Urban living economics

Urban growth reduces region-wide housing costs

Kudos to Matrix for this post regarding a study by Sacramento State University that suggests overall region-wide housing costs drop if a central or downtown area has a 10% growth in housing. These findings differ from the long-standing belief that reducing sprawl drives up housing prices.

The study suggests that if sprawl is controlled housing prices could be expected to fall as buyers would purchase homes in a more dense setting. If sprawl is allowed buyers will seek out larger homes on larger lots, which are usually located further out from the urban center.

It will be interesting to see if the theory plays out here locally with the development underway in downtown Ft. Myers along the Caloosahatchee River. In theory, the buyers of a riverfront condo would probably be looking at a single-family gulf access home if the condo alternative was not available. With all the planned projects it seems feasible that we will approach the 10% downtown growth threshold.

Study: Growth control does not mean high housing prices [Central Valley Business Times]