WASHINGTON, D.C. -- If it was up to home buyers there would be plenty single-family detached homes to go around, but they'd be built in a new urban center -- even if that meant paying a premium for the privilege of living in the "city".

Two recent housing studies, one by the National Association of Home Builders (NAHB), the other the work of the Urban Land Institute (ULI), at first appear to contradict each other -- something you'd expect from groups who've been at odds with each other from time to time.

The NAHB likely will tout any survey that says buyers want single-family, detached homes, the industry's cash cow. ULI often extols the virtues of city living, even if it means higher density condo and town home living.

But the two groups' studies are probably more alike than both groups would care to admit.

NAHB's study

The NAHB concedes its "American Dream" survey of its Web site vistors questioned home buyers predisposed to opt for single-family homes. Eighty-one percent of the households responding to the survey already live in a single-family detached home, compared to 63 percent nationwide. Not surprisingly, 88 percent said they preferred single-family detached home living.

In another question: "Given the choice of a $150,000 townhouse in an urban setting or a $150,000 detached house in an outlying area, bigger in size, but farther from work and shopping, 83 percent of the respondents chose the latter," said Andrew Kochera, an NAHB spokesman. "The nature of the question was to judge how people trade off home size with distances of commuting for work/shopping/entertainment," he added.

But if you put a detached home in a more urban setting, add the elements of "new urbanism" -- design and planning principles meant to restore community life -- even jack up the price by about $20,000 and buyers won't mind, according to ULI's "Valuing the New Urbanism: The Impact of the New Urbanism on Prices of Single-Family Homes."

ULI's report

ULI studied four specific new urban model communities with pedestrian-friendly, inter-connected networks of streets, neighborhood centers, mixed uses and housing types -- much like traditional inner-city neighborhoods. Then it compared home prices in those urban areas with prices of homes in surrounding areas that were not planned with new urbanist techniques -- much like many suburbs. The new urban homes were generally about $20,000 more expensive, but buyers were willing to pay the premium, according to ULI.

"We were looking at single-family detached homes in communities with new urbanist vs. those in non-new urbanism areas. People want to live where there are new urbanist principles. People like the sense of community," said Mark J. Eppli, professor of fiance and real estate at George Washington University. Eppli, along with Charles C. Tu, a Washington University finance professor, authored the academic study.

The ULI study reflects what the Congress for New Urbanism suggests on it's Web site: "The development and restoration of compact, mixed-used, pedestrian-friendly neighborhoods is the best building block for a livable region...key to revitalizing our inner cities and helping to mitigate the effects of suburban sprawl." Yet, neither study really asks a fundamental question: Do you want to live in the city or the suburbs?

"If you get into more detail and compare a traditional suburban, low-density development to a more traditional urban environment, I'm not sure how that would come out," said Lynn Rykowski, also an NAHB spokesperson.

Published: July 30, 1999

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