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A new report from Hawaii’s Grassroot Institute argues that Hawaii’s land-use laws must be repealed because they discriminate against low-income minorities.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.
Nine years ago, the Antiplanner called claims that suburbs caused obesity “junk science.” Research since then has validated that view.
For example, Health and Place journal is focused on “all aspects of health and health care in which place or location matters,” so might be presumed to have a slight bias for an assumption that place influences obesity. Yet it published a 2012 literature review of dozens of papers on the subject that concluded that most failed to account for self-selection bias, that is, that people who might be overweight prefer to live in the suburbs. Thus, any relationship they may have found between weight and suburbia “cannot provide strong support for causality.”
A paper published by MIT’s Center for Advanced Urbanism reviewed several other metastudies that reported “the inconclusive nature of the relation between urban form and public health.” The MIT paper was written specifically in rebuttal to a paper by people associated with the Congress for the New Urbanism, and chided the authors of that paper for failing to disclose their association with that group, “an organization known for certain urban biases linked to their design agendas.”
Here’s a video of Portland City Commissioner Steve Novick saying the city needs to “sacrifice” its single-family neighborhoods in order to stop climate change. We’ve known that planners feel this way, but rarely do they say it in so many words.
From portland politic on Vimeo.
Previously, many Portland politicians have promised to preserve existing neighborhoods by keeping all high-density developments within a half mile of light-rail and other major transit lines. The unspoken truth was that nearly all single-family homes were within a half mile of a major bus corridor, and Portland wants to build so many rail lines that soon most homes would be within a half mile of one of those lines as well.
“National housing prices have risen much faster than construction costs since the 1990s,” says Paul Krugman (agreeing with Obama’s economist, Jason Furman), “and land-use restrictions are the most likely culprit.” While Krugman is right about this, he confuses cause and effect in several other parts of his article, “Inequality and the City.”
His first problem is when he credits (or blames) urban gentrification on, “above all, the national-level surge in inequality.” In fact, as MIT economist Matthew Rognlie has shown, it is the other way around: the increase in inequality has resulted from the surge in housing prices.
Krugman’s next problem is when he asks, “why do high-income Americans now want to live in inner cities, as opposed to in sprawling suburban estates?” The answer that he misses is: most don’t. The regions where housing prices have risen fastest–San Francisco, Los Angeles, Seattle, Portland, Boston, New York–are ones where suburban growth is stifled by growth boundaries or some other form of land-use regulation. Without that stifling regulation, more high-income families would live in the suburbs, just as they do in regions that don’t have that regulation.
The State of Oregon should change its name to Denial, as state and local leaders seem to be living in that state most of the time. Although Portland Mayor Charlie Hales has declared the region’s housing crisis to be an emergency–one that contributed to his decision not to run for re-election–no one wants to get serious about fixing the problem.
The latest is that Metro, Portland’s regional planning agency, has decided that there is no need to expand the region’s urban-growth boundary as there is plenty of room to accommodate the 400,000 new residents that region is expected to gain in the next two decades. Metro’s plans calls for housing 80 percent of those new residents in multifamily housing primarily located in downtowns and along transit corridors.
Downtown Austin today houses about 10,000 people.
As Texas transportation official Mike Heiligenstein pointed out at the American Dream conference in Austin two weeks ago, the idea that huge numbers of people can live downtown is absurd. Downtown Austin today seems to be a forest of high-rise condos, yet only 10,000 people live there. He pictured what it would look like with 20,000 more residents and it seems impossibly dense–yet 20,000 is less than 5 percent of the region’s anticipated growth. Most Americans simply don’t want to live in Manhattan, and given the nation’s wide-open spaces, they shouldn’t have to–yet planners in both Portland and Austin think they should.