It Is Not Too Late For Cincinnati To Adopt Housing Density Measures

A very modest and useful proposal to allow more multifamily housing in Cincinnati was voted down in March by the City Council. The proposal, offered by Councilmember Liz Keating, would have removed density limits in some parts of the city with zoning rules that allow more housing and people. The proposal wouldn’t have touched single-family zones, something lost on a mob of opponents that appeared to kill the proposal. Had it passed, the proposal would have benefitted new people moving to Cincinnati by creating more housing supply. In spite of the defeat, the discussion has begun in the city about how best to address housing prices, with more housing or less.

The battle in Cincinnati is all too familiar to me, bringing back to mind the battle over density that began as the housing market began to recover after the crash of 2008. As the second decade of the century unfolded, angry single-family neighbors rallied against density with a variety of red herrings: the new housing was too big, too small, ugly, too tall, and blocked light and air. Also, new housing would decimate the city’s tree canopy. And of course, what they always proffered as the deal breaker, it wouldn’t make housing more affordable. New housing, they said, is too expensive.

A guest editorial in the Cincinnati Enquirer makes the same point.

“There is currently no data that supports the assumption that higher-density zoning results in lower housing costs. In fact, studies on density and affordability metrics such as the Median Multiple, (used by the UN, World Bank and Harvard’s Joint Center for Housing) show the opposite is true. Higher density housing on average is more expensive!”

Well, that’s not true. There is one recent study (Density Control, Home Price Appreciation, and Rental Growth in the United States) that confirms that, “in the multifamily sector, we find that the relationship between density control and rent growth is positive: rents are rising faster in areas with tight density controls, consistent with supply constraints.”

One point that bedevils this argument about more housing (which is what density is) not resulting in lower overall prices is that new housing – like a new sweater or a new car – is always more expensive than existing product. So, if one looks only at density increases in the form of additional new housing, the average price will be higher and those higher prices will often skew the overall average. However, overall, when the number of new housing units increases, overall and over time, there is a positive effect on price.

Along with this common-sense conclusion, there is also the fact that apartments are getting smaller. Why? Because it is what people living in cities have wanted. Here’s what I wrote about unit size and affordability a few years ago:

“Unit size is falling because more and more people want to live in densely populated cities where land is scarce. When land is scarce it will be expensive. To buy and build on expensive land means that the rents must be high too to rationalize the cost of the land. What’s the solution? Smaller unit sizes solve this problem because consumers trade square footage for lower price, and developers get a higher yield per square foot on their investment.”

Finally, and perhaps most tellingly, Keating’s proposal was vigorously opposed by single-family neighbors, one of who argued in the editorial that “opinion surveys show that detached, single-family homes with a yard, and alternatively, town houses in denser areas that are within walking distance to amenities, are the preferred options for a majority of Americans.”

Before the pandemic, however, this simply wasn’t true. Research by Freddie Mac in 2018 found that, “although the Profile finds a growing number of renters believe their economic situation has improved compared to last summer, it also finds that cost is increasingly driving rental decisions.” Yes, that’s right, people were picking rental housing for because it is more affordable. And more housing in Cincinnati would make it less expensive too.

And last but certainly not least, nothing in Keating’s proposal has any effect on existing single-family zones. Why would they be so upset? It’s obvious to any outsider; when housing is scarce and expensive it results in a transfer of money from poor people’s pockets in the form of higher rents into the higher value of single-family homes. Angry neighbors appear to oppose changes in places they don’t live because it helps their home values. Housing scarcity helps current owners investment gain value.

The bad news is that the modest increases to density in zones that are already dense were squashed by angry, entitled single-family neighbors in Cincinnati. This is not dissimilar to the outrages imposed by the Seattle City Council years ago, reducing density in areas already zoned for density. This “win” for the neighbors will encourage them to do this, too. However, the good news is that it isn’t too late for Cincinnati to learn from Seattle’s mistakes and make the changes anyway. If the city council in Cincinnati doesn’t learn this lesson, they’re consigning people with less money to spend, mostly renters, face rising prices in the years ahead.