Category Archives: Housing

More Regulation Won’t Make Housing Affordable

A new Housing Policy Toolkit from the White House admits that “local barriers to housing development have intensified,” which “has reduced the ability of many housing markets to respond to growing demand.” The toolkit, however, advocates tearing down only some of the barriers, and not necessarily the ones that will work to make housing more affordable.

“Sunbelt cities with more permeable boundaries have enjoyed outsized growth by allowing sprawl to meet their need for adequate housing supply,” says the toolkit. “Space constrained cities can achieve similar gains, however, by building up with infill.” Yet this ignores the fact that there are no cities in America that are “space constrained” except as a result of government constraints. Even cities in Hawaii and tiny Rhode Island have plenty of space around them–except that government planners and regulators won’t let that space be developed.

Instead of relaxing artificial constraints on horizontal development, the toolkit advocates imposing even tighter constraints on existing development in order to force denser housing. The tools the paper supports include taxing vacant land at high rates in order to force development; “enacting high-density and multifamily zoning,” meaning minimum density zoning; using density bonuses; and allowing accessory dwelling units. All of these things serve to increase the density of existing neighborhoods, which increases congestion and–if new infrastructure must be built to serve the increased density–urban-service costs.

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If You Don’t Like Growth Boundaries, Move

Palo Alto may be the most expensive housing market in America. The American Community Survey says the home of Stanford is the only city whose median home price was more than $2 million in 2014; the survey numbers don’t go higher than $2 million so we don’t know how much more.

Coldwell Banker’s 2015 report on average prices of a four-bedroom, two-bath home found that Palo Alto’s was $2.1 million; only Newport Beach, at $2.3 million, was higher–but the American Community Survey says a median home in Newport Beach was “only” $1.7 million. (Coldwell Banker’s 2016 numbers don’t include Palo Alto.)

Palo Alto residents earn more than the national average, but not enough to make up for the high housing prices. The median family income was $176,000 in 2014. That happens to also be the nation’s highest, but value-to-income ratios are still more than 11 when they should be under 3.

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Housing Affordability in 2014

For the United States as a whole, the value of a median-priced owner-occupied home increased from 2.7 times median family incomes in 2013 to 2.8 times in 2014. The 2014 numbers are from the 2015 American Community Survey, which estimates both home values and family incomes for the year before the survey. In the survey, median family incomes are found in table B19101 while median home values are in table B25077.

You can download my spreadsheets combining data from these two tables from the 2015 survey (which, remember, are for 2014) for the nation, states, and counties, urbanized areas, and cities and other places. For comparison, data for 2013 (from the 2014 survey) can be downloaded for nation, states, and counties, urbanized areas, and cities and other places.

In places where land for new housing is abundant, value-to-income ratios tend to hover around 2. Value-to-income ratios above 3 suggest real or artificial limits on the ability of homebuilders to meet the demand for new housing. While the national ratio of 2.8 is worrisome, many states are well under this ratio.

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Not Just Economists

A few months ago, the Antiplanner listed more than a half-dozen papers by economists showing that growth constraints make housing less affordable. Yet many planners still deny that relaxing those constraints will make housing more affordable.

Now a paper by law professor Michael Lewyn makes exactly the same point, and responds directly to arguments made by advocates of growth constraints. Lewyn is far from a free marketeer, having written articles about controlling sprawl, encouraging walkability, and supporting infill development. But he apparently puts affordability above the fuzzy environmental goals of smart-growth planning.

Lewyn’s paper uses different terms than I would use, blaming land-use regulation on NIMBYs instead of urban containment. I think that NIMBYism is a result, not a cause, of the kind of comprehensive planning that leads to unaffordable housing. But that’s merely a quibble; the significance of Lewyn’s paper is that more people–and not just economists–realize that urban containment is a morally unacceptable policy.

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More on Housing and Inequality

NPR tells the story of the impact of the 2008 financial crisis on black middle-class families: on average, they lost a much larger share of their wealth than whites. But NPR fails to relate this to land-use regulation that is promoted by whites who consider themselves “progressives.”

Similarly, a Trulia analysis of differences in housing prices among cities lamely credits the differences to “a lack of housing construction” in some regions, without suggesting why those regions aren’t building housing. Trulia also suggests that these trends are leading to “regional inequality” without mentioning inequality among individuals.

These issues are largely corrected in a new paper by Joel Kotkin, who makes it clear that “progressive policies” such as urban-growth boundaries are causing the high housing prices in some regions and, in turn, growing income inequality. Kotkin points to MIT economist Matthew Rognlie’s research showing that housing is the principle cause of growing inequality in both the United States and Europe.

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The Land of Skinny Roads and Skinny Houses

Much of England and Wales reminds me of the Willamette Valley where I grew up: rolling hills covered with forests, farms, and cities. But Britain’s infrastructure would look completely out of place in most of the United States, being dominated by narrow roads and small houses. As an example of skinny roads, here’s a car parked in a small hamlet in Norfolk.


Parking in what Americans would consider the middle of the road, completely blocking one lane of traffic, is considered completely normal in Britain.

Because there is no parking strip and no shoulders, the car is blocking one entire lane, turning the two-lane road into a single-lane road. This is not unusual; auto drivers do this all the time everywhere from busy roads in resort areas to big cities. Parking appears to be first-come, first-served, so if someone parks on the north side of a street, no one will park on the south side (which would completely block the road) of that part of the street, but they might park on the south side a few car lengths away. The Antiplanner has already complained about the country’s narrow roads; the rest of today’s post will focus on housing.

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Treating the Symptoms, Not the Problems

Portland-area politicians love to build things. In 2004, Multnomah County, the county in which Portland is located, built a new jail, called Wapato, at a cost of $58 million even though county officials knew they had no money to operate the jail. It has been empty ever since.

Now officials want to spend $60 to $100 million building a shelter for the homeless near terminal 1, a former port facility on the Willamette River. So someone came up with a bright idea: why not use Wapato Jail as a homeless shelter?

One argument against the idea is that most homeless people gravitate towards downtown. But terminal 1 isn’t downtown either. Another is that Wapato isn’t set up as a homeless shelter. But it would cost a lot less converting it to a homeless shelter than to build a brand-new one.

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The Democrats’ Fair Housing Plan

Vice presidential candidate Tim Kaine’s outline of Hillary Clinton’s housing plan focused on racial discrimination. While that’s an important issue, it isn’t really at the heart of Clinton’s housing plan. In fact, it isn’t even mentioned in Clinton’s platform.

Instead, the heart of the plan is huge subsidies to middle-class homebuyers aimed at increasing homeownership. Clinton proposes to give anyone who earns less than a region’s median income up to $10,000 to help with a downpayment on a house.

There are several problems with this idea. First, Clinton doesn’t restrict the grants to first-time homebuyers, so it is likely that the program won’t significantly increase homeownership. Second, the median family income in a dozen urban areas, from Boulder to San Jose, is more than $100,000 a year, so a lot of well-off people would qualify free federal money. Third, the $10,000 would only be given to people who can match it with their own savings, and since nearly half of all Americans don’t even have $400 to spare, not much of Clinton’s promise will reach low-income people.

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Don’t Blame Housing Affordability Problems on the Free Market

Miami is one of many places where housing prices have reached crisis levels, and the Miami Herald editorial board blames the problem on the free market. Only government intervention in the form of subsidized low-income housing will fix it, says an August 3 editorial.

Wrong. Government caused the problem in the first place. No matter what the cause, subsidized housing for a few low-income people will not solve it, except for those lucky few.

Despite being one of the fastest-growing states in the nation, Florida housing remained affordable up through 2000. Miami was generally the state’s least-affordable housing market, probably because an influx of immigrants kept median incomes down. But from 1959 through 1999, median home prices remained between two and three times median family incomes.

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