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The other day, The Wall Street Journal ran a fascinating feature piece titled “Wichita Is a Rare Mecca of Affordability for America’s New Middle Class.” As the Journal explains it, housing is a bargain in Wichita. According to Zillow, the average apartment rental in Wichita goes for just $950 a month and the average home purchase price is about $235,000. The regional economy is strong, based on health care, energy, and both legacy industries and new manufacturing. Unemployment in the metro area is 4.1 percent, below the national average.
I immediately thought of our former colleague, Ezra Klein, who has pointed to plentiful housing in Sun Belt cities like Houston and has argued that an absence of zoning and other planning restrictions helps developers get housing built.
So Wichita has no zoning or other planning obstacles, right?
Uh, no. In fact, Wichita uses extensive zoning and a “multi-tiered” planning process. When a developer wants to build housing, the developer first meets with city planning officials, then with neighborhood panels. The point isn’t just to set conditions, but also to help builders get through the process.
“We have a policy of rolling out the red carpet and cutting red tape, especially on projects that add much-needed housing to our community,” says Megan Lovely, the city’s communications manager. “We balance that with a multi-tiered approach to ensuring we receive robust citizen impact. Overall we’ve seen this process be positive and collaborative for both residents and developers and it sets a strong foundation for strong neighborhoods.”
Wichita’s planners target development to the urban core where possible. The city’s 2016 master plan, titled “Places for People,” includes an “Urban Infill Strategy” intended to encourage population and employment growth, residential and commercial development, and reinvestment in the older mature neighborhoods of Wichita.
The city is not opposed to new development on the periphery near the suburbs. There, Wichita has encouraged duplex development, known as “light touch density.” A developer proposing that sort of housing will get a friendly reception from the city’s planners.
So why does all this add up to affordable housing, without just scrapping planning and zoning, Ezra Klein style? Mainly because supply and demand are roughly in balance.
Despite the many attractions of Wichita touted by the Journal, people are not exactly lined up to move there. The city’s population, 389,255, has increased by just 8,000 over the past five years. New housing construction has been around 12,000 during the same period.
By contrast, despite astronomical housing costs, young people are flocking to cities like New York, Chicago, and Boston, bidding up housing prices even higher. In Brooklyn, a small two-bedroom apartment will cost you around $5,000 a month, if you can find one. Among big cities, Philadelphia is a relative bargain (average two-bedroom rental: about $2,200) because demand is softer.
One picture is worth a thousand words. A photo displayed in the Journal article literally shows a new duplex community on one side of a Wichita road, and farmland, waiting to be converted to a subdivision, on the other side.
In Greater Wichita, land is still cheap. A buildable lot goes for about $35,000, and larger tracts cost far less per dwelling. And, of course, a large part of housing costs are land costs.
The conversion of farms to subdivisions such as the Levittowns was exactly how cheap housing got built in the large metro areas in the 1950s and 1960s, aided by the federally subsidized highways and mortgages. But there are no farms left to convert within convenient commuting distance of New York, Chicago, or Los Angeles.
None of these fundamentals have anything to do with the presence or absence of zoning or planning. New York could scrap zoning tomorrow, and it would not cause more cheap farmland to materialize in Brooklyn.
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