The density & affordability question

Housing
Monday, March 29, 2021
A quadplex in Elizabeth, Charlotte NC

There’s been a noticeable shift in the debate about density in Charlotte’s 2040 Comprehensive Plan over recent weeks. What started as a classic confrontation of progressive planning concepts vs. NIMBY-inspired resistance, has now taken on a different tone, with competing viewpoints emerging about the role that density plays in issues such as equity, affordable housing, and how to control the forces of gentrification and displacement. 

On March 9, Equitable Communities CLT, an advocacy organization promoting informed decision making around equity-related policy issues, issued a “call to action” concerning the 2040 Plan that, among other concerns, stated that “(w)hile there are some benefits (e.g. environmental) of increasing housing choices and therefore density in our Neighborhoods it will not minimize our income and racial Neighborhood diversity. To achieve the desired changes in diversity requires a more holistic approach than currently is proposed in the 2040 Plan.”

A few days later, the Charlotte Community Benefits Coalition, representing thirty neighborhood organizations around Charlotte, held a press conference calling for the city to slow down the process for adopting the plan until there’s more analysis of its potential impact on gentrification, noting “(t)he 2040 Plan will transform land use decision making and likely reduce the leverage that communities have over development decisions.”  

And Charlotte isn’t alone in experiencing an equity backlash to land use policies that encourage greater density, as opposition has emerged in other cities such as Washington, D.C. as well. While critics acknowledge other benefits of density – such as more efficient uses of land and infrastructure in an era of climate change, and the creation of more dynamic and resilient streetscapes and neighborhoods resulting from mixed uses and denser populations – there’s growing skepticism around the “density = affordability” rationale.

Both sides in this debate feel like they’re right: Adding more housing units seems like it would help with affordability, because of the law of supply and demand. And yet, a quick glance around densifying neighborhoods confirms they’re some of our most expensive. 

As I’ve listened to these debates, not just in Charlotte but also in surrounding communities such as Davidson, my mind has often returned to a first year graduate school class in housing policy, and a little known and even less understood concept we studied called “housing filtration.” And it seems to me that the recent disconnect that has emerged around the density and affordability issue is in large part due to a lack of understanding about how filtration works in the housing market, and how it relates to the more familiar economic concept of supply and demand.

Supply and demand is rather straightforward:  as more housing is built, the resulting increase in supply should lead to lower housing costs as demand is met. But the filtration theory goes further in explaining how that dynamic is likely to play out in a conventional metropolitan housing market.  

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That theory goes something like this: unless part of a community’s new housing supply is met through some form of subsidized housing, the increase in affordable units rarely emerges from market-driven construction. Instead, the increase typically materializes as a result of older housing “filtering down,” as those who can afford it “move up” to the new market rate (and higher) housing being built, with the older housing they vacate filtering down to lower income buyers and renters. This is the housing stock that planners refer to as “naturally occurring affordable housing,” or NOAH for short.

Once this filtering concept is understood, it becomes easier to understand the growing disconnect between advocates who have embraced the density = affordability argument as planning orthodoxy, and skeptics who view it as a potential Trojan horse for the forces of displacement.

On the one hand, density advocates intuitively feel they have economics on their side, as anyone who has taken an Econ 100 class in college understands the concept of supply and demand. They’re also justified in pointing out how past discriminatory practices used single-family only zoning as a tool to segregate neighborhoods by race and class, and that a more diverse mix of housing options is a step toward addressing old practices of exclusion. 

And yet skeptics of the density = affordability argument also intuitively sense that something is missing in the equation, since for all the supply and demand arguments, few of the neighborhoods where density is actually occurring (whether it’s a central business district, an affluent single-family neighborhood, or a gentrifying community) have much in the way of affordable housing being built. This is especially true in a city like Charlotte without inclusionary zoning to ensure a percentage of affordable housing is built in those neighborhoods (which isn’t an option in the absence of enabling legislation, in a Dillion’s Rule state like North Carolina). 

The duplexes, triplexes and quadplexes being promoted for selective infill in traditional, single-family neighborhoods are unlikely to be at price points that are affordable to those most in need. Newly built duplexes (or “duets,” as they're known in high-priced neighborhoods) are selling for $1 million in Dilworth. Nor is much older housing filtering down in close-in, central neighborhoods, as buyers are driving up prices to acquire the older houses, often for tear downs to build more square footage on the available lots.


Quadplexes in Badin, east of Charlotte, were a common housing type in this former factory town. Photo: Nancy Pierce

The housing that is filtering down? Wherever it is in the metro region, it’s likely to be older housing that, if not yet substandard, isn’t too many years from being so, and facing the need for significant investments for rehab in the near future. So we’re back to the more fundamental need for public subsidies for affordable housing – whether it’s for new construction or the rehab of older units – as reliance on a private sector-driven “build, build, build” model alone is unlikely to solve the affordability problem.

Then there’s the added burden of transportation costs, as much of that filtering is probably taking place further and further from the urban core and its adjacent, close-in neighborhoods. Even Mecklenburg suburbs like Matthews and Davidson are growing more expensive, so future metro-level filtering will likely take place across county lines, where the region is a long way from having adequate public transit to lessen the burden of additional transportation costs for low income families moving further away from jobs and economic opportunity. 

So both sides of this debate are probably right. Zoom out to the metro level, and greater density will add supply, likely leading to more affordable options regionally as housing filters down. But zoom in to a specific neighborhood, and skeptics of the density = affordability argument also have a point if they’re being asked to believe that density will automatically result in more affordable housing in their locales, thereby avoiding displacement and new cost burdens for the very population the density is supposed to benefit.  

We tend to look for easy answers in the civic domain, but public policy challenges rarely have clear-cut solutions, and usually involve tradeoffs. For a while, urban planners, some in the social justice movement and even developers had seemingly found a policy issue they could agree on – encouraging more density would result in more affordable housing. But as the hidden costs and unintended consequences associated with achieving that goal on a metropolitan scale have become clearer at the neighborhood level, the coalition has started to fray.

That doesn’t mean Charlotte should throw up its hands and surrender in its fight for a new comprehensive plan, or even abandon some of its more controversial elements, such as more housing choice and selective density.  

But a genuine effort to understand the complexities around the recent divergence of views could actually lend legitimacy to both sides of the debate, thereby minimizing the polarization that often results when people feel they are being condescended to for not “getting the concept,” or when motives are questioned.  

This mutual validation, along with further dialogue about how to mitigate the negative impacts of a more dense and urban future, may be our best hope for finding common ground and adopting Charlotte’s first new comprehensive plan in more than 45 years.