Of Density and Data, or, What About My Property Values?

Over coffee recently, I was talking with a friend about the fast-rising price of housing. She sympathized with my concern but pointed out, “People want a buying frenzy when they put their house on the market.”

That remark took me aback, but only for a moment. It’s natural, after all. For most homeowners, our home is not just where we live; it’s also by far our biggest financial asset. It’s our nest egg as well as our nest. In a world full of uncertainty, the value of our home is our safety net.

Fifty-six percent of prospective buyers in our area say they have considered getting a second job so they can afford the price of a home, according to an April 28 Philadelphia Inquirer article. When those of us who already own homes read statistics like this, we may feel a messy mixture of feelings. Shock, perhaps. Dismay for those unable to find a foothold in the housing market. And possibly, anticipating the appreciation of our asset, some relief (or even glee).

For better or for worse, there’s not much a town like Swarthmore can do to stop the price of houses from going up even if its council and residents want to—or to prevent homes from selling on the first day they’re listed to buyers offering cash, which has become more or less the norm. The reasons for the state of the housing market are the subject for a different blog post, but I’ll just note here that they range from a demographic surge in the number of Americans reaching the typical home-buying age to low interest rates to pandemic supply chain problems. (Rising interest rates may be cooling the market slightly right now, but that’s not going to make the problem go away.)

When I talk about wanting Swarthmore to be more affordable, I’m not talking about limiting the amount of money people can sell their houses for.

What am I talking about then?

Not Being Forced Out

I worry about my neighbors who’ve lived in town for decades but won’t be able to afford to stay in their homes once they stop working. Many of these people have paid off their mortgages, but they still face large property tax bills and the prospect of needing a new roof or cleaning up a flooded basement.

These residents would almost certainly realize a tidy profit were they to sell their home, but they don’t want to sell. They want to stay where they know their neighbors and perhaps raised their children. They don’t want to leave the community they love.

Back in 2015, Swarthmore’s Aging-in-Place Task Force looked at this issue and made some thoughtful recommendations. Among these is permitting accessory dwelling units (ADUs—otherwise known as in-law suites, garage apartments, etc.) to provide a rental income stream to help retired people afford the continued costs of home ownership. The report points out that regional planning agencies like the Delaware Valley Regional Planning Commission also promote ADUs as important municipal tool to support housing for seniors and others of modest means.

Everyone should read the Aging-in-Place report! It’s an extremely thoughtful and well-written document, and pretty much everything it says is still relevant today.

Points of Entry

Lately I’ve been thinking about the affordability problem as a problem of points of entry. Certain categories of people (wealthy ones) can afford the price of entry into Swarthmore, but where are the access points for anyone else?

ADUs can help address this problem too. We can see this when we look at examples of how legal ADUs, built before our zoning code was enacted in the 1970s and therefore grandfathered in, are functioning.

A backyard ADU in Tacoma, Washington, courtesy of the Sightline Institute’s Modest Middle Homes Library

A divorced friend of mine was able to afford her house in Swarthmore because it came with an upstairs apartment she could rent out. Her tenant was a Swarthmore-Rutledge School teacher who wanted to send her kids to the school where she taught.

Because my friend’s house had a legal ADU, both she and her school-teacher tenant—two single parents—were able to be part of this community.

Another approach would be to divide some of our town’s large homes into multifamily condominiums. This too was recommended in the Aging-in-Place report. (The current zoning code permits the conversion of a single-family dwelling to two-family dwelling, but only through a public hearing process and approval by the town, and conversions to triplexes or quadplexes are not allowed.)

I recently stopped my car to look at an elegant three-story stone house in north Swarthmore that I knew to be a three-unit condominium, though from the outside you’d take it for a single-family home. We have about 50 buildings with between two and ten housing units in them in town that have, like the ADUs, been grandfathered in, but most big-house multi-units in Swarthmore are apartments rather than condominiums. I’m all for rentals, but I’m also interested in seeing people gain a foothold in the housing market, and condos are a great way to do that.

With large homes in town now routinely selling for over a million dollars, dividing them into two- or three-bedroom flats that might cost what I paid for my house in 2000 ($309,000) seems like a strategy worth pursuing.

Proposals like ADUs and large-house conversions are often referred to as “gentle density.” I could imagine using such strategies to add perhaps 10% more housing units to our town’s current 2,200.

But What Would That Do to Property Values?

I’ve heard a lot of concern that adding housing will change the nature of our community and lower property values. To this I’d say, first, gentle density is not about adding large apartment or condominium complexes. As a piece from last summer in New Jersey’s Friendly Planning Newsletter points out, density can be added subtly with “policies that acknowledge the historic scale of a place and build density incrementally, by leveraging historic housing typologies.”

In other words, we can go slow and make use of the housing stock we already have.

Studies of this issue are relatively new, but data is coming out. It shows that gentle density does not depress housing values but in fact increases them.

Think about a homeowner who converts their garage into an ADU and rents it out. What will happen to the value of that property? I think you can see that it’s going to going up. A recent paper by Sarah Thomaz at the University of California, Irvine, shows that ADUs typically increase property values by 40-60%.

I’m definitely interested in going slow. I’m also advocating here for the gentlest variety of gentle density.

Still, it’s worth pointing out that even new large housing complexes with subsidized rents, built for low-income people, generally raise the value of neighboring properties. As an author of a 2022 study by the Urban Institute told the Washington Post:

There is already so much evidence for the benefits of affordable housing—we know it reduces homelessness, lifts people out of poverty, improves health outcomes, helps kids succeed and stay in school…So the fact that we don’t see any negative effect [on home prices] is really huge. Not only that, but we’re seeing a consistent positive impact.

Change Is Coming

There are good reasons to approach any changes to Swarthmore’s zoning code with caution. As a community, we need to talk about what we want our town to look like in coming years and try to come to consensus about the best way to achieve those goals. We need to look at what other communities are doing, dig into whatever data we can find, and think hard about potential unintended consequences.

But we shouldn’t talk so long that we neglect to take action.

As one former borough council president reminded me recently, change is inevitable. Our task is to shape that change as well as we can for the good of the community.

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Top Down or Bottom Up? Trying to reform zoning in a small town in the Cascades

Mia Bretz is a land-use planner who tried to diversify the kinds of housing available in her small town in the foothills of the Cascade Mountains. She says she failed. The reasons she cites are revealing.

Here’s what happened.

Mia was recruited to run for the city council in Leavenworth, Washington—a town of about 2,000 modeled on a Bavarian village—because of her passion for land use. In 2016, she won a seat on the seven-person body. She told me she was the only council member pushing for changes to promote more reasonably priced housing. The other six were willing to go along—but only to a point.

Mia’s town put together a task force of local stakeholders interested in housing. They got a grant for a consultant to put together a needs assessment and an action plan. The council signed off, and the planning commission went to work reviewing it and prioritizing items for implementation.

The first two items were pretty basic:

• To increase the density of dwellings permitted per acre from four to five in some parts of town. (“A really, really, really small change,” she said.)

• To permit duplexes by right. (The town sort of did this already anyway, since accessory dwelling units—a.k.a. ADUs, granny flats, or garage apartments—had already been legalized.)

Low-hanging fruit, Mia thought.

But when the vote was taken at the council meeting shortly before the end of Mia’s term, only one colleague joined her in voting for the density change. For the duplex change, hers was the only vote in favor. All the other council members voted no.

It was a bad way to go out.

Why Did Zoning Reform Stall in Leavenworth?

What happened in Leavenworth? Why wouldn’t Mia’s colleagues support the changes recommended by the task force on housing?

Leavenworth’s housing survey had shown that most residents supported the proposed changes. But those supporters did not come to the meetings. They did not contact their representatives.

In other words, although many local residents supported zoning changes to promote affordability in housing, no grassroots organizations pushed for changes. The effort had been top down rather than bottom up.

“I feel I failed in activating our community properly to make sure our council saw why these actions [were] critical,” Mia told me.

It didn’t help that several powerful landowners made their objections loud and clear. “Theirs were the only voices the council was listening to,” Mia said. But the outcome might have been different if the broader community had mobilized in favor of the plan.

A Bottom-Up Movement in Swarthmore

Mia was curious about our affordability project in Swarthmore. I told her how a few acquaintances had come together last summer because of a shared concerned about rapidly rising housing costs. How our conversations had led to a petition drive asking our borough council to authorize a task force to study the problem of the disappearance of reasonably priced housing. How we assembled readings and held three online reading groups. How we were planning to organize public forums and presentations to community groups.

Mia was impressed. “You have an advantage,” she said.

As we talked more, I saw that Mia had been modest about her accomplishments. During her time on the council, accessory dwelling units were added to the zoning code, short-term rentals were regulated through a bed-and-breakfast permitting process (breakfast not actually required), and a new, zero-lot-line ordinance allowed for townhouses and other kinds of gentle density. Still, she felt, given the seriousness of the problem, that was far too little.

I’m impressed by the work Mia has done, and I’m confident there will be more changes in Leavenworth.

But what struck me most about our conversation was her excitement that the people working to promote reasonably priced housing in Swarthmore are neither professional planners nor government officials, but just ordinary citizens.

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A Different Kind of College Town

The town planner from Mansfield, Connecticut, told me that professors at the University of Connecticut tend not to live in their college town because the houses are so run down.

I was surprised. Here in Swarthmore, when college professors don’t live in town, it’s often because the houses are so expensive.

I’d called the Mansfield planner, Linda Painter, because I wanted to hear about the town’s Affordable Housing Plan, passed last year. What kind of response did they get from residents? How did the plan’s proponents persuade the town to support it? How did the town council respond to the kinds of concerns I’ve heard in Swarthmore, for instance that permitting single-family houses to be converted to duplexes, or legalizing garage apartments (i.e., accessory dwelling units, or ADUs), might hurt property values or cause unwelcome noise or congestion?

But Linda reported that the residents of Mansfield didn’t have many objections. Their questions tended to be less about money than about logistics. “Sometimes people would call and ask how a project would affect their getting in and out of their driveway, if they lived opposite a building,” Linda said. “Technical things like that.”

She must have seen my startled look through the Zoom screen. “We’re a very progressive community,” she explained.

Campus of the University of Connecticut in Mansfield

I got Linda’s name from DesegregateCT, an organization that campaigns for zoning reform across Connecticut in order to “make communities more equitable, affordable, and environmentally sustainable.” They have created a zoning atlas of their state and an easy-to-understand playbook for advocates of zoning reform anywhere.

Hearing that I was interested in learning from a community that was addressing the affordability crisis, the staff at DesegregateCT recommended Mansfield because it’s also a college town. That’s true, but what a different kind of college town! Unlike Swarthmore with its modest population of 1,400 undergraduates, Mansfield’s UConn has 12,000 students and Division I sports. 

Accessory Dwelling Units (ADUs)

Still, the concern of some Swarthmoreans that permitting, for example, ADUs would spread noisy, disorderly college students throughout the town is a very real worry in Mansfield. To address this concern, Linda told me, the town requires that either the main dwelling or the ADU be occupied by the owner. This owner-occupancy requirement helps ensure that the renters won’t be too noisy or make too much of a mess. 

The bottom line about ADUs in Mansfield, according to Linda? “They allow people to stay in their homes.”

For townspeople having trouble paying their mortgage or taxes—possibly because of an illness, job loss, or retirement—the rental income makes it possible for them to remain where they are.

Beyond Zoning Changes

Mansfield also has an Affordable Housing Trust, created last November. Money from the trust will help income-eligible residents with down payments, make repairs that will allow them to stay in their houses, and create accessible homes for people with disabilities. Although the money from the trust isn’t available yet, the town’s new Affordable Housing Committee is tossing around ideas to fund it. These include small fees for building permit fees and proceeds from the payment in lieu of taxes (PILOT) the town gets from the university. (As a non-profit, the university is tax exempt, so it makes non-tax payments to its home municipality instead.)

Swarthmore College, too, pays a PILOT, largely to support the police, fire, and ambulance services the borough provides. These days, the amount of the PILOT is about $350,000. The college also pays property taxes on the hundred-plus houses and apartments it rents to faculty and staff. 

That’s a substantial contribution. Still, I find myself wondering whether the college board and administration might consider some further creative partnership to help keep the borough more equitable, affordable, and environmentally sustainable—what it would be worth to them. 

I wonder what it’s worth to all of us.

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