Tag Archives: housing

Planetizen’s top posts of 2024

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There are a lot here. Quite a few have to do with housing, a topic I would be interested in brushing up on. A lot have to do with transportation, a topic I have just feeling complete and utter despair about, at least in the context of the United States and my particular city and state. One possible bright spot is congestion pricing in New York City. Congestion pricing just works, even though it is politically unpopular and counter-intuitive to many people’s “common sense”. Maybe people will notice that it solves some of the congestion and parking issues they like to complain about, and maybe it will slowly spread to other cities and states.

co-living – dormitories for grownups

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Co-living “refers to buildings in which residents have their own lockable living and sleeping space but share a kitchen and other facilities”, according to smartcitiesdive.com. This would seem to make sense as an affordable housing option, but apparently is often prohibited by zoning.

These types of arrangements could also be set up by employers. In Asia, I get the sense that one reason unemployment and labor rates can both be low at the same time is that employers provide dormitories for workers who want or need them. It might not be glamorous, but if a relatively low-paying job comes with room and board, that could solve a number of economic and social issues that we don’t really seem to have much of an answer to here in the “western” world.

Zillow’s house flipping debacle

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Since I mentioned Zillow’s attempt to use big data to profit on house flipping recently, here is an article on that.

The United States is in the midst of the biggest house price boom ever. The Case-Shiller National Home Price Index was up nearly 20% in the 12 months ended in August, the biggest one-year increase in the history of that index.

Yet one of the biggest real estate brands in the world has seen its stock fall nearly 70% since mid-February. Zillow has gotten hammered after bungling its iBuyer program just three short years after getting into the house-flipping business. The company announced it is shuttering the platform, selling the rest of its housing inventory, and laying off up 25% of its staff.

awealthofcommonsense.com

The housing market has huge inefficiencies, huge transactions costs, and is somewhat corrupt. The algorithms apparently couldn’t account for those factors. The only silver lining is that when you have a big chunk of wealth sunk in the family home, you typically don’t experience huge swings in value on a regular basis.

housing policy overview

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A blogger on Planetizen has a good overview of what many professional planners and economists believe would make a real dent in the U.S. housing problem.

We support reforms to allow developers to build more affordable housing types (e.g., multiplexes, townhouses, and mid-rise multifamily) with unbundled parking (parking rented separately from housing, so car-free households are no longer forced to pay for costly parking spaces they don’t need) in walkable urban neighborhoods, including large-scale upzoning, eliminating parking minimums, reducing development fees and approval requirements for moderate-priced infill, plus subsidizing housing for families with special needs.

Most planners also support innovative home ownership models, such as housing cooperatives and co-housing, modest inclusivity requirements (not so high that they reduce housing production), subsidies for households with special needs such as disabilities and very low incomes, and, sometimes, special regulations such as rent controls to limit rent increases.

Planetizen

This sounds about right to me. There are a couple reasons it is hard to do in today’s U.S. The most obvious is the massive political corruption driven by the construction/road/auto/oil-industrial complex. It is hard for politicians, especially local ones, to resist these forces. The second is the consumer preference for auto-dependent suburban development. I would not take this choice away from anyone. I would just stop subsidizing it and make it no longer the only viable choice for most Americans. Many people would like to try out a walkable urban neighborhood, but assume that there is not one available that they could afford. And they would largely be right. There are just not enough of them, and even in the ones we have the public infrastructure (protected bike lanes, frequent/clean/reliable public transportation, parks and trees) lags far behind what the leading cities in Europe and even parts of South America are providing. (Asia is hopeless though.)

The final issue is that you just can’t combine widespread car ownership and use with a walkable urban neighborhood. You have to get the number of cars down, then use all that space you saved for more housing, open space, and other amenities. And obviously, you have to make sure people can still get around.

So the answer is pretty clear – remove density limits (upzone in the parlance) and parking requirements (actually these last two sound a lot like a “free market” to me), then offset some of the disadvantages of urban density with excellent public infrastructure and parks. You may still need some subsidies and non-profit options to help the poor, but ideally that needs to be done at least at the metropolitan area scale if not state/federal scale. It’s a fairly simple formula but a long game and a politically difficult one.

March 2021 in Review

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Most frightening and/or depressing story: In the U.S. upper Midwest (I don’t know if this region is better or worse than the country as a whole, or why they picked it), electric blackouts average 92 minutes per year, versus 4 minutes per year in Japan.

Most hopeful story: I officially released my infrastructure plan for America, a few weeks before Joe Biden released his. None of the Sunday morning talk shows has called me to discuss so far. Unfortunately, I do not have the resources of the U.S. Treasury or Federal Reserve available to me. Of course, neither does he unless he can convince Congress to go along with at least some portion of his plans. Looking at his proposal, I think he is proposing to direct the fire hoses at the right fires (children, education, research, water, the electric grid and electric vehicles, maintenance of highways and roads, housing, and ecosystems. There is still no real planning involved, because planning needs to be done in between crises and it never is. Still, I think it is a good proposal that will pay off economically while helping real people, and I hope a substantial portion of it survives.

Most interesting story, that was not particularly frightening or hopeful, or perhaps was a mixture of both: One study says 1-2 days per week is a sweet spot for working from home in terms of a positive economic contribution at the national scale. I think it is about right psychologically for many people too. However, this was a very theoretical simulation, and other studies attempting to measure this at the individual or firm scale have come up with a 20-50% loss in productivity. I think the jury is still out on this one, but I know from personal experience that people need to interact and communicate regularly for teams to be productive, and some people require more supervision than others, and I don’t think technology is a perfect substitute for doing these things in person so far.

top urban planning books of 2020

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Planetizen has an annual roundup of urban planning books. Certainly urban planners should care about urban planning, but urban planning is not just for urban planners. It touches on topics of interest to engineers, economists, social scientists (separate from economists? discuss amongst yourselves), and generally people who are concerned/interested in people or the environment. Because cities and their suburbs are the environment where the vast majority of people live.

Some animals and plants also live there, and this particular list is notable devoid of any books on parks, trees, urban ecology, or even environmental quality issues like air pollution or water pollution. It has a number of interesting books on housing. Some urban problems like transportation and land use and air quality have a range of solutions that experts loosely agree on, even if politicians and bureaucrats fail to implement them and special interests actively obstruct and spread disinformation about them. Adequate and affordable housing for everyone is the big urban problem that has never been solved and really has no clear cut consensus on what should be done. The basic puzzle is that as a particular city or neighborhood becomes a nice place to live, prices get bid up, and then over time only the relatively affluent can afford to live there. Once the snowball starts rolling, the people who live there will use their political power to try to limit increases in housing supply (for example, resisting greater heights or apartment buildings or smaller lot sizes). Government can try to intervene by allowing/requiring greater density, or it can go the other way and allow automobile-dependent low-density sprawl to develop. The latter chews up land that could be put to better use (or left wild), pollutes our air and water, cooks our planet, and contributes to everything from diabetes to mass pedestrian death to drunk driving. Governments should stop essentially paying people to live in the suburbs, and let people who make this choice experience the true cost to themselves and everyone else on the planet. But that’s just my view and lifestyle choice and I try to be tolerant of others, up to a point. And actually, I occasionally consider retreating to a quiet, cheap suburban life somewhere in the middle states from time to time. But if I did that I would be aware that it was cheap because the government was subsidizing me at others’ expense.

  • Brave New Home: Our Future in Smarter, Simpler, Happier Housing
  • Golden Gates: Fighting for Housing in America
  • Missing Middle Housing: Thinking Big and Building Small to Respond to Today’s Housing Crisis
  • Race for Profit: How Banks and the Real Estate Industry Undermined Black Homeownership (mortgages and lending, both on the public policy side and private sector side, are part of the puzzle)
  • The Affordable City: Strategies for Putting Housing Within Reach

There are a few books more about urban and regional planning proper:

  • City on a Hill: Urban Idealism in America from the Puritans to the Present (sounds like a U.S.-centric version of Cities of Tomorrow, a classic and awesome introduction to urban planning history. Even the cover is similar to the version of that book that I have.)
  • The Sprawl: Reconsidering the Weird American Suburbs
  • Designing for the Mega-region: Meeting Urban Challenges at a New Scale (could we please have high speed rail to connect our mega-regions? Oh, I forgot, this is the United States and we just can’t have nice things.)

Finally, the book that caught my eye most is specifically about pedestrian deaths (Right of Way: Race, Class, and the Silent Epidemic of Pedestrian Deaths in America), and if you didn’t already notice this is an issue near and dear to my heart. Pedestrian deaths, and motor vehicle-related deaths more broadly, are going to cause coronavirus-level death and carnage each and every year into the foreseeable future, long after the coronavirus shock is in the rear-view mirror. Solutions are known, and would have all kinds of virtuous spillover effects on our urban areas. And yet we fail to understand or act, decade after decade after decade.

Wouldn’t it be fun to just disappear to a mountaintop hermit cabin for a week and read a stack of books on a topic? Well, my idea of fun is not everybody’s idea of fun. Also, I’m not Bill Gates or Steve Jobs, and can’t just leave my family or my day job for a week.

treehouses

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There’s a treehouse hotel you can stay at in Ohio. It’s a pretty cool idea. You could pretend to be an Ewok. I wonder what the maximum density would be for a sustainable treehouse-based civilization. You could use gondolas to get around, minimizing the transportation footprint. You would still need electricity and water infrastructure, hospitals, etc. You would need food, but maybe you could rely heavily on tree nuts and fruit to provide a lot of it. And obviously, you couldn’t cut down too many trees to build the treehouses or you wouldn’t have enough trees left to build them in.

U.S. housing bubble starting to deflate?

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This Reuters article suggests the current U.S. housing bubble may be starting to deflate, if not pop. I don’t quite follow the logic, because it seems to suggest at the same time that the rate of housing starts is not sufficient to meet demand, and that the cost of construction is rising due to rising material, land, and labor costs. In basic economics 101 class, if there is an unmet demand, prices are supposed to rise until supply equals demand. But maybe people are just not willing or able to buy houses they want at the current market prices. What do they do instead? Again in textbook economics land, they should move to less expensive locales, buy smaller houses, live with roommates, rent extra rooms on AirBnB, etc. I guess there are all sorts of legal and cultural reasons these things don’t happen enough or fast enough for the market to equilibrate. Still, even knowing that the real world is not the textbook economic world, it’s hard to buy the argument that developers aren’t building houses because there aren’t as many houses for sale as people who want to buy houses.

buy or rent?

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This academic study says that people who own houses are richer on average than people who do not. But generally, renting costs less per month than buying, so the answer must be the build-up of home equity and price appreciation, right? Well, one conclusion of this paper is that theoretically, if you rented a house for a long period of time, and invested the amount of money you saved compared to paying a mortgage diligently every month, you would come out ahead in the long term over most periods of recent U.S. history. But this doesn’t happen, so maybe the answer is that the type of people who rent homes are not the type who invest, on average, and vice versa.

I wonder if they factored in my mortgage and property tax deductions, which I am hoping do not go away. I’ve always wondered – if two friends bought equally priced houses, rented them to each other, and paid taxes as landlords rather than homeowners, would they come out ahead or behind? As a landlord you can deduct all your maintenance and repair costs, plus depreciation which is just a weird thing that only exists on paper. Would there be anything illegal about this? Could family members do it? If so, why don’t they?

I’ve owned, and rented, and been a landlord and a tenant at the same time, because I’ve moved around and been in some weird situations with a growing family and that was the easiest thing to do. The best thing about renting is how easy it is. If you want to rent a place and really put some effort into it, you can live there just a few days later. I did that once although I had to clean it myself when I got there. The best thing about owning a place is you can mess with it if you want to. Especially the yard if that is your thing. And if that is your thing, it’s a little hard to put a financial price on.

Financially speaking, the man puts money in one of your pockets and takes it out of the other, as far as I can tell, and if you play it just right you have a few pennies left to save for a rainy day. Then you eat, sleep, shit, and do it again, and that is how the financial part of the world works, so it is best to look for meaning in other parts of the world.

best practices in affordable housing

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Affordable housing has fairly simple solutions on the surface – build more housing to push down prices, and/or provide people with an income sufficient to afford market rate housing. But it’s so difficult in practice in the United States, and from what I have seen, around the world. Curbed has a round-up of things being tried in the U.S., but I feel like these are tinkering around the edges of a large problem. I am leaning more and more toward the idea of providing people with an income (preferably by providing them with job skills, but by redistributing tax revenue of necessary) so that they can afford to choose among the options available.

  • revolving loan funds to renovate vacant apartments
  • bonus equity paid to low-income renters, sort of like reward points they can use for a down-payment on a home (this assumes owning is better than renting, which it might not be if all the twisted tax incentives, zoning restrictions and homeowner covenants were removed. In other words, saving is great but converting those savings to home equity is not automatically the best financial move for every family. In other words, maybe helping lower-income families to build financial assets they can use for whatever they need ultimately would be the best policy.)
  • mixed use, green building and transit-friendly development – all great but I am not immediately clear how this helps create affordable housing, other than bumping up supply slowly and gradually
  • non-profits and governments just straight-up renting homes and putting homeless people in them
  • coordinated national housing policy (but this is in Canada, not the U.S.)