Hi Lee, I expect we come at this with some different priors. I'm curious, what is the housing growth rate, in % of existing housing stock terms? What are the demographics of new arrivals (i.e. who is bidding up home prices in individual instances)? Does the zoning ordinance that you say isn't restrictive require parking minimums?
I think it's possible to get a lot of growth without just horizontal expansion. I'm a big fan of LVT, though I'm not sure it'll make development more popular (you'll get less tax revenue from big new buildings), but the incentives will be much better on the private side.
My sense is that community is something that people have always created where ever they dwell together. Top down regulation, while necessary in some cases (where externalities are a problem in particular), don't seem to me to be where community comes from. I.e. you'll get more community from a town with 20 small developers free to work in their neighborhoods, than with a planning process with great "community engagement."
Hi Seth: Our housing costs are driven by affluent retirees and tech workers (some of whom are remote, but the local tech sector is growing) as well, though I think this part of it has faded a bit, as affluent families wanting to not raise their kids in NYC or othe large cities. They seekl suburbs with good schools and parks. They can outbid anybody who works for a living . There have been bursts of immigrants, who compete on the low end. The growth rate since 2010 is 3%ish, but school enrollment is flat (which you have to compare to the decline that would be taking place without in-migration).
We have parking maximums, which have reduced the amount of pavement laid down for new commercial. That's a small success. I just wish we could shrink the pavement from before that was adopted in 2009. There is no minimum parking in the growth center now, but our developers share a belief that parking is essential to market a unit, so that policy has made no difference. Maybe going forward, but I have doubts. Transit is shaky and people who come here are mobility-oriented. They are heading out into the mountains or to the big city on the weekends and while Amtrak carries some of that, it is inconvenient. The small townhome neighborhood I live in has as many cars as people, including kids. That's not true in the growth center, but unless its assisted living, you're not going to sell or rent a unit that doesn't have at least two spaces.
Our height limits do not greatly constrain growing up and the supply of apartments has increased by a magnitude, but mostly people do not move here to live in large buildings. We get our density from single-family homes on small lots, live-work units, duplexes (a lot of those), and townhomes, with some apartments. Considering that it was almost all zoned for large lot residential in 2008, we have made progress in providing both more units and, more importantly in my view, a lot more housing choice. But those changes just made this town more desirable and expensive. I approved an sfd on small lots project that I would like to live in if I could afford to just before I left in 2008. The developer thought he could get $275,000, maybe. They are now almost double that.
None of our developers are that large. The principal commercial developer does have a few projects outside the county. The others can build a few dozen to a few hundred units. And I am puzzled by your belief that the small developers will even participate in building affordable housing. I can think of one exception who works nearby but not here, but our small developers build for the true luxury market and seem to have no interest in less profitable projects, much less something that would be workforce affordable.
As for building community. People do seek that, but there has to a be physical stage. Our sociability occurs in the parks, on the trails, and at the library (which needs to be 4X its current size). We desperately need a community rec center. And then, of course, there are the private sector third places, bars, etc. We've managed to have a lot of that be walkable for the majority of newcomers. Our developers contribute, some more cheerfully than others, but the leadership for all this has been in the public sector. Left alone, most of the developers would still be building strip malls and large lot residential. My take is that, while they enjoy profits, their real goal is to minimze risk.
The reality is that the narrative has shifted over the last 2-3 decades - from how do we get more new homeowners and renters into homes to how do we keep these people in their homes. Turnover is important. Upward mobility is important. Make room so the next generation or next income class can have their shot. Can’t be done without building new supply at all price points. Affordable is important. Market rate is important. Luxury is important.
We should not lose sight of a simple fact. In a more ideal world, we would not need affordable housing. It is inefficient and perverts the market. Abundant housing (where people want to live) is affordable housing.
Sure. It’s called filtering IIRC. But we shouldn’t be tearing down cheap apartment buildings to build expensive ones if we expect filtering to happen - especially if we don’t increase density when we do.
I have an idea of how we can improve on abundance language. Its vagueness is not an advantage. We should use it as an adjective, not a noun. The question should be abundant WHAT? Abundant housing is clearly beneficial. Abundant traffic lanes are clearly harmful.
The studies you cite may be right at some cosmic scale (though some are just too abstract to be credible). But I live in a small metro where the addition of hundreds of market-rate homes of all types has been accompanied by unrelenting increases in the cost of housing, old and new. I have friends who live in a small metro 2300 miles from here who share that experience. And restrictive zoning is not a big part of the story in either place, nor are building codes. In both cases, building enough, fast enough to force prices down is beyond the capability of the local building industry, the local infrastructure, and without stringent regulation, is possible only with a great deal of damage to the environment.
None of that is inconsistent with your point about market-rate housing, which has to be the foundation of any solution. Developers get a bad rap, partly because a few do deserve it, and partly because people are not very thoughtful. I wrote about one way of changing minds in a recent edition of my newsletter, The Practice of Community.
I believe the resistance to building at market rate could be overcome to an extent by switching from conventional property taxes to an LVT. That would make it clear that people are paying for the construction of homes, not speculative windfalls to landowners. It would also have the virtue of not taxing improvements. Would more people add an ADU if doing so did not increase their tax bill?
It can also be overcome by genuinely proactive planning. Our town has overcome most NIMBYs by working hard over many years to provide detailed guidance for development, guidance that is designed in partnership with both the developers and the community. It requires a consistent effort to build and maintain relationships, as well as creativity. It also requires balancing building with the creation of amenities. We have to be building community, not just housing.
Hi Lee, I expect we come at this with some different priors. I'm curious, what is the housing growth rate, in % of existing housing stock terms? What are the demographics of new arrivals (i.e. who is bidding up home prices in individual instances)? Does the zoning ordinance that you say isn't restrictive require parking minimums?
I think it's possible to get a lot of growth without just horizontal expansion. I'm a big fan of LVT, though I'm not sure it'll make development more popular (you'll get less tax revenue from big new buildings), but the incentives will be much better on the private side.
My sense is that community is something that people have always created where ever they dwell together. Top down regulation, while necessary in some cases (where externalities are a problem in particular), don't seem to me to be where community comes from. I.e. you'll get more community from a town with 20 small developers free to work in their neighborhoods, than with a planning process with great "community engagement."
Hi Seth: Our housing costs are driven by affluent retirees and tech workers (some of whom are remote, but the local tech sector is growing) as well, though I think this part of it has faded a bit, as affluent families wanting to not raise their kids in NYC or othe large cities. They seekl suburbs with good schools and parks. They can outbid anybody who works for a living . There have been bursts of immigrants, who compete on the low end. The growth rate since 2010 is 3%ish, but school enrollment is flat (which you have to compare to the decline that would be taking place without in-migration).
We have parking maximums, which have reduced the amount of pavement laid down for new commercial. That's a small success. I just wish we could shrink the pavement from before that was adopted in 2009. There is no minimum parking in the growth center now, but our developers share a belief that parking is essential to market a unit, so that policy has made no difference. Maybe going forward, but I have doubts. Transit is shaky and people who come here are mobility-oriented. They are heading out into the mountains or to the big city on the weekends and while Amtrak carries some of that, it is inconvenient. The small townhome neighborhood I live in has as many cars as people, including kids. That's not true in the growth center, but unless its assisted living, you're not going to sell or rent a unit that doesn't have at least two spaces.
Our height limits do not greatly constrain growing up and the supply of apartments has increased by a magnitude, but mostly people do not move here to live in large buildings. We get our density from single-family homes on small lots, live-work units, duplexes (a lot of those), and townhomes, with some apartments. Considering that it was almost all zoned for large lot residential in 2008, we have made progress in providing both more units and, more importantly in my view, a lot more housing choice. But those changes just made this town more desirable and expensive. I approved an sfd on small lots project that I would like to live in if I could afford to just before I left in 2008. The developer thought he could get $275,000, maybe. They are now almost double that.
None of our developers are that large. The principal commercial developer does have a few projects outside the county. The others can build a few dozen to a few hundred units. And I am puzzled by your belief that the small developers will even participate in building affordable housing. I can think of one exception who works nearby but not here, but our small developers build for the true luxury market and seem to have no interest in less profitable projects, much less something that would be workforce affordable.
As for building community. People do seek that, but there has to a be physical stage. Our sociability occurs in the parks, on the trails, and at the library (which needs to be 4X its current size). We desperately need a community rec center. And then, of course, there are the private sector third places, bars, etc. We've managed to have a lot of that be walkable for the majority of newcomers. Our developers contribute, some more cheerfully than others, but the leadership for all this has been in the public sector. Left alone, most of the developers would still be building strip malls and large lot residential. My take is that, while they enjoy profits, their real goal is to minimze risk.
Those are my thoughts. Interested in yours.
The reality is that the narrative has shifted over the last 2-3 decades - from how do we get more new homeowners and renters into homes to how do we keep these people in their homes. Turnover is important. Upward mobility is important. Make room so the next generation or next income class can have their shot. Can’t be done without building new supply at all price points. Affordable is important. Market rate is important. Luxury is important.
We should not lose sight of a simple fact. In a more ideal world, we would not need affordable housing. It is inefficient and perverts the market. Abundant housing (where people want to live) is affordable housing.
Sure. It’s called filtering IIRC. But we shouldn’t be tearing down cheap apartment buildings to build expensive ones if we expect filtering to happen - especially if we don’t increase density when we do.
I have an idea of how we can improve on abundance language. Its vagueness is not an advantage. We should use it as an adjective, not a noun. The question should be abundant WHAT? Abundant housing is clearly beneficial. Abundant traffic lanes are clearly harmful.
The studies you cite may be right at some cosmic scale (though some are just too abstract to be credible). But I live in a small metro where the addition of hundreds of market-rate homes of all types has been accompanied by unrelenting increases in the cost of housing, old and new. I have friends who live in a small metro 2300 miles from here who share that experience. And restrictive zoning is not a big part of the story in either place, nor are building codes. In both cases, building enough, fast enough to force prices down is beyond the capability of the local building industry, the local infrastructure, and without stringent regulation, is possible only with a great deal of damage to the environment.
None of that is inconsistent with your point about market-rate housing, which has to be the foundation of any solution. Developers get a bad rap, partly because a few do deserve it, and partly because people are not very thoughtful. I wrote about one way of changing minds in a recent edition of my newsletter, The Practice of Community.
I believe the resistance to building at market rate could be overcome to an extent by switching from conventional property taxes to an LVT. That would make it clear that people are paying for the construction of homes, not speculative windfalls to landowners. It would also have the virtue of not taxing improvements. Would more people add an ADU if doing so did not increase their tax bill?
It can also be overcome by genuinely proactive planning. Our town has overcome most NIMBYs by working hard over many years to provide detailed guidance for development, guidance that is designed in partnership with both the developers and the community. It requires a consistent effort to build and maintain relationships, as well as creativity. It also requires balancing building with the creation of amenities. We have to be building community, not just housing.