I've been a cheerleader for accessory dwelling units, or ADUs, for years. For me, part of the attachment was personal: I've lived in three of these "granny flat" apartments in my life, and they were a fantastic way to live and to get an affordable toehold in neighborhoods I could not otherwise have afforded.

But I was never under any delusion that ADUs were a scalable housing solution for cities struggling with affordable places to live. The data seemed clear on this: even as various major U.S. cities passed reforms that broadly legalized and removed barriers to these small rental homes, relatively few homeowners took the plunge to build one on their property. At most, these policies might result in a couple hundred ADUs in a city of hundreds of thousands.

Then a remarkable thing happened in Los Angeles. The state of California passed a law requiring cities to allow ADUs, and pre-empting many of the specific requirements that might make them onerous in practice, such as off-street parking, high utility fees, or strict setback requirements. And what happened? In just two years—2016 to 2018—ADU permits surged from 1% to 20% as a percent of all residential building permits issued in LA.

That's right: one out of every five new homes approved in America's second-largest city in 2018 was an ADU: a total of 4,171 in a single year.

The California legislation was not so earth-shakingly different from previous efforts in many cities as to expect this result. What was so different this time, in this place?

It's hard to say with confidence: experiments in complex systems like a city tend not to be replicable the way they are in a chemistry lab, and simple formulas tend not to just be transplantable from place to place. I find analogies from natural systems are helpful in understanding these human-created systems, so I'm going to deploy one: the idea of the limiting nutrient.

In biological systems, the growth of something is typically dictated not by the total resources available, but by the scarcest resource (Liebig's Law of the minimum). For example, for plant life in a freshwater lake, this is usually phosphorus. Add as much as you want of sunlight, nitrogen, oxygen, et cetera to the environment: no phosphate, no dice. (In the ocean, on the other hand, nitrate is more likely to be limiting.)

I'm from Minnesota, the Land of 10,000 Lakes, more than a few of which end up covered by late summer with a smelly film of green algae. These unpleasant, runaway algal blooms are a result of eutrophication: pollution of the water by runoff containing phosphate and/or nitrate (often from fertilizers or household or industrial chemicals) resulting in an oversupply of nutrients. But it's not just the general oversupply that matters: it's the removal of what was previously the limiting nutrient in that ecosystem that results in the sudden onset of runaway growth of (unwanted, in this case) plant life.

Change happens not at all, and then all at once. This is a hallmark of complex adaptive systems, in which many causes contribute to many effects.

Urban development, on a given site or for a given project, tends to be a pass/fail outcome: does it pencil out or doesn't it? (Does the algae have what it needs to grow or doesn't it?) And so it shouldn't surprise us if limiting-ingredient dynamics apply there as well.

It's hard to say what the limiting factor was that made the difference in LA. It might have been the parking requirement. It might have been reduced utility fees. These factors might have sealed the deal only because of something else unique to Los Angeles: the city's combination of high home prices and abundance of single-family lots, or the fact that yards in California tend to be small and not prized the way they are in some regions? I don't know, but if I were a policy maker, I'd sure be working to figure that out.

Other than ADUs in Los Angeles, here are three other examples of urban phenomena where I would suggest limiting nutrients are a useful metaphor for understanding why change doesn't respond to a simple formula—put in an input (a policy that worked somewhere else), get the output you want (predictable results).

1. Upzoning for More Housing

A 2019 study in Urban Affairs Review, by MIT's Yonah Freemark, examined upzoning in Chicago—the policy of increasing the density and height of construction allowed in specific areas of that city around rail stations.

The study quickly became a bit infamous in pro-housing advocacy circles for its inconvenient core finding: that while property prices increased in the upzoned areas, there was no perceptible increase in construction in those places versus non-upzoned areas. The findings were quickly seized on by anti-development advocates in other cities to claim vindication of their belief that allowing greater density does nothing to alleviate affordability problems. (No matter that the study's author disavowed this interpretation.)

The study's conclusion was widely, and incorrectly, interpreted as "upzoning doesn't lead to more housing." A more defensible conclusion is either that there's a time lag and we just haven't seen new construction yet, or, also plausible, that the zoned capacity was not the limiting factor in development in these areas in Chicago. Something else might be.

To use an extreme example, you could upzone all of Detroit right now to allow 12-story buildings, and you would not witness a flood of new 12-story buildings in Detroit. For zoning changes to make a big difference in the physical form of a city, the zoning has to actually be the limiting factor in its growth.

2. Capacity on Traffic Networks

This is a fairly clear-cut example: bottlenecks. In a typical road system, a very small percentage of the network is actually responsible for essentially all of the traffic congestion problems. Typically it's intersections, not roads themselves, that get overloaded, because traffic from many different origins and destinations must pass through them for whatever reason. (Think of how backups on the freeway often occur at the junction with another freeway.)

Traffic engineers tend to understand this, but the general public doesn't. The most common reaction from laypeople to congestion is "widen the roads," but there are very few cases where the width of the road is actually the limiting factor on capacity. And there are plenty of paradoxical cases where narrowing a key road might actually make the whole system flow better.

3. Cataclysmic Money as Eutrophication

Limiting nutrients aren't good or bad; they're just a feature of systems in which multiple inputs affect multiple outputs. The limits they impose can promote stability / equilibrium just as easily as stagnation or decline.

Jane Jacobs famously decried the effects of "cataclysmic money" on cities: when outside investment rapidly floods a neighborhood, it tends to result in rapid transformation—of its physical landscape, its demographic or cultural one, or all of the above. This can scrape a place clean of the complex web of social ties and network effects that made it not only distinctive and loved, but financially productive and resilient.

At Strong Towns, we've made a closely related observation: that when you pump a ton of money into a complex system, it loses its complexity, and begins to behave in much simpler and more mechanical ways. Or as Neil Johnson puts it:

If there is an over-supply of desirable resources, then it doesn’t matter very much what we decide to do since we will still have enough of everything we need, and more. In such situations, we could each go around acting in whatever way we wanted, either cleverly or stupidly, and yet still end up with an embarrassment of riches. Hence there is no need to learn from the past, or adapt.... The lack of dependence on any feedback or interactions between the objects will make the overall system non-complex.

Money is, quite often, the limiting nutrient in any number of things we'd like to accomplish in our neighborhoods, towns, and cities. Take away that limitation, and you induce a sort of financial eutrophication—with results just as smelly, in their own way, as a pond covered in green algae.

Sometimes a little limitation is a good thing.

(Cover photo: Eutrophic river in the Philippines. Via Wikimedia Commons.)