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Category Archives: Housing

Housing and Wealth Inequality

By | | Housing
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American Nightmare hasn’t sold as well as the Antiplanner’s other books, which is too bad because in some ways it is the most profound of them all. It covers a wide range of issues, including a detailed explanation of the 2008 financial crisis. But the overarching theme is that urban planning and zoning are best viewed as a form of economic warfare by the upper and middle classes against the working and lower classes. While that might not have been the original intent, to judge by the smug attitudes of the beneficiaries of such planning and zoning, they are perfectly happy with the results.

The book, therefore, was really about inequality, an issue recently made popular (and controversial) by Thomas Piketty’s book Capital in the Twenty-First Century. Piketty’s thesis is that income inequality is necessarily rising because the returns to capital wealth are greater than overall economic growth, thus giving people one more reason to hate capitalists.

Last month, a paper by an MIT graduate student in economics named Matthew Rognlie, examined Piketty’s thesis in detail. Rognlie found that the return on most kinds of wealth and capital has not been greater than overall economic growth, and therefore hasn’t been contributing to income inequality. The one exception, Rognlie found, was housing.

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Making Density Affordable

By | | Housing, Urban areas
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The Antiplanner once wrote that “the definition of a socialist is someone who doesn’t understand that subsidizing something is not the same thing as making it affordable.” New York Mayor Bill de Blasio has often been called a socialist, and seems to fit the mold, proposing to make some housing “affordable” by confiscating money from others.

Specifically, de Blasio’s administration has demanded that, in order to get a permit to build a new school building, Collegiate School–a private school that traces its roots back nearly 500 years–must contribute enough money to build 55 units of “affordable housing.” Worse, those 55 units are estimated to cost at least $50 million (nearly $1 million per unit is affordable?), and if they cost more, Collegiate has to pay the difference. (If they cost less, the city pockets the difference.)

Even if the housing cost far less than $1 million per unit, 55 units of affordable housing aren’t going to have any influence on the affordability of New York City housing. Nor is it likely that whoever ends up living in those housing units falls into a conventional definition of the truly needy. Instead, like many of the beneficiaries of New York’s rent control and other housing laws, they will probably be middle- or upper-middle-class people who happen to be friends with the right people.

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California Housing Is Expensive

By | | Housing
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The Wall Street Journal observes that high housing costs are hurting the California economy. This brilliant conclusion is based on a report by Mac Taylor of the state legislative analyst’s office. Unfortunately, the report misses a few important details and as a result comes to entire the wrong conclusion.

Housing is expensive, the report says, because California isn’t building enough of it. Well, duh. Why isn’t it building enough? According to the report, it’s because there is a “limited amount of vacant developable land.” The solution, the report concludes, is to build higher densities in the land that is available.

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Empty Nesters Moving into Bigger Homes

By | | Housing
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The Minneapolis Star-Tribune is “surprised” that retirees are moving into bigger homes, not smaller ones like the “conventional wisdom” dictates. Of course, that’s the conventional wisdom of urban planners, not demographers or economists, which means it is more like untested hypotheses, not wisdom. In any case, people who have accumulated a Marijuana is a sex killer drug while some of the others view viagra 20mg india it in the light of the genetic inheritance of the human chromosome. Creating a Caring Classroom: Action Steps for Teachers Until we take order generic cialis immediate action, nothing will change. thought about this cheap cialis These pills work effectively over patients suffering from incapability. The viagra cipla india http://pharma-bi.com/ primary ingredient at play in the tablet is the most trustworthy method to treat the condition. lifetime of toys and suddenly have time on their hands to play with those toys are not going to move into tiny downtown condos, or at least not all of them.

The Antiplanner is between planes so instead of going into this question in depth I’ll let the commenters take this and run.

Someone Teach Him the Laws of Supply & Demand

By | | Housing
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With its “vibrant mix of residential, retail, commercial and green space,” Arlington County, Virginia is exactly where a lot of Millennials in the Washington DC area would like to live–at least according to one such Millennial named Harrison Godfrey. However, many can’t, as the median home price is $550,000, which is far more than two professionals who each earn $50,000 a year can afford.

Godfrey has apparently never taken an economics class. At just 26 square miles (compared with an average of 450 miles for the rest of Virginia’s 94 counties), Arlington County is in reality a small city. According to the 2010 census, it is 100 percent urbanized with a population density of 8,000 people per square mile.

By comparison, the urbanized portion of Montgomery County, Maryland is just 3,500 people per square mile. In other words, there really isn’t any more room to build in Arlington County, at least not without displacing a lot of people who live there now–which would probably mean some of the ethnic minorities that help make the county “vibrant.”

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Back in the Air Again

By | | Housekeeping, Housing, Transportation
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The Antiplanner was in Austin yesterday speaking at a Texas Public Policy Foundation conference for Texas legislators. I gave two presentations, both of which are available for download.

First, I talked about how Texas can keep the “Texas miracle” going by protecting property rights (8-MB PowerPoint show). I made three recommendations:

  1. Don’t give counties the authority to regulate land uses. Texas may be the only state that doesn’t allow counties to zone, and this keeps city zoning from being too restrictive because developers can simply avoid city rules by developing outside of the cities.
  2. Relax the financial requirements for municipal utility districts. Municipal utility districts allow developers to borrow funds to install infrastructure and then charge homebuyers and other property owners a fee for 30 years to repay the bonds. After the financial crisis, the Texas legislature required developers to put up more of their own funds for infrastructure, leading to a significant increase in housing prices. I argued that the risk of defaults was worth it to keep housing affordable.
  3. Retain city authority to annex land without the permission of the residents being annexed. Most debates over urban sprawl are really debates over who gets to collect taxes. In states where cities have a hard time annexing land, they use other tools, such as urban-growth boundaries, to limit land development. While annexations without voter permission are controversial, the alternative is worse. However, Texas cities are also allowed to have control over certain “extraterritorial” lands outside their city limits. This does not seem to be needed to keep housing affordable and eliminating that control would relieve many of the debates over annexation.

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More Expensive Than It Should Be

By | | Housing
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The Economist reports that housing in China is “cheaper than you think.” The magazine-that-calls-itself-a-newspaper’s measure of affordability is the average price of a 100-square-meter (1,076-square-foot) home divided by average household income.


Older mid-rise homes in Shanghai are torn down and replaced with high rises. Flickr photo by Paolo Vasta.

In megacities such as Beijing and Shanghai, such a house costs nearly 15 times the average incomes of those cities. Not to worry, says the Economist: in medium and small cities, housing is only about 8 times average incomes. As of November, the national average is 8.9 times.

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Oregon Office of Economic Ignorance

By | | Housing, Urban areas
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The Oregon Office of Economic Analysis recently published a four-part economic assessment of the “Portland housing bubble.” Written by an economist named Josh Lehner, the assessment looks at a lot of data but misses the elephant in the room, which is how land-use regulation has affected Portland housing.

Housing prices have risen to pre-financial-crisis levels, says Lehner, and Portland’s rental market has an inordinately low vacancy rate. New construction of both single- and multi-family homes is mostly at the high end. Lehner looks at these facts with alarm, but it never occurs to him that there is a simple remedy: end all of the land-use restrictions.

Land-use regulation not only makes housing more expensive, it makes housing prices more volatile, that is, more prone to bubbles. This is because, when supply is limited, a small increase in demand translates to a large increase in price rather than an increase in supply. Conversely, a small decrease in demand translates into a large decrease in price.

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Liberals and Unaffordable Housing: Cause or Effect?

By | | Housing, Regional planning
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As the Antiplanner noted yesterday, the Washington Post has observed that unaffordable housing markets tend to be in liberal metropolitan areas while conservative metropolitan areas tend to be affordable. This is based on a comparison by Trulia economist Jed Kolko of housing prices (in dollars per square foot) vs. voting for Obama or Romney in the 2012 election.

Note that not all liberal metropolitan areas are expensive while not all inexpensive markets are conservative. But nearly all expensive markets are liberal and nearly all conservative markets are inexpensive. (The one exception, Orange County, California, is partly land-locked by other, more liberal communities.)

New Zealand economist Mish Shedlock asks if this is merely a correlation or does one factor cause the other? His weak conclusion is that “Union work rules, land availability, and building restrictions (or lack thereof) are all likely in play.” In fact, there is plenty of land available in all of the expensive regions; it is just rendered off limits to development by state or local land-use rules.

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You’re a Racist

By | | Housing, Regional planning
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Unless you live in a neighborhood or town that has a perfect balance of all racial minorities, you are a racist. At least, that’s the view of the Department of Housing and Urban Development and of the plaintiffs in a new lawsuit against the Twin Cities Metropolitan Council. According to the cities of Brooklyn Center and Brooklyn Park, which have a lot of low-income minorities, the Met Council’s housing plans perpetuate segregation by assigning more low-income housing to the plaintiff cities and not enough to wealthier suburbs such as Edina and Mendota Heights.

The notion that every suburb should have a perfect balance of minorities and those that don’t are de facto racist is absurd. Different people have different needs, and the things that low-income people need–access to public transport, social services, and family support–are not the same as the things that moderate- to high-income people need.

The solution of advocates of “affirmatively furthering fair housing” is to require that cities with racial imbalances build new, high-density housing and require the developers of that housing to set aside a share of those homes for low-income families. But, even if that were a good idea, that wouldn’t solve the problem that low-income people would rather live in areas where they can get the support they need than in wealthy suburbs.

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