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Michael Lewyn

Michael Lewyn

  • Joined: May 21, 2025
  • Articles: 123

A great new paper on how government fights walking

Many readers of this blog know that government subsidizes driving- not just through road spending, but also through land use regulations that make walking and transit use inconvenient and dangerous.  Gregory Shill, a professor at the University of Iowa College of Law, has written an excellent new paper that goes even further. Of course, Shill discusses anti-pedestrian regulations such as density limits and minimum parking requirements.  But he also discusses government practices that make automobile use far more dangerous and polluting than it has to be.  For example, environmental regulations focus on tailpipe emissions, but ignore environmental harm caused by roadbuilding and the automobile manufacturing process.  Vehicle safety regulations make cars safer, but American crashworthiness regulations do not consider the safety of pedestrians in automobile/pedestrian crashes.   Speeding laws allow very high speeds and are rarely enforced. If you don’t want to read the 100-page article, a more detailed discussion is at Streetsblog.

Big Media Gets Big Buildings Wrong

While reading someone else’s work, I recently ran across an article by David Cay Johnston of the New York Times, claiming that overseas oligarchs  turning apartments all over the world into unused “ghost apartments”.  In this article, Johnston writes:  “In Paris, for instance, one apartment in four sits empty most of the time.” This claim struck me as so astonishing that as to be implausible, for the simple reason that in other “global” cities vacancy rates are much lower.  For example, in New York only 9 percent of housing units are vacant, and most of those units are currently for sale or rent.*  Even this vacancy level should not be particularly astonishing, since cheaper American cities often have higher vacancy rates.  For example, Houston has an 11 percent vacancy rate, and Atlanta has an 18 percent vacancy rate. After googling “one in four paris apartments vacant” I found an article claiming that 26 percent of apartments in four Paris arrondisements (neighborhoods) is vacant- a much narrower claim, comparable to an assertion that one in four midtown Manhattan apartments is vacant.   One would think that a journalist as distinguished as Johnston would know the difference between “Paris” and “some parts of Paris.” A more recent article claims that only 7.5 percent of Paris apartments are vacant- a lower vacancy rate than that of New York.   Moreover, we don’t know what the local media means by “vacant.”  Does this category limited to apartments that are unused 365 days a year?  What about units that are rented out now and then through Airbnb?  Or units that are currently being advertised for rent or sale?  I suspect that the true number of “ghost apartments” is far lower than 7.5 percent, since in London (another “global city”) less than 1 percent of housing units are […]

Evidence that home-sharing doesn’t raise rents

A common argument against Airbnb and similar home-sharing companies is that they raise rents, because every apartment used for short-term rentals could be used for long-term rentals.  A recent paper by a Spanish Ph.D. candidate suggests otherwise. The paper focused on Santa Monica, California where, in 2015, the city adopted an ordinance restricting home-sharing.  This city’s ordinance was successful in reducing Airbnb listings- especially listings of complete apartments, which cities are most likely to regulate (as opposed to spare rooms in a residence used by an Airbnb host). If the anti-home sharing argument was valid, rents should have gone down.  Instead, rents rose in Santa Monica by the same amount as they rose in other Los Angeles suburbs that do not regulate home-sharing to the same extent.

New York State’s Property Tax Cap

One reason for California’s high housing costs might be Proposition 13.  This law, passed by referendum in the 1970s, may discourage housing production in two significant ways. First, under Proposition 13, all housing- even vacant land- is taxed at its original purchase price rather than its current value.  By artificially capping taxes on vacant land, this part of Proposition 13 ensures that a landowner does not suffer as much from keeping land vacant as it would under another tax system. Second, by reducing local property taxes, Proposition 13 forced municipalities to rely on other sources of revenue, such as sales taxes.  Because retail shops bring in more sales tax revenue than residential uses, this law gave California towns an incentive to favor the former. * New York’s Gov. Cuomo has recently proposed a tax cut that buys popularity for state lawmakers on the backs of municipalities.  In 2011, the state passed a law to limit local governments’ property tax increases to 2 percent or the rate of inflation, whichever is lower.  This cap was originally temporary, but Cuomo now proposes to make it permanent.   A bill implementing Cuomo’s proposal was recently passed by the State Senate, but has yet to be voted on by the State Assembly.   Historically, the cap has not included high-cost New York City, but that may change.  If the cap does include New York City, will it have the same results as Proposition 13? Probably not, for two reasons.  First, the tax cap, unlike Proposition 13, does not artificially favor property purchased long ago, and thus does not discourage people from selling their property.  Second, New York State has to consent to sales tax increases, so municipalities don’t have as much of an incentive as their California counterparts to favor land uses that bring in lots […]

New and Noteworthy: Randy Shaw’s Generation Priced Out

In Generation Priced Out, housing activist Randy Shaw writes a book about the rent crisis for non-experts.  Shaw’s point of view is that of a left-wing YIMBY: that is, he favors allowing lots of new market-rate housing, but also favors a variety of less market-oriented policies to prevent displacement of low-income renters (such as rent control, and more generally policies that make it difficult to evict tenants). What I liked most about this breezy, easy-to-read book is that it rebuts a wide variety of anti-housing arguments. For example, NIMBYs sometimes argue that new housing displaces affordable older housing. But Shaw shows that NIMBY homeowners oppose apartment buildings even when this is not the case; apartments built on parking lots and vacant lots are often controversial. For example, in Venice, California, NIMBYs opposed “building 136 supportive housing units for low-income people on an unsightly city-owned parking lot.” NIMBYs may argue that new housing will always be for the rich. But Shaw cites numerous examples of NIMBYs opposing public housing for the poor as well as market-rate housing for the middle and upper classes. NIMBYs also claim that they seek to protect their communities should be protected against skyscrapers or other unusually large buildings. But Shaw shows that NIMBYs have fought even the smallest apartment buildings. For example, in Berkeley, NIMBYs persuaded the city to reject a developer’s plan to add only three houses to a lot. On the other hand, market urbanists may disagree with Shaw’s advocacy of a wide variety of policies that he refers to as “tenant protections” such as rent control, inclusionary zoning, increased code enforcement, and generally making it difficult to evict tenants.   All of these policies make it more difficult and/or expensive to be a landlord, thus creating costs that may either be passed on to tenants […]

Two Cheers for PHIMBY

One alternative to market urbanism that has received a decent amount of press coverage is the PHIMBY (Public Housing In My Back Yard) movement.  PHIMBYs (or at least the most extreme PHIMBYs) believe that market-rate housing fails to reduce housing costs and may even lead to gentrification and displacement.  Their alternative is to build massive amounts of public housing. On the positive side, PHIMBYism, if implemented, would increase the housing supply and lower housing costs, especially for the poor who would be served by new public housing.   And because there is certainly ample consumer demand for new housing, PHIMBYism would be more responsive to consumer preferences than the zoning status quo (which privileges the interests of owners of existing homes over those of renters and would-be future homeowners). But PHIMBYism is even more politically impossible than market urbanism. Market urbanists just want to eliminate zoning codes that prevent new housing from being built- a heavy lift in the political environment of recent decades.  But PHIMBYs want to override the same zoning codes, AND find the land for new public housing (which often will require liberal use of eminent domain by local governments), AND find the taxpayer money to build that new public housing, AND find the taxpayer money to maintain that housing forever.  And to make matters worse, the old leftist remedy of raising taxes on the rich might be inadequate to fund enough housing, because the same progressives who are willing to spend more money on housing also want to spend more public money on a wide variety of other priorities, thus making it difficult to find the money for housing.

The land price argument and why it fails

One common argument against all forms of infill development runs something like this: “In dense, urban areas land prices are always high, so housing prices will never be affordable absent government subsidy or extremely low demand.  Furthermore, laws that allow new housing will make land prices even higher, thus making housing more unaffordable.” This argument seems to be based on the assumption that land prices are essentially a fixed cost: that is to say, that they can only go up, never go down.  In fact, land costs are extremely volatile. For example, a recent Philadelphia Inquirer story showed that in Philadelphia, land costs per square foot  of vacant land fell by 46 percent over the last year.  Why?  A developer quoted in the story suggests that as supply has started to keep up with demand, rents have declined, causing land prices to decline.   In other words, when supply increases, rents go down AND so do land prices.

Response to “Steelmanning the NIMBYs”

Scott Alexander, a West Coast blogger, has written a post that has received a lot of buzz, called  “Steelmanning the NIMBYs”; apparently, “steelmanning” is the opposite of “straw manning”; that is, it involves making the best possible case for an argument you don’t really support.  There have been so many comments to this post that I don’t feel the need to respond to every point (and many of the points are very San Francisco-specific).   But here are a few points, each of which begin with a quote from Alexander:  “Even in the best case scenario, increased housing supply will just make apartments slightly more affordable.”  But the post states that if housing supply increases by the admittedly ambitious 2.5 percent a year, the monthly rent for a one bedroom San Francisco apartment will go down from $3500 to $2100- a forty percent decrease.   Moreover, in looking at the effects of new supply it isn’t enough to compare the benefits of reform to the status quo, because it is quite possible that if we continue “business as usual” policies rents will keep rising.  So instead of comparing $2100 to the current rent, maybe we should compare it to whatever the rent will be if San Francisco continues along its current path (which I am guessing is more than $3500).  “If your theory predicts that turning a city into Manhattan will make rents plummet, then consider that turning Manhattan into Manhattan made rents much worse, and so maybe your theory is wrong.”  This is another version of the theory that density causes rent to rise.  I have responded to that argument here. (Brief summary: Manhattan has gotten LESS dense over time, so if density was bad for rent, Manhattan should be a bargain now!) “And I have heard YIMBYs counter that if people don’t want […]

The Foreign Buyers Are Taking Over (Not!)

A headline in the Boston Globe screams: “Boston’s new luxury towers appear to house few local residents.”   The headline is based on a report by the leftist Institute for Policy Studies, which claims that in twelve Boston condo buildings, “64 percent do not claim a residential exemption, a clear indication that the condo owners are not using their units as their primary residence.”* The report accordingly concludes that these buildings do not “address Boston’s acute affordable housing crisis.” This seems to be another version of the common “foreign buyers” argument: that new housing does not hold down rents, because it will all be bought up by rich foreigners who will let the units sit unoccupied forever. Although the report does not explicitly endorse restrictive zoning, it does urge the city to require new residential buildings to be carbon-neutral- a rule that might make residential construction more difficult. But this inference would be wrong.  If you own a condominium, you have three choices: (1) to live in it; (2) to sit on it and lose money on your mortgage; or (3) to rent it out.   Obviously, you make the most money through choice (3)- renting out the condo.  So even a condo owner who does not choose option (1) has a strong incentive to adopt choice (3).   Thus, it seems likely that at least some, if not all, of the condos will be rented out, thus increasing rather than decreasing regional housing supply, which in turn will have a positive effect on housing prices.   *The residential exemption saves Boston homeowners up to $2500 per year on their tax bill.  I would think that at least some owner-occupants are unaware of or forget to file for this exemption- but since I have no idea how common this is, I am reluctant […]

No, this study does NOT support refusal to build housing

A recent headline in the Forbes blog  screams: “Additional Housing Won’t Make City More Affordable, Says Fed Study.”  This blog post cites a Federal Reserve Study showing that adding 5 percent more housing in the most desirable urban neighborhoods would lower rents by only 0.5 percent. But if you read the study more carefully, it doesn’t stand for what the headline says it stands for.  First of all, it refers only to increasing housing supply in the most expensive neighborhoods.  But housing markets are citywide- so of course if you increase housing supply in just one or two neighborhoods, you are not going to get significant rent reductions.  If you raised housing supply by 5 percent everywhere, presumably you would get more than a 0.5 percent rent reduction. The study itself states: ” The papers that find large effects of regulation on house prices are not necessarily at odds with our findings in this paper, because regulations can have very large effects on the housing stock. For example, Jackson (2016) finds that an additional regulation reduces residential permits by 4 to 8 percent per year. Glaeser and Ward (2009) estimate even larger effects on supply. These effects on construction can accumulate into very large changes to the housing stock, especially when these regulations are in place for many years, as is often the case.” (p. 5)  In other words, the study admits that supply-limiting regulations do affect housing costs: precisely the opposite of what a careless reader might think from reading the Forbes headline. Second of all, 5 percent is not exactly a huge increase.  Even the author of the Forbes blog post concedes that more aggressive supply increases might lead to more aggressive rent reductions. Third, the study assumes a zero vacancy rate (p. 13) which seems to be an assumption that […]

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