Home Sales Reveal Demographic Shift

Last week, the Census Bureau reported a huge surge in July and August new home sales while the National Association of Realtors reported a parallel growth of existing home sales. Total homes sold is the greatest since the 2006 housing bubble while the year-on-year growth in sales was the greatest since 1983, when the economy was recovering from a recession.

The growth in sales in 2020, however, isn’t due to a bubble or an economic recovery. Instead, it represents a major demographic shift. Financial blogger Wolf Richter argues that it is more evidence of a movement “taking place from some densely populated cities, and especially city centers, and especially from rental apartments, to houses a little further out, or in more distant suburbs.”

The Census Bureau and Realtor data don’t indicate whether the sales are in cities or suburbs, but both agree that the greatest increases are in the South and Midwest, while increases in the Northeast and West are much smaller. This would fit Richter’s guess that people are leaving expensive apartments in New York City and San Francisco and buying homes in more affordable places in Florida, Georgia, Indiana, Minnesota, North Carolina, and Ohio, states that already had some of the fastest-growing urban areas before the pandemic. Continue reading

Will the Cities Come Back?

“The Twilight of Great American Cities Is Here,” screams the headline of an article by my friend, Joel Kotkin. He argues that, between the pandemic and the riots following the George Floyd death, people are not going to return to the cities.

Certainly, rents are down and vacancy rates are up in New York City and San Francisco. But does that mean that the cities won’t bounce back after the pandemic is over?

A major pandemic does not “introduce something novel,” observes a historian named Stephen Davies. Instead, “it accelerates and magnifies trends and processes that were already under way.” It can also bring “a final stop to processes that were already exhausted.” Continue reading

Trump Promises to Kill AFFH

On Monday, President Trump announced that he plans to kill the Obama-era Affirmatively Furthering Fair Housing (AFFH) rule, which could have required suburbs to change single-family zoning to allow multifamily housing. This rule had been written by housing activists to make housing more affordable even though there was no evidence that single-family zoning made housing less affordable or that abolishing it would fix the problem.

“Far-left Washington bureaucrats,” Trump said, “are absolutely determined to eliminate single-family zoning, destroy the value of houses and communities already built, just as they have in Minneapolis and other locations. , , , Not going to happen, not while I’m here.”

The truth is that supporters of the rule have a hidden agenda: to stop urban sprawl, even though measures to stop sprawl are the real cause of housing affordability issues. This can be seen in the housing plank of Biden’s campaign platform, which calls for “eliminat[ing] exclusionary zoning policies and other local regulations that contribute to sprawl.” In fact, it is sprawl that keeps housing affordable, and it is only in urban areas that have tried to stop sprawl that housing has become unaffordable. Continue reading

Shaking Down Local Taxpayers for Mixed-Use

Steven Malanga works for the fiscally conservative Manhattan Institute and is the author of Shakedown, a book about how bureaucrats and left-wing interest groups seek to make government bigger and bigger. So why does he support the shakedown of local taxpayers for redevelopment projects?

Malanga’s recent article in the Manhattan Institute’s City Journal describes how developers are turning old shopping malls into housing projects. He writes as though this were a brilliantly innovative solution to both the housing shortage and the decline of brick-and-mortar retailing.

It’s not. It’s central planning, pure and simple, and almost every case he cites required a shakedown of local taxpayers to subsidize the residential portions of the developments. Continue reading

Is Density Worth the Price?

Should cities build more dense housing or sprawl out at the urban fringe? Scott Beyer, the Market Urbanist, wants to see more density while I want to allow more sprawl. Surprisingly, in a debate yesterday over which was the best way to make housing affordable again, Beyer conceded that low-density development was more affordable than high-density. Instead, he argued for high-density development for other reasons.

High-density development, he said, was more environmentally sound, fiscally sustainable, and led to greater worker productivity (which economists call “agglomerative economies”). He claimed that people would live a lot denser if they could but such density is outlawed. Continue reading

We Were Warned Not to Bunch Up

We were warned. After September 11, 2001, historian Stephen Ambrose told us what to do.

“One of the first things you learn in the Army is that, when you and your fellow soldiers are within range of enemy artillery, rifle fire, or bombs, don’t bunch up,” wrote Ambrose in the Wall Street Journal. Now that the U.S. was under attack from terrorists, Ambrose urged the nation as a whole to learn the same lesson: “don’t bunch up.” “In this age of electronic revolution,” he noted, “it is no longer necessary to pack so many people and office into such small space as lower Manhattan.”

Ambrose’s advice was ignored. Manhattan’s population has grown by at least 100,000 people since 2001. Fitting 1.6 million people on a 23-square-mile island is only possible because of transit systems that force people to pack themselves into buses and railcars. Continue reading

The Market Urbanist vs. the Antiplanner

I like Scott Beyer, who calls himself “the Market Urbanist.” He and the Antiplanner see eye-to-eye on a lot of issues. But we also have some areas of fundamental disagreement, as shown in the Reason video below.

Some of them are simply factual. He thinks there is a large, pent-up demand for dense housing in the cities. To the extent that such demand exists, I think it is an artifact of restrictions that prevent low-density development at the periphery of many urban areas. Continue reading

Moving into Your Socialist Home

“Housing is a human right,” asserts Oregon’s U.S. Representative Earl Blumenauer in a paper titled Locked Out: Reversing Federal Housing Failures and Unlocking Opportunity.” That’s debatable, but if Blumenauer really believes it, then why does he support Oregon’s land-use laws that heavily restrict suburban development? After all, that’s the only kind of housing development that is truly affordable.

Click image to download this 28-page report.

Blumenauer was a first-term state representative in 1973, when the legislature passed the state’s land-use law, and he’s been around enough since then to know how urban-growth boundaries have driven up land prices in the cities. Yet his paper completely ignores the role of this law in creating the housing crisis. Continue reading

Yahoo Headline Writers Should Learn to Read

A new study finds that some “metro areas have used an urban sprawl to continue to provide ample housing stock for residents” whereas areas that have emphasized dense developments have seen rents reach an all-time high.

Yahoo! News headlined its report on this study, “How affordable housing in big cities is hurt by urban sprawl.” Yet neither the article nor the study explains how urban sprawl in affordable metro areas makes housing in dense metro areas less affordable.

“It seems that the metros most effectively meeting the demand for new housing are still primarily doing so by continuing to sprawl,” says the study, “despite an increasing demand for dense, walkable neighborhoods that prioritize sustainability.” This was supposed to have been written by an economist, but wouldn’t an economist question whether demand for dense neighborhoods is really increasing if builders, whose livelihoods depend on keep up with demand, aren’t building them in less-regulated areas? Continue reading

An Affordable Housing Boondoggle

Thanks to its urban-growth boundary, Denver has a housing affordability problem. Apartment rents have increased by 65 percent in the last decade, while the nationwide cost of living in that time rose by just 18 percent and rents nationwide increased by an average of 28 percent.

One of the city’s responses was to create a housing voucher program for people who earn too much to qualify for federal housing vouchers but still can’t afford rents in the city. Last July, it allocated $1 million to the program which was supposed to help 125 families.

So far just three households have been able to use it. Out of the million dollars, $180,000 went for administrative overhead, which is a lot of money for just three renters. Continue reading