The Antiplanner » Housing

Category Archives: Housing

A City in Egypt

By | | Housing, Urban areas
9 Comments

In a state of the city address last week, the mayor of Cupertino, Darcy Paul, said that the housing shortage in his city was “not dire” and recommended against approval of a planned mixed-use housing project to replace a former shopping mall called Vallco. Developers wanted to convert the 1.2-million-square-foot mall into 2,400 units of housing along with some retail and offices. Paul thought the retail and offices were fine, but opposed the housing.

Just how dire is Cupertino’s housing shortage? The median home value, according to Zillow, is $2.158 million. The median family income is $158,000. That’s a value-to-income ratio of 13.7. Palo Alto’s is higher ($3.01 million to $167,440 for a value-to-income ratio of 18), but I’d still say that Cupertino’s housing market is pretty dire considering that fifty years ago the value-to-income ratios in the Bay Area were less than 2.5.

Paul is being rightly criticized for his insensitivity to the housing problems faced by newcomers who earn $158,000 a year. But the truth is that almost everyone in Cupertino, Palo Alto, and the rest of Santa Clara County are suffering from a blind spot–more of a blind mountain–when it comes to housing issues. Continue reading →

Housing in 293 Urban Areas in Nine Nations

By | | Housing
2 Comments

Early this week, Wendell Cox released his latest annual survey of housing affordability of metropolitan areas around the world. “Housing affordability cannot be evaluated except in relation to incomes,” he notes, and he compares median home prices with median household incomes in each of 293 urban areas.

At one time, he says, home prices in nearly all of these urban areas were between two and three times household incomes, and they still are in dozens of housing markets in the United States and Canada, as well as a few in Ireland. In other parts of the world, however, home prices have risen to, in some cases, more than ten times household incomes. Of the 293 urban areas documented by Cox, about a quarter have median home prices that are more than five times incomes, and another quarter are between four and five times incomes.

In the United States, lenders generally allow borrowers to pay up to 28 percent of their incomes on a mortgage. At 4 percent interest, a household can dedicate 28 percent of their income to a mortgage on a home that costs three times their annual income and pay it off in 15 years. When home prices reach four times their annual incomes, they need more than 20 years to pay off the loan. At five times their incomes, more than 30 years are required. At six times their incomes, they would need to get a 48-year loan, which is not available in current markets. At seven times their incomes, it becomes impossible for them to buy the house without dedicating more of their incomes to the mortgage than most lenders would allow. Continue reading →

Bill Would Eliminate San Francisco Zoning

By | | Housing
7 Comments

California state senator Scott Wiener, who represents San Francisco, has introduced Senate Bill 827, which would effectively void all local zoning rules in “transit-rich” areas, meaning areas within a half mile of a rail station or a quarter mile of a stop on a frequent bus route. Wiener’s goal is to allow the construction of high-density housing in those transit-rich areas, thus simultaneously providing more affordable housing and encouraging more people to ride transit.

This bill would severely disrupt neighborhoods throughout San Francisco, Oakland, Berkeley, and many other cities that currently have frequent transit service, as maps reveal that it would virtually eliminate zoning in most of the land area of those cities. While some people consider zoning to be an unfair (and possibly unconstitutional) restriction of property rights, most people who live in zoned urban neighborhoods appreciate the benefits of such zoning. By limiting the maximum density of housing, zoning minimizes traffic congestion, noise, and other problems.

Moreover, neighborhoods are built with streets, water, sewer, and other infrastructure to serve the needs of the density at which the neighborhoods were built. Major increases in density would require expensive improvements to water and sewer infrastructure–far more expensive than building new infrastructure on greenfields–and streets probably could not be redesigned to accommodate the density increases in any case. Continue reading →

Paying for a Tesla, Getting a Scion

By | | Housing, Urban areas
14 Comments

The city of Portland has agreed to contribute $6 million towards the cost of a high-rise, mixed-use complex because the building is supposed to include 60 units of “affordable housing.” “That’s like paying for a Toyota and getting a Tesla in return,” Portland Mayor Ted Wheeler enthused.

No, Mr. Mayor. It’s more like paying for a Tesla and getting a Toyota. A very small Toyota, also known as a Scion.

The building in question is supposed to make innovative use of cross-laminated wood to form one of the tallest wooden buildings in America. Normally wood is not allowed for high rises due to fire danger, but the Oregon wood products industry has been trying to boost the use of this material and claims it has overcome the fire problem. The project developers, coincidentally called Project (technically, Project^, but pronounced “project”), are so enthused that they are willing to put up $1.2 million of their own money towards the $29 million structure. Continue reading →

Throwing Money at Housing Won’t Work

By | | Housing
6 Comments

Recognizing that “rents are going up much faster than the incomes” in places like New York and Los Angeles, Secretary of Housing and Urban Development Ben Carson recently told NPR that cities need to move “away from the concept that only the government can solve this problem by throwing more money at it.” In response, Portland’s Mayor Ted Wheeler tweeted, “Secretary Carson, if you don’t think gov’t can provide solutions, then you should step aside and allow someone up to the task to lead.” Apparently, in Oregon it is an apostasy to think that any problem can’t be solved by throwing tax dollars at it.

This is particularly ironic when Portland is now suffering cost overruns on its so-called affordable housing projects comparable to those for its light-rail projects. One project that was supposed to cost $200,000 per unit is coming in at $285,000 per unit–a 42.5 percent overrun. Wheeler proudly tweeted that the city just approved another project with 203 units of so-called affordable housing. Because home prices in a market of nearly 820,000 homes are going to be significantly influenced by the subsidized construction of 203 more–Not!

As the Antiplanner previously noted, “affordable housing is not the same as housing affordability.” Affordable housing is government subsidized housing for people too poor to afford housing. It is not intended or expected to influence the overall housing market because it does nothing about the underlying conditions that have made housing expensive in the first place. The problem in Portland, and the entire West Coast, is that housing is unaffordable to almost everyone, not just the very poor, and the only real solution for most people is to move away. Continue reading →

Affordable Is Not the Same as Affordability

By | | Housing, Urban areas
11 Comments

Too much housing news is based on the failure to distinguish between affordable housing and housing affordability. Affordable housing is government-subsidized housing for low-income people. Housing affordability is the general level of housing prices relative to the general level of household or family incomes, often measured by dividing median home prices by median family incomes.

Areas where housing is affordable, such as Dallas or Raleigh, may still need some affordable housing for very poor people. But areas where housing is not affordable, such as Portland or San Francisco, will not solve their housing affordability problems by building more affordable housing. Despite this, politicians, reporters, and editors all promote more affordable housing to address housing affordability issues.

The San Jose Mercury News, for example, accuses Republicans of “sabotaging” the Bay Area’s affordable housing plans by cutting federal housing budgets. But the federal government didn’t impose urban-growth boundaries that have restricted development to 17 percent of the Bay Area, so why should federal taxpayers subsidize affordable housing that isn’t going to solve the region’s self-inflicted housing crisis? Continue reading →

New Tool Maps Housing and Transportation

By | | Housing, Regional planning, Transportation, Urban areas
1 Comment

For those who like to look at maps rather than databases, the Lincoln Institute has released a handy new tool mapping the United States using all sorts of criteria. Among other things, the map can show every structurally deficient and functionally obsolete bridge, housing affordability, homeownership rates, conservation easements, and many other land-use and transportation factors.

The above map, for example, shows housing affordability, with darker colors representing more affordable. Though this is at the state level, you can zoom in and see it as close as the census tract level.

Continue reading →

2nd Quarter Home Price Indices

By | | Housing, Useful Data
3 Comments

Someone just paid $1.1 million for a tear-down/fixer-upper in Mountain View, California. That’s not really news, as prices in Silicon Valley have been increasingly outrageous. What’s news is that they bought the house with the provisos that the existing owner will get to live there for seven years; the buyer didn’t get to see the interior of the home; and the buyer is required to make improvements before closing on the home. As the San Francisco Chronicle says, the new owner probably figures it will take seven years to get the permits to rebuild the house anyway.

The problem for the buyer is that the same forces that have made housing prices rise in Silicon Valley–namely the urban-growth boundaries adopted by San Mateo and Santa Clara counties–have also made prices more volatile. In other words, what goes up will come down. As shown in the chart above, San Jose prices today are already higher than they were at the peak of the 2006 housing bubble, indicating that another bubble is likely to deflate fairly soon. Continue reading →

Ending Economic Apartheid

By | | Housing
8 Comments

Thanks to its greenbelt and slow-growth policies, Boulder, Colorado is the nation’s most-expensive and least-affordable housing market of any city not in a coastal state. As a result, as noted in an op-ed in The Hill, the number of black residents in Boulder declined by 30 percent between 2010 and 2016, leaving less than 1.6 percent of the city with African-American ancestry.

Closer to my home, the Bend Bulletin argues that the state of Oregon “works against affordable housing by, among other things. . . artificially increas[ing] the price of land through its urban growth boundary system.” Although cities are required to maintain an inventory of developable land within their growth boundaries, the paper notes that permission to expand their boundaries takes years.

The Oregon legislature effectively admitted that this is a problem last year when it passed a law allowing two cities to develop land on up to 50 acres of land outside of their growth boundaries. But can anyone seriously believe that adding 100 acres of new housing will make housing more affordable in Oregon? Continue reading →

Black Population Trends

By | | Housing, Useful Data
1 Comment

Between 2015 and 2016, the total population of the San Francisco-Oakland urban area grew by 13,773 people, but the black population shrank by 5,839, suggesting that Bay Area land-use policies continue to push low-income people out of the region by making housing unaffordable. The Austin urban area, to its shame, saw a decline of 4,439 blacks despite a total population growth of 25,316.

Race is a complicated issue, made more complicated by the increasing (and healthy) mixture of races. According to the 2016 American Community Survey, the number of Americans who are “white alone” declined by 296,061 in 2016, while the number who identify themselves as “two or more races” grew by 445,000; some of the decline of the former and growth of the latter is probably because people are more willing to self-identify as being of mixed races.

In the past, I’ve used blacks as a bellwether of housing affordability problems because black per capita incomes have consistently been about 60 percent of whites’. I’ve previously used “black alone,” but this year that produced some odd results: both white alone and black alone populations declined in sixteen different states. For example, California’s total population grew by 105,000, but its white-alone population shrank by 404,000 while its black-alone population shrank by nearly 12,000. It seems likely that most of the changes in white-alone and black-alone numbers are due to redefinitions, not migrations. Continue reading →