Ann Arbor Area Parks and Greenbelt Proposal
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Question: Proposal B opponents claim that the proposal would cause Ann Arbor housing prices to spike. A more careful analysis of this claim -- bolstered by real-world experience -- shows that it is utterly false.

Answer: The opponents of Proposal B have argued that it will drive up housing prices in the Ann Arbor area. Other land preservation opponents make the same argument, and often cite the fact that two of the cities with some of the country's most effective growth management program - Boulder (CO) and Portland (OR) - have high housing prices. While the argument seems to make intuitive sense, the facts prove otherwise.

Other factors drive housing prices far more than the supply of buildable land. Urban sprawl is NOT the answer to affordable housing.

Portland has had an urban growth boundary (UGB) since 1979, and land preservation opponents have linked the growth boundary to Portland's housing prices. But a 2002 study by the Brookings Institution for the Fannie Mae Foundation concluded that "prices did not rise nearly as fast in Portland as in many other regions in the 1980s, that home prices rose faster in Portland only from 1990 to 1994 or 1996, and that home prices in several other regions without UGBs were also rising rapidly." The study concluded that "it is erroneous to conclude from Portland's experience that UGBs inevitably cause home prices to rise faster."

Thirty years ago, Boulder established a fund to acquire a greenbelt of open space around the city. Since then, land preservation opponents have argued that Boulder's greenbelt has caused high housing prices. While Boulder's housing is expensive, the city's growth controls are not the cause. Housing prices were high before any growth management programs were ever enacted, and prices remained the same relative to those in nearby Denver both before and after the growth controls were implemented. Between 1990 and 1999, the price of the average single-family house in Boulder increased by 106 percent, in Denver by 103 percent, and in nearby Douglas County by 110 percent, according to reports of the U.S. Department of Housing and Urban Development. Denver and Douglas County don't have a greenbelt.

In a 1992 study of 14 California cities, half with strong growth controls, half with none, there was no difference found in average housing prices. Some of the cities with strong growth controls had the most affordable housing, because they had active low-cost housing programs. The most important factor in housing affordability is not so much house cost as income level, so development that provides mainly low-paying jobs makes housing unaffordable.

It is also worth noting that Lancaster County (PA) has one of the country's most successful open space preservation programs and uses the same methods (purchase of development rights, or "conservation easements") that are being proposed here. Housing in Lancaster County is among the least expensive in Pennsylvania.

Why is there no strong evidence of a correlation between land preservation and housing prices?

The supply of buildable land is not the most significant factor in determining the price of housing. The number of housing units, their location, the community's quality of life, and the buyer's ability to pay are more important drivers. Ann Arbor has so much going for it that housing and land values have experienced a history of growth well in advance of open space preservation efforts. While a diminution in the desirability of the Ann Arbor community and lowering of wages would drive down housing values, it is unlikely that anyone would recommend dismantling the amenities or shrinking the paychecks of people who work and live here.

Furthermore, Proposal B will not dramatically change the number of housing units in the greenbelt area.
On average, the plan will remove only 0.1% of Washtenaw County's acreage out of development per year. Instead, it will help guide growth to places in the Ann Arbor area which already have water, sewer, roads, and other infrastructure, and will encourage denser development in those places. Within the City, a new project which complements Proposal B would lead to the addition of 2,000 residential units in the downtown area.

Finally, it should be emphasized that Proposal B will have absolutely no impact - one way or the other - on the supply of affordable housing for low-income persons. This housing is provided through publicly subsidized programs, which are unaffected by Proposal B. The City of Ann Arbor, the City of Ypsilanti, and Washtenaw County have actively promoted affordable housing. The City of Ann Arbor has built more affordable housing in the last few years than in decades. The county has also been helpful in addressing this need. The county is partnering with various townships as well as the city of Ypsilanti to provide both rental housing and homeowner rehabilitation for low-income residents.

Paid for by Friends of Ann Arbor Open Space, 1308 E.Stadium Blvd., Ann Arbor, MI 48104

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