Michael Lewyn

Joined: May 21, 2025
Articles: 127

Book Review, NIMBYism, Zoning

Richard Florida and Market Urbanism

I just finished reading Richard Florida’s new book, The New Urban Crisis. Florida writes that part of this “crisis” is the exploding cost of housing in some prosperous cities. Does that make him a market urbanist? Yes, and no. On the one hand, Florida criticizes existing zoning laws and the NIMBYs who support them. He suggests that these policies not only raise housing prices, but by doing so harm the economy as a whole. For example, he writes that if “everyone who wanted to work in San Francisco could afford to live there, the city would see a 500 percent increase in jobs… On a national basis, [similar results] would add up to an annual wage increase of $8775 for the average worker, adding 13.5 percent to America’s GNP – a total gain of nearly $2 trillion” (p 27). On the other hand, Florida is not ready to endorse the idea that “we can make our cities more affordable… simply by getting rid of existing land use restrictions” because “the high cost of land in superstar neighborhoods makes it very hard if not impossible, for the private market to create affordable housing in their vicinity. Combine the high costs of land with the high costs of high-rise construction and the result is more high-end luxury housing.” (p. 28). I don’t find his point persuasive, for a variety of reasons. First, as I have written elsewhere, land prices are often quite volatile. Second, the overwhelming majority of any region’s housing is not particularly new; even in high-growth Houston, only 2 percent of housing units were built after 2010. Thus, new market-rate housing is likely to affect rents by affecting the price of older housing, rather than by bringing new cheap units into the market. Florida also writes that “too much density can […]

housing

Where The Permits Are

Thanks to Stephen Smith, I recently ran across an interesting database: HUD data on building permits by municipality. So I decided to find the number of permits per 1,000 for a wide variety of cities, focusing on (1) multifamily permits (because rising rent is a bigger problem in most places than rising home costs) and (2) during 2015 and 2016 (because isn’t two years of data always better than one?). Here’s what I found for the places I bothered to look up: Growing high cost cities permits per 1000/mean price for units with 5 or more structures in thousands Seattle 29.4 Denver 19.5 Washington 13.7 Boston 12.5 Portland 12.2 Brooklyn 11.5 Manhattan 10.1 San Francisco 8.8 San Diego 7.6 Los Angeles 6.7 Growing low cost cities Atlanta 28.7 Dallas 15.3 Nashville 14.6 Austin 13.2 (not sure whether this counts as a low-cost city- really its kind of borderline) Charlotte 12 Columbus 7.4 Houston 6.8 Indianapolis 2.3 Low demand (i.e. declining) cities Chicago 5.4 St. Louis 3.6 Cincinnati 2.3 Milwaukee 2.2 Baltimore 2.1 Detroit 1.4 Another fun fact: suburbs of expensive cities lagged behind even the low-demand cities. Nassau and Suffolk Counties had 0.3 and 0.2 multifamily permits per 1000 respectively, Marin County outside San Francisco 0.7, Orange County outside Los Angeles 4.7. Some takeaways: 1. Low-demand cities generally had less building than even the most restrictive cities. 2. Within the high-cost city group, it seems to me that there is a strong correlation between permits and prices: Seattle and Denver are certainly cheaper than San Francisco or Los Angeles. 3. On the other hand, there were some low-cost cities that didn’t have a lot of new construction, like Houston and Indianapolis. But this weirdness can be explained away by looking at new single-family construction: Houston had more than […]

Michael Lewyn
March 16, 2017
5 Comments

housing, Policy

The “Foreign Buyers” Argument

A common argument against new housing supply is that in high-cost cities such as New York, demand from foreign buyers is so overwhelming as to make new supply irrelevant. A recent study (available here) by two business school professors suggests otherwise. The study does show more foreign involvement in the NYC market than I expected: just over 13 percent of Manhattan buyers, and 5 percent of all regional buyers, come from outside metropolitan New York. Even this share is less than in some lower-cost markets: the study notes that 17 percent of Las Vegas buyers are from outside the city. However, the impact of “out of town” buyers is pretty small: the authors conclude that out-of-town buyers “cause an increase in house prices of 1.1% and an 39 increase in rents by 1.6% in both zones.”

Zoning

Yglesias Gives Best Tweetstorm Ever

Matthew Yglesias has a group of tweets that begin with this: Someone needs to give me an Oscar one of these years so I can subject America to a tedious discussion of land use regulation. — Matthew Yglesias (@mattyglesias) February 27, 2017 “In the movies, there is no minimum lot size or maximum lot occupancy; we fill provide as much or as little parking as we want.” — Matthew Yglesias (@mattyglesias) February 27, 2017 “Fences is a powerful reminder that single-family zoning is not enough to make the American dream a reality.” — Matthew Yglesias (@mattyglesias) February 27, 2017

Michael Lewyn
February 27, 2017
3 Comments

Culture & Books, sprawl

My New Book On Market Urbanism

I am happy to announce that my new book “Government Intervention and Suburban Sprawl: The Case for Market Urbanism” is now available at Amazon. There is a “look inside the book” feature at the book’s Amazon webpage for those who would like to know more. I would like to thank not just the readers of this blog who commented on drafts, but also on those of you who helped me refine my thinking by commenting on blog posts.

Michael Lewyn
February 8, 2017

housing

The Land Value Argument Against New Housing

One common argument against new housing is that permitting it causes land to become more valuable, thus leading to higher rather than lower rents. It seems to me that this argument is unpersuasive for a few reasons. First, if it was true, places with permissive zoning would have higher rents rather than lower rents, as the possibility of building would cause land values to explode. Obviously this is not the case. Second, the argument leads to absurd results. If downzoning reduces land values, obviously the best way to ensure low rents is to prohibit as much housing as possible. Perhaps we could prohibit all housing not on five-acre lots. But suburbs with large-lot zoning tend to be pretty expensive, suggesting that such policies are more likely to increase property prices than to lower them. Third, the argument suggests that land costs are the primary determinant of rents. But in fact, land values are much more volatile. The Lincoln Institute has created a database of land value data, and shows huge swings in land prices. For example, in the New York City metro area, the land price (apparently per house) swung from $99,000 in 1996 to just over $433,000 in 2006, down to under $225,000 in 2012, and up to about $250,000 today. It goes without saying that rents and housing prices follow very different patterns.

Michael Lewyn
February 2, 2017
4 Comments

housing, rent control

The Sheer Craziness Of New York City’s Rent Stabilization Mandates

Recently, I met someone who was trapped in a terrible apartment. Why “trapped”? For months (if not years) she had been in an adversarial relationship with both her landlord and her neighbors, but she can’t quite bring herself to leave. Why not? First, she is in a rent-stabilized apartment, and is afraid to give that up because such units are hard to find. Second, because of rent stabilization, she had made the sort of capital investments in her apartment–such as repairs–that are normally made by landlords, but neglected when they are overseeing these price controlled units. By contrast, in a normal city, my friend’s dysfunctional relationship with her apartment would have ended long ago: either the landlord would have evicted her (something very difficult in New York), or she would have moved to someplace less atrocious.

Michael Lewyn
January 30, 2017

housing, sprawl

Thoughts On Today’s Emily Hamilton Vs. Randal O’Toole Cato Discussion

Because of work obligations, I listened to only about a third of today’s Cato Institute discussion on urban sprawl. I heard some of Randall O’Toole’s talk and some of the question-and-answer period. O’Toole said high housing prices don’t correlate with “zoning” just with “growth constraints.” But the cities with strict regionwide growth constraints aren’t necessarily high cost cities like New York and Boston, but mid-size, moderately expensive regions like Seattle and Portland. He says that if land use rules raise housing prices they violate the Fair Housing Act. Maybe this should be the case, but it isn’t. Government can still regulate in ways that raise housing prices, but just have to show reasonable justification for those policies under “disparate impact” doctrine. He also says cities would be less dense without zoning. Is he aware that most city regulations limit density rather than mandating density? O’Toole says growth constraints are why American home ownership rates are lower than in Third World countries and that the natural rate of home ownership is 75 percent. But why are home ownership rates so low in sprawling Sun Belt cities? For example, metro Houston’s home ownership rate is about 59 percent – higher than New York or San Francisco, but lower than Philadelphia or Pittsburgh. The highest home ownership rates are in Rust Belt regions like Akron, I suspect because of low levels of mobility. Some things he gets right: 1) public participation in land use process is harmful because it leads to more restrictions, not less; (2) the mortgage interest deduction doesn’t make much difference in home ownership rates.

Michael Lewyn
November 29, 2016
6 Comments

housing

One Reason Why Subsidies Aren’t the (Only) Solution

I was rereading the Obama Administration’s surprisingly market-oriented policy paper on zoning and affordable housing, and saw one good point that I had never really thought about. One common anti-development argument is that government should subsidize housing for the poor instead of allowing the construction of upper-class housing that might eventually filter down to the poor (or cause older middle-class housing to do so). The policy paper points out, however, that “HUD’s existing project-based and housing choice vouchers could serve more families if the per-unit cost wasn’t pushed higher and higher by rents rising in the face of barriers to new development.” In other words, high market rents make subsidies more expensive, which in turn means that government can subsidize fewer units with the same dollar. In other words, high market rents make it harder, not easier, for government to subsidize housing.

Michael Lewyn
November 24, 2016

Free-market impostors, housing, NIMBYism, Zoning

Kotkin And The Atlantic- Spreading ‘Localism’ Nonsense Together

The Atlantic Magazine’s Citylab web page ran an interview with Joel Kotkin today. Kotkin seems to think we need more of something called “localism”, stating: “Growth of state control has become pretty extreme in California, and I think we’re going to see more of that in the country in general, where you have housing decisions that should be made at local level being made by the state and the federal level too. You have general erosion of local control.” In fact, land use decisions are generally made by local governments–which is why it is so hard to get new housing built. This is as true in California as it is anyplace else; when Gov. Brown tried to make it easier for developers to bypass local zoning so they can build new housing, the state legislature squashed him. Local zoning has become more restrictive over time, not less. And the fact that state government has added additional layers of regulation doesn’t change that reality. But did the Atlantic note this divergence from factual reality, or even ask him a follow-up question? No, sir. Shame on them!

Michael Lewyn
November 1, 2016
2 Comments

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