Nathan Newman and Matthew Yglesias, two national bloggers, have both recently posted on the connection between allowing for urban density and controlling the cost of housing. I think Yglesias comes close to a usable approach to understanding gentrification:

“… As a neighborhood becomes a “hotter,” more desirable place to live, the logical market response is to demolish low-rise structures and replace them with apartment buildings that can accommodate more residents as well as retail outlets on the ground floor. Land prices rise enormously, but rents do not as we fit more stuff into the same quantity of land. Someone had the foresight years ago to invent steel for just this purpose. In practice, however, relatively well-heeled homeowners conspire with misguided anti-gentrification elements to impede real estate development, land prices rise by somewhat less than they would under the high-rise scenario, but housing becomes exorbitantly expensive, thus causing the waves of gentrification to emanate from the “hot” neighborhood pushing residents to-and-fro. …”

What seems missing, however, is a recognition that the oldest buildings will have the cheap rents, and the new buildings will be relatively expensive (since the developer must recoup the cost of construction). Thwarting gentrification involves not only allowing for reasonable density, but also ensuring a fine-grained mix of age and size buildings. It should be easy to build up, and difficult to combine lots for giant mega-projects.

What does this mean in Ann Arbor? Certainly, allowing for higher density downtown, something the city is beginning to do, however I wouldn’t go so far as to embracing “creative destruction” as completely as Newman. Despite raising the maximum height, both the Collegian and Corner House Lofts were somewhat controversial – ostensibly for aesthetic reasons – even though both are near giant ugly parking garages of similar height. The Corner House Lofts building was scaled back after an initial plan was rejected by the Planning Commission, and the Collegian was scaled back because the million-dollar condos didn’t sell.

Here’s an excerpt from my post on why the Corner House Lofts won’t cause gentrification (Although perhaps is a response to it), which seems particularly relevent since I read in this month’s Observer that rental vacancies downtown are running as high as 14 to 20% according to some estimates.

“Construction in general doesn’t cause gentrification, developers like Spoon Equities do. If the Daily is serious about cutting rents, they should be agitating about the Ann Arbor Tenant’s Union, which may not exist next year, thanks to the good work done by the current MSA executives.”