Imagining "Unlimited Density"
A thought experiment attempting to correct certain expectations
At the end of 2023 and beginning of 2024, a merry band of housing advocates, including members of the YIMBYs of NoVA leadership team, came together to try to push four supply-side housing reform bills through the Virginia General Assembly, which convenes only a few weeks each year. Happily, one bill did become law, directing an advisory group to study changes to the state (excuse me, commonwealth) building code that would legalize single-staircase apartment buildings up to 6 stories.
I was minimally involved, attending a few virtual meetings, gleaning bits of information along the way. Most memorably, I learned that some rural lawmakers expressed concern that zoning reforms would cause large apartment buildings to organically sprout up in the small towns in their districts.
Such anxieties betray a profound and seemingly widespread misunderstanding of how real estate development works. We should not encourage people to view tall buildings and the hundreds of individuals who might live in one as threats or burdens. Yet I still believe it would be useful to try to gauge the likely intensity of truly unlimited development in various contexts. The following thought experiment is my attempt as a non-expert. I ran this essay by a housing economist friend who indicated that my claims and prognostications seem “generally” reasonable. But there is a “lot of variation and uncertainty,” my friend added, “about what would play out where.” So let me explicitly caveat my conjunctures as directional and tentative.
Any errors or shortcomings are mine alone.
As a preview, I do think eliminating all limits on density would lead to most places looking more like downtown Manhattan — the one in Kansas, not New York:
Zoning apologists somehow conflate these extraordinarily intricate government regulations with a market outcome, as if they are straw-manning their own argument. At the risk of saving them from themselves, I declare that we wave a magic wand to completely eliminate all density restrictions. We would retain basic rules to safeguard public health, not that they prevent overcrowding today. Wishing away the laws that YIMBYs are currently fighting to reform will help us imagine a pure market outcome for housing. No restriction of units per lot. No height limits or setback requirements. No minimum parking requirements, which I now mentally associate with Communist Romania. Liberal rules for single-staircase apartment buildings.
No one would be able to control where other people live through political means. The law would generally respect and uphold strong property rights. Governments would have to scale up infrastructure to serve the needs of residents. Even if externalities (largely from cars!) were aggressively internalized, this policy regime would still be extremely permissive of development and housing construction.
Building Height Reflects Material Costs
Developing a building costs a lot of money for reasons that go far beyond the land use regulations we just wiped out. Land is expensive, so is construction. Understanding how building height dictates building cost calls for an (oversimplified) history lesson.
When Europeans reached North America, it had an unimaginable wealth of old growth forest: tall, straight trees perfect for ship masts and, you guessed it, buildings. So while Europeans have traditionally favored homes framed in stone or brick, wood framing is at least as American as apple pie or amber waves of Old World grain.
You can use conventional wood framing for at least part of a building up to about 7 stories. A 5-over-1 structure exploits U.S. building code rules that allow up to 5 stories of fire retardant-treated wood framing, on top of a concrete podium of 1 or 2 stories. Such wood is classified as a “type 5” material while the concrete is “type 1.”
Beyond 7 stories, you must use stronger materials such as steel-reinforced concrete. Mass timber is also suitable for framing high-rise buildings, but the great
shows that it may actually cost more than conventional alternatives.The point is, concrete costs a whole lot more than wood. So you will rarely find a building between 7 stories and 10 or 11 stories, essentially the minimum height for a concrete building to pay for itself. And high rents are needed to cover the high cost of constructing a concrete building.
Definitions vary for low-, mid-, and high-rise based on the number of stories. For simplicity I will be referring to these classifications I picked up early in my housing journey from some official source I cannot track down. But it does not really matter.
< 5 stories = low-rise
5 to 12 stories = mid-rise
> 12 stories = high-rise
Based on common sense, I do think most people would stop calling a building “short” at 4 or 5 stories. And 10 stories seems too low for a high-rise. That would include all steel-reinforced concrete buildings, and a skyscraper can have dozens of stories.
An affluent individual might spend a few million dollars on a custom home. A truly rich person might spend tens of millions of dollars, enough to build a high-rise. But the vast majority of us as housing consumers are playing in a market where stuff has to pay for itself somehow. Financial return and opportunity cost are part of the equation. Nonprofit developers of subsidized housing must have budget discipline too.
When a developer, or financier for that matter, is evaluating a real estate project, they are asking themselves: ‘What is the local market like? Can we correctly time the local boom and bust cycle? What is the underlying demand around this site?’ Thus, even if any development is allowed anywhere, a high-rise in a small town is highly unlikely.
An aside, but an important one: today’s cheap housing is often yesteryear’s expensive, fancy new housing. Its construction financing was paid off many years ago, and it may have had multiple owners. Working-class people could afford some types of new housing back in the day. However, the expectation that new housing should be “affordable” is somewhat ahistorical. Not to mention the double standard multi-family housing is held to. An increasingly popular refrain among YIMBYs online is that a detached single-family home is the most “luxurious” type of housing. By design, it makes the least efficient use of land. And land is expensive. A truism among developers is that you make or lose most of your money when you acquire land. Overpaying for it is arguably the biggest mistake a developer can make.
I wish more housing had been built in the past three decades, but the second-best time to plant a tree is today, and we must plant many seeds to resuscitate our housing market.
Maximum Density in Different Contexts
Now we are able to consider what “unlimited density” might actually look like.
First off, any change would happen fairly slowly. Many big buildings would sprout up in extremely high-demand areas like New York City, LA, Denver, etc. Yet current single-family-only neighborhoods would change gradually, a few lots here and there, year by year. For the cost reasons noted above, a lot of new density would be wood-framed gentle density, blending unobtrusively into single-family neighborhoods. We naturally imagine new development as high-rises, but allowing for a wider variety of housing types, and experimentation with novel building typologies, would produce many new mid- and low-rise multi-family homes.
My friend recommends this AEI analysis of how gentle or “light-touch density” would unfold over time. I probably think the change would happen faster than the median housing nerd does, especially if we fully deregulated density. The critique that real-world missing middle reforms have produced very few homes seems to largely overlook the fact that localities have ended single-family zoning while retaining significant restrictions such as setbacks and strict limits on lot coverage.
Still, there are many unknowns. Roughly a century of economic and regulatory headwinds caused middle housing to go missing. Creating it is a lost art, one that developers, contractors, and financiers would need at least a few years to rediscover.
Relatively few places would economically support high-rise development. Some instances might surprise you, but the overall picture would be less dramatic than you might expect. Current land use regimes often direct intense development to specific areas, causing it to erupt like a geyser, in part because developers are only allowed to build at high densities in so few places. I am hopeful that allowing density more broadly would make it less concentrated and draw less negative attention.
Local Changes to Population Growth
The two big winners would be high-rise development in urban centers like Washington, DC (where we of course vaporized the height limit, defying Congress) and mid-rise development, which would become much more common overall, especially in inner suburbs like Arlington and Alexandria. The U.S. would have more megacities with ten million residents. Our cities would start to approach the densities of European ones. Ten-thousand people per square mile is dense by American standards, but five times sparser than Paris, beloved city of light mid-rises.
A certain species of online commenter loves to crow about how American cities are existentially doomed and our hope for the future lies in suburbs populated by, implicitly or explicitly, ‘the right kinds of people.’ Yet the District is still the most expensive part of the DC region to buy a home. Central locations still offer the most. Some people want to live a short distance from a lot of other people, which they must rely on zoning to do. (Yet I seem to recall lectures about hard work and earning things.)
Archetypical exclusionary suburbs like Fairfax County, Virginia would have to let themselves meaningfully grow — no more minimum lot sizes. Much of that growth would likely come from townhouses, which are easy to build. A small row of townhouses can fit on a large suburban lot. We would also expect many new ADUs.
Transit-oriented development would become a thing that naturally happens around train stations and bus depots, not something governments hire consultants to study. My economist friend does note that decades after Arlington, VA, embraced TOD to great acclaim, sites very close to its Metrorail stations remain ripe for redevelopment.
The biggest loser of new residents would be currently booming exurbs that are close enough to the city for a soul-crushing, family time-stealing commute by car but far enough away that people without generational wealth can qualify for a mortgage. This would slow or maybe start to reverse the most environmentally destructive type of development: greenfield sprawl that clears forest and paves farmland.
Cities would still grow outward, horizontally, but not as much as they do now. Here again, I am more optimistic than people who formally study these issues, though perhaps less naive than some of my fellow urbanists, who seem to think that driving has no redeeming qualities. The status quo of limiting growth in city centers and affluent suburbs walling themselves off appears close to the optimal strategy for maximizing sprawl and paving the Earth. That reality is driving a largely, though not entirely, intergenerational culture war among American environmentalists.
Rural areas might also lose a lot of residents, who are finally able to seek a better life elsewhere. Jobs and opportunity would resume their rightful place as the primary driver of internal migration in our great nation.
I recently saw a Facebook ad that was literally just someone saying that they moved to Michigan because the cost of living is low and they could afford to buy a house. That was the pitch. Obviously we should aspire to more. (For the record, Michigan is fine.)
In summary, I think we could expect fully deregulating density to supercharge agglomeration: City centers would be much denser, the gradient of density out to the suburbs would be more gradual as missing middle and mid-rise apartments filtered in, sprawl would be less extreme overall, and rural areas might lose significant population. My friend recommends this analysis of a paper estimating the macroeconomic effects of housing deregulation and larger cities.
Closing Thoughts on Dynamism
It is common for people to worry about rural America depopulating, even if — rather revealingly, in my view — they do not live there. This can be an emotional issue and I know little of rural places, as much as I have enjoyed visiting Appalachia and western Iowa and traveling across the Midwest. If someone is able to move to a different part of the country for a better job or education, and reasonably affordable housing makes it possible, that strikes me as a good thing. The workers who remain will be able to demand a higher wage, based on my understanding of the relevant research. More dynamic land use might help some small towns stabilize and start growing again.
This exercise leaves me wondering how different our country would be if Americans had an abundance of options for where they could live and what kind of home they could live in. We would be freer by any definition. I wonder about the unrealized promise of a dynamic America where people welcome each other as neighbors.
In such an America, high-rises would not pop up everywhere, but I get the feeling that all kinds of beautiful things would.
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