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Slide 1 Slide Presentation APPENDIX A The Impact of Smart Growth on Housing Affordability ANALYSIS OF 8 METROPOLITAN MARKETS BY LAND USE PLANNING SYSTEM
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Slide 2 Housing Affordability: A Tale of Two Nations Kansas CityPortland
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Slide 3 There has been considerable debate about whether the newer, prescriptive urban planning policies (“smart growth”) materially raise house prices in relation to the more traditional, responsive planning systems. This inquiry reviews house price experience and trends in 8 markets, 4 with prescriptive planning and 4 with responsive planning. An attempt is made to estimate market prices in the absence of smart growth, by developing a “market upper limit” that is applied to all markets. Prices and trends in responsive and prescriptive markets are then evaluated based upon this standard. Summary of Research SMART GROWTH & HOUSING AFFORDABILITY
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Slide 4 Housing Affordability Distribution: 2006 MAJOR METROPOLITAN MARKETS MEDIAN MULTIPLE (Median House Price/ Median Household Income) MEDIAN MULTIPLE 3.0 AFFORDABILITY MAXIMUM
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Slide 5 The Issue Does smart growth lead to materially higher housing costs than occur in non-smart growth markets?
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Slide 6 Land Use Planning Systems and Metropolitan Markets PortlandKansas City
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Slide 7 Planning Types & Markets RESPONSIVE PLANNING (Liberal) Atlanta Dallas-Fort Worth Indianapolis Kansas City PRESCRIPTIVE PLANNING (Smart Growth) Boston Portland (Oregon) San Diego Washington (DC)
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Slide 8 Population Growth:1996-2006 METROPOLITAN MARKETS Calculated from US Census Bureau Data
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Slide 9 Existing House Analysis: Median Prices PortlandKansas City
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Slide 10 Existing House: Structure Replacement METROPOLITAN MARKETS: 2006
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Slide 11 Existing House: Market Upper Limit METROPOLITAN MARKETS: 2006
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Slide 12 Existing House: Median Price METROPOLITAN MARKETS: 2006
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Slide 13 Existing House: Median Price Trend METROPOLITAN MARKETS: 1996 & 2006 2006$
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Slide 14 Median Price & Market Upper Limit METROPOLITAN MARKETS: 2006
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Slide 15 Median Price & Market Upper Limit METROPOLITAN MARKETS: 1996 2006$
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Slide 16 Median Price & Market Upper Limit Trend RESPONSIVE MARKET AVERAGE: 1996-2006 (2006$) Median House Price Market Upper Limit 2006$
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Slide 17 Median Price & Market Upper Limit Trend PRESCRIPTIVE MARKETS AVERAGE: 1996-2006 (2006$) Market Upper Limit Median House Price 2006$
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Slide 18 2006$ Market Upper Limit & Regulatory Excess EXISTING HOUSE: METROPOLITAN MARKETS: 1996
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Slide 19 2006$ Market Upper Limit & Regulatory Excess EXISTING HOUSE: METROPOLITAN MARKETS: 1996
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Slide 20 Share of Difference in Price Increases BY PLANNING SYSTEM TYPE: 1996-2006 Regulatory Excess 98% Non-Smart Growth Market Factors: 2%
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Slide 21 Predicted & Actual Smart Growth Impact “COSTS OF SPRAWL-2000” V. ACTUAL: 2000-2006 Change in Cost per House
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Slide 22 Demand & Median Prices: 1996-2006 METROPOLITAN MARKETS Change
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Slide 23 New House Analysis PortlandKansas City
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Slide 24 New House: Structure Cost NATIONAL & BY PLANNING TYPE
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Slide 25 New House: Structure Cost METROPOLITAN MARKETS
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Slide 26 New House: Finished Lot Cost METROPOLITAN MARKETS
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Slide 27 Market Upper Limit & Production Price METROPOLITAN MARKETS
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Slide 28 Actual Price & Market Upper Limit NEW HOUSE: METROPOLITAN MARKETS
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Slide 29 Market Upper Limit & Regulatory Excess NEW HOUSE: METROPOLITAN MARKETS
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Slide 30 The Negative Externalities of Smart Growth PortlandKansas City
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Slide 31 Price Difference Components PRESCRIPTIVE V. RESPONSIVE MARKET PRICES 2006$
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Slide 32 Share of Price Difference PRESCRIPTIVE V. RESPONSIVE MARKET PRICES
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Slide 33 Median Multiple: 1980-2006 MAJOR METROPOLITAN MARKETS BY PLANNING TYPE Prescriptive Planning Responsive Planning Calculated from JFK School of Government, Harvard University Data
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Slide 34 MEDIAN MULTIPLE (Median House Price/ Median Household Income) Housing Affordability Distribution: 1996 MAJOR METROPOLITAN MARKETS MEDIAN MULTIPLE 3.0 AFFORDABILITY MAXIMUM
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Slide 35 House Value:Income Ratio: 1950-2006 CALIFORNIA, TEXAS & UNITED STATES California United States Texas Median House Value/ Median Household Income Calculated from US Census Bureau Data
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Slide 36 Housing Affordability Distribution: 2006 MAJOR METROPOLITAN MARKETS MEDIAN MULTIPLE (Median House Price/ Median Household Income) MEDIAN MULTIPLE 3.0 AFFORDABILITY MAXIMUM
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Slide 37 Relocation Bonus: From Smart Growth MOVE TO RESPONSIVE MARKET (AVERAGE) Additional Years Gained: Purchase and Finance the Median Priced House (Median Income in New Market) 40-Year Career 11.4 Years Median Household Income Relocation Bonus $646,000
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Slide 38 Relocation Bonus: Move from Boston MOVE TO RESPONSIVE MARKET (AVERAGE) Additional Years Gained: Purchase and Finance the Median Priced House (Median Income in New Market) 40-Year Career 10.6 Years Median Household Income Relocation Bonus $598,000
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Slide 39 Additional Years Gained: Purchase and Finance the Median Priced House (Median Income in New Market) 40-Year Career 5.4 Years Median Household Income Relocation Bonus: Move from Portland MOVE TO RESPONSIVE MARKET (AVERAGE) Relocation Bonus $305,000
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Slide 40 Additional Years Gained: Purchase and Finance the Median Priced House (Median Income in New Market) 40-Year Career 18.3 Years Median Household Income Relocation Bonus: Move from San Diego MOVE TO RESPONSIVE MARKET (AVERAGE) Relocation Bonus $1,035,000
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Slide 41 Relocation Bonus: Move from Washington MOVE TO RESPONSIVE MARKET (AVERAGE) Additional Years Gained: Purchase and Finance the Median Priced House (Median Income in New Market) 40-Year Career 11.4 Years Median Household Income Relocation Bonus $645,000
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Slide 42 House Prices & Income Required MAJOR METROPOLITAN MARKETS: 1996-2006 Change in Years Income: Required to Purchase Median Priced House
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Slide 43 House Financing & Income Required MAJOR METROPOLITAN MARKETS: 1996-2006 Change in Years Income: Purchase & Finance Median Priced House
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Slide 44 Domestic Migration: 2006-2006 METROPOLITAN MARKETS BY PLANNING TYPE
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Slide 45 Domestic Migration Rate: 2006-2006 METROPOLITAN MARKETS
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Slide 46 Domestic Migration: Portland: 2000-2006 INSIDE & OUTSIDE URBAN GROWTH BOUNDARY
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Slide 47 Migration: San Diego & Rust Belt NET DOMESTIC MIGRATION: 2000 TO 2006
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Slide 48 Conclusion After accounting for non-regulatory (non-smart growth) differences, it is concluded that smart growth materially increases housing prices.
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