Meetup this Saturday

This weekend Anthony Ling who writes the blog Rendering Freedom (and has previously written here) will be in DC. Stephen Smith will also be in town, and we’re planning a meetup on Saturday. Anthony is an architect in São Paolo. He writes about architecture, economics, and urbanism, and I’m excited to learn more about his experiences studying and working in Brazil.

If you’re in the DC area, I hope that you can join us.


Saturday, December 1st at 1:00 p.m.

Burger Tap and Shake (at Washington Circle in Foggy Bottom)

Please email me at if you have any questions.

Irrelevant real estate trends

Earlier this week Wendell Cox wrote a piece at New Geography arguing that projections for increasing demand for multifamily housing relative to single family homes are incorrect. He was criticizing a study by Arthur Nelson that predicts increased demand for multifamily housing relative to single-family housing in California between 2010 and 2035. So far, Cox points out that this hypothesis is not being fulfilled; between 2000 and 2008 slightly over half of newly occupied housing units were single-family homes on conventional lots (larger than 1/8 acre), not indicative of a shift in preferences toward multifamily housing.

Cox emphasizes that his data is based on revealed preferences rather than forecasts or surveys which may indicate a false preference for denser housing. However, he does not acknowledge that these preferences he cites are not revealed in a free market. The mortgage interest tax deduction biases home buyers toward larger homes, the complex entitlement process for dense infill development restricts supply of denser housing, and the the zoning and parking requirements that regulate development all shape revealed consumer decisions.

Both Cox and Nelson seem to base their views of consumer preferences heavily on introspection, assuming that over time more Americans will come to share their preference for suburban or urban living respectively. And they both take the same approach of looking at the real estate trends aggregated across the entire state. This is an interesting question for academics, but not a particularly relevant area for real estate markets. Real estate is local, and state trends are not likely to apply to many cities and neighborhoods. The average home sold in California went for $309,000 at $195 per square foot last month. However this statistic is meaningless for West Hollywood residents where the  average sale price was $378 per square foot. It’s equally meaningless for Bakersfield residents where the per-square-foot price was $87. Only one of these local areas faces a housing affordability problem, which Cox emphasizes is an important concern for land use policy.

Fortunately for consumers, it’s not necessary for academics to accurately forecast changing real estate preferences. They only need for local developers and homebuilders to do so, and the profit incentive leads developers to do just this, unless policy prevents them from doing so. High housing costs indicate supply restrictions that prevent developers from meeting consumer demands. If Bakersfield city planners adopted a binding urban growth boundary, the type of policy Cox decries, we would see the cost of conventional single family homes rise. In most of the places where we see housing affordability problems such as West Hollywood, it’s not Smart Growth policies that are to blame, but rather conventional zoning that prevents increased density from bringing down housing costs.

The most notable exception to this is Portland’s Urban Growth boundary which, in conjunction with density restrictions, keeps house prices in the city at $200 per square foot compared to the state average of $135. This UGB seems to be the driving force behind the work of many anti-density “market suburbanists,” which alone is enough of a reason to oppose this policy. However, in the cities where residents pay the greatest premium for housing, it’s likely that we would see much more multifamily home construction in a freer market.

If zoning restrictions and parking requirements were relaxed in areas of the country where residents currently pay the highest premiums to live, we would in large part see more multifamily construction rather than single family. This is why, despite the cumbersome entitlement process for multifamily buildings in many cities, and the mortgage interest deduction luring consumers to larger owner-occupied homes, over half of last year’s building permits were for multifamily units in some of the country’s most expensive cities like Los Angeles, New York, and Washington, DC.

Campaign season is over links

Stephen had great twitter coverage of urbanist election issues last night, but here are a few more links to significant outcomes:

1. Washington state and my home state of Colorado voted to legalize marijuana possession, private use, and in Colorado limited production. Drug policy liberalization is a huge win for cities, as arrest rates among users are higher in urban areas. However, given the current administration’s intolerance for medical marijuana dispensaries that are legal under state laws, I see little reason to hope that the feds won’t prosecute drug users  who are in violation of federal but not state laws.

2. In Alexandria, VA voters reelected democratic Mayor William Euille and elected an all democratic city council. This has ramifications for the city’s waterfront redevelopment plan; opponents of increased development have sued, and the case will be heard by the state supreme court this spring. Opponents allege that the zoning change required supermajority support from the city council, but the new democratic plurality makes supermajority support likely.

3. In Escondido, CA voters passed upzoning with Proposition N which will allow increased downtown housing development as well as allow more commercial and industrial development. The city’s conservative leadership supported Proposition N for economic development.

4. Kirk Caldwell was elected mayor of Honolulu. The opposing candidate Ben Cayetano ran on an anti-rail platform. Rail in Oahu is already under construction, but a lawsuit has stalled progress. The elevated 20-mile HART project has a projected $5.2 billion price tag, $1.55 billion of which local officials say will come from the federal government.  I don’t know enough about the project to have an opinion on whether or not it’s a good idea.

5. Virginia voters said “yes” on Question 1, requiring authorities to demonstrate public use to employ eminent domain (as opposed to the Kelo public benefit standard).

6. I won my unopposed election for Area Neighborhood Commissioner in DC’s 1B08 district and look forward to being a market urbanist voice in local politics.