Related, interesting quote from someone talking to Jane Jacobs: http://www.citylab.com/design/2016/05/happy-100th-birthday-j...
New, high-rise public housing surrounded by pretty but functionless lawns had erased the formerly dense mix of retail, institutional and residential uses. She learned about what was lost from settlement house workers and tenants.
As one resident told her: “Nobody cared what we wanted when they built this place. They threw our houses down and pushed us here and pushed our friends somewhere else. We don’t have a place around here to get a cup of coffee or a newspaper even... But the big men come and look at that grass and say, ‘Isn’t it wonderful! Now the poor have everything.’”
Due to the collapse of industry round here, deprivation and crime shot through the roof (to the point Latvia recommended its citizens not visit this city in particular).
The high rises have become synonymous with that crime and deprivation. No one wants them at their back yard because of who typically lives in them, not because of the aesthetics.
In fact, they have recently had a makeover and now look great. Unfortunately, the same people still live there.
In the US people go to the park to interact with people, and go home to have solitude [hopefully with nature in their backyard, but even if not they want a quiet apartment without lots of people near them, or at least the illusion of it].
Some people prefer the US way, some the European way. But you have to build the city to match what people want.
The ugly urban cities are a result of a mismatch.
The US is a car-centric culture that is fueled by (relatively) cheap gasoline (energy prices).
Take for instance shopping malls. Shopping malls in Asia (usually in urban centers) build up vertically while in the United States they are build out horizontally with acres and acres of parking spaces.
Some of the best US cities have European-like features (NYC with Central Park and its other parks like Union Square, Tompkins Square, traffic shut down on some streets or at least seating that takes up part of the street).
Ironically, part of the blame lies with zoning. Zoning restricts housing supply, thus increasing housing prices and making securing a political deal expensive. When you get one, you want to make the most of it. That means lots of expensive apartments.
"Expensive" means luxury. "Lots of" means space maximimisation. (Since the political process has constrained supply, you need not worry about someone competing on design - availability is almost enough by itself.)
This is illustrated in a recent New York Times article, where several architectural features of older buildings either directly violate modern zoning laws or would be done away given as a side effect of them: http://www.nytimes.com/interactive/2016/05/19/upshot/forty-p...
Other people can be a source of comfort, education, assistance and enrichment. But, other people can also prove to be a great source of annoyance, stress, competition, and fear.
Maybe an even more important trick than making things attractive in shared urban spaces is making all the new arrivals get along with and trust the existing people in the city, and vice versa.
But it doesn't look like the law gives cities what they need to ensure such an outcome. In order to promote urban productivity and tranquility in a nation where people are free to settle anywhere, there's a case to be made for giving local communities more, not less, control.
People who want quiet suburbs can pool together a corporation to own a planned community. That limits the scope of their NIMBYism to just their community, and as shareholders they could vote on whether to get paid for selling their land to Walmart or Google or the people wanting to set up high-density apartment complexes. Plus they have an even stronger voice in their immediate community, so they can do things like build walls to keep the homeless out. I think getting bought out as a shareholder would warm them to the idea; if Walmart buys the land next door you just want to complain, but if you're getting some of the money you might be in favor.
The government should only have the power to prescribe structural integrity rules, fire safety codes, building codes for number of exits, etc.
A government (in the United States) is just a mechanism for an area's resident citizenry to express their collective will. Whether you call it "government" with "citizens", or a "corporation" with "shareholders", it's the same thing.
Any way, I fail to see how it would be materially different. A group of people, who collectively own the land make rules (laws) about how it can be used by other member of the group.
This is not to say it is a complete or normative defense of NIMBYism, but rather that a lot of knee-jerk SJW sort of reaction is missing the point and failing to address, or even really attempt to understand, where NIMBYs are coming from.
Part of me wonders if this could be solved by tech, particularly insurance products that offer homeowners protection against the variety of ways that seemingly-great expansion projects can go wrong. I'd enjoy working on that sort of problem, except that so much of the current interest in this entire topic is political, and politicians have some incentive to maintain zoning-like systems because it offers them (the politicians) great opportunities for rent seeking, by being the gatekeepers of an approval process that should instead be more straightforward and just hedged by homeowners in the form of custom insurance products.
[0] "Why are there NIMBYs?" William Fischel, < https://www.dartmouth.edu/~wfischel/Papers/00-04.PDF >
The source of the problem is that people started buying homes as investments, overpaying for them because there was insufficient supply, and now that they've got a mortgage and they don't want to end up underwater, so they have to make sure everybody else overpays too.
Probably the solution is inflation. Build more housing and at the same time print more money. Then real housing prices go down while nominal housing prices stay the same, so your house doesn't "lose value" compared to your mortgage but housing still becomes more affordable for new buyers. This would also help by devaluing everyone's student loans and other debt. Call it the banks' punishment for 2008.
As Harvard Economist Edward Glaeser, Economics Nobelist Paul Krugmann, Financial Times columnist and an economist Tim Harford have been saying, the issues are politically induced housing scarcity through the use of zoning density restrictions and also overuse of historic landmark status. The use of politics to create artificial scarcity to create market inefficiencies is called "rent-seeking" in Microeconomics.
Another example was the NYC limit of 13,000 Taxi medallions which lead to a market value for medallions of $1.2 million. Then Uber/Lyft came along to disrupt the market and provide more transportation in NYC and the value of the medallions dropped to less than $700 K.
I believe that Congress is looking into the zoning form of "rent-seeking" with the understanding that zoning is not necessarily local but might be federal to override this inherent unfairness where older people housing expensive and scare for younger people.
For more info: Edward Glaeser: Build Big Bill (Mayor of NYC) http://www.nydailynews.com/opinion/build-big-bill-article-1....
Tim Harford: The Undercover Economist. https://www.amazon.com/Undercover-Economist-Revised-Updated-...
Creating these politically induced market inefficiencies are what create an inherent transfer of wealth from the poor to the wealthy and from the young to the old and of course is a major contributor to financial inequality.
If zoning were de-regulated around San Francisco, I doubt that many of you would pay much less than what you'd pay now for housing, assuming you're not making less than the AMI.
San Francisco had an Area Median Income in 2014 of $83,222. Those who make below this qualify for affordable housing. If you want to imagine what kind of housing policy the bay area would implement, look to what the DelBlasio administration is doing [1]. In 2015, the AMI for a family of four in New York City was $86,300. According to the DelBlasio administration's plan, "there will be affordable housing available for each level of income from “Extremely Low Income” to “Middle Income.” The middle group, “Low Income” will benefit the most, receiving nearly 60 percent of the 200,000 projected units. Each of the other levels of income will receive eight to 12 percent of the units."
So, given that you wouldn't qualify for affordable housing, you'll end up buying new property at market-driven prices. If developers were to flood the market with thousands of additional units, how would that affect prices? If you were a developer, wouldn't you try to maximize profit for your investors? With that given, developers would collude. They'd roll out new, optimally priced units over time. They'll make excuses to policymakers as to why projects are delayed.
Today, the middle class can't even get a chance to buy something that it can't afford. With de-regulated housing, the former constraint is lifted and new homeowners will be heavily debt-burdened with super-jumbo non-conforming mortgages. However, you'll have somewhere to live.
[1] http://www.amny.com/real-estate/affordable-housing-in-new-yo...
We should also do away with National Parks and Forests, which are nothing more than zoning laws at the Federal level.
For that matter, state and local parks get in the way too.
How much lost economic output are restrictions on real estate development in Golden Gate Park costing the city of San Francisco?
How many more people could be housed there if the city simply got out of the way and let the developers build twenty or thirty thousand new units in there?
Why does Federal law even allow a local community like San Francisco so much control over its land?
I live in SF. Some of the working class people I meet live as far away as Richmond, Vallejo and Gilroy. They spend hours commuting back and forth; but they have no choice. It kills the 'quality of life', but what can one do?
If, for example, it was possible to get from Richmond to SF in 15 minutes at any time of day or night, it would make a world of difference. The pressure to live in SF would be eased, knowing that any time you wanted to enjoy the city life, it was a quick 15 minute ride away.
Communities hate more development, because people don't want to disturb their little paradise, which they worked so hard to create. And these days, it is much easier for people to move; heck, many people live nomadic lives, spending months here, and months there.
Something else to think about: an influx of residents has second-order effects: more schools, more police, more fire, etc. etc. Who'll pay for that? The taxes will flow over decades, but these things need to be built right away!
That is not the idea. The idea is to let people live where they want to live, without the weight of the commute hanging over them. And even if someone chooses to live far away, they should still be able to maintain a decent quality of life.
There is no denying that dwellings closer to the city centers are in higher demand, and hence cost more. I posit that it is primarily due to a mediocre transportation system. If the Bay Area had a world-class high-speed system, the demand would be reduced, lowering the prices and benefiting everyone.
This fall there will be an initiative on the ballot called "L.U.V.E." which will require any development over two stories to get voter approval. It's actually split the anti-development activists apart, as some of them think it goes too far.
It's a beautiful city, but part of me feels like it's a ticking time bomb due to lack of education in society. Much like there was broad rejection of vaccinations here, there's rejection of the concept of supply & demand (some calling it a "Republican conspiracy.")
Maybe someone could do a startup to sort this stuff. I've been thinking about it but not cracked it.
A piece of land with a liberal zoning is worth more. It is a target for redevelopment in order to max out the zoning. The net result in my local is the steady replacement of anything old (ie 10+ years) by newer ridiculously large replacements. Apartments and other attached units are now so expensive, and prices rising so steadily, that the logical thing to do is let them sit empty. The pittance one might claw back in rent pales in comparison to rising prices, and who needs pesky tenants anyway.
So... liberal zoning --> rising land values/prices --> redevelopment is better than renting --> fewer rental units = higher rent. It's true up and down the west coast. Now if a government told owners that no, they are not going to rip down that apartment block to replace it with luxury living, all-one-level, condos (ie for old/rich retirees) then perhaps prices might stabilize, sending more units into the rental market and so also stabilizing rents.
Selling 1000 units at $2000 is more profitable than selling 500 units at $2500. Moreover, collusion is a) illegal, allowing us to smite them with the Hammer of Antitrust Enforcement, and b) assumes there are few enough developers that they can actually do that without anybody defecting, which seems unlikely.
> In a realistic scenario, de-regulated zoning around San Francisco would benefit developers and lenders while worsening the financial burden of the middle class.
Your proposed alternative to increasing supply once to reduce prices is to keep supply constrained and subsidize rents forever.
There is no way out of the fact that increasing the housing supply is the only real solution, and that requires zoning regulations to be relaxed so that it can actually be increased. If you then have other problems with increasing the housing supply, you fix them, because one way or another there needs to be a lot more housing.
For example, the thorough analysis above indicates that increasing San Francisco's housing supply by 30% would cut prices in half.
The man's name is Bill De Blasio.
And the AMI used for affordable housing is so high, it's a joke. They include Westchester, Putnam, and Rockland counties in the calculation as a blatant concession to the real estate industry.
The "Low Income" units are further broken down into 40%, 50% and 60% of AMI, and nearly all the Low Income units being built are for that "up to 60% of AMI" range. That ensures they have the largest possible pool of applicants, and since the units are awarded by lottery, the new affordable housing units will take just as long to get into as a decade-long public housing waitlist.
There is a lot to criticize about our actual implementation of the affordable housing - from both business interests and progressive interests. This suggests that this is one of those politically Hard Problems that most politicians will always avoid like the plague.
For every 1 story increase in building height in a San Francisco apartment complex, there is 10 less houses that have to be build in Suburbia.
10 parcels of land that can now be converted to national parks, and public spaces.
People need a place to live whether you like it or not.
We can either make room for them in the cities, by increasing density and building height limits, or we can stand by and watch as urban sprawl continues to destroy our environment.
A co worker was on the residents committee for a block of flats (london UK) that had to have the roof replaced not cheap and the original contrcator did it wrong and they had to sue them and have it redone.
Can be converted to public spaces. However who would make sure that this conversion actually happens? What are the incentives?
For anyone reading this, be wary that the national backlash against public land is being driven by high federal deficits caused by overspending on the military and taxes on the ultra-wealthy that are at nearly an all-time historical low. Remember that we all own public land as individuals and can use it at any time for any purpose that is not destructive. The idea of freely giving away that land to private interests to be exploited for private gain is deeply unsustainable and I mourn for future generations that would miss out on what we enjoy today.
The great tragedy in all this is that I've found that the people in the most enlightened areas, the regions with the most natural resources and beauty left from the time of earliest creation, can take it all so easily for granted and come to take stances that don't ensure its protection. If anyone is on the fence about sustainability vs economic growth, I strongly urge you to do a full accounting with all externalities. You may find that the philosophies and principles that guide environmentally conscious individuals are rooted in logic and not some knee-jerk hysteria like what is sometimes portrayed by infotainment news. I understand that every community is different, but like most things in our society we can rely on a majority sentiment that only thinks one move ahead, not 10 or 20 or 30 like we do. We can’t go wrong by meditating on such important decisions and drawing our own conclusions, which I’m confident will have little alignment with the propaganda of the day.
I appreciate especially this part of your comment: If anyone is on the fence about sustainability vs economic growth, I strongly urge you to do a full accounting with all externalities.
If we focus on the full accounting of positives (not even looking at externalities), we already see problems with these economic models. They fail to assign positive economic value to the zoning laws.
The economists in the article say something like "these zoning laws are depressing economic output by $1.5 trillion."
But, there's another way to look at it: "the value that communities derive from having the power to zone their cities as they see fit is $1.5 trillion."
In other words, these local communities are willing to exchange $1.5 trillion in easy-to-value economic activity for the power to create not-so-easy-to-value zoning laws. The fact that these economists choose to ignore that economic value does not eliminate that value.
I see it as comparable to a stay-at-home spouse who raises children. Such a person doesn't receive an easy-to-count dollar-value paycheck. But those stay-at-home parents across the country are, without any doubt, working hard and contributing significantly to GDP. It's a matter of measurement, not existence. The economic value definitely exists.
How seriously should any of us take an economic model which completely ignores such contributions to GDP?
More development doesn't make housing more affordable. It makes it less unaffordable compared to the alternative of restricting supply. For how that turns out, just take a look at SF.
Like, desirable cities are always going to be expensive, but you can choose between whether they're moderately expensive vs insanely expensive.
> So... liberal zoning --> rising land values/prices --> redevelopment is better than renting --> fewer rental units = higher rent. It's true up and down the west coast.
??? The west coast, by and large, does not have liberal zoning. This is particularly true in coastal California, which has the worst affordability problems.
One of the issues is that cities tend to only have small pockets of liberal zoning in downtown cores, so we get all our density from large towers that are inherently very expensive to build. If we got more middling density in existing SFH areas, it'd be much easier to get cheaper housing: http://missingmiddlehousing.com/
I highly doubt this is going on over any long period of time. If there's a bubble like this, it'll pop.
Why do you think these new apartments are luxury apartments? It's because living in your city is a luxury that people with enough money are paying for. If they didn't exist, people would be paying even more for living spaces that do exist. So, build new apartments and prices go up. But don't build new apartments, and prices go up more.
The most reliable way to get affordable housing (besides a lottery or waiting list, which doesn't solve the problem) is to have built new housing 30 years ago.
Luxury apartments can also be defined during zoning as units that the city assumes will rarely be occupied. It is often easier to get a permit if you can claim that the people in your development aren't going to contribute to traffic problems. I've even seen the pre-selling to overseas investors trotted out as justification for not upgrading traffic connections to a development. So-called "elder living" units also fit this scheme.
As for rents, the standard has always been that yearly rent should be around 1/20th of the unit's value, the "20-year" rule. But with property prices rising so quickly, some units are renting out at 1/50th their value. Once you get into those areas, rent becomes irrelevant and you run into the paradox that many units (houses and condos) are worth significantly more without tenants. You don;t want to bother asking tenants to clear out so you can show the unit. So investors planning to flip something in the next couple years don't bother with rent. Only when they think that they may have to hold on for a while do they consider.
Strangely, its thought of as acceptable for tech workers (with their new found purchasing power due to disparate wages compared to traditional workers) to displace long-time residents of a community, but those same tech workers are aghast when communities would prefer they not come.
“We don’t need one more job in Boulder,” Mr. Pomerance said. “We don’t need to grow anymore. Go somewhere else where they need you.”
Indeed. It seems I'm a bit late to coin the term "tech privilege".
The anti-growth mentality is incoherent: it was fine for me to move here 20 years ago, but how dare tech workers try to do the same thing!
If you limit building, that effect just gets worse, though. The rich are always going to be able to outbid the poor/working-class, and if you limit the supply of housing, competition for that housing intensifies. A study from the California Legislative Analyst's Office found exactly this (more development = less displacement): http://www.lao.ca.gov/Publications/Report/3345
> In this follow up to California’s High Housing Costs, we offer additional evidence that facilitating more private housing development in the state’s coastal urban communities would help make housing more affordable for low–income Californians. Existing affordable housing programs assist only a small proportion of low–income Californians. Most low–income Californians receive little or no assistance. Expanding affordable housing programs to help these households likely would be extremely challenging and prohibitively expensive. It may be best to focus these programs on Californians with more specialized housing needs—such as homeless individuals and families or persons with significant physical and mental health challenges.
> Encouraging additional private housing construction can help the many low–income Californians who do not receive assistance. Considerable evidence suggests that construction of market–rate housing reduces housing costs for low–income households and, consequently, helps to mitigate displacement in many cases.
I moved south, the weather and opportunities are better. But then I probably fall into most of the boxes outlined in the article.
However, the planning laws in the UK put brakes on growth down here. Having been in in Tokyo and London it's obvious why accommodation is cheaper (by about 50% [1]) in Japan than the UK: they build up and dense.
I think the argument of the article is more about the character of the places people move _to_ rather than the places they move _from_. Where cities are very expensive, it's too hard to get a toehold in the economy as someone new to the area/just starting out.
We need to get over the mistakes of the 50s and 60s and accept that if we want affordable housing for the masses we need higher, denser accommodation.
Unfortunately what we get is low density out-of-town box houses that aren't connected to any infrastructure. If we get much at all. Where there is development in the cities, it seems to be too little to shift prices.
[1] http://www.numbeo.com/cost-of-living/compare_cities.jsp?coun...
Also, driving down the price of housing prevents EXISTING public spaces and parks from being converted into homes, as cities will be less incentivized to do so.
There is already a lot of public spaces that are being converted to houses, so preventing a conversion to urban sprawl is equivalent to converting back to a public space.
In fact, urban apartment complexes in dense cities are much much MORE valuable and desirable than suburban homes. There are 10s of millions of people who would rather live in a desirable place like downtown NYC than the place they are currently living in, if it was as affordable as suburban homes.
The facts that back this up, are housing prices. Housing prices in cities are 4x higher than they are in the countryside, which, due to the laws of supply and demand, means that lots of people prefer city living to suburban living.
Careful with calling it "best". Not everyone likes that kind of thing in a city.
I don't. I hate those types of cities, I feel very stressed and oppressed ("squished" if you get what I mean) when I go to cities designed in that way. I can handle it for a visit, but I would never want to live there.
Different people like different things, that's why we have a variety of cities in the US, you can live in a place that matches what you like. But don't call it "best" just because it happens to be what you like.
And the government can use the new money in place of normal tax revenue, which helps the economy.
It's possible to go too far and have hyperinflation. It becomes problematic if prices double every day and nobody will accept your money because it will have lost half its value by the time they get to the bank, as is often the case in failing or mismanaged countries. But if we had e.g. ten percent inflation per year for several years, the effects would be a rather large net positive. It's basically a wealth transfer from lenders to borrowers, where "borrowers" means the taxpayer (national debt), people with student loans or car loans or credit card debt, etc. And homeowners with mortgages, canceling the reduction in housing prices that would otherwise come from significantly increasing the housing stock.
And I still don't think the flipping is relevant in the long run. It's pent-up demand sorting itself out. They can't keep flipping forever.
Not only does restrictive zoning not fix the problem, it only makes it worse. Part of why you have investors buying properties in places like SF is that housing is such a hot commodity due to the restricted supply. If it was easy to make lots more apartments and condos there, it would be less attractive as an investment, which would mean less speculation.
A more restrictive approach could discourage such redevelopment and sequestration, keeping rental units as rental units.
But living in your own house means you have your own roof, that can just as well needs maintenance, and you also can pick a bad contractor, and so on.
There are trade-offs. And there are external costs. Having your own backyard means usually having and using a car, taking up space close to downtown (because fuck commute times, right?) for just a family (and taking up road capacity too). These are currently undervalued.
The whole housing calamity in the Bay Area (and in London and Berlin) is manifestation of exactly this. (Plus idiotic zoning laws and height restrictions, and of course grafts, bribes, corruption, and the usual.)
Even more extream if your looking at a listed building - which I did when I was looking at buying a ex alms house listed in Pevsner (one of only two buildings of note in my home town)
But these are very low-level problems, and they tend to sort themselves out pretty quickly (in ~5 years, let's say, if the building needs a renovation and the owners were not too keen on participating and saving for it beforehand).
Also, if you want to get a mortgage for a lease, you can, if the mortgage repayment deadline is before the lease expiry. When it comes to property banks only care about getting a notarized mortgage contract and getting on the property's land registry sheet in a first position. (And this latter part is interesting, because most land registries - as far as I know - don't really have the concept of expiring records - so you can't record the fact of your lease.)
"Immigration was just fine for my grandparents, but now it's about time it stopped."
That's a mischaracterization though. The fundamental equation for immigration is to make sure the immigrants don't bring down the average. When your grandparents came here the average was lower than it is now.
Which is why it's a lot easier to get a green card if you have a masters in engineering than if you're a farm hand. It fundamentally has to be that way if you want to have any sort of a social safety net, otherwise the majority of world population would take citizenship and become eligible for social assistance.
I agree entirely, which is why the (if there is a 'the') Libertarian position on the matter is a combination of open immigration and private charity instead of socialism.
http://pc.blogspot.com.au/2016/06/immigration-is-fundamental...
There really are costs to current residents to allowing unfettered growth. Increased traffic, for example, materially reduces people's quality of life.
People vote for their own self interests, and calling someone "incoherent" simply because they were born in Boulder and love their home is not a productive argument.
If you were born somewhere and are attached to the way of life you've known since you were born, it's certainly an argument. I don't agree with it, but it's not incoherent.
I'm referring to the people (particularly in SF) who moved there a decade or more ago yet are virulently opposed to "tech workers" doing the same thing.
And yes, I understand voting for self-interests. What's irritating is when people try to frame their self-interests as a moral crusade, as though tech immigration is somehow inherently evil.
"The change that accommodated me was fine. The change that accommodates you is bad!"