Urban densification is bad for the planet

We're told, aren't we, that building more densely in our cities will be great for the environment. Cramming everybody into a smaller space means more bikes, more walking, more public transport and fewer of those terrible, evil cars. With the result that, hey presto, all our carbon footprints are ever so much smaller.

Hang on a minute though...



Hmmm. This graph comes from a study by the Australian Conservation Foundation and, echoing similar studies from Chicago and elsewhere, it shows that transport - all those cars - isn't the bad boy you think it is when it comes to our carbon footprint. High-rise, apartment living itself generates a per capita carbon footprint 50% higher than is the case for suburban living. Even with a higher impact from using the car, suburbs are less environmentally damaging than dense urban environments. And this is without us even trying to reduce its footprint.

All this reminds us that, far from eating beef and driving cars being the biggest culprits in terms of energy use, heating or cooling our homes is the baddie. And not only is our individual footprint bigger (largely as a result of unshared accommodation and the lack of families in dense urban environments) there's also that huge additional cost dubbed "operational" - everything from street lighting and traffic management through to lifts and managing communal areas in apartment blocks. The idea that cramming us all together is good for the planet doesn't stack up.

Despite this (and despite denisification being bad for health, congestion and housing affordability) we are still wedded to the idea of ever more dense cities and to the denigration of suburbs as ugly, planet-killing, car-choked hell holes. Time to change.

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Densification policies won't solve London's housing crisis

Here's Joel Kotkin and Wendell Cox:

Nowhere, here or abroad, has densification materially improved housing affordability, whether for low income households or the larger number of middle-income households. Density-oriented policies have helped drive prices up so high that Bay Area, $200,000 salary engineers cannot afford a home near their headquarters. In the meantime, many young families are increasingly leaving the state for less heavily regulated and less expensive states like Texas, Nevada and Arizona. Among those under 35, 80 percent of all homes purchased nationwide are single family houses and virtually all surveys of millennials express an overwhelming desire for this kind of residence.

This reality is lost on our planners as they seek to square the circle of providing family housing in an ever denser planning environment. So what do those pesky millenials want in a house?

“This is very likely because a huge majority are now married (66%) or in permanent relationships (13%, and almost half (49%) have children under the age of 18 living with them. In other words, it appears that they are seeking to raise their families in suburban rather than mid-city environments. And the NAR figures confirm this, showing that in the past year 57% of buyers under the age of 36 opted for suburban homes – and that the most popular type of home purchased (83%) was the single-family suburban home with three bedrooms and two bathrooms.”

So in response to demand for the sort of suburban environment my generation enjoyed, the planners tell us they want denser development, flats above shops, tower blocks, garden-free apartments or town houses. This makes no sense yet it's precisely what the latest iteration of the UK's National Planning Policy Framework (NPPF) expects.

At some point we have to start asking people living on the fringes of London's suburbia (and other cities too) just why they have such an issue with some of the land near them being used for new suburban homes. Is it simply a matter of 'build 'em somewhere else'? Or are the common concerns - school places, traffic, medical centres, drains, floods - genuine? Maybe it's more visceral - some people in Cullingworth feel it isn't a village any more because of the new development.

There are lots of options and alternatives - new towns, garden communities, new villages, urban extensions - but none of these involve densification, piling people up on top of each other, cramming them into "walkable", "sustainable" tenement communities, a 21st century version of the crowded housing we cleared in the '50s, '60s and '70s. Build more suburbia, dammit!

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London's property market - are the vultures circling yet?

My wife owns a share in an apartment on the Costa del Sol and it's lovely. But as successful investments go, it isn't one. The area between Estepona and San Pedro is littered with the marked out roads, pavements and street lights for what would have been thousands of villas and apartments. Even some of the completed developments are ghosts, mothballed by the developer or the bank against some possible - even mythical - future recovery in the housing market. Don't get me wrong here, there are also thousands of completed developments filled with happy people from all over Europe, it's just that the enthusiasm of developers, the gung ho (and sometimes corrupt) approach of local councils to development and an international property investment industry focused on flipping off-plan rather than housing people resulted in a vast oversupply of development opportunities.

For all that the Costa del Sol is great, the supply of people who want to go and live there is limited especially given the competition from other sunny, cheap and welcoming places like Bulgaria, Malta, Cyprus, assorted Greek Islands, Turkey and Portugal. Not to mention the rest of Spain's Mediterranean coast. I know that 'living there' covers a multitude of options from full time residency through spending winter on the beach to what amounts to extended tourism. But such opportunities limit the demand for such property, even in a world where a two-bed apartment will cost as little as £100-150k.

Imagine then how limited the market must be for two-bed flats that are selling at £2-3m!

There are an extra 14,000 unsold apartments on the market for between £1,000-£1,500 per sq ft. The average price per sq ft across the UK is £211.

Molior says it would take at least three years to sell the glut of ultra-luxury flats if sales continue at their current rate and if no further new-builds are started.

However, ambitious property developers have a further 420 residential towers (each at least 20 storeys high) in the pipeline, says New London Architecture and GL Hearn.

So we already have 14,000 empties and plan on building about 40,000 further properties to go onto this market? Do we not see that this is going to do nothing at all to resolve London's housing problems, will probably bankrupt a couple of developers and will result in a lot of wealthy Londoners stuck in negative equity. Regardless of any Brexit effect, the simple truth the we learned on the Costa del Sol applies here - there aren't enough people who have the cash to buy these apartments and who want to own property in London.

...hundreds of Asian investors who had bought London developments off-plan in 2015-16 in the hope of making a quick profit by selling apartments on closer to completion have instead lost hundreds of thousands of pounds. “They intended to flip [buy and sell on] the apartments and make big profits, but it hasn’t worked out like that, and now they are trying to get out at the smallest possible loss.”

A lot of folk who lounged on Spanish beaches back in 2004 or 2005 will be very familiar with this pitch - it was what the salesmen said back then: "the market's booming, everyone's investing, you only need to put down a deposit, you can't lose!" A loads of people took the punt, sticking down options on, as yet unbuilt, apartments and villas expecting to "flip them". It didn't happen. Most ended up owning an apartment they hadn't expected to own that was worth a lot less than the mortgage. For some it was a financial mess, even a disaster.

In London and for the New London Architecture "shiny city of millionaires" sort of developers, the prospects look pretty grim right now. Not because of Brexit (although that probably hasn't helped) but because if your development strategy is based on there being an increasing supply of people who can pay more than £2m for two-bed flat, then - outwith Venezuelan-style inflation - your strategy is going to crash. London's centralise and densify policies are creating this situation. Indeed, I'm sure the vultures that feed apon unsuccessful capitalists' vanity are circling already.

The problem is that, in every way (not just housing) London is too expensive, not family-friendly and lacking in the essential community that makes places work. Without revisiting the "build it ever higher" strategy - densify, densify, densify - London faces a second property crisis; one of empty mothballed homes owned by anonymous finance houses, crashed property developers, a frantic secondary market of short term lets, and an ever-wondering public asking why the city built things for international investors to 'flip' rather than homes that people might want to live in?

I recall a conversation with a Yorkshire developer about a conversion and new-build scheme in Saltaire. He ended up rescuing the development by creating a rental business for the flats he couldn't sell. Speaking to me he said: "Six months earlier I'd have been pricing up yachts, six months later I'd have been bankrupt." Right now London's 'build it and they will come' development market is looking pretty ropey and it's hard not to conclude that, as ever, avarice and vanity have meant that property developers have ignored the lessons of the Costa del Sol.

Yes, you've got benign local (and national) government keen for you to build. For sure, there are banks from all over ready to throw money at the schemes. But are there actually enough real customers for the things you're building? If there isn't, you need to think again about the strategy. In the case of London, we've maybe reached the point where there isn't.

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No Sadiq, upzoning and densification don't resolve housing costs

You need 'urbanized area expansion' too:

The idea that the Bay Area might build more housing on greenfield sites – single or multifamily – isn’t even contemplated. Nor does the piece cite examples of where large scale infill densification actually rendered housing affordable in the absence of new greenfield construction. I’m not aware of any such cases.

That’s not to say that upzoning or densification are a bad things. I would support upzoning and building more infill in nodes proximate to transit stations. (I also think we should be honest that our intent in this is in fact to change the character of the neighborhood). But if you’re taking urbanized area expansion off the table, don’t ever expect to bring housing prices down materially.

No new building land, no fall in house prices relative to earnings.

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