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Home Location Preferences And Their Implications For Smart Growth

Todd Litman's picture

Location, location, location. Choosing a smart home location can help households become healthy, wealthy and wise, since it affects residents' physical activity levels, long-term financial burdens and opportunities for education and social interaction.

Several recent studies advocate smart growth development to help achieve various planning objectives, including affordability, health, energy conservation and pollution emission reductions. Just last week the Transportation Research Board released a major new report, Driving and the Built Environment: The Effects of Compact Development on Motorized Travel, Energy Use, and CO2 Emissions which concludes that cost effective smart growth policies can make a substantial contribution toward climate change emission targets.

These proposals are not without critics. Their main argument against smart growth is that, by reducing the supply of large-lot, urban fringe housing, smart growth harms consumers and contradicts market demand. For example, Alan Pisarski writes in a recent blog, "It is clear that most people, excepting a small but often very loud minority, opt for lower density living when income permits." Smart growth criticism rests primarily on this claim. Is it true?

I investigate this question in my new report, Where We Want To Be: Home Location Preferences And Their Implications For Smart Growth. It evaluates consumer housing preferences. Here is what I found.

Although market surveys indicate that most North American households preferred single-family homes, they also indicate strong preferences for smart growth features such as improved accessibility (shorter commutes), land use mix (nearby shops and services), and diverse transport options (good walking conditions and public transit services) and will choose small-lot and attached homes that offer these features.

The current housing market demonstrates a major shift in consumer preferences toward smart growth. Demand for sprawl housing is declining, resulting in oversupply and reduced value. Urban fringe housing is readily available for sale and rent at discounted prices. The current stock of large-lot housing should be adequate for decades, but the supply of small-lot and attached housing will need to approximately double by 2025 to meet consumer demands.

These shift result from various demographic and economic trends, including aging population, rising fuel prices, more positive attitudes about urban living, and increased health and environmental concerns. In addition, suburban living and suburban housing investments have lost their glamour. The housing market correction in 2008 spoiled this confidence. Households are likely to be more cautious and rational in the future. Described differently, for a few decades, consumer decisions seemed to defy the rules of economics. Households chose dispersed housing locations with little consideration to the resulting increase in transport costs. Increased congestion, rising fuel prices, health and environmental concerns are forcing consumers to be more rational. Some embrace this opportunity but others react with fear.

This is not to suggest that automobile travel and suburban living will end.  Even with aggressive smart growth policies most North Americans would continue to live in single-family houses, although a greater portion of those will be small-lot and attached housing, such as townhouses.

Rather than harming consumers, smart growth benefits consumers directly and indirectly. Many sprawl location households would probably be better off had smart growth policies been implemented years ago. They would now be less vulnerable to stresses such as higher fuel prices, job loss or illness, and would enjoy other benefits such as time savings, reduced accident rates, and increased physical fitness and health.

Smart growth critics are wrong to claim that sprawled development and automobile-dependent lifestyles are normal and socially desirable. Those reflect unique circumstances that occurred between 1950 and 1980: growing vehicle ownership, Baby Boom generation family formation, low fuel prices, increased female employment, middle-class flight from cities, highway expansion, and the excitement and prestige that resulted from rapid technological development. Virtually all of those factors have peaked. Driving will probably never be as cheap or as exciting as it was during that period.

When smart growth critics claim that sprawl is a universal preference they probably reflect their own preferences and those of similar-aged friends and neighbors. Most younger people I know prefer more urban neighborhoods, enjoy physically active transport, and telecommunications improvements (mobile telephone or Internet access) more than new vehicle technologies. 

For more information see:

Reid Ewing, Keith Bartholomew, Steve Winkelman, Jerry Walters and Don Chen (2007), Growing Cooler: The Evidence on Urban Development and Climate Change, Urban Land Institute and Smart Growth America (www.smartgrowthamerica.org/gcindex.html).

Reid Ewing (2007), "The Demand For Smart Growth: What Survey Research Tell Us," Planning, American Planning Association; at www.smartgrowth.umd.edu/pdf/Research_Dec07.pdf.

Christopher B. Leinberger (2008), "The Next Slum," Atlantic Monthly, March 2008; at www.theatlantic.com/doc/200803/subprime.

Jonathan Levine (2006), Zoned Out: Regulation, Markets and Choices in Transportation and Metropolitan Land Use, Resources for the Future (www.rff.org).

Todd Litman (2004), Evaluating Criticism of Smart Growth, VTPI (www.vtpi.org); at www.vtpi.org/sgcritics.pdf.

Todd Litman (2006), Understanding Smart Growth Savings, VTPI (www.vtpi.org); at www.vtpi.org/sg_save.pdf.

Todd Litman (2009), Where We Want To Be: Home Location Preferences And Their Implications For Smart Growth, Victoria Transport Policy Institute (www.vtpi.org); at www.vtpi.org/sgcp.pdf.  

Arthur Chris Nelson (2006), "Leadership in a New Era," Journal of the American Planning Association, Vol. 72, No. 4 (www.planning.org); at http://law.du.edu/images/uploads/rmlui/conferencematerials/2007/Thursday/DrNelsonLunchPresentation/NelsonJAPA2006.pdf.

John V. Thomas (2009), Residential Construction Trends in America's Metropolitan Regions, Development, Community, and Environment Division, U.S. Environmental Protection Agency (www.epa.gov); at www.epa.gov/smartgrowth/pdf/metro_res_const_trends_09.pdf.

TRB (2009), Driving and the Built Environment: The Effects of Compact Development on Motorized Travel, Energy Use, and CO2 Emissions, Special Report 298, Transportation Research Board (www.trb.org); at http://onlinepubs.trb.org/Onlinepubs/sr/sr298prepub.pdf.

ULI (2009), Emerging Trends in Real Estate, Urban Land Institute (www.uli.org); at www.uli.org/ResearchAndPublications/EmergingTrends/Americas.aspx.

Eric Weiss (2008), "Gas Prices Apply Brakes To Suburban Migration," Washington Post, 5 August 2008; www.washingtonpost.com/wp-dyn/content/article/2008/08/04/AR2008080402415.html.

Todd Litman is the executive director of the Victoria Transport Policy Institute.



good work


I like your article and your study. This does a good job to counter claims made by critics of smart growth planning. It seems to me if you just look at the areas where home prices are very high and there is a large demand for homes, those are often areas that are walkable, transit accessible, etc. I live in Madison WI and the near east and near west sides of town that are very close to downtown and the Univ. are very expensive and there is high demand for those smaller homes. They are areas with walkable retail in the neighborhood. Go further out and you will find large lots with large newer homes that cost less when they are traditional sprawl suburban style developments. In Chicago the prices for homes in older close to the city suburbs with good transit and walkable downtown areas are much more than for homes in the sprawling 'burbs with large lots far far from Chicago and far from anything other than office parks and strip malls.

Todd Litman's picture

Smart Growth Home Preferences and Prices

Dear Froggyprager

Thank you. Positive feedback is always appreciated!

Yes, one of the key implications of this research is that many households prefer living in smart growth communities (compact, mixed, multi-modal). If such housing is in short supply, prices incease making them unaffordable to many of the people who need them most: people with low incomes and physical disabilities. Described more positively, to the degree that land use policies and planning practices support smart growth development they provide a variety of very important benefits: direct savings and benefits to the additional households that are able to move into those homes, and indirect benefits from reduced traffic, road and parking costs, accidents, energy consumtion, pollution emissions and habitat loss. Communities and developers that ignore these trends will be at a competitive disadvantage compared with those that do.

Todd Alexander Litman
Victoria Transport Policy Institute
"Efficiency - Equity - Clarity"

supply and preference


This is an impressive report. Another point is that reported preferences often reflect current supply rather than absolutes. For example, surveys in San Fransisco and Portland revealed that the lack of affordable family-designed housing is a major reason families with children "prefer" single-family homes. This was also borne out in Vancouver, which published "High-Density Housing for Families with Children" design guidelines in 1992 and now has many children living in high-density neighborhoods.

It is true that the percentage of households with children has fallen dramatically since the Baby Boom, but even at zero population growth these households would make up roughly a third of the population (even in famously "childless" countries like Japan). I would like to see an updated version of Vancouver's design guidelines adopted as a significant part of "Smart Growth," especially since family-friendly design is also oriented to pedestrians of all ages and accessible to people with disabilities.

Several resources that have been helpful to me on this issue:

When we decided to have children, we carefully considered the options and decided to stay in our walkable urban neighborhood in Seattle, but it took us a long time to find even a 2bd apartment.

Smart growth not so smart

Beware of smart growth in your town. It is founded on the premise that you want growth, even if you don't. Small and mid-size communities are being taken over by State mandates that plan on growing your town, even if the majority is against it. Smart-growth does not do well in a democratic society. So it uses power-broker developers to force its growth agenda through City Councils and County Boards. Buyer beware!!!

what about smaller cities?

Todd, thanks for the article - good stuff.
As a planner in a smaller provincial city with a population of approximately 150,000 I constantly face the argument from politicians and anti-smart growth colleagues that most of the smart growth policies are designed for larger cities.
I am not aware of any research reports that illustrate that these trends (younger generation's preference for urban neighborhoods) are also applicable to smaller cities.
Do you know of any reports that I can source?
As you know, smaller cities just dont have the resources to fund these type of reports.

Smart growth Poison

Smart growth principles killed my former home town of Santa Barbara. The development lobby used these smart growth principles to ram in high-density development, even after citizens said it would ruin the character of the once- midsize city. The fallacy that smart-growth principles preserve land outside the city is upside-down. The larger the city gets, the more people want to come and develop outside the city. Developers are laughing all the way to the bank using this tool to take over cities.

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