Incentivizing Housing Production

The answer is DENSITY.

Over the holidays I was lucky enough to spend time with my children and granddaughter in Rome. Before leaving I had convinced myself that I would not write about Italian housing trends. After visiting, I changed my mind. The biggest “housing” takeaway from my visit was continued affirmation that density is good.

Typical Street in Rome

Density has been a controversial subject in virtually every Illinois community I have worked in, especially in my hometown of Rockford, Illinois. Some communities have pushed for greater density to increase their returns on investments of infrastructure and others, like here in Rockford have pushed back on increased density.

I have long heard Rockfordians tout that density is bad and often one will hear elected officials cite the dangers of density. These alleged dangers include higher crime, unhealthy conditions, and a host of other unsupported claims; however, given that these decision makers control what land use policies get adopted, we have embraced sprawl, increased minimum lot sizes, and focused primarily on single family housing production – well, we used to. If we reflect back to my September 30, 2023 post, The Rockford Housing Market, we see that this focus along with our land use regulations, Reforming Land Use Regulations and Housing Production published November 2, 2023, have all but killed production. Now can be the time to change. Now needs to be the time to change.

Density is not bad.

Increased density leverages existing infrastructure, or money our community has already spent on roads, parks, and other quality of life measures. The municipality wins. Density allows for land costs to be reduced on a per unit basis allowing developers to add better quality materials and amenities that make the properties attractive. The developer wins. The biggest winner however is the community as the rent or for sale prices can be reduced allowing one’s money to buy more, or simply live more affordably.

This is where Rome comes in. As I walked miles in the city, I couldn’t help but notice the benefits of density – more residents, more walkability, and more businesses in neighborhoods. All of this existed in harmony. Of course, this is typical in Europe.

Since I know housing doesn’t exist in a silo, I’ve read about the other factors that help drive desirability for living in areas and resident outcomes aka The Social Determinants of Health.

The biggest indicator of success is life expectancy. We look at life expectancy as it is where the conditions of where you live come to roost. Life expectancy in Italy is 84 years from birth. In the U.S. we just dropped to 76 years. In Winnebago County we average 77 years. Italians live longer then we do, and it should be noted they live longer while spending nearly 1/3 on health care expenses per capita compared to the US – but that’s another story.

We know crime affects life expectancy and crime is often cited as driven by density. The Italian murder rate is 1.1 murders per 100,000 residents. The US is 5 per 100,000. Rockford is 10.8 per 100,000, placing us at 17^th most dangerous city in the Nation.

Looking at all crimes, Italy has crime rate of 39.04 crimes per 1,000 residents. The U.S. 41.29 crimes. The rate of crime in Rockford is 48.06 per 1,000 residents during a standard year. Rome is number three on the top ten safest cities in Italy.

Another concern I have heard is that density thwarts home ownership. The Italian home ownership rate is currently 74.3% vs. the U.S. rate of 65.9 and Rockford’s rate of 53.8%. Rome is consistent with the Italian rate.

One may ask, why am I making these comparisons and what does it have to do with conditions here in my city of Rockford, Illinois? Aside from the previous Substack posts I’ve written and linked above; we have a housing problem that is going to thwart our ability to grow and meet the needs of our growing workforce. In, Labor and Housing, published November 11, 2023, I mentioned the anticipated 5,000 jobs at Chrysler. These aren’t the only added jobs. The airport continues to cite its growth projections and added jobs as do other local employers. Big employers.

If we don’t address our housing crisis now, will these employees stay in our community? Worse, will these or other employers stay in our community? Today we need to solve for these future possible residents. We need to spur housing and we need to use the little time we have to address our land use policies and practices, and we need to cozy up to understanding the real return on investment density can bring. And, we need to break our fear of density and incent housing built in existing neighborhoods, with existing infrastructure.