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On coexistence

One common NIMBY* argument is that new housing (or the wrong kind of new housing) will “destroy the neighborhood.” For example, one suburban town’s politicians fought zoning reform in New York by claiming that allowing multifamily housing “is a direct assault on the suburbs.“ Indeed, many people do seem to believe that apartments and houses are somehow incompatible. But I saw an interesting counterexample recently. A couple of weeks ago, I attended the CNU (Congress for the New Urbanism) conference in Charlotte, North Carolina. CNU usually sponsors neighborhood tours, and I toured Myers Park, one of the city’s richest neighborhoods. Myers Park was built in the 1910s; most blocks are dominated by large single-family houses with an enormous tree canopy. Although Myers Park is only a couple of miles from downtown Charlotte, it certainly looks suburban, if by “suburban” you mean low-density and dominated by houses. (According to city-data.com, the neighborhood density is just below 4000 people per square mile, less than that of affluent Long Island suburbs like Great Neck and Cedarhurst). And yet on one of the neighborhood’s major streets (Queens Road) apartments and houses seemed to alternate. This does not seem to have reduced home values; the average value of detached homes there is over $1 million, about four times the statewide average. Moreover, Myers Park apartments are not the sort of “missing middle” housing that is virtually indistinguishable from a house. I saw a five-story building in Myers Park: not a skyscraper but definitely not something that looks like its neighbors. Not far away is a four-story building that looks like it has a few dozen units. In other words, apartments and houses can coexist, even in places that are very suburban in many ways. *As many readers of this blog probably know, NIMBY is an […]

Detroit: LVT would fix that

In a recent Mackinac Policy conference, Detroit’s Mayor Mike Dugan proposed *drum roll* a land value tax. Sort of. Mayor Dugan’s proposal would create separate tax rates for land and capital improvements (i.e. the buildings on top). Specifically, he wants to decrease the tax rate on buildings by ~30% and increase rates on land by ~300%. The change would increase revenue for the city and also cause a series of second order effects. Taxing Blight & Rewarding Investment Detroit’s existing tax structure disincentives development. Holding vacant land or land with dilapidated (i.e. assessed as worthless) structures is cheap from a tax perspective. Actually developing land triggers a tax increase because of the brand new structure who’s value gets figured into the tax bill. What’s worse, the existing tax system encourages land hoarding. Land speculators sit on neglected parcels on the off chance that a developer needs it as part of a larger project. To caveat that, though, not all land speculation is bad. Holding some land off market and releasing it later into a development cycle can have positive benefits. In Detroit’s case, however, these are mostly vacant lots and abandoned buildings creating public health hazards the city has to deal with. The Political Economy of Land Value Taxation Unexpectedly – for me as a latte sipping coastal urbanite in California – Dugan’s LVT would also lower tax bills for homeowners. Land values in Detroit are low — in absolute terms and relative to structure values. Making the shift to taxing the less valuable land component of a property nets out positive for most homeowners. And the fact that it’s a win for homeowners makes me think it’s politically viable, both in Detroit and elsewhere. In places struggling to get back on a growth footing — places where land values […]

What’s Scott Alexander asking, anyway?

In a pair of posts, Scott Alexander goads his mostly-YIMBY readers by claiming to believe that density is likely to increase prices. To quantify his readers’ views, he laid out a thought experiment in a Google poll, the results of which we’ll no doubt see in a few days. You can see the poll – and my answer – below. As a YIMBY scholar, I mood-affiliate with the first answer, but I chose the middle one because there is a fundamental misunderstanding between pro-housing people like me and Scott’s recent posts. Housing growth is not the same as city densification Scott’s experiment isn’t a “housing growth” experiment, it’s a “city densification” experiment. Crucially, he requires “proportional increases in the number of office buildings, schools, etc”. That is, the experiment would increase office space at the same pace as housing even though office vacancy rates (19%) are far higher than housing vacancy rates (~1.7%). Oakland is a pretty balanced city: as best I can tell from simple Census data, it probably has a jobs/residents ratio pretty close to the California average (by contrast, San Francisco has twice the state jobs/resident ratio). If Scott ran his experiment in a bedroom community, or stipulated that office space is left under current regulations, I’d have an easy time coming down on the “less expensive” side of the ledger. The point of the YIMBY movement is that housing faces uniquely strict regulation. California cities (and those in some other states) believe that offices and industrial uses are “taxpayers”, generating more revenue than they use in services. Housing is viewed as a fiscal cost. Regulation (“fiscal zoning“) and discretionary decisions have reflected this bias for decades. The result is headlines like “SF added jobs eight times faster than housing since 2010.” If Oakland upzoned citywide, it […]

Cataloguing California’s Cornucopia of Land Use Legislation

The Terner Center for Housing Innovation at the University of California, Berkeley has released a policy brief summarizing the effect on housing production of the bewildering array of new housing laws California has enacted since 2016.  A preliminary analysis of market effects of the new laws, accompanied by findings from interviews with California-based planners and land use lawyers, points toward the effectiveness of simple and direct legislation requiring localities to give ministerial approval to small-scale projects. For other laws, including those prescribing more complex formulas regarding affordability criteria for larger developments, it remains too early to gauge how housing production will respond. Of the legislation that has been enacted to date, California’s accessory dwelling unit laws (beginning with SB 1069 in 2016), according to those interviewed by the Terner Center, have been responsible for the astonishing twenty-fold increase in ADU permits documented from 2016 to 2021.  Legislation enacted in 2021 requiring ministerial approval for duplexes and lot splits (SB 9), estimated by the Center to allow for up to 700,000 new units, has not yet been widely used, partly due to localities’ use of other restrictive zoning regulations such as mandatory setbacks to impede use of the law.  Further strengthening of this law, in the same manner that the ADU law was fortified through 2019 revisions, may be necessary to unlock its full potential for new home construction.  Other new laws are in the early stages of demonstrating their effectiveness. The imposition of stricter requirements on localities’ Regional Housing Needs Allocation (RHNA) process through legislation enacted in 2017 and 2018 has resulted in dramatic increases in zoning capacity targets for the next eight-year period set by the Housing Element Law (of which the RHNA is a part).  For Southern California and the Bay Area, total housing allocation has increased from […]

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 […]

Wanted: Market urbanist research assistant

help wanted

Ever wondered how you could make your urbanism hobby a full-time job? Come work with me & Emily Hamilton at the Mercatus Center’s Urbanity project: Are you a gritty, liberty-minded researcher who is passionate about cities? This is a unique opportunity for an aspiring scholar to develop a portfolio of research in urban economics, planning, housing affordability, and land use regulations with talented scholars and staff at the world’s premier university source for market-oriented ideas.  The ideal candidate will think like an economist, deftly handle complex datasets, and express himself or herself clearly in writing. This position reports to the program manager of the Urbanity Project. Responsibilities Include:•Collaborate with research fellows on quantitative research projects using GIS and data analysis software.•Read, understand and summarize scholarship in urban economics, planning, and land use law.•Translate and promote research through media and outreach engagement.•Support Mercatus scholars and affiliated fellows in consultations with city and state policymakers. Requirements Include:•Degree or equivalent knowledge in economics, urban & regional planning, or a related field•Experience with either a GIS or a statistical software package such as Stata and R; familiarity with and willingness to master the other•Strong verbal, written, and interpersonal communication skills •Enthusiasm for collaboration and adaptability to a varying mix of responsibilities•A strong interest in the Mercatus Center’s mission, with a specific focus on cities and liberty https://us63.dayforcehcm.com/CandidatePortal/en-US/mercatus/Posting/View/732

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