Traditionally, low-density zoning has been based on a desire to exclude so-called “undesirables” and thus keep property values high.
But now that compact neighborhoods are becoming more desirable (and thus more expensive), the argument that density leads to poverty and plummeting property values can no longer be taken seriously.
But Not-In-My-Back-Yard (NIMBY) activists now have a new argument: that far from reducing property values, density increases them too much, by making the neighborhood too desirable.
For a challenging analysis, check out wodehouse‘s response immediately below Lewyn. It’s complex, but worth contemplating:
As I have been trying to explain on various threads on Planetizen, inflated urban land prices are an obstacle to INCREASES in density in the RIGHT places. Urban land price curves do slope up towards the most central and most desirable locations. But when the entire curve is deflected upwards at the fringe (by serious “discontinuities” in land rents across regulatory boundaries) the prices also rise across the entire city simply because of the way real estate markets work. The result of this, is FEWER potential buyers at each zone apart from the fringe (which is where people “priced out” elsewhere are deflected to – actually to both there and “beyond” the fringe).
He concludes:
NOT having an urban growth boundary, is a MUST. This sounds contrary, but it is the truth.
So in Metro Vancouver with, the defacto urban containment boundary of the ALR in place for 40 some years, following Wodehouse one would expect to see lower densities inside that line and higher densities outside it, when in fact, quite the opposite is the case with urban population densities on average twice those in metro Vancouver as those in metro Seattle and Portland and significantly beyond that of US cities that have even looser urban containment policies than the relatively slack ones in place in places like Portland.