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Category Archives: Housing

The Housing Bubble Continues to Inflate

By | | Housing, Useful Data
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Housing prices in Washington state grew by nearly 10 percent in the last year, more than in any other state in the country. Other states with rapid price growth include Arizona (7.1%), California (6.3%), Colorado (8.0%), Florida (7.3%), Idaho (8.6%), Nevada (9.3%), Oregon (6.8%), Texas (6.3%), and Utah (8.0%). These numbers compare average prices from April 2017 through March 2018 with averages from April 2016 through March 2017 from the Federal Housing Finance Agency’s home price index dataset, specifically the state quarterly all-transactions index.

After adjusting for inflation, prices in Colorado, DC, Montana, North Dakota, Nebraska, Oklahoma, Oregon, South Dakota, Tennessee, Texas, Utah, and Washington are higher today than they were at the peak of the mid-2000s housing bubble, but price increases show no real sign of slowing down. Inflation-adjusted prices grew faster in the last year than they did the year before in 36 out of 50 states (as well as DC), and they declined in only one state, North Dakota. Continue reading →

H+T Not So Efficient

By | | Housing, Transportation
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One of the excuses planners have made for their support of densification is that, yes, housing costs are higher in dense areas, but this is more than offset by lower transportation costs. They call this the H+T Affordability Index, but — as the Antiplanner pointed out nearly five years ago — this claim was based solely on hypothetical and, in some cases, obviously inaccurate numbers.

Despite the lack of any real evidence, density advocates managed to persuade lending authorities to loosen mortgage loan criteria for people locating in dense, transit-rich areas. Since people living in such areas supposedly saved a bundle on transportation, they could afford to spend more on a mortgage.

Now a new study has come out that collected ten years of real data from 11,000 families who moved to compact, transit-rich areas. The study found that some people saved money on transportation, but others spent more, and the net overall effect was a wash. “We conclude that the location affordability literature may significantly overstate the promise of cost savings in transit-rich neighborhoods,” say the researchers. Continue reading →

Home Price Data and Highway Update

By | | Housing, Transportation, Useful Data
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The Federal Housing Finance Agency (which oversees Fannie Mae and Freddie Mac) has published home price index data through the fourth quarter of 2017. These data go back as far as 1975 for the states and many urban areas.

The Antiplanner has posted enhanced spreadsheets that use the raw data from the state and metropolitan area files to create charts like the one above showing housing trends. The metropolitan area spreadsheet allows users to create charts showing price indices in nominal dollars or dollars adjusted for inflation. The state spreadsheet only creates charts for inflation-adjusted indices. Continue reading →

Neat, Plausible, and Wrong

By | | Housing
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The Antiplanner is frequently reminded of H.L. Mencken’s statement that “there is always a well-known solution to every human problem: neat, plausible, and wrong.” Millennials, for example, blame baby boomers for ruining the world. Most of the mistakes that baby boomers made were in adopting simple and plausible but wrong solutions to complex problems. Now the millennials are promoting their own simplistic and wrong solutions to the problems created by the baby boomer’s errors.

For example, around 1970 people accurately pointed out that there were environmental problems with American lifestyles, including air pollution, water pollution, and loss of wildlife habitat. These were complex problems, and one of the simplistic solutions was to draw urban-growth boundaries around cities to protect wildlife from urban sprawl and reducing pollution by encouraging people to drive less. Growth boundaries didn’t solve any of those problems, but they created a lot of other problems, such as unaffordable housing, traffic congestion, and increased taxes.

Instead of abolishing the growth boundaries, millennials want to solve the problems the boundaries created using such techniques as rent control and regulations on landlords. Washington DC, for example, passed an ordinance giving tenants first right of refusal if a landlord decides to sell a dwelling. This has led to a “cottage industry of attorneys who use this law to prey on homeowners.” Continue reading →

More Evidence of Government Failure

By | | Housing, Transportation
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The Antiplanner is fully aware that government doesn’t work, but I wish that politicians would stop trying to prove it. First, the Portland city council has decided to make permanent a temporary rule that requires landlords to pay moving costs of up to $4,500 for any tenants they evict without cause or whose rents they raise by more than 10 percent. Portland housing costs have been rising at faster than 10 percent per year for the past several years. this is supposed to control that rise.

Instead, what it will do will discourage anyone from renting a house or building apartments for rent. This will only make costs rise faster than before.

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NIMBYism Not the Real Problem

By | | Housing, Transportation, Urban areas
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The California legislature is getting some push back on S.B. 827, which proposes to eliminate zoning in most of San Francisco, Oakland, and other “transit-rich” cities. So legislators have announced a new proposal, A.B. 2923, which would allow the Bay Area Rapid Transit District (BART) to build whatever it wants on land it owns, most of which is presumably near BART stations.

Home sweet $2 million home. Photo from Google streetview.

There’s no doubt that Bay Area housing is too expensive. An 848-square-foot home in Sunnyvale just sold for $2 million (a $550,000 premium over the asking price), or $2,358 per square foot. Increasing numbers of people are buying homes sight unseen. For some, commuting from Bend, Oregon is a viable option because the cost of flying is less than the cost of housing in the Bay Area. Continue reading →

What $1.2 Million Buys

By | | Housing, Urban areas
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If any country in the world should be less concerned about urban sprawl than the United States, it is Australia. Its population density of about 8.3 people per square mile is less than even Canada’s. Yet, thanks to the efforts of some urban planners obsessed with getting people out of their automobiles, most of Australia’s major cities have urban-growth limits the severely constrain development.

This 1,840-square-foot, four bedroom home in Sydney, which the real estate listing describes as “complete overhaul needed,” recently sold for more than AU$1.5 million, or US$1.2 million.

Last week, an article in The Guardian showed the result: homes in Sydney that you wouldn’t want to let your dog enter, much less your family, for sale for more than a million dollars. To be fair, a million Australian dollars is only $784,000 U.S., but still that’s more than most can afford. Judging from the photos, you could find houses in Texas for under $100,000 that are better than $1.2 million homes in Sydney.

Here is the interior of the above US$1.2-million home.

“We didn’t touch anything,” said one of the photographers who was taking pictures for the real estate company. “It was just too hazardous.” “All attendees are required to sign a waiver prior to entry,” a real estate ad announced. “No entry to anyone aged under 16. No open toe shoes to be worn.” Continue reading →

Gentrification and Housing Affordability

By | | Housing
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An opinion piece in the Los Angeles Times this week repeats the argument that gentrification is reducing transit ridership. The Antiplanner was not persuaded by this when the claim was presented in the Eastsider last fall, but it and Senate Bill 827 raise another issue: what does gentrification do to housing affordability?

A standard theory of housing is that people who can afford to do so buy new homes and older homes trickle down to lower-income people. But this assumes that the older homes aren’t torn down to make way for the new. In regions with urban-growth boundaries, most new homes can be built only by sacrificing old ones — gentrification. This process is further encouraged by cities like Portland and Los Angeles that subsidize developers to build transit-oriented developments along rail transit lines.

People who already own homes aren’t hurt by this; in fact, their home values rise. But gentrification can price renters out of their housing and leave them with no comparably priced housing to go to. Continue reading →

Will Density Make Housing Affordable?

By | | Housing, Useful Data
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California left-wingers who want to densify cities to make them affordable are getting some push-back from other left-wingers who think density will push low-income people out of neighborhoods. A proposed bill to eliminate zoning in transit-rich areas in order to allow developers to build high-density housing would, say opponents, displace low-income families from neighborhoods with high rental rates in favor of high-income whites who can afford to pay for high-rise housing.

The opponents aren’t wrong. On one hand, increasing housing supply would seem to make housing more affordable. But affordable for whom? With housing prices in some California cities averaging more than $1,000 per square foot, building high-density housing that costs $400 to $500 a square foot would allow people who can afford that to find a place to live. But hardly anyone can afford that.

The problem is that high-density housing–that is, mid-rise and high-rise housing–costs 50 to 68 percent more, per square foot, to build than low-density housing. If California really wants to build housing that is affordable to low-income people, it needs to build more low-density housing. To build that, it needs to open up land that has been off-limits to development because it is outside of urban-growth boundaries. Continue reading →

Bringing the Danish Plan to the Front Range

By | | Housing, Urban areas
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In 1976, Boulder Colorado city councilor Paul Danish persuaded the rest of the council to pass a slow-growth ordinance that limited the growth of Boulder to 2 percent per year. Ever since then, it’s been called the Danish Plan. In 1995, the ordinance was modified to reduce growth to just 1 percent per year, and the city of Golden Colorado also passed a similar limit in 1995.

Now Denis Hayes, the Golden resident who persuaded the city pass that limit, wants to extend the benefits of slow growth to the entire Colorado Front Range. His ballot initiative 66, if approved, would limit growth in Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, El Paso, Jefferson, Larimer and Weld counties to 1 percent per year. After each city or county in the region has issued its quota of building permits in a given year, it would not be allowed to issue any more that year.

“Rapid growth raises the price of land and makes it hard for industry to move in,” says Hayes. “Amazon would be a lot more likely to settle here if we are controlling growth.” Continue reading →