Growth Boundaries: Counterproductive, Expensive, and Anti-Urban - "There are usually two rationales for growth management. The first is environmental: it preserves natural areas on the metro fringe. That goal seems short-sighted, for reasons I’ll state below. The second is that growth management helps contain infrastructure costs. If growth cannot extend beyond a boundary, or does so incrementally, it will prevent excess extension of roads, pipes, etc. That might be a valid benefit, and one I’ll explore in a later article. In this piece, however, I’m more interested in the costs of growth management. The main one is affordability; when governments draw lines where growth can and cannot go, it reduces the supply of buildable land, and thus also the supply of housing. This makes housing more expensive, according to the economic literature. One study, titled “A Line in the Land”, found that in various U.S. cities, growth restraints led to price increases and political manipulation by NIMBYs. Other studies, focusing on Portland, said that pre-UGB the city never had home price medians above the national median. But the UGB caused a price spike in the early 1990s, and has continued, writes Portland State University business professor Gerard Mildner, because of the UGB’s rigidity... Growth management advocates often say that metros can maintain their housing elasticity by upzoning the core. But this often isn’t allowed either, due to the density limits described above. Instead they become places that can’t grow anywhere—up, in, or out. Randal O’Toole, a research fellow at the Independent Institute, argues that even if these metros allowed ample infill, they would not become affordable with growth containment policies still in place. Because peripheral land is cheaper, and low-rise suburban tract housing easier to build, suburban greenfields are more hardwired for affordability than infill neighborhoods, he believes. In a recent public debate, O’Toole noted that every state has low-density zoning, but only some struggle with affordability. They are generally the ones that instituted strict suburban growth management policies. The suggestion is that these arbitrary lines are part of the regulatory salad that makes housing expensive, and may even be the most significant regulation of all. Beyond affordability issues, growth management amounts to an oversimplified approach to urbanism. The main reason boils down to the fact that cities are complex... Growth containment laws posit that all these complex operations should occur inside a narrow boundary, whether or not expensive urban land is the best place for them. This violates “comparative advantage”—an economic principle stating that different land areas have different optimum uses—and is tyrannical to boot... There’s no point in forcing the suburban areas right next to cities also to be farms and forests. It’s a bit of agrarian-romanticism that ignores the entire point of urbanization. But the most ironic thing about growth containment is that it may worsen sprawl. In Portland, the UGB only extends 10-15 miles east, west and south beyond city limits (Portland’s northern boundary is Vancouver, WA). That is a limited buildable area for a 2.2-million-person metro, and causes people to leapfrog to distant cities. Consider: 8 of Oregon’s 10 fastest-growing cities sit right inside the edge of Portland’s UGB, showing the demand for suburban sprawl and the desire to live near, but not in, the city... Portland’s commuter statistical area is now comparable to larger metros like New York. “Perhaps the greatest irony is that an ‘urban containment’ policy designed to prevent sprawl could well be accelerating it,” wrote Cox in New Geography. “Higher prices, in part due to [the UGB], have forced more people to look ever further for housing that is affordable.”"
The Anglosphere needs to learn to love apartment living | Financial Times - "Forty years ago, the UK, US, Canada, Australia, New Zealand and Ireland had roughly 400 homes per 1,000 residents, level with developed continental European countries. Since then the two groups have diverged, the Anglosphere standing still while western Europe has pulled clear to 560 per 1,000. Unsurprisingly, the same pattern is reflected in house prices, which have risen further and faster in most anglophone countries since the global financial crisis than elsewhere. There appears to be a deep-seated aversion to urban density in anglophone culture that sets these countries apart from the rest. Three distinct factors are at work here. The first is a shared culture that values the privacy of one’s own home — most easily achieved in low-rise, single-family housing. The phrase “an Englishman’s home is his castle” dates back several centuries. From this came the American dream of a detached property surrounded by a white picket fence, while Australians and New Zealanders aspired to a “quarter acre”. A new YouGov survey bears this out: when asked if they would like to live in an apartment in a 3-4-floor block — picture the elegant streets of Paris, Barcelona or Rome — Britons and Americans say “no” by roughly 40 per cent and 30 per cent respectively, whereas continental Europeans are strongly in favour. The cumulative impact of centuries of such preferences is huge. Across the OECD as a whole, 40 per cent of people live in apartments, and the EU average is 42. But that plummets to 9 per cent in Ireland, 14 per cent in Australia, 15 per cent in New Zealand and 20 per cent in the UK. And it’s not just living in these apartments that Britons don’t like. Almost half say they would oppose new 3-4-storey blocks in their local area, whereas in every European country surveyed a plurality would be in favour. This brings us to the second shared problem: planning systems. No matter that the UK has a discretionary approach while the others use zoning — the planning regimes in all six anglophone countries are united in facilitating objections to individual applications, rather than proactive public engagement at the policy-setting stage. This preserves the low-density status quo. Finally, we have what I call the nature paradox: Anglophone planning frameworks give huge weight to environmental conservation, yet the preference for low-density developments fuels car-dependent sprawl and eats up more of that cherished green and pleasant land."
Auckland: the 2016 upzoning worked - "In 2016 Auckland upzoned about 75% of its core urban area. Six years later, there’s been a lot more construction, expanding total housing supply by 4%. Rents in Auckland haven’t risen as fast as in the rest of New Zealand, and affordability (rent as a percentage of household income) is now better than in the rest of the country, when it used to be worse."
Inclusionary Zoning: The Most Promising—or Counter-productive—of All Housing Policies - "Imagine two towns, both committed to helping their low-income residents but short on funding for social services. Both decide to require retailers to sell 5 or 10 percent of their wares at steeply discounted prices to families who qualify for benefits: milk, jeans, refrigerators, whatever. But they do it two different ways. The first town flat-out forces stores to do it, giving them nothing back in exchange. The place gets a little better for the lowest-income families who qualified for the discount, but there are other unintended, but inevitable, consequences that hurt the whole community. Retail is highly competitive, so only the most profitable shops can afford to sell a share of their products at a loss. Lots of stores go out of business, and surviving stores tend to be ones with bigger markups and higher prices: Nordstrom, not Payless; Whole Foods, not Safeway. Prices for everybody not qualified for discounts go up. Even for those who receive the discounts, there are fewer places to shop and marked-down supplies are limited. The town overall becomes less prosperous. The second town also requires “inclusionary pricing”—the same 5 or 10 percent discounts to qualifying families—but this town also compensates stores with economic benefits of comparable value: they can build a bigger shop than otherwise allowed under local laws; add profitable new ventures, such as liquor sales; dispense with expensive parking lots that were otherwise required; and win exemptions from certain taxes. In this community, retailers come out even and stay in business. The money they lose on their inclusionary sales is balanced out by gains from new benefits. Families with lower incomes shop where everyone else does, in a range of stores. Unlike the town that does not balance out the cost of its inclusionary pricing, this second town makes sure low-income families can thrive and be part of the local social fabric without shuttering stores and pushing up prices for those who don’t get the discount—keeping the whole community thriving and intact... If IZ imposes costs that it doesn’t sufficiently offset, it will suppress homebuilding. Without new homebuilding, IZ can effectively freeze neighborhoods in architectural amber, choke off housing choices, inflate home prices, accelerate the displacement of working families, erect walls to opportunity and inclusion, and forestall both density and affordability... Many people active in local politics—including many neighborhood groups, social justice advocates, politicians, and ordinary voters—seem convinced that developers make so much money they can easily absorb the costs of subsidizing rent for a share of their tenants... f IZ imposes costs on homebuilding, on net, fewer homes will be built. There is no free lunch. There is no wiggling out of the economics. IZ without balancing offsets will push some prospective housing developments from black to red ink, suppressing housing choices and driving up housing prices for everyone. Rising prices, in turn, drive displacement of cities’ families and individuals with low incomes and wealth. In this way, un-offset IZ can effectively function precisely as what its proponents aim to overcome: exclusionary zoning. In places with housing shortages and rising prices, un-offset IZ is a zero-sum game at best: it helps affordability by creating some subsidized homes, but hurts affordability overall by hampering the creation of more homes overall."
The Verdict Is In: Land Use Regulations Increase Housing Costs - "the Obama administration published the report "Housing Development Toolkit." Rather than echoing past presidential administrations, and thinking up all the ways that the federal government could subsidize homeownership, the report listed why homes are so expensive in the first place: restrictive zoning, bureaucratic delay and other regulations. The report laid out a 10-point plan for how expensive major metro areas can reduce their housing prices, mainly by liberalizing their markets to increase supply. The surprising thing was that this call for deregulation came from a Democratic president whose answer for other government-imposed problems--from expensive health care to failing inner city schools to slow economic growth--is to advocate for more government interference. So what inspired Obama's unusual position? It might be that the academic literature has by now grown so overwhelming that certain conclusions can't be ignored... The best part of having this academic, bipartisan consensus against land use regulations is that it may drown out all the phony theories behind why housing prices are so high. In San Francisco, to name one example, just about every last scapegoat has been targeted for eating up the housing supply, including the growing tech industry, rich Asian immigrants buying second homes, Airbnb hosts who use their units for short-term rentals, and developers who only build luxury units. Others claim that the city's proximity to water and mountains, mixed with its high residential density, makes it "land constrained"; of course, this is a self-imposed problem, since regulations prevent much of the infill and outlying land alike from getting built up. And activists have even stated that San Francisco's innate characteristics as a dense and historic city make it so desirable that no amount of supply will satiate demand; in other words, the city functions outside of basic economic laws. These arguments have been used in other expensive cities like New York and Washington, DC. But anecdotal evidence shows that global megacities that embrace rapid construction, such as Houston and Tokyo, can maintain affordability despite populations that are both fast-growing and wealthy. The academic literature shows that this isn't an accident; regulations that restrict supply really do make areas more expensive, while a hands-off attitude creates more elastic markets and lower prices. It's nice that America's highest level of government has caught on."
It’s Easy To Blame Private Equity For Housing Shortage, But Crisis Has Deeper Roots - "The Democrats who run the US House Financial Services Committee have identified a convenient villain: corporate investors. The committee held a hearing today, and the name of the session is the giveaway: “Where Have All the Houses Gone? Private Equity, Single Family Rentals, and America’s Neighborhoods.” Indeed, corporate investors have purchased hundreds of thousands of single-family homes across the country over the last decade, making it harder for Millennials, Gen Z and other first time buyers to break into the market. But, some experts, including a key one at the hearing, argue that the problems with the housing market run much deeper; they pin the housing shortage and rising rents on the lack of new home building since the Great Recession."
Raze, rebuild, repeat: why Japan knocks down its houses after 30 years - "Unlike in other countries, Japanese homes gradually depreciate over time, becoming completely valueless within 20 or 30 years. When someone moves out of a home or dies, the house, unlike the land it sits on, has no resale value and is typically demolished. This scrap-and-build approach is a quirk of the Japanese housing market that can be explained variously by low-quality construction to quickly meet demand after the second world war, repeated building code revisions to improve earthquake resilience and a cycle of poor maintenance due to the lack of any incentive to make homes marketable for resale... Everywhere from major metropolitan areas such as Tokyo and Osaka to struggling mid-size cities to suburban housing estates, renovated buildings are an evolving niche in the property market, emblematic of the dramatic transformation under way in Japan. The country is shrinking
Weird. Why aren't greedy investors buying up Japanese houses and driving up prices like in the rest of the developed world? Clearly the Japanese are doing something right by having less greedy people than in the rest of the world!
Why is Melbourne’s housing still so much cheaper than Sydney’s? - "Whether they buy or rent, Melburnians are, on average, spending less on housing than Sydneysiders, enough to entice anyone struggling with Sydney’s seemingly impossible housing market. And while vacancy rates in Melbourne are the country’s lowest – at 0.8% – its median rent, at $543, is still $180 cheaper than Sydney’s. Only Adelaide has cheaper median rent than Melbourne, which makes the Victorian capital a very tempting proposition for young people or low-income families... Long-term factors include the natural geography that borders and restricts Sydney, including national parks and mountains that prevent endless, easy expansion. Another is the simple fact that Melbourne has been able to build more dwellings than Sydney... Since 1992, NSW has, on average, built around six dwellings for every 1,000 people each year, compared with eight to nine dwellings for every 1,000 people in Victoria and Queensland. The report also said that the costs of building new dwellings, particularly apartments, were significantly higher in Sydney, making it harder to increase supply and in turn decrease rent. “So Melbourne’s been able to produce or committed to more development of apartments than Sydney, particularly in the inner city, making their apartment prices cheaper,” Wiltshire says. “The restrictions on how high you can build, in particular, bind much tighter in Sydney.”... “The median income between New South Wales and Victoria is pretty similar, but the distribution of those incomes is quite different. You’ve got a greater proportion of people in that high income bracket in New South Wales than you have in Victoria. “And that would push up prices at the top end of the market which tends to spill over into other portions of the market as well.”"
Liberal logic: developers are greedier in Sydney than in Melbourne. There is no point reducing the cost of building, since greedy developers won't pass on the savings
‘Thanks Dave!’ Residents Cheer Chappelle After He Blocks Development, Buys 52-Acre Lot Near His Home - "Dave Chappelle’s neighbors cheered him after Chappelle bought the entire 52-acre lot near his home in Yellow Springs, Ohio, to block a proposed 140-home development... “The village and Oberer had worked together to produce a plan that would include duplexes and affordable housing along with single-family homes in a 53-acre area along Spillan Road at the south edge of town”... “The houses they were going to build were not affordable to the people who live in the village,” Chappelle’s publicist Carla Sims told the Daily Mail. “It was going to attract interlopers. Dave was trying to make sure that the people that live in Yellow Springs can stay and afford to live in Yellow Springs. This development was not going to do that.”"
Damn greedy developers and landlords keeping housing expensive!
Why self-made millionaire Tori Dunlap still rents - "“I was 22 and trying to figure out my career and what my life looked like,” she says. “I did not have the skills to be able to manage a home, to make repairs on the home.” Today, she’s a multi-millionaire who still rents. “That’s 100% OK because it’s something that makes sense in my life,” she says. “I’m single, I don’t have kids and I travel a lot. It’s nice knowing that I have the flexibility to pick up and move if I want to.” Rather than tying up much of her wealth into a single property, she grows those funds in diversified investments instead... While some people might think that monthly homeownership costs will be cheaper in the long-run compared with renting, that’s increasingly untrue in most real estate markets. For 89% of Americans, renting a two-bedroom home is cheaper than buying a comparable property, according to a recent analysis by The Economist. Three years ago, that was true for only 16% of Americans, the study says. Plus, there are other recurring homeownership expenses you don’t have to pay for as a renter, including private mortgage insurance, property taxes, mortgage interest and the cost of repairs. Not to mention, coming up with enough cash for a down payment."
Market-rate housing will make your city cheaper - "The activist asked me what I thought we needed to do to ensure affordable housing in San Francisco, to which I responded “We should let people build a lot more of it.” At which point a look of shock and dismay came over her face, and in a horrified voice she asked: “Market rate??” “Yes,” I said. “Market rate.” In fact, the belief that building market-rate housing raises rents is surprisingly common... Cook seems to be concerned mainly with the price of buying a house. But “affordable housing” policies, like inclusionary zoning, rent control, and public housing, are all about renting houses... it seems as if he thinks that the price of a market-rate rental unit comes built into its walls and floors — that market rents in an expensive city are fixed, and have nothing to do with the number of units that exist there... Because some units in a modern American city are price-controlled, it means that market-rate units will usually be more expensive than the average unit. This isn’t always 100% true — some market-rate units might be even cheaper than price-controlled units because they’re really small and crappy, or because they’re in a really dangerous neighborhood, etc. But in general, market-rate units will be more expensive than the average unit. So it’s easy to see how building more market-rate housing can increase average rents. The key word here is “average”... Suppose you bulldoze a parking lot in San Francisco and build a gleaming new tower full of market-rate apartments targeted at tech workers. Maybe some tech workers move in from San Jose or Palo Alto to live in those apartments — but probably not, since their jobs are down in San Jose and Palo Alto. More likely, they move into the gleaming new market-rate units from other parts of San Francisco. They move from low-rises in the Mission and Bernal Heights, from old Victorians in the Haight, and so on. And when the tech workers move to the new tower, what happens to those rental units they just vacated? Those units go on the market! And unless landlords want to let their units sit vacant for many months (which costs them a lot of money), they have to rent those units at a discount to whatever they were charging before. Who moves into those newly discounted units? Maybe some other tech yuppies looking for a bargain. Maybe some service workers paying market rent in the East Bay and commuting over every day to work in SF. Maybe some middle-class family currently paying market rent elsewhere in SF. It’s not clear. But whoever it is, the availability of a discounted market-rate unit gives them some negotiating leverage with their current landlord... So by this process, building fancy new expensive market-rate housing lowers rents for regular folks. This process is especially important when you have a city that’s attracting a big influence of highly-paid people looking for rental units (i.e., yuppies). Without any new market-rate construction, the yuppies will flood into the city’s older housing stock, offering to throw wads of cash at landlords for the chance to move into a low-rise or an old SF Victorian or a Brooklyn brownstone or whatever. By building gleaming new towers of fancy “luxury” units, you can divert those yuppies, so that they don’t start a bidding war with existing middle-class residents for existing middle-class units... it’s especially cynical and counterproductive when so-called “progressives” in cities like SF block the construction of new housing on parking lots, as happens rather regularly. But even if you have to tear down existing housing to build market-rate housing, you can get a net benefit in terms of affordability. If you tear down 50 units of low-rise housing and replace them with 500 units in a huge tower, that’s a lot of new supply. So the benefit can outweigh the cost in terms of affordability. Of course, there is a way that building market-rate housing can raise rents within a small area. It’s called “induced demand”. If a new apartment tower makes a neighborhood seem nicer or more upscale, it can draw in high-income people from elsewhere, raising demand for housing in the nearby area. That increased demand will raise rents locally. But it’ll still improve affordability overall, because the rich people who move to that neighborhood will leave their old neighborhood. That reduces demand for housing in the old neighborhood, which will make it more affordable... the “induced demand” or “gentrification” effect — there are a bunch of papers showing that even that doesn’t usually happen... New market-rate housing lowers rents in the surrounding area a little bit, though the effect is probably mitigated by the induced demand effect. In a few cases, induced demand can even cancel out the supply effect within a very small radius. At the citywide level, though, you get the full effect. Opponents of market-rate housing will occasionally grasp at a single study that seems to go against this growing weight of evidence. But even then, they almost always misunderstand the research they try to cite... Opponents of market-rate housing construction have a ridiculous fantasy that if they can just restrict supply enough, rich yuppies will be forced to move far away, while middle-class and working-class people will get to stay where they are. This is simply not what happens. What actually happens is that money finds a way — the landlords together find a way to get what they want, which is to expel the middle-class and working-class renters out of town, and have the higher-paying yuppies take over their units. This is exactly what happened in San Francisco. Incredibly low rates of market-rate housing construction in SF and surrounding cities led to soaring rents and a stagnant population, while median incomes also soared — not because everyone in SF got a giant raise, but because lower-income people were driven out of the city by high rents! People need to abandon the fantasy that blocking market-rate housing can drive rich people out of town. It cannot. All it can do is to make life more unaffordable for everyone."
Left wingers hate the market and don't understand how it works, so
Refusing to build housing leads to gentrification, as poor people get pushed out
JUE Insight: The effect of new market-rate housing construction on the low-income housing market - "I illustrate how new market-rate construction loosens the market for lower-quality housing through a series of moves. First, I use address history data to identify 52,000 residents of new multifamily buildings in large cities, their previous address, the current residents of those addresses, and so on for six rounds. The sequence quickly reaches units in below-median income neighborhoods, which account for nearly 40 percent of the sixth round, and similar patterns appear for neighborhoods in the bottom quintile of income or percent white. Next, I use a simple simulation model to roughly quantify these migratory connections under a range of assumptions. Constructing a new market-rate building that houses 100 people ultimately leads 45 to 70 people to move out of below-median income neighborhoods, with most of the effect occurring within three years. These results suggest that the migration ripple effects of new housing will affect a wide spectrum of neighborhoods and loosen the low-income housing market."
Left wingers don't understand the ripple effect
Supply Skepticism Revisited - "Although “supply skeptics” claim that new housing supply does not slow growth in rents, we show that rigorous recent studies demonstrate that: 1) Increases in housing supply slow the growth in rents in the region; 2) In some circumstances, new construction also reduces rents or rent growth in the surrounding area; 3) The chains of moves sparked by new construction free up apartments that are then rented (or retained) by households across the income spectrum; 4) While new supply is associated with gentrification, it has not been shown to cause significant displacement of lower income households; and 5) Easing land use restrictions, at least on a broad scale and in ways that change binding constraints on development, generally leads to more new housing over time, but only a fraction of the new capacity created because many other factors constrain the pace of new development."
Australia should prepare for the death of the middle class, experts warn - ““The main issue is obviously the housing market,” Mr van Onselen said… Red hot inflation over recent years has seen the cost of goods and services soar, he added, putting intense pressure on household budgets. “But on top of that, people’s average tax rates have risen very strongly in the past couple of years, so they’ve had more of their disposable income lost there too.” Australia has gotten to a once-unimaginable situation where having a full-time job is no longer a shield against financial despair and even poverty, social services groups say. Last year, St Vincent de Paul Society saw a 40 per cent surge in the number of calls for support from struggling Aussies. Many of them belong to a cohort that would broadly be considered “to have security in their quality of life”, a Vinnies spokesman told NCA Newswire… The gap between rich and poor has widened so much that Australia’s middle class is worse off than it was 20 years ago, financial adviser Alex Jamieson believes. “Back in the 2000s, life was certainly easier; the houses were bigger, the school fees weren’t as expensive and many people didn’t have mortgages close to what they are sitting at now””
Is the Environmental Movement Killing Itself with Social Justice? - "The tweet got a fair bit of attention. So far, it’s had 1,081 “impressions” (meaning people who saw it), with some “likes” and retweets, but it got a hostile reply from an anti-sprawl group in southern Ontario. The reply was a copy and paste from Wikipedia, which called NumbersUSA anti-immigrant, and cited the Southern Poverty Law Center in saying it was conceived by “white nationalist John Tanton” as the “grassroots arm for the anti-immigrant movement.” Several things are noteworthy about the reply: one is how biased the entry in Wikipedia is; another is that the SPLC still retains any shred of credibility after its corruption and highly questionable money-raising methods were exposed a few years ago – not to mention the bad behaviour of its founder, Morris Dees, who was fired in 2018. John Tanton was an ophthalmologist and conservationist who was concerned about America’s rapid population growth, which since the mid-sixties has been driven by immigration. By SPLC-type reasoning, that made him a white supremacist. It’s also noteworthy that whoever copied and pasted from Wikipedia was content with accepting what it said without further investigation. PIC replied to the anti-sprawl group by saying that the NumbersUSA study should be judged on its own merits and that the discredited SPLC should not be used as an excuse to ignore the impact of population growth on sprawl... One of PIC’s followers on Twitter who frequently posts population-related material, including retweeting PIC’s tweets, informed PIC via “Messages” (i.e., directed only to PIC) that she had been blocked on Twitter by the lead author of a paper on “post-growth climate mitigation scenarios” published on Research Gate. When she asked him why, he explained (via email) that she had tried to use his work “in service of an anti-immigrant, closed-borders argument,” and that if she was concerned about ecological breakdown, what she needed “to target is capitalism, not immigrants and refugees, who are overwhelmingly victims of it.” He asserted that “we can have a post-growth society with immigration – the two are not incompatible.” He also asserted that, speaking as an ecological scientist, the claim to reject immigration on ecological grounds had “been rebutted repeatedly” and was “a position used cynically by people whose only actual concern is to uphold racial chauvinism.” PIC can certainly agree with him about the desirability of “gender equality, universal access to high-quality education and healthcare, and decent livelihoods and economic security.” These he said were the “basic socialist principles” she should be arguing for and that she had “put the cart before the horse” with her concerns about population growth... To have concerns about immigration levels does not make one “anti-immigrant” any more than using birth control makes one anti-baby... some environmental organizations, as discussed above, do more than ignore the population issue, they also actively disparage those who address it"
End Wokeness on X - "NYC homeowners who lost their homes to squatters sat down with CBS. Some of them are now in debt for paying electricity and maintenance bills for the squatters. Squatters turn into tenants after 30 DAYS. After that timeframe, homeowners will be arrested if they turn off electricity/water, attempt to evict them, or change locks."
