Michael Lewyn

Michael Lewyn

Would the Vienna strategy work here?

Progressives often argue that American cities should imitate Vienna’s 1920s strategy of building enormous amounts of public housing while controlling rents paid to private landlords. But a look at the birth of Vienna’s public housing system shows why that system is not easily replicated. A book supported by the city government points out that the city had an enormous housing shortage after World War I, and that the working classes “began reclaiming the land surrounding the cities” (p. 13). The city then “offered its support in the form of the redesignation and purchase of sites”. Settlers received housing in return for committing to work on the building site (id.) Obviously, this strategy cannot be replicated today; there is not a huge amount of unowned or extremely cheap land that people can just commandeer and build on, and I am not sure many people can easily become construction workers in exchange for housing. In addition, the city financed housing in ways that are not easily replicated today. The book notes that tax revenue for housing came from a 1923 “tax on housing development .. a simple working-class apartment was taxed at an average annual rate of 2.083% of its pre-war rentable value, this went up to 36.4 for luxury homes.” This might have worked in 1923 because city residents had no suburbs to flee to; however, today, city residents can easily respond to large tax increases by moving. Moreover, in 1923 there was no zoning or environmental review or “community engagement” to give Not In My Back Yard (NIMBY) activists a chance to delay or prevent housing construction. Today, even if government can afford to build new housing somewhere, the bureaucratic obstacles to such housing might made it politically impossible to build in some places, or expensive and time-consuming to build […]

Louisville and density regulation

Lydia Lo and Yonah Freemark have an interesting new paper ? EditSign on zoning in Louisville on the Urban Institute website. They point out that of the land zoned for single-family housing, 59 percent is zoned R4, requiring 9000-square-foot lots, which means no more than five houses per acre. From a transportation standpoint, this is not ideal. Even the most cursory Google search reveals that a neighborhood should have at least eight or ten units per acre to support minimal bus service. This is because if only a few people live near a bus stop, only a few people will ride the bus. So Louisville’s zoning generally prohibits density high enough for decent bus service. Similarly, from a housing supply standpoint, such zoning is not ideal either. Obviously, a development with 5 houses per acre contributes less to regional housing supply than one with 10 houses per acre. Much ink has been spilled over the evils of zoning places for nothing but single-family housing. But perhaps the density of housing is just as important as its form.

Is Tokyo comparable to U.S. cities?

In his new book Arbitrary Lines, Nolan Gray points out that Tokyo is more affordable than many U.S. cities because its zoning policies are less restrictive. One common counterargument is that because Tokyo is a population-losing city in a population-losing city, it simply lacks the demand to have high housing prices, and is thus more comparable to the low-cost Rust Belt than to high-cost cities like New York. But a short look at my World Almanac suggests otherwise. On page 730, it lists the world’s largest urban areas. It shows that between 2000 and 2021 , Tokyo actually grew by 8.4 percent. By contrast, metropolitan New York-Newark grew by 5.7 percent, and Los Angeles by 5.6 percent. In other words, Tokyo’s population actually grew more rapidly than high-cost U.S. cities.

Long-term renters ARE short-term renters (maybe)

One reason local governments are often hostile to Airbnb and similar home-sharing websites is that politicians believe that the interests of short-term renters and long-term renters are opposed- that is, that Airbnb wastes housing units that could be used by long-term renters. This claim is of course based on the assumption that the interests of long-term renters are more important, because short-term renters are usually rich tourists with plenty of money to spend. If short-term rents were always as high as those of fancy hotels, this argument might make sense. But in fact, some Airbnb rents are comparable to rents in the long-term market, and some Airbnb landlords in fact will rent property for months. I discovered this while playing around with Airbnb listings in New York City. In particular, I looked at rentals for the entire month of August. I found rents as low as $827 per month (for a furnished room in Hollis, Queens). Even after limiting my search to full-fledged apartments (as opposed to sharing a room in someone’s house) I found some listings that were comparable to those in the long-term rental market. I found a listing for $1800 in Staten Island, and $1826 in Midwood (in southern Brooklyn) – far less than what I pay. The cheapest Manhattan listing (a walk-up in Murray Hill) was $2400, about what I paid before I got married. I did another search for 3-month tenacies (from Aug 1-Oct 1) and found comparable results: the cheapest fully private space rented for $1752 (in East New York) and the cheapest Manhattan listing rented for $2453. The cheapest roommate arrangement was $736- in Bensonhurst. In sum, it appears that if you can afford a traditional apartment, you can probably afford a low-end Airbnb listing- despite the regulatory obstacles that government uses against […]

Review: Homelessness is a Housing Problem

In Homelessness is a Housing Problem, Prof. Gregg Colburn and data scientist Clayton Page Aldern seek to answer the question: why is homelessness much more common in some cities than in others? They find that only two factors are significant: 1) overall rents and 2) rental vacancy rates. Where housing is scarce and rents are high, lots of people are homeless. Where rents are lower, fewer people are homeless, even in very poor places. (In fact, high city incomes correlate positively with homelessness, because more and better jobs lead to higher demand for housing). By contrast, many other factors that one might think are related to homelessness in fact are not correlated on a citywide basis. For example, since homeless people are generally poor, one might think that places with high poverty rates or high unemployment rates have lots of homelessness. The authors show that this is not the case. Where most people are poor, there is less demand for housing, which translates into lower rents and less homelessness. One might also think that places with warm weather have lots of homelessness, because homeless people might be attracted to them. But high-rent cold cities like Boston have above-average levels of homelessness, while cheaper warm-weather cities like Orlando and Charlotte do not. However, homeless people are more likely to have temporary shelter in cold cities than in expensive warm-weather cities like San Diego- either because city governments are less motivated to build homeless shelters when no one is at risk of freezing to death, or because the homeless themselves are less eager to use shelters. I suspect that if the authors focused only on highly visible unsheltered homelessness, they might have found a stronger correlation with weather). It might be argued that shelters themselves (or other social services) attract the destitute. […]

Reasons to be a Census skeptic

Over the past week, the press was chock full of 2020-style headlines like “Census Bureau Confirms Pandemic Exodus from SF.” That’s because according to the Census Bureau, virtually every urban county in the U.S. (even urban counties in growing metros like Dallas and Atlanta) lost population between July 2020 and July 2021. But is the hype justified? I suspect not, for a variety of reasons. First of all, Census Department estimates have, in recent years, tended to underestimate urban populations, at least in some cities. For example, in 2019 the Census estimated Manhattan’s population as 1.628 million, while the actual count of 2020 showed 1.694 million residents- an underestimation of over 65,000 people. The Census estimated Brooklyn’s population at 2.559 million, but the actual count showed 2.736 million- an underestimate of over 150,000. (On the other hand, the 2020 population count was actually a bit lower than the 2019 estimates for Washington and San Francisco). Second, even the 2020 Census probably undercounted cities more than it undercounted suburbs. How do we know this? Because according to the Census Bureau itself, it undercounted Blacks by 3 percent and Hispanics by 5 percent, while slightly overcounting whites. These groups tend to be more urban than suburban (at least compared to whites) – so if the Census undercounted these groups, it probably undercounted urban population generally. Third, the timing of the Census Bureau’s estimates does not quite make sense to me. By July 2021, rents had already began to rise in Manhattan; the low rents of February and March were already disappearing. This suggests that by July, population (and thus demand) was increasing. Fourth, even if the Census Bureau’s population estimates were valid for the summer of 2021, they certainly aren’t valid any more. How do we know? It seems pretty obvious that […]

Do HOAs justify zoning?

At a recent webinar, Prof. Christopher Serkin of Vanderbilt Law School made an interesting argument. He pointed out that a) Sun Belt cities tend to have less restrictive zoning than northern cities; b) Sun Belt cities also have more homeowners’ associations (HOAs) with restrictive rules; and therefore (c) perhaps zoning reform will fail because homeowners will react to restrictive zoning by creating more HOAs, which will limit density and housing supply just as much as zoning. It seems to me that this argument has some weak links. The most obvious is that it is not clear that the correlation he points out really exists. Admittedly, northern and midwestern states have fewer HOAs than the rest of the nation. In the Northeast, only 29 percent of new homes are part of HOAs, as opposed to 47 percent in the Midwest, and 2/3 in the South. But not all southern and western states are the same- and if we go state-by-state, the correlation between HOAs and strict zoning starts to disappear. In particular, California metros are notorious for strict land use regulation and high housing costs. But 64.9% of California homeowners belong to an HOA, well above the national average. In fact, only three states (Vermont, DC and Florida) have higher HOA participation rates than California. On the other hand, Texas metros tend to be less restrictive, but only 1/3 of Texas homeowners belong to a HOA. Similarly, only 15 percent of Tenneseee homeowners belong to an HOA. So its not quite clear that metros with lower housing costs and/or less zoning have higher HOA participation rates. ( On the other hand, this data would be more useful if we were able to a) distinguish between new subdivisions and the rest of the housing market, b) distinguish between HOA participation rates for […]

Where investors invest

One argument I have run across recently is that the high cost of housing is caused by mysterious corporate investors are buying up real estate and forcing up the cost. The stupidest version of this argument is that investors are hoarding all the real estate. Why is it stupid? Because corporations like to make money, and a corporation that doesn’t sell or rent out real estate is making no money from it. A more sensible version of the argument is that the existence of investors adds demand for housing, and thus that their presence thus increases housing costs.* But even if this true, are these investors really a significant factor in the housing market? In today’s Washington Post, an article supplies data for 40 metro areas. If investors are really the problem, one might think that the most expensive metros have the highest investor share. But this is simply not the case. In San Francisco, only 6 percent of for-sale houses are being purchased by investors (about the same as the 2015 share). In metro New York and Los Angeles, that share is around 10-11 percent. The most investor-heavy markets are in growing, medium-cost Sun Belt markets like Atlanta (25 percent), Charlotte (25 percent), Jacksonville (22 percent) and Phoenix (21 percent). And within those markets, investors are not buying in the most expensive areas. In Atlanta, the highest investor shares are in the lower-income Southside, and low and moderate-income southern and western suburbs. In Jacksonville, the mostly lower-income Northside and the working-class Westside have higher investor shares than the more middle-class Southside. This pattern seems to hold in less investor-heavy metros as well: even though some affluent Manhattan zip codes have high investor shares, most of the high-investor zip codes are in East Harlem, the South Bronx, and other poor […]

More information about NYC “Billionaire’s Row”

A recent Youtube video on New York City’s “Billionares’ Row” (a smattering of very expensive buildings at the northern edge of midtown Manhattan) has received over six million views. Much of the video is rather propagandistic: it uses perjorative terms like “loopholes” to describe how the supertalls on Billionaires’ Row complied with zoning codes. The video relied heavily on sources such as socialist Sam Stein (who generally opposes market-rate housing). Having said that, this video does contain some interesting information. In particular, the video points out that to the extent that the condos in these buildings are vacant, it isn’t necessarily because the owners are treating them as wealth storage units. Instead, the video claims that 44 percent of the units haven’t even been sold yet: the owners of the building are waiting for prices to rise a bit more before finding a buyer. However, this data may be far less scandalous than it seems at first glance. Some of the buildings with the fewest sales are rather new. For example, 179-unit 217 West 57th Street has had only 47 sales (and only six rentals) listed on Streeteasy.com- but that may have something to do with the fact that it did not open until 2020. Similarly, 111 West 57th, also built in 2020, has had only 19 sales and one rental listed on Streeteasy. (I wonder, however, if there are sales or rentals not listed on Streeteasy). By contrast, 157 West 57th Street, built in 2013, has had 213 sales- more than twice the number of units in the building; thus, the average unit in 157 has been not only sold but resold. What about the units that are owned by owners? Here we are still short of information. The video says that in the “Billionaires’ Row” zip code (10019, […]

The “outer boroughs” myth

One argument against bus lanes, bicycle lanes, congestion pricing, elimination of minimum parking requirements, or indeed almost any transportation improvement that gets in the way of high-speed automobile traffic is that such changes to the status quo might make sense in the Upper West Side, but that outer borough residents need cars. This argument is based on the assumption that almost anyplace outside Manhattan or brownstone Brooklyn is roughly akin to a suburb where all but the poorest households own cars and drive them everywhere. If this was true, outer borough car ownership rates and car commuting rates would be roughly akin to the rest of the United States. But in fact, even at the outer edges of Queens and Brooklyn, a large minority of people don’t own cars, and a large majority of people do not use them regularly. For example, let’s take Forest Hills in central Queens, where I lived for my first two years in New York City. In Forest Hills, about 40 percent of households own no car. (By contrast, in Central Islip, the impoverished suburb Long Island where I teach, about 9 percent of households are car-free- a percentage similar to the national average). Moreover, most of the car owners in Forest Hills do not drive to work. According to the U.S. Census Bureau’s American Community Survey (ACS), only 28 percent of the neighborhood’s workers drive or carpool to work. Admittedly, Forest Hills is one of the more transit-oriented outer borough neighborhoods. What about the city’s so-called transit deserts, where workers rely solely on buses? One such neighborhood, a short ride from Forest Hills, is Kew Gardens Hills. In this middle-class, heavily Orthodox Jewish neighborhood, about 28 percent of households are car-free- not a majority, but again high by American or suburban standards. And even […]