Emily Hamilton

Emily Hamilton

Houston as an Affordability Model

In December, I was asked to testify at a House Subcommittee on Housing and Insurance hearing on government barriers to housing construction and affordability. I provided examples of reforms to land regulations that have facilitated increased housing supply, particularly relatively low-cost types of housing, including multifamily, small-lot single-family, and accessory dwelling units. Following the hearing, I received a good question from Congresswoman Sylvia Garcia. She points out that, as in the country as a whole, the share of cost burdened renters has increased in recent years in Houston, in spite of land use liberalization. She asked what local policymakers could do to improve affordability for low-income residents. When market-oriented housing researchers point to Houston’s relatively light-touch land use regulations as a model for other U.S. localities to learn from, its declining affordability may cause skepticism. Houston, however, has fared better than many other cities in housing affordability for both renters and homebuyers. While Houston is the only major U.S. city without use zoning, it does have land use regulations that appear in zoning ordinances elsewhere, including minimum lot size, setback, and parking requirements. These rules drive up the minimum cost of building housing in Houston. However, Houston has been a nationwide leader in reforming these exclusionary rules over the past 25 years. Houston policymakers have enacted rule changes to enable small-lot development and, in parts of the city, they have eliminated parking requirements. In part as a result, Houston’s affordability is impressive compared to peer regions. As the chart below shows, Houston has the lowest share of cost-burdened renter households among comparable Sun Belt markets for households earning 81% to 100% of the area median income. Only San Antonio and Austin have lower rates of rent burden among households earning 51% to 80% of the area median income. At the […]

Welcome Michael Nahas

Market Urbanism is proud to welcome Michael Nahas as a new writer who will bring an Austin perspective to the blog. Michael’s Twitter handle is @MichaelDNahas, and he also blogs at City Econ. Here’s a short interview we did over email. Emily: How did you become interested in cities? Michael: A coincidence back in 2018 got me to look into cities. I had read a pop science article about how zoning policy in San Francisco was driving up the price of homes. The article stuck with me, because I’m fascinated by economics and it was so strange. I had always rented and didn’t know how regulated housing was. Then, at a party, I happened to mention this curious article in a conversation. The person I mentioned it to was Josiah Stevenson, an influential member in AURA, Austin’s YIMBY organization. He quickly recruited me into AURA and got me to look at cities. And once I started looking into cities, I wondered why economists haven’t studied them more! Cities are where they gather. They’re where information and goods are gathered. In cities, the biggest economic decisions get made and the most goods trade hands. Fission reactors work by bringing refined uranium into a tight space, causing an energy-producing chain reaction. Likewise, when you bring people into a tight space (with the right conditions), it causes the bright glow of economic activity. I believe that making that economic glow brighter will improve my life and everyone else’s life too. That’s what made me so interested in cities. Emily: What cities have you lived in? Michael: Ordered by the time I’ve spent as an adult: New York, Austin, Charlottesville (Virginia), Minneapolis, London (UK), Berkeley, and Nijmegen (NL). I have a great love for Philadelphia, having grown up an hour away, but I never […]

Protecting Housing Affordability by Protecting the Right to Build Housing

Legislators in Colorado and Tennessee have introduced bills modeled on Arizona’s Private Property Rights Protection Act, a law that requires municipal governments to compensate landowners when new land use regulations make land less valuable. Both states already have areas with housing affordability problems due in part to land use regulations that are already on the books. Requiring local policymakers to compensate property owners for downzoning going forward won’t do anything to reduce existing barriers to housing construction, but they can at least help prevent the problem from getting worse.  Though the Fifth and Fourteenth Amendments to the Constitution state that Americans must be compensated when private property is taken by the government, the Supreme Court has long held that state and municipal governments generally don’t have to compensate property owners when land use restrictions reduce their property values, even the rules eliminate nearly the entire value of the property in question. In 1926, the Supreme Court ruled in Euclid v. Ambler that local governments’ police powers, delegated to them by their states, give them the authority to restrict real estate development. The 1978 decision Penn Central v. New York further entrenched this authority. The Court found that land use restrictions are not takings requiring compensation for property owners so long as the property maintains any economic value at all. In Smyth v. Falmouth, the Court held that even a building permit denial that reduced a property’s value by 91% didn’t require the locality to compensate the owner. Law professor Ilya Somin points out that it wasn’t always this way. The District Court that heard Euclid prior to the Supreme Court determined that local governments were required to compensate property owners for regulatory takings just as with eminent domain. Their opinion stated:  The argument supporting this ordinance proceeds, it seems to […]

Opening Arlington up to Housing

Arlington County policymakers have issued a call for ideas on improving housing availability and affordability. If you’d like to submit your own ideas, you can do so here through the rest of the day. The ideas that I submitted are below. Arlington County is a national model for transit-oriented development. Permitting dense, multifamily housing to be built on the County’s transit corridors has contributed to making the Washington, DC region more affordable compared to other high-income coastal regions. Nonetheless, housing prices in Arlington are high and rising due to increasing demand for access to the job market, schools, and other benefits that Arlington offers. County policymakers have opportunities to reform land use regulations to permit both dense multifamily housing and missing middle housing to improve access to Arlington’s opportunities. Zoning for Transit Oriented Development Ahead of Metro’s arrival in Arlington, county policymakers adopted the well-known “bulls eye approach” to planning, which calls for dense development surrounding the Rosslyn-Ballston corridor Metro stations. This plan calls for dense development to be permitted within one-quarter mile of these stations. Unfortunately, this plan has never been realized in the zoning ordinance. The County maintains single-family or townhouse zoning within one-quarter mile of four stations on this corridor and a relatively low-density multifamily zone within one-quarter mile of the Rosslyn station. The County needs more townhouses and low-rise multifamily housing, but it also needs more high-rise multifamily housing as the bulls eye plan recognized. Given the high and rising land values and house prices along this corridor, it’s past time to realize this decades-old planning objective. Further, planning for urban villages around Metro stations should be extended to the area around the East Falls Church station area, where residents of multifamily housing have to walk past land zoned exclusively for single-family houses to reach the […]

What’s a stickplex?

  A stickplex is a dense residential structure or group of structures built with inexpensive materials and techniques, most commonly wood. Stickplexes use 2,500 square feet of land per unit or less. Stickplexes have per-square-foot construction costs roughly in line with detached houses due to avoidance of costly features like elevators and more expensive construction methods. This type of housing includes features of both multifamily housing and single-family housing. They economize on land while avoiding the high construction costs of large multifamily buildings. Relative to high-rise housing, stickplexes can cost one-third less to build on a per-square-foot basis. And because they use a relatively small amount of land per unit, their land costs are lower than the typical detached house’s land costs.  Stickplexes versus missing middle Daniel Parolek coined the term “missing middle” and emphasizes that missing middle “is compatible in scale with single-family homes.” He advises caution about permitting three-story buildings, while a stickplex can be three stories or taller. A duplex on a 6,000 square foot lot would fit the definition of missing middle. But it would not be a stickplex since it would use more than 3,000 square feet of land per unit. Missing middle housing has found traction politically. Policymakers who have passed zoning reforms from Oregon to Nebraska to Durham have used the term to describe the type of construction they would like to see. Minneapolis Council Member Lisa Goodman described the city’s reform to permit triplexes in language similar to Parolek’s: “I like to refer to it as, ‘the box can’t change,” she said. “All that can change is how many families can live within the existing box.” However, in Minneapolis, questions remain about how feasible triplexes will be to build in permitted building envelopes. Zoning rules, including floor area ratio limits of less than one […]

The Limits of the Singapore Housing Model

In 2015, urban studies professor Anne Haila published a book on Singapore’s land ownership and housing system called Urban Land Rent: Singapore as a Property State. The Singapore housing model has recently been getting some attention for its widespread homeownership and affordability relative to high-cost coastal cities in the United States. Both Haila and, recently, writers at Bloomberg and CityLab approach Singapore uncritically. And Singapore’s housing market does offer some key lessons to the United States. But unlike the story Haila and some other U.S. commentators have told, it has its downsides. Singapore’s housing market works much better for households near the middle of its income distribution relative to the highest-cost U.S. regions, but provides severely inadequate housing for its low-income migrant workers. The Mechanics of Singapore’s Public Housing In Singapore, 90% of the land is government-owned, and about 80% of citizens and legal residents live in owner-occupied public housing on leased land. Extensive government landholdings and a leasehold system date back to the country’s colonial era. Following Singaporean independence in 1965, the People’s Action Party, which has been in power ever since, has expanded state land holdings. At independence, about 50% of Singapore was government-owned, reaching its current level of holdings in 2002. Government land ownership has been accomplished through eminent domain along with land reclamation, which has increased the size of the island by a quarter. Government land is auctioned for housing and other types of development primarily as 99-year leases. The Housing and Development Board (HDB), a government agency, builds the majority of new housing, but some higher-end housing is privately developed. The HDB and private developers compete for land at auctions, and both pay market prices for it. Unlike the U.S. public housing system under which units remain government-owned and are leased to low-income tenants, Singapore’s […]

Homeownership and the Warren Housing Bill

Elizabeth Warren’s housing bill has received a lot of love from those who favor of land use liberalization. Like Cory Booker’s housing bill, the Warren bill would seek to encourage state and local land use reform using federal grants as an incentive. Warren’s bill would significantly increase funding for the Housing Trust Fund and provide a small increase in allocations for public housing maintenance. However, Warren’s bill also includes new subsidies to homeownership and policies that could reduce the production of new renter-occupied housing relative to owner-occupied housing. There’s a trade off in housing policy between promoting homeownership as a wealth-building tool and promoting affordability that politicians, including Warren, have failed to confront. Rather than promoting housing affordability by rolling back policies that subsidize homeowners at the expense of renters, Warren’s bill seeks to reduce exclusionary, suburban zoning at the same time it introduces new policies to incentivize homeownership. First, Warren’s bill would require most foreclosed homes to be sold to new owner-occupants, rather than to landlords who would rent them out. The intention of the bill is to prevent institutional investors from profiting from foreclosures, but this approach has a strong anti-renter bias. When changes in economic conditions, demographics, or preferences lead to an increase in the proportion of Americans who want to rent rather than own, this policy would stand in the way of homes being adapted to meet new needs. Second, the bill would provide down payment assistance to first-time homebuyers who live in, or were displaced from, historically redlined neighborhoods. All levels of government have played horrific roles in excluding minorities from white neighborhoods and subsidizing wealth-building through home equity for white households alone. The victims of these policies deserve to be compensated for this unfairness. The Justice Department and the Department of Housing and Urban […]

Three Policies for Making Driverless Cars Work for Cities

Some urbanists have become skeptical about the future of autonomous vehicles even as unstaffed, autonomous taxis are now serving customers in Phoenix and Japan. Others worry that AVs, if they are ever deployed widely, will make cities worse. Angie Schmitt posits that allowing AVs in cities without implementing deliberate pro-urban policies first will exacerbate the problems of cars in urban areas. However, cars themselves aren’t to blame for the problems they’ve caused in cities. Policymakers created rules that dedicated public space to cars and prioritized ease of driving over other important goals. Urbanists should be optimistic about the arrival of AVs because urbanist policy goals will be more politically tenable when humans are not behind the wheel. To avoid repeating mistakes of the past, policymakers should create rules that neither subsidize AVs nor give them carte blanche over government-owned rights-of-way. Multiple writers have pointed out that city policymakers should actively be designing policy for the driverless future, but few have spelled out concrete plans for successful driverless policy in cities. Here are three policies that urban policymakers should begin experimenting with right away in anticipation of AVs. Price Roadways Perhaps the biggest concern AVs present for urbanists is that they may increase demand for sprawl. AVs may drastically reduce highway commute times over a given distance through platooning, and if people find their trips in AVs to be time well-spent, when they can work, relax, or sleep, they may be willing to accept even more time-consuming commutes than they do today. As the burden of commuting decreases, they reason, people will travel farther to work. However, the looming increase in sprawl would be due in large part to subsidized roads, not AVs themselves. If riders would have to fully internalize the cost of using road space, they would think twice […]

Three Lessons from Nashville’s Building Boom

Nashville has enjoyed some of the country’s fastest job growth for several years as healthcare and tech startups have made the city home. Unsurprisingly, this economic boom has coincided with a large increase in population, greater demand for real estate, and rising house prices. But Nashville’s policy environment has moderated price increases relative to what many in-demand cities have experienced. Nashville policy has made it possible for housing developers to build both up and out in response to this new demand. However, an expansion of historic preservation efforts that have so far failed to prevent demographic change could stall the new housing supply that has maintained the city’s relative affordability. Nashville’s experience offers three lessons for other cities: 1. Legalize Housing and It Will Be Built  Since 2010 the Nashville Metropolitan Statistical Area has grown by more than 400,000 residents, or 20 percent. Davidson County, home to Nashville at the center of the region, has grown by nearly 65,000 people, or 10 percent. Like other Southern cities, its easy to build new suburban housing in the Nashville region, and most of this population growth has been accommodated by building out. What’s unusual is that Nashville is also accommodating significant infill. In 2010 the city enacted a downtown rezoning. It eliminated parking requirements and increased by-right height limits. The new code is essentially a form-based code. Nearly all uses except for industrial are allowed in the center city. Dozens of new office, hotel, and residential towers have delivered since the new code was implemented, and many more are under construction. Since the new code has been in place, population in the two census tracts affected by upzoning has grown from about 7,500 to about 10,000. Forthcoming research from my colleague Salim Furth shows that Nashville’s recent low-density growth has been comparable to what we’d expect […]

United against dynamism

The battle lines being drawn for the SB 827 debate is perhaps the clearest example ever of the strange bedfellows that align on land use politics. Tenant rights activists stand in opposition to preemption of local land-use regulations with landlords and owners of suburban single family homes. In The Future and Its Enemies, Virginia Postrel develops a dynamist-stasist lens for understanding policy debates. Dynamists are generally accepting of new ideas and innovation. They view the freedom to experiment as integral to the learning process that allows quality of life to improve over time. Rather than focusing on the distribution of income that results from innovation, dynamists’ concern is that life is getting better for everyone, most importantly the lowest income people. Stasists occupy the other end of the divide and come from two different perspectives. First, they may appreciate the privileges that the current law provides them. They don’t want to see the social upheaval that greater economic mobility could bring about. Second, they may be technocrats who do have a vision for a future that they think will be better than the present but want to achieve it only through a government-led plan. Each opposes the decentralized processes consumers and producers use to solve their own problems. The dynamist-stasist division applies to all areas of economic activity, but “not in my backyard” is the stasist “rallying cry.” Postrel’s framework is useful for understanding why opposition to upzoning unites groups that seem to have opposing politics. In the case of SB 827, stasists include technocrats who want to see increased access to housing, but only if new housing is rent controlled, subsidized, or government built, and traditional NIMBYs. Pessimism about change unites stasists of all stripes. They’re united in their view that new housing supply will result in worse neighborhoods rather than better ones. People who don’t want to […]