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.
The current administration’s transportation department “subordinates civil engineering to social engineering as it pursues an exclusively urban vision of dense housing and government transit,” notes page 5 of the 2016 Republican Party Platform. For example, the administration’s “ill-named Livability Initiative is meant to ‘coerce people out of their cars.'”
In contrast, Republicans pledge “to remove from the Highway Trust Fund programs that should not be the business of the federal government,” including mass transit, “bike share programs, sidewalks, recreational trails, landscaping, and historical renovations.” The platform notes that more than 20 percent of federal highway revenues go to mass transit, yet transit is “an inherently local affair that serves only a small portion of the population, concentrated in six big cities.” (Really, six big urban areas, namely New York, Los Angeles, Chicago, Washington, San Francisco-Oakland, and Boston, where two-thirds of transit rides take place.)
The Department of Transportation is inviting comments on a proposed change in the rules for metropolitan transportation planning. Under the current rules, every metropolitan planning organization (MPO) must write a long-range (20 years) transportation plan and update it every five years, as well as a short-range transportation improvement plan that lists that projects the organization expects to fund in its region.
Some urbanized areas, however, have multiple metropolitan planning organizations. For example, Miami, Ft. Lauderdale, and West Palm Beach each have their own metropolitan planning organizations even though (since 2000) they are in the same urbanized area. The proposed rule would require the MPOs to submit a single long-range transportation plan for the entire urbanized area.
On one hand, the purpose of MPOs in the first place is to save the federal government from having to review thousands of grant proposals from the thousands of different cities and counties that make up the nation’s urban areas. Thus, this represents a streamlining from the federal government’s point of view since it reduces the number of grant proposals it will have to deal with.
“The West is disappearing,” claims a new report by the Center for American Progress. They should rename themselves the “Center for Alarming Americans,” as the report is pure hokum.
Based on data from 2001 and 2011, the report found that the West “loses” 432 square miles of land per year, or about an acre every two-and-one-half minutes. This sounds so alarming that the San Jose Mercury-News reported that California is “losing most land to development.” “Most” means “more than half,” but by any definition, far less than half of California has been developed.
The eleven contiguous western states have a total of 1,173,990 square miles of land. At 432 square miles per year, it would take 2,718 years to develop them all. Since half of the land is federal forests, parks, and rangelands that will never receive more than a modest amount of development, there doesn’t seem to be much to worry about.
Feudalism–an economic system in which all land is owned by the monarch and everyone else must pay rent to use that land–supposedly ended hundreds of years ago. But a map of the world showing the current status of property suggests that it is alive and well over most of the planet. Moreover, a new form of feudalism that nominally allows people to own land but severely limits what they can do with that land dominates much of the rest of the world.
For years, various surveys of economic freedom have attempted to portray the amount of liberty people enjoy in different countries. However, none of these surveys have explicitly included property rights as one of the measures of freedom, probably because there is no easy index for such rights.
That was supposed to be remedied by the new International Property Rights Index. This judges a nation’s respect for property rights using ten criteria. However, only one of these has to do with ownership of real estate, and none of them consider how regulated such owners might be. As a result, it gives high ratings to countries in which property rights are actually severely limited.
Los Angeles has some of the least-affordable housing in the world. In 2014, median home prices there were 7.5 times median family incomes, beating out San Francisco (7.0 times), Honolulu (6.9 times), San Jose (6.8 times) and New York (5.1 times).
Developing this orange grove will have no impact on orange prices, but could go far to helping make housing more affordable. Wikipedia photo by Ricraider.
So naturally, some people in Ventura County, just north of Los Angeles and part of the Los Angeles urban area, think it is vitally important to protect farms and open space, and they are seeking approval of a measure that would require a vote of the entire county before any land could be rezoned for development. Median home values in Ventura County were just 5.8 times median family incomes in 2014, more because of incomes, which are a third higher than Los Angeles County, than home prices, which are just 4 percent higher than LA County. The open-space measure will serve to make housing even more expensive while it protects a resource that is already abundant: open space.
A new report from Hawaii’s Grassroot Institute argues that Hawaii’s land-use laws must be repealed because they discriminate against low-income minorities. Hawaii was the first state to pass a land-use law in 1961, and not coincidentally it has the least affordable housing in the nation.
The 2014 American Community Survey found that median home prices in Hawaii were 6.7 times median family incomes, compared with the national average of 2.7. These high prices had pushed low-income minorities to leave the state: while urban Honolulu had grown by 12 percent between 2000 and 2010, the urban area’s black population declined by 4 percent.
Hawaii’s 1961 land-use law divided lands in the state into urban, agriculture, and conservation (later a fourth category, rural, was added). While the supposed purpose was to protect Hawaii’s agricultural sector, in fact it destroyed it because high housing prices increased labor costs and plantations and canneries can’t compete with those in places like Fiji and Costa Rica.
How do you measure happiness? The Antiplanner isn’t sure, but recent research finds that people living in low-density suburbs are happier than people living in cities. People living in rural areas are happiest of all. The effect isn’t as pronounced for especially intelligent people, the researchers concluded, but it was still there.
One reason why people in some cities may be unhappy is the high cost of living there. The Washington Post asks “why it seems impossible to buy your first home.” The paper doesn’t bother answering the question, but the cities discussed in the article–Portland, Boston, Denver, Seattle, Washington, and several California cities–all are under some form of growth management. All but Boston and Washington have urban-growth boundaries, while Boston and Washington are surrounded by counties that have passed highly restrictive zoning codes prevention new home developments.
In addition to making housing unaffordable, growth management makes urban areas dense. So, the question is: is it the density that makes people unhappy or the unaffordable housing? One alternative possibility is that unhappy people are attracted to dense, expensive areas, but I don’t see why that would be true. I suspect that density itself is not the problem, but things that are often (but don’t have to be) associated with density, such as a higher cost of living and traffic congestion, are the real keys to urban unhappiness.
In the minds of Australians, the term “Australian dream” is even more firmly associated with homeownership than the term “American dream” is in the minds of Americans. For more than a century, Australia has enjoyed higher homeownership rates than the United States.
Yet now the Australian dream is nearly dead thanks to state land-use restrictions that have made Australian housing some of the most expensive in the world. According to Wendell Cox’s housing survey of English-speaking countries, Sydney, Australia is the second-least affordable urban area, with only Hong Kong being less affordable. Hong Kong at least has an excuse of somewhat limited land area.
Some blame the housing crisis on the “concentration of wealth,” when in fact the opposite is true: by making housing expensive, the government has concentrated wealth in the hands of existing homeowners at the expense of renters and recent and aspiring homeowners. Others suggest that Australians should dream about something else, as if there is little anyone can do to ever make housing affordable again.
Portland State University planning professor Ethan Seltzer thinks it’s a “misconception” that urban-growth boundaries make housing more expensive. “This claim has been addressed and dismissed since Gov. Vic Atiyeh’s administration,” he claims, though without offering any actual evidence.
“By law,” he continues, “there must be enough land in the UGB to meet needs for residential development for the next 20 years.” The law says it, so it must be true. Never mind that Metro decided not to add any land to the growth boundary last year even though Portland was in the midst of a housing crisis.
Planners such as Seltzer may have convinced themselves that they are immune to the laws of supply and demand, but economists disagree. The end of this post lists more than half a dozen economic papers that conclude that growth management and land-use regulation explain most if not all the differences in housing affordability among cities.