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The paradox of the American West: plenty of open land, but nowhere to build new homes

A conveyer belt full of houses crashes into a mountain in the West.
The cost of housing in Western states is soaring. But the simple solution — build more houses — is proving difficult.Chelsea Jia Feng/Insider

Western states have plenty of wide open land. So why can't they build more homes?

Tucked in the far southwest corner of Colorado is the historic city of Durango. Built in the 19th century at a railroad junction, it's nestled in a bend of the Animas River as it flows through the magnificent San Juan Mountains.

Stunning scenery and copious amenities helped attract 460 new residents to the town of 19,000 during the pandemic. That may not sound like a lot, but it was enough to juice median home prices by 50% in just three years, with them soaring from $500,000 in 2019 to over $750,000 by 2022. The boom caught longtime residents, recent arrivals, and even municipal planners by surprise. During a meeting held by a local economic-development organization early last year, the county deputy manager at the time, Mike Segrest, warned the city was headed for "complete disaster" if it couldn't get prices under control, since the spike has meant that teachers, police officers, and service workers can no longer afford to live there.

Durango isn't the only place in the Western US dealing with the fallout from the so-called Zoomtown boom: Across the region, the price of a home has jumped 36% since 2020. And the explosion of home prices has caused a mounting homelessness crisis — even fast-growing metros such as Phoenix and Las Vegas have struggled to provide sufficient shelter for all the people struggling with high housing costs.

"Policy is this slow-moving thing, but the market can be very responsive," Megan Lawson, a researcher at the Montana think tank Headwaters Economics, said. "If you have a disproportionate share of homebuyers who are either investors or folks moving in with cash — that's when you see the exponential price increases."

The solution to keep prices under control seems fairly simple: Just build more housing. But while cities elsewhere, including Houston and Minneapolis, have managed the recent boom in national demand by scaling up supply, much of the West is struggling to keep up. That's because the region has some unique constraints: Despite seemingly ample quantities of wide-open space, the mountainous landscape and proliferation of conservation areas means land that can be developed is often in short supply. And even cities that do have available land are trying to unlearn 70 years of unsustainable, sprawl-first development practices.

Durango is walled in by Forest Service land and the Southern Ute Reservation — and its zoning code states apartment buildings can't surpass three stories in height. But without ramping up its rate of new construction beyond the average of 150 new units a year, Durango will struggle to get costs back under control. All this makes the city a microcosm of the challenges facing larger cities between the Rocky Mountains and the Pacific coast, where legal and cultural hostility to density has paired with environmental barriers to create the most acute affordable-housing crisis in the country.

The scourge of sprawl

For decades, growth in the West revolved around sprawl. After World War II, the federal government fought back against a growing housing crunch by pouring money into subsidies for single-family homes and an interstate highway system to serve them. Once all the necessary federal support was in place, expansion was easy: There was plenty of land to build on, and developers would do the hard work of constructing roads and utility lines for new neighborhoods, saving cities time and money. The result was metropolises that sprawled for miles, with suburban neighborhoods far afield from once dense city centers.

The development pattern was most noticeable in the West, where previously modest cities such as Phoenix and Denver grew outward over the course of the 20th century, annexing more and more territory that developers rapidly transformed. Today, seven of the 10 cities with the largest footprint are west of the Mississippi. For a time, sprawl boosted housing supply and accommodated newcomers to the West: Nearly 60 million more people live in the region now compared with the 1950s. San Diego, for instance, grew from a harbor-oriented city of 200,000 residents in 1940 to an expansive 325-square-mile metro that's now populated by almost 1.4 million people.

"From the '60s up into the '90s, San Diego was meeting its state-mandated housing targets relatively easily because it had a lot of undeveloped land available," Kyle Stevens, a development strategist at the architecture firm Carrier Johnson + Culture, told me.

But sprawl came with significant downsides. In the 1990s, the maintenance bills for far-flung roads and sewer systems came due, forcing municipal leaders to confront the outsize costs associated with maintaining distant, thinly populated cul-de-sacs. Communities on the coast also found themselves simply running out of available land as they began to run up against mountainous natural preserves. And then there was the immense environmental cost of suburban sprawl. After all, the farther someone lives from an urban center, the more miles they have to drive to get around and the more emissions they produce. Across the US, sprawl began to subside in the mid-'90s. But even with fewer subdivisions being built, the damage had already been done. If public officials wanted to pivot to density, they'd have to retrofit it onto cities designed around space.

Running out of land

When the economy crashed in 2008, housing construction screeched to a halt. Eerie, half-constructed subdivisions in once booming Western cities became symbolic of the housing market's collapse. But the devastation of the Great Recession also gave policymakers an opportunity to shift growth away from subdivisions and toward apartments and mixed-use buildings.

This renewed focus on dense housing soon ran into problems. Some of them were universal, including zoning codes that allowed only for the construction of single-family homes. Under this standard, developers can build single-family homes without municipal review. But turning a single-family lot into a multiunit building requires developers to engage in a protracted bid for an exception to the zoning code — a process that gets more expensive the longer it drags on. Cities can streamline this process by fundamentally changing their codes, but major rewrites are politically contentious. All this red tape has caused a serious slowdown in much-needed housing construction. In the '80s, about half the new homes in San Jose, California, were for individual families. In the 2010s, 90% of new-home construction was devoted to multifamily buildings, but because of costs associated with bypassing single-family zoning, 800 fewer units were added to the city each year than in the '80s.

As the pace of construction slowed, people kept moving west. More than 7 million people have moved to the region since 2010, causing home prices to soar even before the pandemic-era boom. The median value of a house in Durango bottomed out at $344,000 in 2012, but by 2020, median listings had risen to nearly $600,000, mostly because of the lack of any new supply. In San Diego, the median price of a home shot up from $362,000 in 2002 to over $800,000 today.

The West also faces unique challenges given how much land in the region is either designated for conservation, owned by the federal government, or both. California's coastal cities are now surrounded on all sides by state parks, driving up prices in areas like Marin County. Just across the Golden Gate Bridge from San Francisco, 46% of the county is conservation land, and the median price of a home is $1.7 million.

The preservation of so much land across the West has also created a plethora of tourist destinations in places Headwaters Economics calls “high-amenity communities”: small cities with easy access to outdoor recreation, arts, and fine dining. In these small, scenic cities — such as Durango; Santa Fe, New Mexico; and Jackson, Wyoming — the proliferation of short-term rentals has exacerbated the affordability crisis. Lawson, the Headwaters Economics researcher, said: “The housing stock in these communities has to do double duty. It has to house residents, and it has to provide a place for visitors to stay.”

Megan Lawson, Headwaters Economics

While few would advocate opening up spectacular natural preserves such as the Marin Headlands or Grand Teton National Park to development, public lands have complicated matters in cities including Las Vegas, where almost all the seemingly barren terrain between the southern edge of the city and the California border is owned by the Bureau of Land Management. Nevada Sen. Catherine Cortez Masto has been pushing to open up at least 25,000 acres of this land to development.

That effort is strongly opposed by environmentalists including Kyle Roerink, the head of the Great Basin Water Network, who thinks the city would be better served with a concentration on infill rather than a doubling down on sprawl. "What we've seen for years in Vegas is that growth does not pay for itself," he said. "We're going to build all these new developments south of where the core of the city is — what does that mean for all of your other infrastructure? New roads that are going to have to be maintained, new power lines that are going to have to be maintained, water infrastructure, social services."

Build, build, build

Despite the unique challenges of building in the paradoxically wide-open West, some cities have been able to break through. Aided by its proximity to both Lake Tahoe and the Bay Area, Reno, Nevada, experienced its own boom during the pandemic. Unlike other cities, Reno has plenty of land to develop, much of it in the urban core. Crucially, it had the political will to turn its housing crisis around.

Mayor Hillary Schieve launched a program in 2019 called 1,000 Homes in 120 Days, which deferred the impact fees — which developers typically pay the city to cover the cost of connecting new buildings to utility lines — until after construction was completed. That program led to more than 2,000 units of new housing being proposed. Then, in 2021, the city's planning department was restructured to "really focus on how can we get more housing into the market," Schieve said, adding that meant "looking at zoning codes: parking requirements, setbacks, landscaping requirements." This new regime has made it far easier for developers to build apartments on vacant land and unused parking lots downtown. Cumulatively, those efforts have helped the Biggest Little City in the World get to about 5,000 new housing starts every year, the most since the Great Recession. For the moment, the city's housing market has plateaued — the average cost of a home this summer was virtually identical to what it was a year earlier.

Other cities have seen similar results from liberalizing their zoning codes, and smaller communities have gotten even more creative, particularly when it comes to dealing with vacation rentals. In Colorado's Summit County, a popular ski destination, officials implemented its Lease to Locals program, which involves paying homeowners to convert their nightly vacation rentals into properties for long-term tenants. Converting a three-bedroom home for a year entitles the homeowner to $24,000. In its first year, the program transferred 70 units to long-term leases for just under $1 million — less than the average cost of building three new homes in Colorado.

Despite these efforts, the ability of municipalities to fix the housing market on their own is limited. "There's a perception that this is a local problem," Schieve said. "No, this is a national problem. When it's across the board, it has to be a collaborative approach at the federal level, at the state level, at the local level." And since it was the federal government's prioritization of sprawl that instigated this mess, the West may need federal support to climb out of it. There are plenty of ways Washington could help — such as loosening the requirements around the extension of Federal Housing Administration loans to mixed-use developments — but even if the feds merely shifted transportation priorities away from highways and toward public transit, that could have a major impact on the cost of new construction by further reducing the need for parking.

"Streets need to be the amenity for living in the urban area," Howard Blackson, an urban designer from San Diego, said. "What suburban sprawl gave you is all that stuff in a house. Now we have to give it in a neighborhood. State rules can help, local zoning rules can help, and then you need the federal government to do its part."

As things stand, the West is in danger of becoming an exclusive playground for the rich, with working-class people who weren't lucky enough to buy a house three decades ago crowding into a paltry amount of subsidized housing, while everyone else ends up on the street. Only by embracing density does the region stand a chance of reasserting itself as the land of opportunity that it has long represented in the American imagination.


Kyle Paoletta's reporting and criticism has appeared in Harper's Magazine, New York Magazine, and The Nation. He is at work on American Oasis, a book about the cities of the Southwest that will be published by Pantheon in 2024.

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