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.
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.
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.
Donald Trump, income inequality, transportation, housing, education, and other subjects are all brought together in this op-ed in the Washington Examiner.
Airbnb was founded in 2008, but didn’t really start growing until 2010. San Francisco housing has been unaffordable at least since 1979, when median home prices in the San Francisco-Oakland urban area were four times median family incomes. By 2006, two years before Airbnb’s founding, they were nearly nine times family incomes.
Median Bay Area home prices are now down to seven times median family incomes. So naturally, local activists blame Airbnb for high housing prices. That’s just as dumb as blaming affordability problems on Google and other tech buses.
San Francisco Bay Area housing was affordable in 1969, when median home prices were just a little more than twice median family incomes. What happened between 1969 and 1979? Not Airbnb. Not Google. What happened was that Marin, San Mateo, Alameda, Contra Costa, and Santa Clara counties all adopted urban-growth boundaries that included little or no vacant land for growth.
Poor Martha’s Vineyard is beset by McMansions that have become so controversial that the people having them built have asked their contractors to sign non-disclosure forms to make sure they don’t talk to the press about the giant homes they are building. Local activists are annoyed that many of these homes are occupied only a few months a year but continue to use electricity to keep them heated year round.
A trailer for a movie about big homes on Martha’s Vineyard.
Don’t feel too sorry for residents of the island off the Massachusetts coast, for they brought it on themselves. In 1974, the state legislature created the Martha’s Vineyard Commission, whose mission is to “carefully manage growth so that the Vineyard’s unique environment, character, social fabric and sustainable economy are maintained.” Among other things, the commission has preserved 40 percent of the island as permanent open space, and would like to preserve the remaining 30 percent that is undeveloped.
Lengthy permitting processes are responsible for housing affordability problems in many cities, reports the Washington Post. Of course, I’ve been saying this for nearly two decades, but it doesn’t become true until it is reported in one of our newspapers of record.
While the Post is right about the problem with permitting, the article gets a lot of other things wrong. “Land is obviously part of the problem,” says the article. “San Francisco and Boston, hemmed in by water, have only so much of it left to build on.” Um, not really. The San Francisco Bay Area has built on less than 18 percent of the land available. Just 53 percent of the Massachusetts counties in the Boston metropolitan area have been urbanized, and that doesn’t count parts of the metro area in New Hampshire and Rhode Island. Why do people think that water on one side means they can’t expand in the other three directions?
The article never mentions urban-growth boundaries or other artificial constraints on urban expansion. Instead, it says “critics” have “blamed zoning laws.” In fact, zoning by itself isn’t the issue. Houston doesn’t have zoning, while Dallas does, yet both are growing rapidly and about equally affordable. Instead, the problem is urban containment.
Portland housing prices are growing faster than almost anywhere in the nation. So the Portland city council has decided to address this problem by building 1,300 units of “affordable” housing, adding less than one-half percent to the city’s housing inventory.
How are they going to pay for this? By taxing new homes 1 percent of their value. Because new and existing homes are easily substitutable for one another, when the price of new homes goes up by 1 percent, the price of existing homes will also go up by 1 percent.
The problem is that politicians don’t understand the difference (or hope voters don’t understand the difference) between “affordable housing” and “housing affordability.” The former is something governments build to help people who are too poor to afford decent housing. The latter is the general level of housing prices relative to the general level of incomes. Building “affordable homes” addresses the first problem, but not the second–except in cases such as Portland where affordable housing makes housing less affordable.
An article in the Wall Street Journal points out that self-driving cars will give more people access to housing that is affordable, particularly in urban areas where growth-management regulation has driving up housing costs. Unfortunately, that’s not the overt message in the article, which is instead headlined, “Driverless Cars to Fuel Suburban Sprawl,” as if that’s a bad thing.
You’d think that a writer for the Wall Street Journal would realize that sprawl is a good thing, but it gives people access to more affordable housing and less traffic congestion, and most importantly allows people to live in the way most people prefer: in a single-family home on a private lot. But this article by technology writer Christopher Mims seems to assume that everyone knows sprawl is bad, even though it doesn’t say why. In fact, the article reports, in a shocked tone, that “half of Americans live in, and are perfectly fine with, suburbs.”
Mims admits that no one really knows how self-driving cars will change the world. But he joins others in assuming that nearly everyone will give up owning a car and rely on car-sharing instead. After all, he and others point out, cars are actually used only 5 percent of the time–what a waste! Hey, Mr. Mims, the toilet in your house is probably used only about 5 percent of the time. Are you willing to share it with anyone who can download a smartphone app?
New York City politician Adriano Espaillat has proposed that the federal government create “anti-gentrification” zones “where vulnerable tenants could form cooperatives to purchase their apartment buildings away from predatory landlords [and a] ruthless market.” As a rule of thumb, any time a politician proposes a new government program to save people from the “ruthless market,” it is worth looking to see what other government programs are really causing the problem.
First of all, gentrification is a local problem, so why should the federal government get involved? Espaillat’s answer is “the federal level . . . is really where the money is.” The real answer is that Espaillat is running for Congress, so he has to propose a federal solution to get people to vote for him. Considering that the federal government is nearly $20 trillion in debt, the Antiplanner suggests that people should be skeptical of politicians who think the federal government is made of money.
Second, a lot of gentrification is driven by the “build up, not out” crowd, often using government subsidies to promote their visions. In New York City, for example, Mayor de Blasio wants to rezone low-income neighborhoods so that the city can tear down people’s mid-rise apartments and replace them with high-rise “affordable” housing. Too bad there isn’t some architectural critic to challenge this plan. Maybe they could write a book about it.