A Balloon Animal Analogy of Gentrification

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A city’s housing market is like a balloon animal.

The amount of air in the balloon represents the land prices – the overall demand for housing in (particular areas of) the city.

And the exact shape of the balloon animal is determined by how you squeeze and twist the balloons in particular areas. That’s your city zoning laws.

Balloon animal fans know that when you squeeze one area of the balloon, the air doesn’t just go away. Delightfully, it just pumps the air into a different section.

Likewise, squeezing the air out of expensive central neighborhoods through zoning rules like height limits, free parking mandates, and other caps on infill construction doesn’t make the demand for luxury housing go away. It just pushes the development frontier out into other areas of the city.

The 38-foot height caps in Philadelphia’s Southwest Center City neighborhoods are the primary factor driving rent increases in Point Breeze. There is a clear causal line between this and this. Neighbors at 23rd and South squeeze the balloon by blocking taller buildings (5 stories oh noez!), but the housing just bulges up to the south of Washington Ave.

The real shape of the the Philadelphia balloon has a big “wedding cake“ shape at the center, with tall buildings flanking the length of Broad and Market, and smaller wedding cakes near transit stations and commercial corridors in high rent neighborhoods.

Some people like the idea of smooshing the wedding cakes with 38-foot height limits and other caps on density, and squeezing the housing demand further out beyond the four central quadrants of the city. We’re down 1 million people from our peak population, after all, so why not spread out?

That’s not my favorite idea though, because I think the number one goal in land use policy has to be maximizing public transit ridership, and growing the share of residents who can conveniently walk and bike to work.  To accomplish this, we need to let the balloon expand in the areas closest to employment centers (Center City and University City) and rail stations. Letting the balloon expand where it wants is more compatible with a low cost of living (because more people can cut car expenses out of their household budgets) and sustainable, equitable growth.

This entry was posted in Miscellany.

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