I’ve lived in Evanston for over 30 years and it’s wonderful. As an economist, I’ve followed the debates about development, particularly about housing affordability and gentrification. Given that I’d like to see Evanston remain the wonderfully diverse, vibrant, and affordable community that I love, I thought I would share my perspective on economic development.
Gentrification: What Can Be Done?
Gentrification is caused by rising demand from people who want to live in a particular place, which drives up housing prices and rents, and can make the community unaffordable to people with low incomes. This kind of market process is fine when we’re talking about sports cars, but it’s a shame to see people who want to live in Evanston priced out.
What can be done about this? The simple answer from economics is to meet the rise in demand with an increase in supply. It’s hard to increase the supply of houses much, but we can make room for a lot more potential Evanstonians through increased population density.
Density: Do More Residents Help?
Certainly there are limits on how dense we would want our community to get, but we’re nowhere near that (in fact, Evanston’s population is 6% smaller than it was in the 1960s). With more population density in Evanston, we would have an even better restaurant community, more theaters, more stores, and importantly, a bigger tax base for supporting our schools, our libraries, our roads, and other important city services. There would be more of us riding the L, which will keep our CTA link to Chicago more viable in the long run. We would have more people in our houses of worship, more artists and musicians, more people like actor and award-winning screen writer Lena Waithe to achieve great ends and inspire us.
Development that increases population density helps with the problems of gentrification in three ways. It expands the tax base, which helps support City services for all residents. Secondly, it creates demand for many types of jobs right here in Evanston, which increases incomes for people who want to live and work in Evanston. Thirdly, if development provides a wider array of housing options, this can have a powerful effect on keeping housing affordable here. This last effect is subtle, but important.
Housing Accessibility: More Inventory Means More Movement
In my time in Evanston, I began as a student and shared a place with roommates. Then I got a job and an apartment on my own. Then I got married and we rented a house. Then we had a child and bought a house. Then we had several more children and bought a house with more bedrooms that was in walking distance to a school. But housing isn’t like Hecky’s fries, where if I want more I just have to ask and they’ll make them. Every time I moved, I needed to have someone else decide to move out before I could move in. If they hadn’t moved, then I would have had to bid up the price somewhere else, or to leave Evanston for someplace cheaper.
I watch the turnover in my neighborhood. Generally, it is retired couples selling their homes to families with young children. If the older couples choose not to move, then those young families will have to push up the prices of housing in other neighborhoods or choose to live in other cities. To the extent that Evanston provides new attractive places for people to live, we make housing in Evanston more affordable.
While we have an inclusionary housing ordinance that requires developers to include affordable units on site or remit cash into the city’s affordable housing fund, my sense is that the ordinance’s effect on gentrification in Evanston is small when compared to the effect of growing the number and range of residential choices here. It’s a tricky thing to maintain a successful city, and for a place like Evanston, increased population density can help a lot. It can make life better for the people who live here now, and just as importantly, it allows more people to enjoy the benefits of life in Evanston. Encouraging development that increases the supply of housing units keeps housing costs here lower and is the best way to keep Evanston affordable.
Mr. Witte is a professor of economics at Northwestern University