Category Archives: Housing

Somebody over at Bloomberg named Karl Marx, excuse me, Karl Smith, thinks America should become a nation of renters. Homeownership made sense, he says, when ownership costs were low relative to rent. But now, due to something he calls “financialization,” homeownership is too expensive, and so we should abandon the American dream of high levels of homeownership.

It may be self-serving for them to say so, but realtors are right to say that homeownership is a key to building wealth. Photo by Chris & Karen Highland.

Apparently, due to fast-rising home prices, private investors such as pension funds are buying homes and then renting them out. Homebuilders are even building homes with plans to rent them instead of selling them. Continue reading →

As previously noted here nearly three years ago, Hong Kong is one of the densest and least affordable housing markets in the world. According to Chinese University of Hong Kong geography professor Ng Mee Kam, the region’s housing shortage “is more like an artificial shortage.”

That’s because Britain only allowed development on 25 percent of the territory’s land, and the government of China has continued this policy since it took over in 1997; the other 75 percent is owned by the government. The dense area packed with high rises occupies just 3.7 percent of the land and such high rises are prohibited on the other 21 percent or so that is developed. Continue reading →

“A provision in President Biden’s American Jobs Plan to make housing more affordable by giving cities incentives to abolish single-family zoning has a number of flaws,” says an op-ed published by Real Clear Policy on Monday. “Most important, single-family zoning didn’t make housing expensive and abolishing single-family zoning won’t make it more affordable.”

Homeless tents in Los Angeles’ Skid Row. Photo by Russ Allison Loar.

Urban planners are so eager to impose higher densities on American cities so badly that they are willing to ignore the costs, whether those costs are unaffordable housing or the truth about densities. Unfortunately, almost every city in America has urban planners on its staff while almost no city has an antiplanner on its staff. The result is that no one looks seriously at the unintended consequences that result from their programs and policies, which are usually layered on top of (and supposedly remedies to) the unintended consequences of previous programs and policies. Continue reading →

In 1947, the U.K. Parliament passed the Town & Country Planning Act, which limited urban development to 6 percent of the land area of the country. Housing soon became expensive. Politicians responded by promising to build lots of new housing, mostly high-rise but some mid-rise.

The new housing proved to be a disaster. It created lots of social problems including crime and congestion. Much of the housing was also poorly built. Meanwhile, housing affordability continued to decline. Today, only the upper classes own their own homes while most working-class Brits live in “council housing.” Continue reading →

The Colorado legislature is considering a bill to allow cities to require developers to provide “affordable housing” in their developments. This is called “inclusionary zoning.” Such requirements have three effects.

This five-story building is typical of the new housing being built in Denver. It has 871-square-foot one-bedroom apartments for rent for $2,400 to $3,600 a month. Someone would need an income of nearly $100,000 a year to afford one. Inclusionary zoning would make it even more expensive. Photo by Jeramey Jannene.

First, developers respond to the higher costs by building fewer units of housing. Second, to pay for the units they have to sell or rent at below-market rates, they raise prices on the market-rate units. Third, existing home sellers or landlords, seeing that new units are going for higher prices, raise their prices as well. Voila! Inclusionary zoning makes housing less affordable. But don’t believe me: here’s a paper that proves it using real-world data. Continue reading →

Jerusalem Demsas, a writer for Vox, thinks people should “sue the suburbs” to eliminate their exclusionary zoning, meaning single-family zoning. Her example is Franklin, Tennessee, a suburb made well-off by the location of North American corporate headquarters for both Nissan and Mitsubishi.

As a result, the median home price in Franklin is higher than nearby Nashville. Demsas blames that on exclusionary zoning. But incomes in Franklin are higher than Nashville; when compared with incomes, Franklin housing is actually more affordable than Nashville’s. Considering all of the businesses located in Franklin, it is only a suburb in the sense that it is near Nashville, not in the sense that huge numbers of commuters pour into Nashville from Franklin every morning.

Demsas says that Franklin’s relatively small share of multifamily housing is evidence of exclusionary zoning. In fact, it is just evidence that when people get enough income, they prefer to live in single-family housing. Using 2019 American Community Survey data for more than 500 cities across the country, there is almost no correlation between the percentage of housing that is multifamily and the affordability of housing in those cities (correlation = 0.3 where 1 is perfect and 0 means no correlation). Continue reading →