Property-rights and housing-affordability advocates were surprised and elated that the chair of President Obama’s Council of Economic Advisors, Jason Furman, gave a speech blaming housing affordability problems on zoning and land-use regulation. They shouldn’t be: while Furman is correct in general, he is wrong about the details and the prescriptions he offers could make the problems worse than ever.
There is no doubt, as Furman documents in his speech, that land-use regulation is the cause of growing housing affordability problems. Yet Furman fails to note the fact that these problems are only found in some parts of the country. This is a crucial observation, and those who fail to understand it are almost certain to misdiagnose the cause and propose the wrong remedies.
Citing Jane Jacobs (who was wrong at least as often as she was right), Forman blames affordability problems on zoning that “limits density and mixed-use development.” Such zoning is found in almost every city in the country except Houston, yet most cities don’t have housing affordability problems. Thus, such zoning alone cannot be the cause of rising rents and home prices.
Based on this erroneous assumption, Furman endorses what he calls the administration’s agenda, which is its Affirmatively Furthering Fair Housing program. Rather than making housing more affordable, this program is aimed at ending racial segregation of middle-class suburbs by requiring the construction of multifamily housing in suburbs that are not racially balanced relative to their urban areas. It assumes that multifamily housing is less costly (and thus more affordable to low-income minorities) than single family, but that is only true because units are smaller: on a dollar-per-square-foot basis, multifamily costs more than single family, especially for mid-rise and high-rise apartments. Multifamily also uses more energy per square foot than single family, which means heating bills will be higher.
In other words, the fundamental assumption of Affirmatively Furthering Fair Housing is that it is “fair” to put low-income minorities in cramped apartments with little privacy so long as those apartments are in the same suburbs as single-family homes with large private yards occupied by the middle class. It also assumes that the solution to problems created by zoning is even more government interference in the market, either through regulations mandating certain housing types or subsidies to that housing (another part of the administration’s agenda). It is worth noting further that nothing in the program would insure that the people in those apartments are, in fact, racial minorities.
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Once we recognize that housing affordability is a crisis only in some urban areas and not others, we have to ask what it is about those urban areas that makes housing expensive. It is not zoning that limits density or mixed-use, which is found almost everywhere; it is growth-management planning that limits development at the urban fringe, which is found mainly in coastal states (CA, FL, HI, MA, MD, OR, VA, WA, and most New England states)–not coincidentally, the very places where housing affordability is a major issue.
Without land-use regulation outside of the cities, all the city zoning in the world won’t stop developers from meeting demands for affordable high- or low-density housing outside city limits. On the other hand, if growth management, whether through urban-growth boundaries, urban-service boundaries, large-lot zoning, greenbelts, or other means, limits expansion of the urban area, then housing will become both more expensive and more volatile.
Personally, I would be willing to give up all city zoning restricting density and mixed-use development provided we also give up all zoning and land-use regulation outside of city limits. This will allow developers to meet whatever demand there is for high-density housing as well as for traditional suburbs. Neighborhoods could continue to protect themselves from unwanted intrusions and nuisances using deed restrictions, as is done in much of Houston, one of the nation’s most affordable cities and urban areas.
One of the major points of my 2012 book, American Nightmare, is that zoning was originally developed to keep not just racial minorities but the working class in general out of middle-class neighborhoods (a point more recently made in Sonia Hirt’s 2014 book, Zoned in the USA). When that failed to work due to rising working-class incomes, middle-class planners supplemented zoning with growth management. That policy appears to be working as blacks and other working-class populations are fleeing many of the urban areas that have applied it, urban areas that celebrate themselves as havens for the “creative class,” which is simply another name for the middle class.
In short, Furman’s and the administration’s focus on zoning is wrong and will fail to make housing more affordable. Instead, they should look at growth management as the cause of housing affordability problems and at eliminating such growth management as the solution.
Very true point: “even the most aggressive subsidy programs will build too little housing to have much of an effect on the market.”
In NYC, they are building a heavily-subsidized affordable apartment building with very low rents.
Building has 700+ units; (there have been over 100,000 applications (so far). So the market will see no change except that 700+ lucky people will benefit greatly from a government investment of tens of millions of $.
This is disingenuous. That same EIA table shows that energy usage per household and per household member is lower in multifamily homes. Also from the EIA, “Apartments in buildings with 5 or more units use less energy than other home types.”
There is nothing intrinsic to the construction of a multifamily building that makes it necessarily less efficient than a single family house. In fact, all things being equal they can be much more efficient because each unit in an multifamily building can share walls with other units, limiting the surface area of the entire volume that radiates heat to the outside. I suspect that the EIA’s per-square-footage numbers make multifamily look worse only because most US multifamily building stock is older (think prewar central steam heat, brick and plaster) and mostly located in cold norther cities.
And if multifamily units tend to be smaller, so what?
This post exposes the Antiplanner’s own fundamental assumption: that square footage alone is the highest good to which we can aspire.
When I read this, I thought, “Wow. Finally, he gets it!” But then the gesture of charity was spoiled with the next sentence:
What’s the moral difference, really, between a homeowner justifying restrictions on development by saying, “I don’t want to look at an apartment building out my window,” to one on the periphery saying, “I don’t want the view of the farmland outside my window marred by a bunch of houses?”
Why is a forest of tract homes and big box stores any less an “unwanted intrusion” than an apartment building for low-income families?
Just guessing that Obama will be making housing more affordable the same way he made health insurance “more affordable”.
What’s the moral difference, really, between a homeowner justifying restrictions on development by saying, “I don’t want to look at an apartment building out my window,” to one on the periphery saying, “I don’t want the view of the farmland outside my window marred by a bunch of houses?”
This will be hard, since I am addressing a government planner and I’m still not 100% convinced they are fully human. The former is usually the result of an entire neighborhood agreeing on the nature and style of their immediate surroundings and forming a covenant or getting zoning changed to protect something thousands of people agreed on. The latter is generally the result of a single person, say, an old bitch like Elizabeth Furse, deciding the nature of the development or lack thereof for several miles around her and passing a special rule just to benefit herself.
That clear it up for you?
I’m neither in government nor am I a planner so I can assure you I’m 100% human.
So land use restrictions are OK if they’re the result of a bunch of people acting collectively but not if they’re enacted in the interest of just one individual?
Where do urban growth boundaries fit into this rule of thumb?
”
In fact, all things being equal they can be much more efficient because each unit in an multifamily building can share walls with other units, limiting the surface area of the entire volume that radiates heat to the outside.
“~ Ohai
I know this is repeated a lot but it makes little sense. At the end of the day, a building is a building. A SFH has less surface area exposed to the outdoors. A multifamily building has more surface area. The laws of thermodynamics don’t care about some arbitrary difference humans create with their labeling. It works the same.
Once you do something like measuring the BTU per sq foot of the unit, you’re not comparing apples to apples. They need to measure the BTU consumed by the entire structure.
etc, etc, etc
”
Just guessing that Obama will be making housing more affordable the same way he made health insurance “more affordable”.
” ~metrosucks
That would make for a great onion article. Obama declares he can end homelessness only if Congress passes the American Residential Structures for Everyone ( aka the arse act ). It will require that everyone provide the IRS with proof that they have housing.
Part of the legislation will stipulate that if the housing doesn’t include at least 3 bathrooms, a small gym and a mother-in-law apartment for the 20 somethings that can’t afford housing on their own, then the housing doesn’t qualify. Housing that doesn’t qualify must be upgraded to meet the new requirements by 2018 or torn down.
Rather than making housing more affordable, this program is aimed at ending racial segregation of middle-class suburbs by requiring the construction of multifamily housing in suburbs that are not racially balanced relative to their urban areas.
So- suburbs that are not racially balanced (read: lots of white people, few black and brown) are a bad thing. Why, then, is it also considered a bad thing when folks from the suburbs move into a central city that is not racially balanced (read: lots of black and brown people, few whites)?
I’m still waiting for an explanation as to why the Antiplanner’s house in Camp Sherman is so much more expensive than an entire farm in Kansas?
#Amenities
The laws of thermodynamics don’t care about an arbitrary human label like, “energy efficiency,” either, but that doesn’t mean it can’t be quantified. What is the purpose of a building? One purpose is to keep its human occupants insulated from extremes of temperature, and according to the Antiplanner’s source multifamily residences are more efficient at doing that than single-family residences. If it doesn’t make sense ask yourself why penguins in Antarctica huddle together to keep warm. Apartment buildings benefit from the same effect.
Incidentally, one reason why apartment buildings appear worse on a square-footage basis is likely due to the split incentive effect. In many older apartment buildings the landlord pays the heating bill, so tenants have little incentive to be more energy efficient, by say, lowering the thermostat a few degrees or keeping their windows tightly closed.
Indeed, I once lived in an old prewar apartment building where the steam radiator pipes got so hot that residents would resort to opening windows just to keep from burning up, even in the middle of winter.
“I’m neither in government nor am I a planner so I can assure you I’m 100% human.”
Know what I find funny? No one online will ever cough up to being a government drone. What’s the problem? When I go to Oregon, for example, probably 10 percent of the cars on the road are DAS or some other public agency. Yet these government employees vanish remarkably when one is asked to speak up. I couldn’t find a government employee to save my own life.
You talk just like a planner, with the same condescending sneer and superior smugness. They all talk like this so it must be something they are taught, or the profession selects for assholes.
There is no way you are in private enterprise. You’re connected to government in some way, and a craven coward for not admitting it.
The federal government has yet to promulgate a housing policy that will lower the cost of housing. This proposed “agenda” will be no different.
The AFFH agenda appears to conflate race and income in a way that is likely to lead it to be counterproductive. It presumes that there is some “right” racial mix that everyone prefers, and that not only does it know what the relative levels are, but that it knows how to promote them. It ignores the fact that by forcibly changing the mix of new residents to an area, it affects the likelihood that some existing residents will choose to move or at least start looking elsewhere.
It presumes that there is some “right” racial mix that everyone prefers…
Most everyone prefers turkey at Thanksgiving, moreso than at nearly any other time of the year. And with nary a government planner in the loop, turkeys enough to satisfy demand appear at the market. I have no doubt that if people preferred a specific racial mix in their neighborhoods, they would find a way to make it happen without being ordered about as if they were pieces on a chessboard.