HOW THE WAR ON SPRAWL CAUSED HIGH HOUSING PRICES

REGULATION

- RANDAL O'TOOLE

HIGH HOUSING PRICES have reached crisis proportions in much of the country. You can blame the war on sprawl for that.

Since the 1960s, planners have convinced many state and regional governments to limit the physical spread of urban areas. They called this “growth-management planning,” and the most common growth-management tool was an urban growth boundary. Outside such boundaries, development was practically forbidden.

About 99 percent of Oregon, for example, is outside of an urban growth boundary. In most of those places, families cannot build houses on their own land unless they own at least 80 acres, actually farm it, and have thereby earned $40,000– $80,000 per year (depending on soil productivity) in two of the last three years.

Hawaii passed the nation’s first growth-management law in 1961. By 1970, the state had the most expensive housing market in the country. A standard measure of housing affordability is the price-to-income ratio: median home price divided by median family income. Hawaii’s ratio in 1970 was more than 3, while in every other state it was 2.4 or less. California’s ratio was 2.2.

In 1963, the California legislature gave cities control over what happened outside their limits. In the 1970s, a slow-growth movement prompted many cities to draw urban growth boundaries, effectively forcing all new development to happen within their boundaries. By 1980, the price-to income ratios in many California urban areas were above 3; some were above 4.

Oregon passed a growth-management law in 1973, Florida in 1985, New Jersey in 1986, and Maryland and Washington in 1992. Housing affordability declined after all these laws were implemented.