Sightline Institute researcher Michael Andersen offers Willamette Week readers “five ways to make [housing] cheaper.” Sounds good, except none of them will work.
Here’s a duplex in a Portland single-family neighborhood. According to the Sightline Institute, this was supposed to make housing more affordable, but nobody seriously thinks that it will, so now they are upping the ante for even more density. Photo by Mark McClure of the Sightline Institute.
Andersen starts with the erroneous assumption that “the main factor driving the rising cost of all housing in Portland is the cost of building new housing.” In fact, the main driving factor driving the high cost of housing in Portland is the cost of land, thanks to the region’s urban-growth boundary. Everything else about housing, including high construction costs, is derived from that, so housing will remain expensive until Portland abolishes the growth boundary.
One of Andersen’s solutions is to rezone Portland to allow five-story buildings throughout the city. Just three years ago, the Oregon legislature abolished single-family zoning, requiring cities to allow four-plexus on lots once suitable only for single-family homes. Predictably, that isn’t making housing any less expensive, so Andersen wants to up the ante by allowing 40 or 60 units per acre in single-family neighborhoods.
“Such buildings are far less expensive per unit than steel towers or single detached homes,” says Andersen. He doesn’t mention that the reason why they are less expensive is because the units are less than half the size of typical single-family homes. According to Zillow, the median price of a condo in the Portland metro area is about $354,000, whereas the median price of a single-family home in San Antonio–a metro area that is a lot like Portland but doesn’t have an urban-growth boundary–is $324,000. Zillow doesn’t say so, but it is a good bet that the median single-family home in San Antonio has twice the square footage of the median condo in Portland.
Andersen’s other proposals are equally unlikely to produce any results. Of course, Andersen never mentions the urban-growth boundary.
The Willamette Week did offer a response, of sorts, to Andersen’s article. Writer Brianna Wheeler points out that the mid-rise apartments that Andersen wants to build all over Portland all “feel like Holiday Inns” and that Portland has “settled itself on a path to itself becoming an overstuffed, overpriced metro.” Sadly, she’s not being critical of Andersen’s ideas; instead, she blames it on “classism and racism.”
The urban-growth boundary favors the wealthy and hurts the poor, so classism is a factor. But it probably would never occur to Wheeler to blame the growth boundary for high housing prices. Like Andersen, she probably thinks they are all the fault of residents of single-family homes who don’t want to see Holiday Inn-style apartments popping up in their neighborhoods.
The apartments she hates were effectively designed by urban planners. If she wants to fix the problem, get rid of the planners and their growth-management rules and let developers build homes for the market. Housing prices will come down, which will hurt the wealthy, which may be why they don’t want to abolish the growth boundary, but she and others in her generation be able to afford to buy a home.
So the AP titles the page “Five Solutions That Won’t Work” but only addresses ONE of the solutions and addresses the other four solutions by just saying ” Andersen’s other proposals are equally unlikely to produce any results.” this is some stellar in depth critique of Michael Andersen’s paper.
This is right up there with the AP critique of “Twelve Ways to Destroy Cities” which discusses European cities but AP primarily critiques US cities and gives one example of a German city from 2005.
Sketter, Your critique has merit, but you do not list Anderson’s other proposals and if you feel they would work. Your critique would be better if you list Anderson’s proposals with data why or why not they will work.
”
Predictably, that isn’t making housing any less expensive,
” ~anti-planner
I’d imagine when folks pull permits, that’s public info. Do we have a source for data for what permits are being pulled, especially for multi-family housing?
I ask because when Minneapolis did this — allowing duplexes and triplexes where essentially zoned R1 — I was doubtful that it’d have enough volume to matter. Why not? Because it doesn’t make sense to spend 600K to buy an existing SFH and convert it ( or maybe scrape it off ) into a duplex where you maybe even in a red hot housing market might be able to get $300K for each unit.
For some individuals, it’s good to see them have new options. But the costs are so high it’s hard to see anyone making a profit without rolling up their sleeves and getting it done.
@KX1781: I think their assumption is that if you strangle supply enough eventually that duplex will go for $800k per unit. The issue is that when it reaches that point the economy will be so gentrified that most productive industries will have left the area. What is left over will be just an inflated financialised mess. Japan in the 1980’s is a prime example of it.
Housing prices will come down, which will hurt the wealthy, which may be why they don’t want to abolish the growth boundary, but she and others in her generation be able to afford to buy a home.
Exactly like I’ve been saying….
Getting rid of the UGB in Oregon wouldn’t deflate the prices, it’d collapse the artificially inflated real estate prices that major real estate corporations and lobbyists have fought TOOTH and Nail to keep that way, THEIR Equity is tied into this.
Artificially maintained value is how these companies work…. Hell it’s how Elon Musk works, no company which sells 10x fewer cars than GM/Ford……..is that valuable. When he was “Screeching on social media about getting Saudi backers….now twitter, list goes on. Never ending stream of “Green subsidies” and shuffling money around. He’s one part corporate welfare queen, one part financier, one part anarcho-capitalist, one part crypto money launderer.
Single family scrapes and new dup’s are going for $1.3M+ each in Denver. I think the developer paid $600K for the old house/lot.
$2.6M – $600K for the lot leaves $2M to tear down the old house, build the new dup’s, and profit.
And those dup’s are nice, as well they should be for that money. I have a wider lot very close by and planned on building five units on it, two up/two down/one basement, but zoning code changed a few years ago such that all doors have to face the street. So now I’m stuck with building four max.
The Holiday-Inn style apartment buildings are *everywhere* and rapidly multiplying in Dallas-Fort Worth. These buildings are normally 4 or 5 levels, square or rectangular, and often horribly ugly. Bloomberg did an article about this unfortunate trend in 2019. Even with the proliferation of these cheap-to-build, high density structures, apartment rents are increasing quickly.
https://www.bloomberg.com/news/features/2019-02-13/why-america-s-new-apartment-buildings-all-look-the-same
Another report
https://cheddar.com/media/why-all-new-apartment-buildings-look-identical
Three of my five reforms (ending mandatory double stairwells, which create the “Holiday Inn” effect Mr. O’Toole and I both dislike; ending bans on small apartment buildings; and ending bans on living in a self-built rolling structure) are deregulatory, and the other two (land value taxation and more road space for mass transit and biking) are somewhat regulation-neutral (though I did include the case for market-based parking counts).
I don’t expect the AP to ever be a fan of bus lanes, but I guess I’d have hoped he could find things to like in an anti-central-planning agenda. I even mentioned rising land costs as “the single biggest factor behind Portland’s rising rents.” But he’s right that I neglected to mention his very favorite deregulatory goal, ending Oregon’s urban growth boundaries.
I don’t blame the AP for failing to notice the many times when I or other supporters of Oregon’s fourplex legalization said that it was a useful but long-term and incomplete step toward meeting our housing needs.
I do think he errs in failing to note that because of the delays built into the legislation, Oregon’s fourplex legalization hasn’t even taken effect yet in many of the relevant cities, let alone had time to affect the state housing market through construction, price effects and so forth. Perhaps he isn’t aware of such details.
For the record, I personally think ending the urban growth boundaries would reduce the price of homes, though those savings would be offset somewhat by higher transportation costs and greater externalities and deferred costs. We can quibble about the math and I know the AP and I both have in different venues.
I find the AP’s relative lack of interest in the costs of centrally planned anti-proximity laws approximately as confusing as he finds as my lack of interest in the costs of centrally planned anti-sprawl laws.
Michael,
Thanks for your comments. We should have a debate sometime. I’m sure it would be enjoyable and enlightening.
The Antiplanner
If there is one thing I am certain of it is that San Antonio is not like Portland and Texas is nothing like Oregon.
So yeah apples have different prices than oranges.
Jay Dub,
You are right. San Antonio is growing a lot faster than Portland and Texas is growing a lot faster than Oregon, so they must be doing something right.