America’s “Grand Housing Bargain” Is Broken. It’s Time for a New One.
A neighborhood in Sarasota, Florida, that was chosen for radical change while other neighborhoods stay exactly the same.
For decades, we've been living under an unspoken grand bargain when it comes to housing. It’s an arrangement that most people don’t think about explicitly, but it shapes nearly every conversation we have about growth, change and affordability in our cities and towns.
The current grand bargain is simple: No neighborhood needs to change; they can all stay in their current form, but in exchange, one or two neighborhoods will experience radical transformation.
In practice, this means that most neighborhoods are locked in amber, fiercely resisting any change at all, while a select few are subjected to sudden, large-scale redevelopment that reshapes their character overnight. It’s an all-or-nothing approach. It works for almost no one.
This arrangement might have seemed like an expedient tradeoff when it first emerged, but it’s proving to be an increasingly bad deal for everyone. The neighborhoods that avoid change aren’t static; they’re slowly declining. Costs keep increasing. The tax base does not. The lack of incremental adaptation means that they’re becoming less financially productive, more expensive to maintain and increasingly fragile.
Meanwhile, the neighborhoods that are chosen for transformation experience a kind of shock treatment that leads to skyrocketing costs, displacement and a sense of loss for long-time residents. It also creates a cycle of disinvestment, where the prey neighborhoods know that the financial predators have marked them for redevelopment, so why paint the house? Why mow the yard? If the future value of the home is as a scrape-off, why care about it at all?
In most cities, the expectation is that neighborhoods should remain the same forever. If there’s a fight over growth, it’s usually about where the change should happen (anywhere except near me). Cities end up channeling all their growth into just a handful of places — often low-income neighborhoods that lack the political clout to push back. And when the pressure for new housing builds up, the changes come suddenly and dramatically.
It’s time for a new grand bargain — one that acknowledges the reality that cities are living, breathing systems that must evolve and adapt over time. This new grand bargain is equally simple but far more viable: Every neighborhood needs to experience a bit of change; they all need to evolve and mature, but no neighborhood should experience radical change.
At its core, this new paradigm recognizes that change is inevitable and the healthiest places are those that can accommodate it incrementally. In a city where every neighborhood is allowed — and expected — to change a little over time, the pressure to radically transform any one area dissipates. We don’t need to build massive condo towers in a handful of areas if we’re allowing backyard cottages and duplexes to emerge gradually in every neighborhood.
Incremental change is the foundation of a strong and locally-responsive housing market. It allows for natural evolution and continuous improvement. Instead of waiting for an outside developer to swoop in with a large-scale project that displaces current residents and overwhelms local infrastructure, an incremental approach enables neighborhoods to grow in ways that are more responsive to local needs and resources.
In fact, this is how cities used to grow before the postwar Suburban Experiment. A neighborhood would start with small, simple homes. Over time, as the city matured and land values increased, those homes would be gradually expanded, converted or replaced with more substantial structures. The growth wasn’t disruptive; it was a natural evolution that provided housing at many different price points.
This kind of organic development has all but disappeared in today’s regulatory environment, where even modest changes require not only costly, time-consuming approvals but often a high degree of cultural consensus as well.
Under the new grand bargain, all neighborhoods must be allowed to evolve to the next increment of intensity. For a neighborhood of single-family homes, this might mean converting single-family homes into duplexes or building backyard cottages. More mature areas might see small apartment buildings or other investments that thicken up the neighborhood. The point is that no place can be off-limits to the next increment of maturing.
Crucially, this approach also ensures that no neighborhood is subjected to radical, large-scale transformation. In the current paradigm, distressed neighborhoods often become the target of big redevelopment projects that erase the existing community and replace it with something entirely different. This top-down approach not only breeds resentment (multiplies the NIMBY sentiment) but also fuels gentrification and displacement. Today, the motivating goal of all homeowners is to not be in the neighborhood marked for redevelopment.
The new grand bargain offers a more relatable alternative. Residents should be able to leave their neighborhood, come back a decade later, and still recognize it. It will have changed, yes, but in a way that feels natural — like the way an old friend ages over time. This kind of gradual adaptation is not just better for the people who live in these places; it’s also the key to building financially resilient cities.
At Strong Towns, we understand that making this shift won’t be easy. It requires regulatory change, which is always a challenge. Policymakers need to embrace a more flexible and responsive approach to land use regulation — one that facilitates small, incremental changes rather than erecting barriers to them. The specific code changes are simple, but the conversation around them isn't.
For places to make this change, a conversation needs to happen at the community level. Residents need to understand that a neighborhood evolving over time is not something to fear but something to embrace. It’s the only way to ensure that our cities remain vibrant, adaptable and accessible to everyone.
The leaders of our Local Conversations are leading those bottom-up conversations. If there's one near you, consider joining. If there isn't, you should start one. Our team is here to assist you.
There is a lot more about this new grand bargain in "Escaping the Housing Trap," the bestselling book on the Strong Towns approach to housing that I co-authored with Daniel Herriges. And if you're ready to start this conversation in your own town, consider booking an event with Strong Towns. We’d love to come to your community and help kickstart a discussion about how to get lots of housing built quickly in a way nearly everyone can support.
The grand bargain we’ve been living under is broken. But with a new commitment to incremental growth and thoughtful change, we can create neighborhoods that are both dynamic and enduring — places that grow stronger over time. That's a Strong Towns approach.
What comes next for incremental housing in 2025? Tune into the State of Strong Towns address on January 30 at 4 p.m. EST to find out.
Charles Marohn (known as “Chuck” to friends and colleagues) is the founder and president of Strong Towns and the bestselling author of “Escaping the Housing Trap: The Strong Towns Response to the Housing Crisis.” With decades of experience as a land use planner and civil engineer, Marohn is on a mission to help cities and towns become stronger and more prosperous. He spreads the Strong Towns message through in-person presentations, the Strong Towns Podcast, and his books and articles. In recognition of his efforts and impact, Planetizen named him one of the 15 Most Influential Urbanists of all time in 2017 and 2023.