Tag Archives: housing affordability

HUD Backs Off on Housing Mandate

In a case with national ramifications, the Department of Housing & Urban Development (HUD) has effectively given up on its efforts to impose high-density housing on low-density suburbs in the name of racial integration. HUD had ordered Westchester County, New York, to build low-income housing in response to claims that county zoning led to segregated housing.

This was widely seen as the model for HUD’s affirmatively furthering fair housing rule, which requires local governments that have received federal housing funds to review local housing patterns with the de facto assumption that, if the community is not perfectly integrated, whatever segregation exists must be due to local zoning rules making housing less affordable.

In response to HUD’s order, Westchester County had submitted an analysis finding that, while the county was not perfectly integrated, local zoning was not the cause. The Obama administration had rejected this analysis, but the current administration accepted a new analysis that “essentially the same” as the rejected one. Continue reading

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Portland Housing Stupidity Grows

Here’s an incredibly stupid idea to deal with Portland’s housing affordability problems: Multnomah County proposes to build tiny houses in people’s backyard. The people will get to keep the houses on the condition that they allow homeless people to live in them for five years.

That’s supposed to be an incentive. For five years, you have to share your yard with a homeless person who may be suffering from a variety of problems, after which you get to keep whatever is left of the tiny home. But as one Portland neighborhood activist points out, what homeless people need is healthcare and social work, not to be warehoused in someone else’s backyard.

I suspect homeowners are going to be wary of this offer because they will have little control who lives in their yard. Not only would the homeowners be required to maintain the tiny houses while the homeless person or people lived in them, Portland is making it increasing difficult for landlords to evict unwanted tenants.

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Making Boulder Affordable

Boulder, Colorado is the least affordable city in America that is not in California, Hawaii, or the New York City urban area. Boulder’s unaffordability is directly due to a combination of land-use policies, including a greenbelt that is nine times larger than the city itself and limits on the number of building permits that the city can issue each year.

Click image to download this report. Click the link below to go to an executive summary of the report.

A new report published by Colorado’s Independence Institute argues that these land-use policies violate the Fair Housing Act and must be repealed. Thanks to these policies, the black population of Boulder is declining despite the fact that the city’s overall population is growing. Boulder also has one of the lowest homeownership rates of any city in the country, and it is especially low for blacks, who, more than whites, are increasingly forced to live in high-density, multifamily housing instead of single-family homes.

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The Evils of Urban Containment

The Antiplanner is flying to the East Coast today to help some local activists fight a proposed urban-growth boundary. Coincidentally, the Antiplanner’s faithful ally, Wendell Cox, released his annual international survey of housing affordability today.

As the Antiplanner has done for American states and urban areas, Cox shows that, among international urban areas, there is a high correlation between urban containment policies–whether through growth boundaries, greenbelts, or other tools–and unaffordable housing. Simple supply and demand says that when you restrict supply in the face of rising demand, prices will go up–and that’s exactly what we see all over the world.

Cox supplements data he has gathered himself from eight countries (plus Hong Kong) with additional data for urban areas in China and Malaysia. With a little work, it should be possible to add urban areas in non-English-speaking Europe. Perhaps we can have this done in time for the 2018 survey.

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Portland Falls to Number 2

Portland housing prices have been rising faster than in any other major city in the nation, but the latest data show that the city has fallen to number 2 in that measure. Seattle housing prices rose by an annualized 11.0 percent in September, while Portland prices rose by “just” 10.9 percent. No other major city saw prices rise as fast as 10 percent.

Seattle prices are rising so fast that the city is selling every available vacant lot that it has, even though some would rather those lots be turned to parks. Seattle developers are renting studio apartments for $750 a month that are so small–just 130 square feet–that there is no room for a bathroom door.

Portland’s housing market is so tight that 17 acres is considered a large parcel. Naturally, the owners are planning to put multi-family housing on it at 70 units per acre. The largest available parcel in Portland suburb Lake Oswego is a mere 4.5 acres that will be developed at 48 units per acre.

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Portland: Still the Model for Unaffordability

The Census Bureau estimates that the city of Portland is growing by more than 10,000 people a year while the Portland urban area is growing by more than 40,000 people a year, or more than 100 people a day. Despite, or more likely because of, hundreds of millions of dollars spent on growth planning, the region is doing a very poor job of producing the housing those people need to live in.

Metro, Portland’s regional planning agency, brags that not only is the region following most of the advice recently offered by the White House for making housing more affordable, it actually pioneered several of the techniques. Yet according to the Federal Housing Finance Agency, Portland-area housing prices are currently growing at 13 percent per year.

Metro has an article describing some recent housing developments that inadvertently reveals just why housing is getting so expensive. Continue reading

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Housing Affordability in 2014

For the United States as a whole, the value of a median-priced owner-occupied home increased from 2.7 times median family incomes in 2013 to 2.8 times in 2014. The 2014 numbers are from the 2015 American Community Survey, which estimates both home values and family incomes for the year before the survey. In the survey, median family incomes are found in table B19101 while median home values are in table B25077.

You can download my spreadsheets combining data from these two tables from the 2015 survey (which, remember, are for 2014) for the nation, states, and counties, urbanized areas, and cities and other places. For comparison, data for 2013 (from the 2014 survey) can be downloaded for nation, states, and counties, urbanized areas, and cities and other places.

In places where land for new housing is abundant, value-to-income ratios tend to hover around 2. Value-to-income ratios above 3 suggest real or artificial limits on the ability of homebuilders to meet the demand for new housing. While the national ratio of 2.8 is worrisome, many states are well under this ratio.

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Not Just Economists

A few months ago, the Antiplanner listed more than a half-dozen papers by economists showing that growth constraints make housing less affordable. Yet many planners still deny that relaxing those constraints will make housing more affordable.

Now a paper by law professor Michael Lewyn makes exactly the same point, and responds directly to arguments made by advocates of growth constraints. Lewyn is far from a free marketeer, having written articles about controlling sprawl, encouraging walkability, and supporting infill development. But he apparently puts affordability above the fuzzy environmental goals of smart-growth planning.

Lewyn’s paper uses different terms than I would use, blaming land-use regulation on NIMBYs instead of urban containment. I think that NIMBYism is a result, not a cause, of the kind of comprehensive planning that leads to unaffordable housing. But that’s merely a quibble; the significance of Lewyn’s paper is that more people–and not just economists–realize that urban containment is a morally unacceptable policy.

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Band-aids Won’t Make Housing Affordable

The city of Portland is considering new rules that will limit the size of new homes. This will supposedly make housing more affordable, but all it will do is limit the supply of homes that people want and make them less affordable.

The city of Denver is about to adopt new rules charging developers fees that will be used to build affordable housing. As if making new developments more expensive will make housing more affordable.

Voters in San Francisco just adopted a new ordinance allowing the city to require builders of 25 homes or more to dedicate a fourth of those homes to low-income renters or buyers. In the past, such “inclusionary zoning” rules only required that 15 to 20 percent of new homes be affordable. But if rules like this really worked, why not just require that all new homes be affordable?

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Growing Urban Areas Must Grow

The Antiplanner recently listed more than half a dozen academic papers that concluded that growth management makes housing more expensive. To this number might be added a paper (really a lengthy blog post with some neat graphics) by economist Issi Romem, who works for the real-estate web site BuildZoom. Romem finds that urban areas with unaffordable housing haven’t expanded geographically to match their population growth, while areas that have expanded geographically remain affordable.

An article in the Wall Street Journal breathlessly reports this as news, when it is only news to those who have drunk the kool-aide of urban planning. The writer of the article, Laura Kusisto, has apparently listened to too many urban planners herself, for she reports that urban “sprawl” has a “tendency to lead to oversupply that can lead home prices to crash.”

This is completely wrong; the cities that Romem reports have grown geographically did not bubble and crash in the 2000s. Instead, the urban areas that saw housing prices crash are the ones that tried to contain sprawl. Too bad the WSJ can’t afford to hire reporters who understand a smattering of economics, such as the fact that restricting supply makes a good inelastic which in turn makes its price more volatile.

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