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Category Archives: Housing

The Year in Review

By | | Follow up, Housing, Transportation
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The Antiplanner tends to agree with Dilbert that New Year’s is a random calendar date, but everyone else is looking back at 2018, probably because it provides a good excuse for a blog post. From my point of view, the two most important events of 2018 were the continuing decline of transit ridership and urban planners’ latest victory in their battles against single-family homes.

November ridership data will be out in a few days, and December a month after that, but October data show that year-over-year ridership fell in eleven of the last twelve months, the exception being July when New York subways were recovering from major delays due to repairs in July 2017. Over the last decade, annual ridership in some urban areas has fallen by nearly 50 percent, and it has fallen by more than 15 percent in more than half of the nation’s 50 largest urban areas.

While some of the decline is due to increasingly unreliable rail systems in New York, Washington, and a few other cities, most of it is due to factors beyond transit agency control: the growth of ride hailing, the growth of other alternatives such as electric scooters, and the growing affordability of driving as oil prices remain low. The question isn’t whether transit will recover; it is whether it will be able to survive at all, especially outside of New York City and the six other cities (Boston, Chicago, Philadelphia, San Francisco, Seattle, and Washington) where transit still makes a difference in the day-to-day life of the average resident. Continue reading →

Housing Market Cooling

By | | Housing
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Early signs indicate at least some housing markets are cooling off. Homes for sale in Seattle aren’t seeing as much intense bidding as a few months ago. Bidding wars are also becoming rare in Portland. The Case-Shiller index says that markets are weakening in other regions as well.

Unlike the 2008 financial crash, housing markets today appear to be the result of, not the cause of, an approaching recession. That recession, in turn, is likely the result of Trump’s trade war. The stock market, which boomed after Trump’s election, has been declining for the last three months as the trade war has increased the cost of manufacturing and consumer goods.

A major problem with relying on government planning for things like housing and transportation is that planning is too slow to keep up with the real world. One obvious sign of this is how road projects that used to take a few months to build now require years and even decades for planning and construction. For housing, the problem is even worse. Continue reading →

How to Sell Forced Densification to Libertarians

By | | Housing
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When cities pass zoning rules (as Missoula, Portland, and many Portland suburbs have done) mandating minimum-density zoning — so that people are forced to either build high-density housing in existing low-density neighborhoods or build nothing at all — libertarians lead the charge against such rules. But urban planners have managed to achieve the same result, and gain the support of some who consider themselves libertarian, by:

  1. Drawing an urban-growth boundary or passing similar policies forbidding development outside the existing urban footprint;
  2. Waiting a few years for the resulting supply shorting to push up housing prices;
  3. Blaming high housing prices on residents of single-family neighborhoods who object to densification of their neighborhoods;
  4. Proposing a law or ordinance that effectively eliminates zoning in those single-family neighborhoods.

Thus, we have a writer for Reason magazine supporting a law that would eliminate much of the zoning in San Francisco and other unaffordable California cities. Another Reason writer endorses a new zoning ordinance in Minneapolis that allows multifamily housing in single-family neighborhoods. The Mercatus Center blames high housing prices on single-family zoning as does a report from the Cato Institute. Continue reading →

Aussie Housing Bubble Deflating

By | | Housing
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When America’s housing bubble burst in 2006, housing prices in Australia hesitated only briefly before continuing to rise. Prices since then have risen to extreme levels, but now the Australian housing bubble seems to have reached its peak and is rapidly deflating. This is having dire implications for Australian banks, its currency, and its economy as a whole.

With the support of urban planners and “sustainability” advocates such as Peter Newman, most Australian states began imposing strict growth limits around major cities in the 1990s. The result was a rapid decline in housing affordability. In Melbourne, for example, median home prices rose from about 3.5 times median incomes in 1997 to 7.0 times in 2004.

According to Wendell Cox, who has been keeping track of housing affordability since 2004, prices in all major Australian housing markets were unaffordable by that year, with median home prices being at least five times median household incomes. While prices in some markets briefly dipped in parallel with those in the United States, prices in Sydney and Melbourne have risen dramatically. By 2015, Cox ranked Sydney second only to Hong Kong as the least-affordable housing market in the urban areas he studied (which are mainly in English-speaking nations). Continue reading →

California Feudalism

By | | Housing, Regional planning
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“Feudalism was about the concentration of wealth and power in a relative handful of people,” say New Geographer Joel Kotkin and big-data whiz Marshall Toplansky. By that definition, California is increasingly feudalistic, they argue in a new paper, California Feudalism.

“At its essence, feudalism was about hierarchy, and the domination of land ownership by a relative few,” says the paper. In contrast, “a strong, land-owning middle class” has played a central role in more egalitarian societies, ranging from ancient Greece to the United States of the 1960s. California’s land-use and energy policies run counter to such a land-owning middle class, which helps explain why California’s homeownership rate peaked in 1960 and today is one of the lowest in the country.

Kotkin and Toplansky are not the first to compare restrictive land-use policies with feudalism. The Antiplanner’s 2016 paper, The New Feudalism, noted that under the old feudalism the government or a small number of people owned nearly all of the land, while under the new feudalism, more people own land but the government strictly controls what they can do with it. More than 30 years before that, private property advocate and vice-president of the Ethan Allen Institute John McClaughry applied the same term to the same type of regulation in an environmental law review article. Continue reading →

Home Sizes and Housing Affordability

By | | Housing, Useful Data
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The median number of rooms in an American home increased slightly from 5.4 in 2007 to 5.5 in 2017. Moreover, there seems to be some correlation between the median number of rooms and housing affordability.

The American Community Survey doesn’t ask people the size of their homes in square feet, probably because it assumes most people don’t know. But it does ask how many rooms are in their homes. Survey directions specify that “Rooms must be separated by built-in archways or walls that extend out at least 6 inches and go from floor to ceiling.” People are to “include bedrooms, kitchens, etc.” but “exclude bathrooms, porches, balconies, foyers, halls, or unfinished basements.”

This can be misleading because many homes built since World War II have open floorplans, which usually means the kitchen, dining room, and living room are all one big room. By census definitions, a three-bedroom, open-floorplan home would have four rooms, while a three-bedroom, traditional house would have six rooms even if both have the same number of square feet. The best we can hope for is that the ratio of open- to closed-floorplan homes is about the same in different parts of the country, which seems unlikely. Continue reading →

BART Can’t Solve Bay Area Housing Crisis

By | | Housing
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Last weekend, California Governor Jerry Brown signed Assembly Bill 2923, which gives BART the authority to ignore local zoning rules and build high-density housing on its own land in the Bay Area. This bill faced fierce opposition from mayors and city councils in Contra Costa County, but was supported by affordable housing advocates.

Ignoring the debate over density at the moment, what makes anyone think that BART, which can’t even effectively run a transit system, can suddenly become an expert housing developer? BART estimates that, with passage of this bill, it will be able to build 20,000 units of housing, about a third of which will be “affordable” (which in the Bay Area can mean affordable to people who earn $115,000 a year or less). While the region could use 20,000 housing units, there is no reason to think that BART can build them affordably or that high-density housing can even be affordable.

BART is well known for the cost overruns, maintenance problems, and crime problems on its transit system. It will be interesting to see how it applies these skills to housing. It’s hard to imagine the results will be very desirable. Continue reading →

Blacks and Single-Family Housing

By | | Housing
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Over the past decade, the share of American households who live in single-family detached homes has remained fairly constant at 61.5 percent plus or minus a couple of tenths of a percent. But the share of non-Hispanic whites who live in single-family detached homes has grown slowly but steadily from 68.4 percent in 2007 to 69.0 percent in 2017. At the same time, the share of blacks who live in single-family detached homes has declined from 48.3 percent in 2007 to 46.4 percent in 2017.

Some people think I’m imposing a cultural bias when I say that single-family detached homes are the most preferable type of housing recorded in table B25024 of the American Community Survey, which also includes single-family attached (row houses), duplexes, apartments of various sizes, mobile homes, boats, and recreation vehicles. Many urban planners believe that multifamily housing is superior, but many of those planners themselves live in single-family homes. It appears that planners’ eagerness to put other people in multifamily housing may have its greatest effect on low-income people, of whom blacks are disproportionately represented.

In fact, in some places it appears that blacks are losing out to non-Hispanic whites in the choice of housing stock. In sixteen states and a distressingly large number of counties, cities, and urban areas, the percentage of non-Hispanic whites living in single-family detached homes grew even as the percentage of blacks shrank. Continue reading →

Housing Preferences by Age

By | | Housing, Useful Data
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Supposedly, young people today prefer to rent multifamily housing over buying single-family housing. This claim is used to justify policies aimed at densifying cities by rezoning neighborhoods of single-family homes for multifamily housing. As the New York Times Timothy Egan writes, “An unholy alliance of socialists and developers threatens to destroy the city’s single-family neighborhoods with a major upzoning.”

Data from the 2017 American Community Survey can help put this claim to the test. Table B25125 breaks down housing into six types: single-family, multi-family, and other (mobile homes, boats, RVs, vans), each owned or rented, and reports for householders (one of the adults in the household) of ages 15-34, 35-64, and 65-plus. We can compare the results with table HCT004 from the 2000 census to see how young people (and middle-aged and seniors) lived in 2017 vs. how they lived 17 years before.

In 2017, 29 percent of householders under 35 owned and 20 percent rented a single-family home, while 2 percent owned and 44 percent rented multifamily housing. But that’s not much different from 2000, when 31 percent owned and 16 percent rented a single-family home and 2 percent owned and 42 percent rented multifamily. Continue reading →

Closing the Black-White Homeownership Gap

By | | Housing, Useful Data
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Homeownership rates in the United States peaked in 2004 at a little over 69 percent, then declined after the financial crash to less than 63 percent in 2016. Since then they have risen slightly to above 64 percent in late 2017 and 2018.

When broken down by the race of the householder, non-Hispanic white rates have been 6 to 8 percentage points higher than the national average, while black rates have been 20 to 22 percentage points lower. Between 1995 and 2004, blacks closed some of the gap, going from under 60 percent to more than 65 percent of the rates enjoyed by non-Hispanic whites. After the financial crash, however, blacks lost more than they had gained in the previous decade, with rates falling below 58 percent of non-Hispanic white rates in 2016.

Black rates made a slight recovery in 2017, according to the American Community Survey. Table B25003 shows homeownership rates, B25003B has rates for black householders, and B25003H has rates for non-Hispanic whites. There are also tables for whites including Hispanic (B25003A); Indian/Native Alaskan (C); Asians (D); and Native Hawaiian/Pacific Islander (E). But I’m focusing on blacks and non-Hispanic whites as economic bellwethers. Continue reading →