Physical Address

304 North Cardinal St.
Dorchester Center, MA 02124

Michael Lewyn

Michael Lewyn

  • Joined: May 21, 2025
  • Articles: 123

The “Global Buyers” Argument

One common argument against building new market-rate housing is that there is an infinite supply of rich foreigners willing to soak up new supply.  One obvious flaw in this argument is that housing prices do occasionally go down even in expensive places. But even leaving aside this reality, the “foreign buyers” argument is not logically provable, since there is no way of knowing whether there are more rich foreign buyers in San Francisco than in, say, Raleigh or Houston. Thus, the argument rests on the following chain of logic: 1) we know that there are rich foreigners taking over Expensive City X (but not Cheap City Y) because housing prices are high; (2) therefore, the rich foreigners are what keep housing prices high in City X. The argument makes sense only when you add the following premise: housing prices can only be high in the presence of huge numbers of rich foreigners.  I really don’t see any reason to take this premise seriously.

Does Home-sharing Create Negative Externalities?

  A decade or two ago, a traveler who wished to stay in a city temporarily had no alternative to a hotel. Even if the owner of a house or condominium wished to rent out a room for a short period of time, the costs of advertising in a newspaper would have at least partially canceled out the financial benefits from renting. But the Internet has made home-sharing much more economical, through websites like Airbnb.com.  At first glance, the home-sharing industry seems highly beneficial: guests get a cheaper and/or more exotic vacation, home-sharing hosts get extra money to pay off mortgages, and their neighborhoods benefit from tourist revenue. Nevertheless, NIMBYs have attacked home-sharing.  One major argument is that home-sharing creates negative externalities.  For example, a recent law review article(1)  notes that some neighborhood activists in Silver Lake (a trendy Los Angeles neighborhood) sought to exclude home-sharing from their neighborhood on the ground that shared homes are “hotel-like room rentals”  and such a “commercial use [causes] the noise and traffic levels of the area [to] increase as a result of people coming and going, and the transient nature of the establishment can increase the crime rate.” As a result of these problems, home-sharing “brings nuisances to residential areas, thereby lowering the value of all homes in the neighborhood.” In other words, the “externalities” argument rests on the following chain of logic: Assumption 1: Home-sharing, as a commercial use, is no different from hotels. Assumption 2: Commercial uses bring down property values. Conclusion: Home-sharing brings down property values. But none of these claims has significant factual support.  First,  home-sharing is somewhat different from a large hotel. An individual hotel might have hundreds or thousands of guests on one block.  By contrast, home-shares tend to be spread out over a much larger space, […]

Middle Aged NIMBYs, Young YIMBYs

Today, CNU Nextgen, a group of younger members of the Congress for New Urbanism, retweeted a New York Times story about the evils of NIMBYism in Boulder. Why did I find this noteworthy?  Because on the Pro-Urb listserv, dominated by middle-aged CNUers, a very different conventional wisdom prevails.   Most of the Pro-Urb posters on housing costs assume that high rents are the result of insatiable demand driven by wealthy foreigners, that government lets developers do as they please, and that housing supply is pretty much irrelevant.

Do The Rich Cause High Rents?

One common argument against building new housing is that new construction will never reduce housing costs, because the influx of ultra-rich people into high-cost cities creates an insatiable level of demand. I recently found a source of information that may be relevant to this argument: the Wealth Report, which lists the number of high-wealth individuals in a set of world cities, including five American cities (New York, Los Angeles, Chicago, Houston and Miami).  In particular, the report lists the number and percentage growth of “ultra high net worth individuals” (UHNWIs), which it defines as those with over $30 million in wealth. It seems to me that if UHNWI growth was related to high housing costs, then the most expensive cities in this group (New York and Los Angeles) would have the highest UNHWI growth.  In fact, the number of UHNWIs grew most rapidly in Houston (63 percent) between 2005 and 2015.   By contrast, UNHWI growth in the other four cities ranged between 31 and 34 percent. In Canada, UNHWI growth was higher, but roughly equal (ranging between 65 and 70 percent) in Toronto, Vancouver and Montreal- despite the fact that these cities have radically varying housing costs. The median housing unit price in Vancouver tops $1 million, about three times the median price in Montreal. What about UNHWIs as a percentage of city population?  New York has 5600 of them in a city of 8.1 million*- just under 700 per 1 million.  Low-cost Chicago has 2030 in a city of 2.7 million- about 750 per 1 million. Houston has 1318 in a city of 2.1 million, or around 625 per million.  These differences don’t strike me as significant.   *I am assuming these people all live in the central city; I am not actually sure this is the case, […]

Are High-Rises More Expensive?

One common argument against allowing the construction of taller apartment buildings is that tall buildings cost more to build, and thus are “overwhelmingly occupied by the wealthy.”  For example, tall buildings, unlike houses and walk-up buildings, require elevators. But in fact, fairly tall buildings can be pretty cheap where demand is low and/or housing supply is high.  For example, in East Cleveland, a low-income suburb of Cleveland, one 24-story building rents one bedroom apartments for as little as $552 per month, despite the fact that the building contains extras such as a pool and a fitness center.   This means that (assuming rent should be no more than a quarter of income) someone earning less than $30,000 could afford this building. Even in nicer neighborhoods, older high-rises are not hugely expensive: for example, in midtown Atlanta, the Darlington’s apartments start at just over $700. It could be argued that because these buildings were built decades ago, their costs are not relevant to those of newer buildings. Certainly, newer high-rises are more expensive than older ones- but the same is true for newer walk-ups.  To test this proposition, I focused on the outer boroughs of New York, using Zillow.com to focus on buildings built between 2010 and 2016.  The cheapest newer apartment in Brooklyn started at $1150 (about $350 more than the cheapest older listing); the cheapest new elevator building started at $1600 (and included a doorman, thus inflating the rent beyond the basic amount caused by elevators).  Similarly, in Queens the cheapest newer building rented for $1450 (over $600 more than the cheapest older listing), while the cheapest newer elevator building rented for $1550. In sum, it seems to me that the difference in cost between the cheapest high-rises and the cheapest low-rises, although not nonexistent, are not huge either.

Jane Jacobs And High-Rises

Since new urbanists (in my experience) tend to be very skittish of high-rise development, one might think that their ideological ancestor Jane Jacobs was one of these people who thought no building should be over five floors. But in her 1958 essay “Downtown Is For People,” she hinted at a very different view, describing New York City’s Lever House and Seagram Building as among the city’s “extraordinary crown jewels.”  Similarly, she described San Francisco’s Union Square (which bordered buildings of wildly varying heights) as “the city at its best.” Jacobs was not against height–but she was against monotony.  She wrote, for example, that Park Avenue should “have the most commercially astute and urbanite collection possible of one- and two-story shops, terraced restaurants, bars, fountains and nooks.”   So I’m not sure she would have favored the common modern idea that high-rise and low-rise buildings should be segregated from each other, or that buildings of different density are “out of scale.”

To Know Home-Sharing Is To Support It

If you read elite commentary on the home-sharing industry (that is, Airbnb and its competitors), especially on the Left, you might think it is quite controversial.  However, a recent Pew survey suggests otherwise. According to Pew, very few people know very much about home-sharing.  Only 11 percent of Americans have used home-sharing services,  and 53 percent of all adults have never even heard of them.  Only 9 percent of Americans claim to have heard “a lot” about the homesharing debate, and 16 percent have heard “a little.”  Among people who have actually used home-sharing services, these numbers rise to 19 percent and 37 percent. But to the extent Americans are aware of home-sharing, they like the idea.  Only 4 percent of Americans think home-sharing should be illegal, and only 30 percent think it should be taxed.  52 percent think homesharing should be legal and untaxed.   Even among self-described liberals, only 38 percent think homesharing should be taxed.

Are Billionaires To Blame?

One common argument I have read in various places is that the high rent of New York and other large cities is a result of globalization and inequality (English translation: rich foreigners).  According to this theory, rich people have created a surge of demand so overwhelming that no amount of construction could possibly meet it. It seems that if this argument were true, rent would be growing most rapidly in rich neighborhoods full of super-expensive skyscrapers, such as New York’s Upper East and West Sides. This week, NYU’s Furman Center helpfully came out with its latest report on housing in New York City. Page 6 of the report reveals that between 1990 and 2014, rent in the Upper East Side rose by 23 percent- about the same as the citywide average. Upper West Side rent rose by 38 percent- more than the citywide average, but less than ten of the city’s 50-odd other neighborhood clusters, including not only hipstery Greenpoint, but also not-so-nice areas like East Harlem. So this bit of data, although not conclusive, seems inconsistent with the “rich foreigners” theory.

“Public Schools Only” Vouchers and Sprawl

About a month ago, I wrote about the pros and cons of school vouchers as a solution for “school-based sprawl” (that is, parents moving to suburbs to avoid urban public schools).   I noted that a voucher program that included private schools might be expensive, since some private schools are quite costly. By contrast, a school choice program limited to public schools would avoid these fiscal problems: the state could simply forbid public school districts from discriminating on the basis of residence.  If a school district wanted to avoid radical increases in enrollment, it would have to use a lottery to decide which students were admitted.  This plan might discourage sprawl by making prestigious suburban schools available to urban parents.  And if both students from affluent families and students from poor families entered these schools, the class differences between urban and suburban schools might be erased in the long run.  So such an open enrollment program might both expand student choice and be more egalitarian than the status quo. This plan has one major cost: it would require a considerable investment (either public or private) in transportation, since students in search of good schools might wish to go all over a metropolitan area.  Either government will have to buy many more school buses, or parents will have to spend a lot more time transporting their children to faraway schools.  Moreover, suburbanites will be unwilling to pay property taxes for schools that other people’s children will attend; thus, states  might have to take over school financing. I note that most states have in fact enacted “open enrollment” laws allowing some interdistrict transfers. However, these laws are generally toothless;  suburban school districts can generally refuse to admit students from other districts on the ground that there is insufficient space for them.   Moreover, open enrollment […]

Supply-And-Demand Denial And Climate Change Denial

I have criticized the idea that the law of supply and demand no longer applies to big-city housing (or, as I call it, supply-and-demand denialism, or “SDD” for short). It just occurred to me that there are a few similarities between supply-and-demand denialists and those who deny climate change. To name a few: *Rejection of science. Climate change denialists reject climate science; SDD true believers reject economics. *Paranoid fantasies about foreigners. Some climate change denialists treat worldwide concern over climate change as a conspiracy by Europeans or Chinese to destroy the U.S. economy; SDD believers are obsessed with foreigners purchasing U.S. or Canadian real estate. *Obsessive fear of change. Climate change denialists assume that any possible limit on fossil fuel emissions will destroy the U.S. economy (despite the fact that we already have lots of taxes and regulations and somehow maintain a more-or-less First World standard of living). I suspect (though I realize this is conjecture) that SDD believers are often NIMBYs who fear, without any obvious basis in reality, that new housing will turn their neighborhood into a slum or into a playground for the rich. *Self-interest generating these fears. Climate change denialists get information from politicians funded by the fossil fuel industry (and media outlets that support those politicians), which has a strong interest in limiting regulation of fossil fuel pollution. NIMBYs are sometimes homeowners who have a financial interest in limiting new housing in order to keep prices and rents high, or housing activists who can more effectively argue for government-subsidized housing if housing prices are high.

Trending now

A self-defeating argument
Texas MUD
gentrification
Only 2 Ways to Fight Gentrification (you’re not going to like one of them)
The problem with “public” transportation