'Good Planning' and Demand

Some studies suggest that planning requirements decrease land values, consistent with the expected impact of regulatory obligation, but increase house prices. This implies a demand effect associated with increased amenity created by planned urban development (Ihlanfeldt 2007), but may also reflect a supply effect as noted earlier. This has become a dilemma under planning regimes which seek to promote housing affordability through principles of good design.

For instance, a review of 152 ‘new urbanist’ planned communities throughout the USA, found that all schemes included objectives for diverse and affordable housing (Talen 2010). However, only nine communities offered homes for sale at prices affordable to households on the area median income. Overall only 15 % of sampled communities included dedicated affordable housing, much of which had been subsidised by other financial programmes.

This research suggests that supply- and design-based strategies alone are not enough to secure affordable housing in new development.