Category Uncategorized

Unpacking Emergent Tokyo with author Jorge Almazán

As foreigners, we are mesmerized by zakkyo buildings or yokocho, but within Japan, scholars, and authorities often ignore and neglect them as urban subproducts. In spite of their conspicuous presence and popularity, the official discourse still considers most of Emergent Tokyo as unsightly, dangerous, or underdeveloped. The book offers the Japanese readership a fresh view of their own everyday life environment as a valuable social, spatial, and even aesthetic legacy from which they could envision alternative futures.

Book Review: The Making of Urban Japan

American YIMBYs point to Tokyo as proof that nationalized zoning and a laissez faire building culture can protect affordability. But a great deal of that knowledge can be traced back to a classic 2014 Urban Kchoze blog post. As the YIMBY movement matures, it's time to go books deep into the fascinating details of Japan's land use institutions.

Land Value Taxation and Intertemporal Tradeoffs

Georgists assert that a Land Value Tax (LVT) ensures land is always put to its most efficient use. They claim that increased carrying costs deter speculation. And if valuable land is never held out of use, society is better off. I think the story about incentives is correct. But I question whether pulling development forward in time is definitionally more efficient. In a world with transaction costs, tradeoffs abound and it’s worth thinking through the implications of an LVT. A Tale of Two Cities  Picture a growing local economy with increasing land values and an LVT. Now suppose we split the time stream and create two parallel universes with different tax rates. In scenario A, we apply an LVT at 75%; in scenario B the LVT is set at 25%. There are two important questions here: 1) When will a given parcel be forced into development? 2) What intensity of development will the parcel support at the moment it’s put into productive use? To answer our first question, we look at the tax curves and make some assumptions. Suppose carrying costs push land into productive use at $250 psqft in LVT costs, scenario (a)’s parcel goes into development around year 9 at a $331 psqft. Scenario (b)’s parcel doesn’t see development until year 20 and a ~$1K psqft value. Given the delta between year 9 and year 20’s psqft valuations, we could expect to see different intensities of development. We’re now left with the question of whether a duplex in nine years is better than a mid-rise in twenty. Appropriating the full rental value of land would pull development forward, but that doesn’t definitionally lead to it being put to its highest and best use. Highest and best is contingent upon what time scale we’re optimizing for and that choice […]

Entrepreneurs and the Changing Political Economy of Housing

Discussions about land use reform focus on policy – as they should. Overcoming NIMBYism will require deep legal, political, and regulatory reform. That said, entrepreneurs may be helping to short circuit the perverse incentives that give rise to NIMBYism in the first place. New companies may be encouraging homeowners to embrace density and helping to break the tie between homeownership and anti-deveolpment attitudes in the process. Creating Demand for Density Belong is an early stage startup making it easier for homeowners to rent out their single family home. The main use case is that of a homeowner renting (instead of selling) after a move. A lot goes into becoming a landlord and Belong’s elevator pitch is that they simplify the process. The company’s customers access insurance, connect to contractors for repair and renovation, get help with listing, and find anything else they need all in one place. To the extent they’re successful, they’ll be creating a class of small scale landlords with every reason to develop missing middle housing. Transforming the family home from a speculative asset to one producing a monthly stream of revenue makes ADUs and duplexes more attractive. More units mean more tenants and therefore better monthly returns. And once an owner is no longer an owner-occupier, “neighborhood character” concerns become less salient as well. That said, this is admittedly speculative. Whether single property landlords will be as YIMBY as I suspect is an empirical question for the future. More immediate, though, are the incentives another new startup is creating for homeowners across California. Densification as the Path to Homeownership Homestead is a property developer that’s using legislation like California’s SB9 and SB10 to build housing. They work with homeowners interested in the upside of doing a lot split and adding housing like a duplex or an […]

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 […]

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 […]

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 […]

Book review: Last Harvest

In the standard urban growth model, a circular city lies in a featureless agricultural plain. When the price of land at the edge of the city rises above the value of agricultural land, “land conversion” occurs. In the real world, we’re more likely to call it “development” and it is, of course, a lot more complicated. Simplification is valuable and gives us more general insights. But is greenfield development complicated in ways that are interesting and might change the results of urban economic models? Or that might change the ways we think or talk about development policy? Witold Rybczynski’s 2007 book Last Harvest helps answer these questions. It tracks a specific cornfield in Londonderry, Pennsylvania, from the retirement of the last farmer to the moving boxes of the first resident. With its zoomed-in lens, Last Harvest answers (or at least raises) lots of questions that are interesting but not especially important in the grand scheme: Why do expensive homes mix some top-line finishes with cheap, plasticky ones? Why do anti-development communities permit any subdivisions at all? What is ‘community sewerage,’ and how does it work? Exactly who thinks it’s attractive to have brick and vinyl cladding on the same house? What’s it like to buy a house from a national homebuilder? Does Chester County really produce forty percent of America’s mushrooms? The Stack Rybczynski does not use this term, but what he describes is part of what I call the “stack” of housing supply. One of the central facts of development is that it relies on a very long chain of industries and professions, each of which relies on every other part of the stack doing its job. If one part is left undone, nobody gets paid: ‘Without a water contract, we can’t get a permit for the water mains, […]