are absurdly squandering the fact that there’s high demand to locate things in and around our city. I don’t think that’s a point that’s best emphasized by highlighting the aesthetic failings of cookie cutter Sun Belt subdivisions.

There are real and potential weaknesses in the sun belt model. Some argue their characteristically sprawled settlement pattern is vulnerable to big increases in oil prices. Others that they’re built on cheap water and electricity that is vulnerable to the exigencies of climate change. Nor is it likely sprawl in Dallas is as sustainable as absorbing the same growth within older, established cities like San Francisco.

There’s an analogous pattern to the sun belt migration in Australian cities. Rather than settle in established suburbs with better access to jobs and services and even in some cases greater walkability, many people opt to locate in fringe and peri urban areas where densities are generally lower.

A key underlying cause is the same choking-off of supply as happens in America’s older cities and results in higher prices. For example, residents of Armadale in Melbourne persuaded Stonnington Council last month to rule against a 475 unit development, with buildings up to 12 storeys, proposed by Lend Lease.

This is an ideal location for housing – it’s only six kilometres from the CBD and well-served by public transport. The site in Orrong Rd is very large (2.5 Ha) and mostly abuts rail line and playing fields, not houses. Yet residents oppose the development, saying it is:

totally out of character with the heritage, low-density surrounding area of Armadale /Prahran /Toorak and would introduce CBD-type high-rise development to these suburbs

But the analogy partly breaks down because unlike sun belt cities, even the planning processes in Australia’s fringe suburbs can’t supply enough lots. With only two thirds of the required lots being built each year, the O’Farrell government is now seeking to address Sydney’s housing shortage by asking developers to nominate fringe sites suitable for the development of tens of thousands of residential lots. Many of these sites are outside established growth centres or outside areas nominated in Council growth strategies.

Ways have to be found to increase the supply of housing in Australian cities. A lot of that will come from the fringe, but much more needs to come from established suburbs. I think we have to try other approaches – I’ve suggested one before, but I’ll return to this issue again.