EDITOR’S NOTE: The following is an excerpt from “5 Rules for Tomorrow’s Cities,” by Patrick M. Condon, published by Island Press. In it, Condon talks about the critical challenges to face urban designers over the next four decades. He shows how the very things that constrain cities — climate change, migration, financial stress and population change — could actually prompt the emergence of more equitable and resource-efficient spaces. This excerpt comes from “Rule Four: Strengthen Social Resilience through Affordable Housing Design.”

Urban resilience is the ability to efficiently adapt and change a city over time, as circumstances dictate. Urban resilience includes any number of types of resilience, such as economic, physical, social, and ecological resilience, to name a few. The concept of urban resilience is similar to the concept of urban sustainability but less static. A perfectly sustainable city is one where the three pillars of sustainability — equity, ecology, and economy — are in perfect balance, presumably forever. A resilient city, on the other hand, is one where the three pillars are largely in balance but continue to change in sometimes unexpected ways. Cities can and should be designed to be resilient in the face of profound changes such as the rural-to-urban migration, birth rate collapse, and vanishing middle class we will experience in the next four decades.

These transformations will, of course, occur in the context of the mother of all perturbations: climate change. By 2060 the world’s developed nations must reduce per capita production of greenhouse gas emissions by more than 80 percent. Absent success in this last goal, our other ambitions are probably moot. Most climate scientists agree that failure to reach this target paves the way for a global biosphere crash with cataclysmic economic and social consequences worldwide. In this book, we focus more on burgeoning social and economic shocks, particularly how economic inequality is largely manifested in the form of unaffordable housing

For emerging city districts, the question of resilience is tied to the scale of individual urban increments and the financial and legal practices governing their construction, ownership, and reconstruction. Both the scale of the financing and the scale of individual urban increments are relevant. In this instance, it seems that small truly is beautiful.

Most buildings (in both the developed and undeveloped world) are relatively small. Small buildings can often be added to by “barnacle-ing,” that is, attaching pieces to the sides or top of an existing structure, as the need arises. Vancouver has many examples of barnacle-ing, prompted by policy changes that allowed additional density in exchange for retaining the existing structure. In some cases, the habitable square footage on the parcel is increased by 200 percent by these artful additions.

This strategy is not unlike what one sees in informal communities, where an original rudimentary structure provides simple shelter for a rural immigrant family in the first decade, and in successive decades space is added above or behind the original box.

Urban designers should take note of the fact that in informal communities, less bound by policy, barnacled expansions occur naturally and without permits. In formal contexts policy approval is required, and policy means can be used to either inhibit (most often the case, sadly) or encourage (as in the case of Vancouver’s RT-7 and RT-8 zones) this organic evolution.

Building codes can either enhance or inhibit urban resilience. Most formal cities in the developed world have building departments dedicated to ensuring that all buildings live up to certain construction codes — codes usually authored to protect either occupant safety or building durability. These codes can be, and most often are, reasonable for new construction.

The problem occurs when building codes designed for new construction are used to regulate building renovations. In most jurisdictions, building owners are required to bring the entire building up to code whenever a stipulated level (usually low) of reinvestment is reached or if an owner wants to change the use of a building from single-family to multifamily, for example. The burden of these costs, which can be substantial, often makes renovation, addition, or reconstruction financially impractical.

Various “smart codes” have been promulgated by scattered jurisdictions over the past twenty years in an attempt to mitigate this problem. The New Jersey Rehabilitation Subcode is a good example. Because New Jersey has more old buildings than any other U.S. state, and because the cost of bringing them up to code was causing widespread building neglect, New Jersey had to act. The result was a more reasonable code specifically designed for rehabilitation and guided by the philosophy that some rehabilitation is better than no rehabilitation. The Subcode has now replaced the normal building code for building rehabilitation. This represents an advance, one that other jurisdictions should take up and that urban designers concerned about resiliency should actively lobby for.

It is useful to here provide a specific urban resilience strategy to clarify how principles of resilience might be actually applied. For this purpose, we introduce you to the concept of “hiving,” proposed as a partial solution to Vancouver’s housing crisis. Hiving is the splitting up of existing nominally single-family homes into multiple tenures. But before detailing this strategy we need to wrap our brains around how three epochal waves — migration, financial stress, and demographic shift — make hiving necessary, logical, resilient, and sustainable.

The first influence is shrinking family size. Families are shrinking around the world but especially in the developed world. In 1900, when many U.S. streetcar city suburbs were under construction, the average family size was close to 5. Now it has shrunk to 2.6 and is still declining. As a result, neighborhoods, absent any other change, are losing population. While family sizes are falling, financial stresses on the Millennial generation are extending the time that adult children must stay in the familial home, slightly mitigating neighborhood depopulation but not in the most ideal way. This phenomenon is not unique to the United States but exists in other developed countries too, as increasing housing costs and other features of economic inequality alter living patterns worldwide. Hiving makes it easier for Millennials to establish their own independence, should they wish, while it repopulates neighborhoods by adding dwelling units onto existing parcels.

The second influence is worldwide asset inflation. Real estate, and by real estate we really mean land, is no longer priced for its utility value but increasingly for its value as an investment asset. Globalization has dramatically increased the speed and amount of capital flow around the world. Consequently, all assets now go up and down in lockstep, from Shanghai to Moscow to London and to New York. This is most noticeable in the stock market, where a drop in stocks in Hong Kong is mirrored hours later in New York. Less noticeable is how global real estate prices also move in unison. Housing prices, which until recently rose and fell with an urban region’s average family income, now go up and down in response to the health of the global economy and the appetites of investors for real estate assets. And the appetite of investors for real estate is growing fast. In such a context, wage earners are hard hit — particularly wage earners in a metropolitan area where job numbers are increasing but wages are not.

The worst example of this phenomenon is Vancouver (where the principal author lives). Vancouver is cursed with both astronomically high real estate prices (the highest in North America if measured in relation to average incomes) and the lowest wage rates of any major city in Canada. Vancouver arrived on the map of desirable global cities relatively recently. Before the 1980s most people, even North Americans, couldn’t find it on a map. It is safe, clean, has good airport connections, and is gorgeous to look at, making it an attractive target for investment. Returns on investment have averaged 8 percent a year and have reached as much as 24 percent in 2016, making it at least as competitive as stocks, with less volatility. Also, you cannot live in a stock, but you can live in a house. If you include its value as a home or returns in the form of rent, returns on Vancouver real estate are far higher than on stocks. In most ways investment in real estate pays for itself.

Much of the Vancouver real estate investment frenzy is fueled by foreigners, but local investors also get swept up, lifting prices to four times the level they would be if property values were aligned with local wage rates. And as the price of purchasing a home rises, so does the cost of rent.

Vancouver now presents an attractive but largely false image to the world, an image that suggests comfortable citizens housed in gleaming glass towers enjoying brilliant mountain views. Unfortunately, this image conceals the reality where many of those high-rise units sit empty — nothing but “cash boxes in the sky” for investors — while wage earners crowd into small apartments, often devoting well over 50 percent of their after-tax income to rent.

In such a context we offer hiving as a partial response. This is just one case study example of an urban design strategy that can be modified for other developed world locations in these convulsive times. The specific responses suitable for an extreme case like Vancouver are not directly applicable to all other metropolitan areas, but the larger economic and social drivers — globalization, low wages, and migration — are the same everywhere. Also the same almost everywhere in the developed world is the presence of millions of individual small parcels, in settings that we may call suburban but which in actuality cover most of our urbanized land.

Hiving, then, is an infill strategy specifically aimed at adapting existing Vancouver neighborhoods to accommodate an increasing urban population. To attack the dysfunction of the Vancouver housing markets we need a strategy that starts from a realistic appraisal of how global forces are affecting urban land costs, and we must do so in comparison to the troubling trajectory of local wage rates. Hiving starts from this mathematical calculus and via this process determines the minimum density needed for a Vancouver project to pencil out as affordable (affordable in this context meaning housing costs of 30 percent of pretax family income or less). Hiving is thus distinct from simpler concepts of infill development, which are not always grounded in financial reality — not always grounded in a firm understanding of the relationship between the price of land and the average incomes of local wage earners.

In this case study, we focus almost entirely on the value of land. In other parts of the world the value of the building may be important, but not in Vancouver. On most Vancouver parcels the land is ten times more valuable than the building on it. Buildings also need repair and replacement over time, so their value is ephemeral. Land value endures, indeed it grows, without any additional investment.

As the asset value of land increases and wage rates continue their relative decline, it is obvious that the average wage earner cannot afford as much land as his or her parents. Not even close. It is thus logical to cut up the land into more affordable pieces, pieces cut to a small enough size that the average wage earner might now afford it.

The typical Vancouver single-family home parcel, with or without a building on it, costs $2 million at this writing. Most of these parcels are between 3,000 and 3,500 square feet. Thus Vancouver land costs about $600 per square foot (actually much more if you subtract unusable setback areas). In the case of Vancouver, average families who earn $80,000 per year can afford (using the traditional calculus where 30 percent of family income goes to housing) to pay only about $400,000 for land and a home, or up to five times their annual family income (this assumes interest rates stay below 5 percent). They can thus (assuming a ballpark figure of 25 percent of total spent for the structure) afford about 500 square feet of land at $300,000. But most Vancouver parcels, now occupied by detached single-family type dwellings, are roughly 3,500 square feet.

Wage-earners in Vancouver cannot afford this much land. The solution for Vancouver, using very simple math, is to allow these parcels to be divided between at least five families. So each family gets a very modest amount of land, approximately 500 square feet. If the average unit size is 900 interior square feet (just enough space for a two-bedroom unit), the total built square feet of habitable space on the parcel will total 4,500 square feet. This is roughly 1.5 times the square footage of the bare land of the parcel. This means that the “floor surface ratio” (FSR) of the project would be 1.5, meaning the building will contain one and a half times as many interior square feet of usable space as the parcel. Obviously, this means that the building will need to have more than one floor to fit on the parcel. A three- or four-story structure would be more logical.

This is a large increase over the average FSR for these nominally “single-family” parcels, which are typically about 0.7 FSR or less in Vancouver. A 0.7 FSR is not unusual in streetcar suburbs across North America. In auto-oriented sprawl, the FSR is usually less, often far less.

In some ways, the easiest way to redevelop the parcel would be to tear down the existing house and start over. This is probably suitable in the many cases where the existing structure is modest and in need of extensive repair. But the majority of Vancouver homes are of a higher quality and worthy of continued use. It is also more sustainable to reuse as much of any existing structure as possible, of course. The proposal here is to reuse the principal structure, “barnacle-ing” on additions and dormers, often more than doubling total usable area. A second strategy for gaining space is to lift the main structure up and provide a new foundation underneath, perhaps moving the structure in the process to create a more practical site configuration. Happily, Vancouver parcels also have rear lanes. This dual access to public rights-of-way makes it easy to build, service, and occupy “lane house” dwelling units at the rear of the lot.

The astute reader may have noticed a sleight of hand. Urban designers typically suggest solving the affordability problem by building much larger buildings than the ones discussed above. If five units is affordable, why not sixty on the same piece of land? Build much higher and reduce the land component of the unit price! In Vancouver, we have encountered a number of problems with this philosophy.

First, whenever a piece of Vancouver land is rezoned to allow higher-density development, its speculative value inflates beyond reason. If the increase in allowable density is by a factor of ten, the increase in the speculative value of the parcel increases in lockstep. Parcels that sold only a few months before for $2 million are suddenly flipped for ten times that amount. Neither the home buyer nor the developer gains from this transformation. Any gain from the increased allowable density goes to the land speculator, whose gains are doubly outrageous because they accrue so passively.

Second, tower blocks are ill-suited for most parts of the urban landscape, for reasons that Jane Jacobs made clear fifty years ago. Her insights have been incorporated into the arguments of neighborhood residents who successfully and rightly oppose tower block proposals in their neighborhoods.

Finally, high-density tower blocks are not resilient, are expensive per square foot to build, and are not efficient users of energy and resources. For this and other reasons we have found that a strategy of hiving is a more reasonable way to dramatically increase the allowable density over vast areas of the urban landscape, without the “feeding frenzy” unleashed when land is released one parcel at a time for very high-density development, and without the intense neighborhood resistance to high-density projects requiring large land assembly. In Vancouver (and in other cities experiencing a similar failure of the housing market), a hiving strategy, if widely deployed, could triple the city’s housing supply in time, providing more than enough new homes for even the most ambitious population growth goals.

Of course, tripling the allowable square feet on a parcel and increasing the allowable parcel unit count from one to five might also injuriously inflate land value. To mitigate this speculative pressure, city governments can extract well-calibrated development taxes (or housing units in lieu of taxes) to support nonmarket housing construction in return for building approvals. This will both moderate land price inflation and provide funds for permanently affordable housing for wage earners.

The prospect of converting “single-family” neighborhoods into a neighborhood that includes many five-family buildings may seem extreme to some, and in many cities, this may be a bridge too far. But this idea is not extreme in Vancouver. Vancouver is already on its way to this status, having recently rezoned the entire city to allow up to three dwelling units on each lot, two in the principal residence and one on the lane. At the time of this writing, the city is considering increasing the allowable number of units to four, in return for protecting the existing structure. Not quite enough to make these units affordable, but getting closer.

These changes are coming very fast in Vancouver, as the financial stresses described above become more and more extreme and the housing crisis here becomes more exaggerated. Given this precedent, we can expect similar responses to be entertained in other jurisdictions as they “catch up” with Vancouver’s plight. Urban designers should be prepared to participate in this discussion, wherever they are, and also be equipped with an understanding of the financial drivers underpinning these transformations. The financial constraints described above are the real drivers of neighborhood change, and they apply everywhere. If we are correct and these trends persist for the next few decades, local opposition to changing zoning to allow subdivision will crumble in other urban areas as well, just as it has in Vancouver. Urban designers must first understand and then make proposals that are prescient and practical given these constraints and opportunities. This hiving case study provides a process that can be adapted to many other problems in many other jurisdictions.

Adapted from “5 Rules for Tomorrow’s Cities,” by Patrick M. Condon. Copyright © 2019 Patrick M. Condon. Reproduced by permission of Island Press, Washington, D.C.