Big Builder Graphics Team
Big Builder Graphics Team

Residential developers and builders fret justifiably over local land-use time, trouble, and cost inflation. Fees, permit approval timelines, and regulatory hoops get more obstructive by the day. It's harder and harder to bring lots online at costs that translate into home prices that all but a few buyers can afford. Now, for the authors of those local rules, regulations, and levies, it's their turn to do some stewing as well.

Planners, municipal elected and appointed officials and agencies--and the local voter populations who put and keep these local policy setters and enforcers in their roles and--face complexity today perhaps like never before.

From a planning perspective, their jobs--like many of ours--come down to two primary motivations: managing risk and accessing opportunity as regards the overall health and well-being of their jurisdictions. A benchmark that serves as the measure of that health and well-being, above all others in most cases, is the property valuations or wealth of the key property owners.

Looking at risk, the interests of entrenched blocs of property owners, often the same ones who determine who makes local policy decisions and who doesn't, are a key influence in one of housing's most complex challenges, the matter where density impacts affordability.

Looking at opportunity, on the other hand, often means looking beyond those entrenched past and present interests toward the people and forces who may replenish and redouble economic vitality and resilience for the stretch ahead.

Builders and developers find themselves vectored into the position of trying to make those two opposing interest sets literally find common ground.

Berkeley-based housing sage Issi Romem takes on this touchstone issue in an analysis, "Can U.S. Cities Compensate for Curbing Sprawl by Growing Denser?" It's a must-read explication that draws on data that shows how real-world development behavior doesn't necessarily match with widely-held assumptions, especially as regards the thought that "the suburbs are over and cities are the future." Two of Romem's four principle take-aways zero in precisely on the mid-cycle dilemmas facing builders and developers, as many investors, operators, and strategists attempt to pencil land buys for a market 18 to 48 months from now that's totally obscured.

Here are those two take-away points:

Densification has slowed down across the board, and especially in expensive cities, undermining their ability to compensate for less outward expansion.

Unless they enact fundamental changes that allow for substantially more densification, cities confronting growth pressure face a tradeoff between accommodating growth through outward expansion, or accepting the social implications of failing to build enough new housing.

Romem maps the predicament local policy-makers face as a trilemma, three propositions, each of which effectively cancels out the other two, and each of which carries with it a big dose of uncertainty as to both benefits and costs.

Here's the way that "trilemma" looks.

We think it's important to recognize here that Romem's insights leave open to question a few areas that can materially impact developers' and builders' success-rates in buying, valuation, development, approval, and marketing land and lots as local decision-makers' jobs grow more difficult and complex.

One might be as simple as this. There's density and there's density. Design, technology, engineering advances, and community insight trends make suppositions about the number of people occupying a certain square-footage of area different today than five, or 10, or 20 years ago.

Another is that the high-risk of declining real estate values if municipalities can't sustain resilient access to critical human and natural resources may feel theoretical. But it's not. Not having enough affordable housing becomes a slippery economic and financial slope that can easily lead to depressed property values.

So, from our point of view, we see the realistic road ahead for local planners and policy makers not as a "trilemma," really, but more of a Hobson's Choice. You take increased density or you leave it. Neither option is particularly desirable in anticipation, and the risk of big downsides lurks behind the clouds, whether you take it or leave it.

Still, new streams of people living in a place are synonymous with that place's future. No new streams of people living there are synonymous with Ghost Towns. Density needs to be part of how cities, towns, and infill areas roadmap a future. But innovation can make density work, look, and feel better than it has up to now.