New and Sprawl

How homebuyers trade-off SO-CALLEDNEWURBANISTS advocate higher residential densities as higher residential density alternatives to sprawl. However, since the beginning of the twentieth century, mar- against neighborhood quality. ket forces—assisted by government pro- grams—have favored low-density subur- ban development. Given the strength of these market forces, and the popularity of the single-family detached on its own lot, why should planners and devel- opers now expect that a new urbanist design model can change the evolution of in such a fundamental way? The spatial structure of cities is deter- mined by households balancing commut- ing costs against housing costs in their ANDREJSSKABURSKIS search for optimal locations. Moving far-

8 4 ZELL/LURIEREALESTATECENTER ther from the center increases a house- design that brings out the attractive aspects hold’s commuting cost by an amount that associated with higher-density living. is independent of its housing consump- Neoclassical economic models that tion. As a result, the households that are focus on location as defined by commut- willing to spend more on commuting gain ing distance to a center usually ignore even larger savings due to the lower land neighborhood characteristics. On the prices. Neoclassical economic models sug- other hand, classical economists such as gest that rising affluence flattens urban Ricardo tended to ignore location while land rent gradients and density profiles showing how land rent profiles reflect and increases the rate at which cities spread the value of differences in fertility (qual- outward. Although conventional suburban ity) that can be interpreted in the urban housing is disdained by many architects setting as differences in neighborhood and planners, its attributes are in line with quality. Since there is no contradiction neoclassical economic theories of spatial between the two theories of land value, it structure and household preferences as is possible to view land value and there- revealed in the market place. How then, fore the density profiles of a city as being can , a development option determined by centripetal and centrifu- that would increase density on the lowest gal forces (the neoclassical theory), as priced land at the periphery of the city, be well as by neighborhood attributes (the a viable and replicable substitute? classical theory). Thus, new urbanist New Urbanism’s main innovation is to designs may generate the differential use higher density, generally considered an rents that overlay the neoclassical profiles “inferior” attribute in the economic sense, developed through the commute/lot size to create a “superior” asset: attractive, tradeoff. The Ricardian model, on the walkable mixed-use neighborhoods. other hand, provides the demand-side Consumer preference surveys suggest that argument for the new urbanists’ claim while many suburban residents like their that their developments are an antidote detached , they do not like the “rest to sprawl, by turning the net effects of of the suburban package” and it is this higher density into a positive attribute. “rest” that New Urbanism reconfigures. Research has shown that there is a price New urbanists claim—with little evi- premium, or a capitalized Ricardian rent, dence—that homebuyers will willingly attached to houses in some new urbanist forgo the conventional detached house on communities. That is, some consumers a large lot to gain the neighborhood qual- appear to be willing to pay a premium ities made possible by sensitive urban for the neighborhood attributes made

REVIEW 8 5 possible by the higher density of new CORNELL urbanist developments. The size of this clientele is disputed. A homeowner survey was conducted in Neighborhood quality plays an Cornell, one of eleven new urbanist important role in housing desirability planned communities totaling 45,000 patterns and real estate valuation, and units that have been built in Markham, a neoclassical models are not contradicted suburban municipality about a half-hour by trends and the return to drive from downtown Toronto. In 1992, downtown phenomenon. Changing the Markham city councilors, anticipating household formation, marriage rates, a doubling of population to 225,000 over and fertility rates, coupled with increases a ten-year period, commissioned the in women’s participation in the labor Miami firm of Duany Plater-Zyberk, a force, and global shifts in the nature pioneer of New Urbanism, to design of employment opportunities have Cornell, a new on a increased the demand for higher-density 1,500-acre site owned by the province of housing and downtown locations. At the Ontario as a result of a 1973 expropriation same time, demand by non-family for a second Toronto airport (that was later households headed by both men and cancelled). The plan (Figure 1) houses women for single-family suburban hous- 27,000 people in 10,000 dwellings and ing in the continues. The inter- includes ten elementary schools, two sec- est of this paper however is in the ondary schools, three community centers, prospects for higher-density develop- and 250,000 square feet of retail space as ment on the lowest-priced land at the well as employment for 10,000. People edge of a city. If we accept the neoclassi- began moving to Cornell in 1998. At the cal models, we would expect that new time of the survey in the fall of 2004, urbanist projects would be most success- Cornell had just over 1,000 occupied ful as projects on vacant land pro- dwellings; half of the 203 survey respon- duced by earlier discontinuous urban dents had lived there for at least two years. growth. This paper explores the demand Gross residential densities in Cornell for higher-density housing in the parts of average eight units per acre, which is more the city that offer the greatest potential than Markham’s five to six dwellings per for developers to build and for con- acre, and considerably more than the three sumers to buy the conventional detached to four dwellings per acre threshold that house on a treed lot that forms the dream usually defines low-density development. of most families in all parts of the world. This makes it sound as if Cornell is coun-

8 6 ZELL/LURIEREALESTATECENTER Figure 1: The Cornell master plan 1. Storm Water Management Facility 2. Place of Worship 3. Public Elementary School 4. Separate Elementary School 5. Neighborhood 6. Public High School 7. Community Recreation Center 8. Community Park 9. Heritage Feature 10. Separate High School 11. Hospital 12. Environmentally Significant Area 13. Community Library 14. Central Green Corridor 15. Spine Road (main street) 16. Ground Floor Retail

tering sprawl; however, there is a difference higher-density housing and mixed land- between the density that developers pro- use but there is no assurance of this out- pose when applying for approval and what come, and it is likely that market demand finally gets built, and some higher-density will determine Cornell’s future density. plans that have been approved in Cornell has a larger proportion (43 Markham have ended up as conventional percent) of row and townhouses than low-density subdivisions. City planners either Markham (11 percent) or inner-city hope that Cornell will be completed with Toronto (10 percent). Thirty-seven per-

REVIEW 8 7 cent of Cornell’s housing is detached hous- house prices; unlike some of the early new es (Figure 2), which is substantially lower urbanist communities, this is not a high- than Markham’s 76 percent, and lower income enclave. than the metropolitan average of 43 per- Cornell has attracted young families cent. The median house size in Cornell with an average adult age just under forty, (2,037 square feet) is smaller than in the as compared to forty-eight for the metro- (2,300 square feet), as is politan area. The average household size is the median detached-house lot: 3,300 3.1 compared to 2.8 for the metropolitan square feet at Cornell versus 4,000 square area. The demographic profile of Cornell feet in the metropolitan area. Detached does not support the claims of some houses at Cornell sold in 2002 for researchers that new urbanist develop- C$240,000 to C$360,000, and - ments attract mostly single adults, with or houses for C$140,000 to C$190,000, without children. More than half of the compared to the average price in metro- survey respondents were first-time home- politan Toronto at that time of buyers, and most of the households came C$343,000, slightly higher in Markham. from the surrounding suburbs, suggesting Thus, Cornell, although located within a that Cornell is not competing with the wealthy municipality, offers a range of downtown condominium market. Since

Figure 2: High-density detached housing at Cornell

8 8 ZELL/LURIEREALESTATECENTER more than a third of respondents said that urbanist theory, access to theaters and they had considered moving outside the restaurants was not considered important. greater Toronto area, Cornell also appears More than two-thirds of respondents to keep households from moving farther considered that the “quality of the neigh- outside the urban boundary. borhood design” attracted them to Cornell, and more than half identified the project’s “general appearance” as an attrac- CHOOSINGNEWURBANISM tion. More than a third liked the wide range of housing available and the same Half of respondents said that a desire to proportion said they considered invest- buy their first home was one of their main ment value as one of their three main rea- reasons for deciding to move, and half also sons for buying their dwelling. A quarter said that they moved because they wanted of respondents expressed the importance to live in a new urbanist community. No of the pedestrian and park networks. The association (p-value=0.83) was found developer’s reputation, the transportation between the decision to buy a first home network, the project’s prestige, the mixed and the decision to move to a new urban- land-use, and ease of do not ist community. Changes in household size appear to have been major considerations. and changes in income were the other For the dwelling attributes, the floor plan main stated reasons for moving. helped more than 80 percent of respon- Most respondents considered either the dents decide on their present dwelling. dwelling or the neighborhood as being the Cornell has garages accessed by back lanes most important general factor affecting (Figure 3), and these lanes were positively their housing decisions. Of the location appreciated by almost a half of the respon- attributes, “proximity to friends and rela- dents, but less than a third of the respon- tives” was identified by more than half as dents valued porches and balconies, being one of the three most important in perhaps because their small size reduces their decision to come to Cornell. their utility. “Proximity to work” was important to The main statistically significant differ- more than 40 percent (availability of public ences across the dwelling types were due to transport mattered to less than 15 percent), the people in the higher-density options while “proximity to people with similar being more inclined to stress the impor- lifestyles” attracted more than a third. More tance of cost considerations and proximity than a third also valued access to and to work. Since “downtown” for these community facilities; contrary to new households is Markham rather than

REVIEW 8 9 Figure 3: Back lane at Cornell

Toronto, neoclassical arguments for a vious housing, by examining the other declining density gradient have to be options they considered before choosing adjusted to recognize the multiple peaks their current dwellings, by comparing within the growing polycentric urban the type of housing they would have region. These households may not be sac- selected had Cornell not been available, rificing commuting time for lower land and by examining the option they prices, but they are accepting the higher- would most likely choose if they were density to be nearer their work. For most looking for a new place to live. Our respondents, neighborhood attributes research shows that a household’s previ- played a major role in their decisions to ous type does not predict the move to Cornell, and most were aware of dwelling type they buy in Cornell. For the new urbanist features and expressed example, only 39.1 percent of the their appreciation of them. Thus, there is a households that came from detached basis for believing that new urbanist attrib- houses bought detached houses, and utes encourage households to accept high- only 22.7 percent of the households er-density living. from semi-detached houses bought semi-detached houses. More than a half (56.3 percent) of the households that CHANGESIN were living in townhouses bought a BUILDINGTYPE detached house in Cornell. This sug- gests that the survey population is het- The substitutes to Cornell can be erogeneous—as many are moving up as inferred by looking at households’ pre- down in their housing purchases.

9 0 ZELL/LURIEREALESTATECENTER A high proportion of the semi- sen a detached house were engaging in detached and townhouses occupants (86.1 wishful thinking. Most households did not percent and 67.9 percent) “seriously con- change housing types when they moved to sidered” buying a single-family detached Cornell. Most (80.8 percent) of the house- house but most also considered a semi- holds moving to detached houses would detached (83.3 percent) and a townhouse have moved to a detached house elsewhere (55.6 percent). The small proportion had the new urbanist option not been (11.3 percent) of households that consid- available. However, the distribution is even ered an suggests that suburban for households moving to Cornell’s town- multi-family housing types are not a sub- houses and it is possible that the option stitute for Cornell, and that the main effect deflected them into a higher-density build- on the market of higher-density housing is ing type. This tendency is supported by a trickle-down process: one out of every the semi-detached occupants, half of four Cornell households left an apartment whom said that they would have bought a unit behind for others to occupy. single detached house had Cornell not When asked about the housing that been available. respondents would have chosen had Most of respondents (86.6 percent) Cornell not been available, only two said that they would move to a single-fam- would have chosen a multi-family build- ily detached house if they were looking for ing, and more than half (56.2 percent) said a house now. Most (82.8 percent) also said that they would have chosen a detached that they would choose a new urbanist house, a proportion that is not much larg- community if they were to move now; er than the 41.8 percent currently living in only 3.4 percent said that they would not, detached houses. At most, Cornell drew and the rest did not know. Cornell’s cur- 14.4 percent of its households away from rent mix with 37 percent detached houses the suburban single-family detached house falls almost 50 percent short of satisfying market, a number that only moderately the demand for detached houses that is supports the claim that New Urbanism likely to be generated by its aging popula- reduces sprawl by conserving land. Since tion. Nevertheless, of the households that only 21.9 percent said they would have would select a detached house now, 82.3 chosen a townhouse had their Cornell percent say that they would choose one in option not been available, the project a new urbanist community. Apparently, either enticed people into the higher-den- the demand for a detached house does not sity option, or many of the townhouse lessen the respondents’ interest in New occupants who said they would have cho- Urbanism. These results support the find-

REVIEW 9 1 ings in the literature that suggest suburban higher-density type such as a townhouse. households like the detached house but are On the other hand, most of the occupants dissatisfied with the “rest of the package.” of the higher-density —semi- detached and townhouses—would move to a lower density dwelling. About a half of all CHANGESINLOTSIZEAND of the Cornell households would increase HOUSINGDEMAND lot sizes and a half would stay with their current building type. Only two house- Respondents were asked if their previous lot holds would decrease their land consump- was bigger, about the same, or smaller than tion by moving to a more dense building their Cornell lot. The same proportion type. Our research suggests that Cornell’s moved to a smaller lot (47.8 percent), as most permanent effect on land consump- moved to a larger lot (45.8 percent). Most tion is through its supply of detached hous- of the people coming from detached hous- es on small lots, encouraging some people es (76.4 percent) moved to a smaller lot, who are expanding their housing consump- while most of the rest moved to a larger lot. tion to accept smaller lots in exchange for More than a half (58.3 percent) of the higher neighborhood quality. households currently living in townhouses Households may move to larger lots moved to smaller lots, compared to a much because of increased household size, and smaller proportion (31.3 percent) of the the survey suggests that at least half of the detached house occupants. These statistics moves to Cornell were due to changing support the argument for more townhouse housing needs. The birth of a child suburban developments to help contain increased the size of 15.8 percent of the sprawl. However, the fact that many house- households. New households were formed holds stayed in detached houses but accept- by the 12.3 percent of the people who ed smaller lots suggests that they are either moved out from their parents’ home. giving up lot size to gain the attributes of Almost the same proportion got married New Urbanism, or are decreasing their (7.4 percent) as separated or divorced (6.9 housing consumption due to changes in percent) canceling their net effect on household composition or income. aggregate housing demand. Empty nesters, Comparing the current dwelling type however, were not attracted to Cornell. with the type that households would select The households that did not change size if they were to move now shows that are randomly distributed across the three detached house occupants would stay with building types. Three out of every four of detached houses and would not move to a the households that did not change in size

9 2 ZELL/LURIEREALESTATECENTER increased their dwelling size but only half portion did cite their desire to live in a new moved to larger lots, suggesting that some urbanist community as a reason for mov- Cornell households reduced lot size ing from their previous and often less land- despite increasing their house size. consuming dwellings. The distribution of Cornell building types by household changes offers no sur- prises: households decreasing in size tended SATISFACTION to move to townhouses (56.3 percent), while growing households move to The most important features attracting detached houses (55.3 percent). households to Cornell are the result of Households that decreased in size tended to neighborhood design (Figure 4); the prox- decrease both house size (66.7 percent) imity to friends, relatives and work; the and, more often, lot size (77.1 percent). Of house plan; and the back lanes. The impor- growing households, 38.3 percent moved tance of the in both the resi- to smaller lots, while only 23.8 percent dents’ decisions to move out of their previ- moved to smaller houses. Many of the ous dwelling and in their decisions to come households that could have been expected to Cornell is in accord with other research to move to conventional suburbs accepted of new urbanist communities. smaller lots and higher densities in Cornell. In response to the question “In gener- Evidently, New Urbanism encourages some al, how does your experience living here people to trade lot size for neighborhood compare to the expectations you had when quality, but the numbers are not impressive. moving in?” 91.4 percent of the 199 The net effect of Cornell depends also respondents felt that their experience was on the extent to which the availability of at least as good as their expectations and below-average-priced units lets people almost a half (43.3 percent) felt that it was move to larger houses at an earlier date. better or much better (12.0 percent) than Since most respondents saw themselves as the expectations they had when moving in, having had either a “wide” (67.0 percent) and only 17 respondent (8.6 percent) felt or, at least, a “narrow selection from which it was worse. When asked what they dis- to choose” (26.7 percent), most could have liked about Cornell, 30 percent men- found a dwelling elsewhere. Since a high tioned the traffic on local streets, 18 per- degree of choice tends to be positively cor- cent the lack of commercial development, related with satisfaction, we infer that no and 12.4 percent (mostly the occupants of one was pushed into Cornell by adverse detached houses) complained that their market conditions. Indeed, a sizable pro- houses were too close together. The 8.6

REVIEW 9 3 Figure 4: Compact neighborhood street at Cornell

percent whose expectations had not been CONCLUSIONS met were twice as likely (29.4 percent) to complain about density or small lots, and Almost all of the Cornell respondents three times more likely to complain about expressed satisfaction with their housing the lack of commercial facilities. When and their community. The quality of the asked in an open question what they “par- neighborhood design was an important ticularly liked,” the responses were consis- factor attracting most households to tent: community spirit (58.2 percent), Cornell and it appears to be accepted in neighborhood design (57.2 percent), loca- exchange for higher density. These find- tion (21.9 percent), and open space (18.9 ings are in accord with the Ricardian percent). The households whose expecta- model of land value based on quality dif- tions were not met were less likely to men- ferences. The more cost-conscious house- tion community spirit and much more holds are in the smaller units in the high- likely to appreciate the open space. In all of er-density housing and their somewhat the housing surveys that I have conducted higher concern for proximity to work is or been involved in over the last thirty in accord with the neoclassical theory. years, a small percent of respondents The story told through the survey always express their dissatisfaction with research suggests that some households their conditions, but we did not find a core are making the lot-size/neighborhood- group of households that were dissatisfied quality trade-off that is needed for the with the higher densities or with any of the new urbanist option to have a small net attributes of New Urbanism. Overall, the effect on the region’s density and slightly survey points to a very satisfied clientele. help to reduce sprawl.

9 4 ZELL/LURIEREALESTATECENTER The survey shows that half of Cornell’s move to a detached house if they were to households increased the size of their lots move now, but Cornell’s mix contains only when moving to the new urbanist com- 37 percent detached houses. Some older munity, and half decreased it. We conclud- households do move to smaller houses but ed that Cornell attracts households des- not nearly at the rate at which young tined to live in the suburbs and is not com- households in a growing city move to larg- peting with the high density condomini- er ones. The transitions that could occur um market. Most of Cornell’s residents within Cornell as the population ages will will either stay in their detached houses or not free enough of the larger units for the eventually move to a detached house. younger households who are now living in Although the density in Cornell is twice as Cornell’s row or townhouses, and who high as in some of the surrounding con- want to move to larger houses. ventional suburbs, its net effect on urban With increasing income, more house- density is not nearly as high on account of holds will be able to buy detached houses the differences in the kind of households and we can expect this trend to continue. that the two options attract. Many of Given the finding that most of Cornell’s Cornell’s residents are first-time buyers of residents plan on being in a detached lower-priced, higher-density houses who house at some future date, and that almost would not have been able to buy a con- all of these same households want to live in ventional suburban house. Had Cornell a new urbanist community, the future for not been available, they would have moved detached house subdivisions incorporating to some other townhouse community. We new urbanist principles appears very good. conclude, therefore, that the availability of By increasing the proportion of detached the new urbanist option did reduce sprawl houses within its projects, the application in the urban region slightly by placing of new urbanist principals in the design of detached houses on smaller lots, but the suburbs can help reduce sprawl. New reduction is much smaller than indicated Urbanism’s greatest contribution toward by a simple comparison with the density of increasing suburban densities can be made a conventional . by capturing the market for single-family The Cornell dwelling mix is not replic- detached houses on smaller lots. able across suburban development. One half of Cornell’s current population cannot be satisfactorily housed over their housing life cycle within a development like This work was made possible by a grant from the Canadian Cornell: 88.6 percent say they would and Humanities Council.

REVIEW 9 5