Category Archives: Housing

The Millennial Dream

A new survey from Trulia confirms similar surveys in the past: Millennial housing preferences really aren’t much different from those of previous generations. Contrary to claims that most Millennials want to live in inner-city multifamily housing, nearly 90 percent of Millennials aspire to buy a single-family home. Moreover, the vast majority hoping to live in suburbs or small towns, while only 8 percent say they want to live in a central city.

The myth that Millennials want to live in cities is so pervasive that one news report claimed that the results of this survey contradict the “reality” that people are moving to the cities. In fact, as Wendell Cox has shown, central city population growth was slower in the 2000s than the 1990s, for both Millennials and the population in general. Meanwhile, suburbs and small towns continue to grow faster than center cities, even among 20-29 year olds.

While the populations of core neighborhoods in and near downtowns are growing when measured on a percentage basis, this is mainly because these populations were so low in the first place. The 1950s and 1960s saw most major cities evict residents from their downtowns as a part of the urban renewal process, which was the urban planning fad of that era. Now, the same urban renewal tools–tax-increment financing, eminent domain, and other gifts to developers–are used to bring people back to downtowns, which is today’s urban planning fad. While planners have proven that “if you subsidize it, they will come,” this isn’t evidence of a huge and permanent change in housing tastes.

Continue reading

Share

The Antiplanner’s Law of Housing Affordability

Growth management not only makes housing more expensive, it makes housing prices more volatile. So, even though the American economy isn’t exactly booming, growth in some parts of the country is sending housing prices upwards, and housing affordability has become a battlecry in San Francisco, Los Angeles, Seattle, Portland, and many other cities.

Unfortunately, it is usually the battlecry of advocates of the wrong policies. San Francisco’s affordability crisis has led to a blame game, with some blaming high housing costs on anti-development progressives (which is partly true) while other say they are solely due to due to demand, not supply (which is completely wrong). Proposed solutions include increased rent controls and inclusionary zoning, both of which would make housing less affordable in the long run.

In Seattle, someone noticed that developers were tearing down $400,000 bungalows in order to build three $600,000 condos and came to the wrong-headed conclusion that housing could be made more affordable by saving the bungalows. Yes, $400,000 is less than $600,000, but if you don’t increase the supply of houses, overall affordability will decline.

Continue reading

Share

Housing Supply Reduced by Less Than One-Tenth of a Percent: Everybody Panic!

According to the 2013 American Community Survey, San Francisco has 381,000 housing units. The San Francisco Chronicle has found that about 350 of them are used as full-time vacation rentals through Airbnb. This, says the paper, “bolster[s] claims by activists that the service removes scarce housing from the city’s limited inventory.”


Supporters of Airbnb held a rally last October to persuade the city to legalize the service. Flickr photo by Kevin Krejci.

Since they live in one of the least affordable housing markets in the country, San Francisco residents are understandably sensitive to housing affordability. However, they are quick to blame high housing costs on everything but the real culprit. If it’s not Airbnb, it’s the Google, Apple, and Facebook buses taking people to work in Silicon Valley.

Continue reading

Share

The Most Racist Urban Area in America

Yesterday, the Department of Housing and Urban Development (HUD) approved a new fair housing rule called Affirmatively Furthering Fair Housing. This follows the Supreme Court’s recent ruling allowing HUD to use disparate impact as a criterion for determining whether a community is guilty of unfair housing practices.


Racists. Wikimedia photo by Bernard Gagnon.

In one form of disparate impact analyses, HUD compares the racial makeup of a city or suburb with the makeup of the urban area as a whole. If the city doesn’t have enough minorities, it is presumed guilty and must take steps to attract more. Under the Affirmatively Furthering Fair Housing rule, that could mean subsidizing low-income housing or rezoning land for high-density housing.

Continue reading

Share

TOD Coming to Pittsburgh

Yet another example of light rail spurring economic development comes from Pittsburgh, where the Port of Allegheny County has approved $12.5 million in public subsidies for a $42.5 million transit-oriented development. Since the development will include 152 apartments and 15,000 square feet of retail space, that’s a subsidy of more than $82,000 per apartment. The subsidies will also help pay for a 541-space parking garage.

Don’t be impressed by 15,000 square feet of retail space: that’s about the size of a new Trader Joe’s. The average Trader Joe’s is about 12,000 square feet, but the newer ones are bigger. Of course, if they actually attract a Trader Joe’s, they might be able to fill the apartments, but the fact that Pittsburgh has one of the most affordable housing markets in the country probably means there is little demand for stack-and-pack living.

So once again it is proven that light rail doesn’t stimulate economic development; it merely stimulates subsidies for economic development. Pittsburgh officials complain that “transit-oriented development is very difficult in Pennsylvania” because “there is no dedicated funding source” that can be used to subsidize it. So why are they bothering? Apparently just because they want to follow the latest fad.

Share

Housing Apartheid

Smart-growth land-use controls are creating a generation of renters and result in “social and housing apartheid,” say economists Shamubeel and Selena Eaqub. Writing from and about Auckland, New Zealand, they note that, since 1995, the cost of developable land has risen 73 percent faster than incomes (p. 52).

They admit that demand has played a role in housing prices, but not the principle role. “Over time, house prices can fluctuate considerably, but, in the normal scheme of things, only in a transitory way,” they write. “Prices will rise to signal the market to make more houses and then fall back when supply matches demand. But house prices can rise continuously, relative to incomes and rents, if there are physical or regulatory constraints that stop supply” (p. 51).

Continue reading

Share

Portland’s Housing Future

The Antiplanner spent yesterday in the Portland, visiting the neighborhood where I grew up and seeing the new homes springing up in people’s backyards, sideyards, frontyards, and just about anywhere where there is a little open space. Portland planners say that 55 percent of new homes built in the next two decades will be multifamily or single-family attached homes (row houses). If the single-family homes being built in my old neighborhood are good examples of the kind of single-family planners want for the remaining 45 percent, they won’t be any more attractive than the 55 percent.

Economist Bill Reid argues that Metro planners are greatly overestimating the desire for multifamily housing. Based on a survey published by Metro itself, Reid predicts that Metro’s plans will result in a shortfall of more than 40,000 single-family detached homes. Unfortunately, Reid’s study doesn’t seem to be available on line, but it is described in this Portland Tribune article.

Predictably, one of the comments on the Portland Tribune article lauds Metro and urban-growth boundaries for protecting Oregon from becoming like “overcrowded California.” In fact, these policies are deliberately designed to turn Portland into another overcrowded California urban area.

Continue reading

Share

The Cost of Regulation in San Diego

Last week, economists at the Fermanian Business & Economic Institute released a report estimating that government regulation increase San Diego housing prices–for both buyers and renters–by an average of about 40 percent. The report says that only 16 percent of San Diego County has been developed (the 2010 census says 18.5 percent), and almost all of the remaining land is off-limits to homebuilders. Yet, the report notes, a significant portion of that land “is geographically suitable for development.”

Although the land shortage is responsible for much of the regulatory cost, there are other costs as well. “The time involved in what is often a prolonged and complicated process . . . can add 15% or more to the price of a new house,” or more than a third of the total regulatory cost, says the report. This process can take 12 years or more before developers can start building a single home. Of course, the Antiplanner has argued that cities can only get away with imposing such an onerous process if they have shut off most vacant land from development through urban-growth boundaries and other regulatory tools.

Continue reading

Share

Lafayette Presentations

Lafayette, Louisiana would seem to be the last place in the world that you would expect to adopt a smart-growth plan. Yet the city adopted one recently and is now beginning to implement it by revising its zoning code. The Antiplanner believes that this code will make housing and other developments more expensive and slow the economic growth of Lafayette.

I suspect the problems can be traced to a decision made a couple of decades ago to consolidate the city and parish government. The argument at the time was that most people lived in one of six Lafayette cities and towns, and the few people scattered across the rural parts of the parish couldn’t afford to maintain the roads and other infrastructure. Consolidation was supposed to fix that.

Today, the roads are in worse shape than ever, both in the city and the parish, and congestion is a major local problem. When the parish asked for a tax increase to improve roads, the parish council at that time refused to guarantee that the money would actually be spent on roads, so the voters rejected the increase.

Continue reading

Share

U.S. Land Worth More Than $23 Trillion

A new study from the Bureau of Economic Analysis estimates that America’s land, exclusive of buildings or other improvements, was worth nearly $23 trillion in 2009. It has undoubtedly increased since then. The analysis, which was summarized in a Wall Street Journal blog post yesterday, presents estimates by state (for the lower 48 states only) broken into three categories: federal, developed, and agricultural.

Nationwide, the three categories add up to about 76 percent, leaving 24 percent in an implied “other” category. However, in a few states, the three categories add up to more than 100 percent, suggesting that developed federal lands are counted both in the developed and the federal categories. There may also be some overlap between federal and ag land.

Most of the important data are found in table 3, which the Antiplanner transferred to a spreadsheet for a more detailed review. The table shows that, nationally, ag land is estimated to be worth an average of about $2,000 an acre. However, it is worth much more–$5,000 to $16,500 an acre–in a few smaller eastern states including Connecticut, Delaware, Maryland, Massachusetts, New Hampshire, New Jersey, and Rhode Island. The higher values in these states probably reflect the competition for that land by exurbanites.

Continue reading

Share