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Category Urban[ism] Legends

Gentrification: An LVT Would Do That

In many cities, poor people occupy valuable urban land close to downtown jobs, amenities, and transit. They can afford to live there because the housing stock in inner areas is usually older. If it hasn’t been completely renovated, the result can be quite cheap, even if the land is pretty valuable. In areas where there’s already some gentrification pressure, landlords face a timing problem: they can renovate (or sell to a developer) now, and cash out. Or they can hoard the property and wait until prices rise, supplying low-cost housing in the meantime. Land value taxes are specifically designed to penalize the hoard-and-wait approach by raising the annual tax cost of sitting on valuable land. It is specifically designed to accelerate neighborhood change. That’s the point. That’s what it says on the tin. Gentrification isn’t the only urban problem, and maybe it’s a small enough urban problem that a land value tax is a good idea anyway. But I think most of the benefits of Georgism can be unlocked with George-ish schemes (like renovation abatements or vacant land taxes) that are more narrowly designed.

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.

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 […]

Confounding Diversity with Segregation Again

In July, I showed that an otherwise careful group of researchers at the Othering and Belonging Institute were using a measure of statistical racial segregation that confounds diversity with segregation. Briefly, regions with more variety in the racial makeup of their neighborhoods will show up as statistically “segregated.” Regions where all neighborhoods are pretty similar will show up as statistically “integrated.” To their credit, the study authors corresponded with me at length and adjusted their Technical Appendix to emphasize limitations that I had pointed out. Today, Mark Zandi, Dante DeAntonio, Kwame Donaldson, and Matt Colyar of Moody’s Analytics released a much less careful study purporting to show the “macroeconomic benefits of racial integration.” But if one were to make the mistake of taking their study at all seriously it would lead one to the opposite conclusion: mostly-white counties do better economically. They discovered white privilege and mislabeled it “integration.” (When economists talk about “segregation” statistically, they mean differences in racial proportions across neighborhoods. This is not the same as the de jure segregation regime imposed in the American South. It’s not even the de facto segregation that persists in some neighborhoods today.) The easiest way to see Zandi et al’s mistake is to work backwards from the table of county results they (helpfully) published. The most integrated county in America, in their analysis, is Kennebec County, Maine. It’s 94.6% white. The rest of the most-integrated counties are similarly pallid – with the exception of Webb County, Texas, which is 95% Hispanic. In each of these counties, integration is a mathematical product of the lack of diversity. With hardly any minorities, hardly any neighborhood can diverge from the dominant group. These extreme counties aren’t an accident. Whereas most researchers treat metropolitan areas together, Zandi’s team worked with counties. Several of their […]

The “Renters Are Evil” Argument For Zoning

Charles Marohn’s recent article in The American Conservative on the evils of single-family zoning received over 200 comments. The most provocative responses were the ones forthrightly defending exclusion, on the grounds that renters are dangerous and must be excluded at all costs.  For example, one person wrote:  “People of all races also have a right to escape from uncivil society… Renters are entirely different in their outlook and practices than home owners in how one regards their neighborhood. For one it transactional, for the other its their dream and investment.”  In other words, homeowners are better citizens, and thus must be protected from disorderly renters.  What’s wrong with this argument? If you really believe homeowners are better citizens, you would want homeownership to be as cheap as possible, so that more people could become homeowners. For example, you would be positively eager to have small, cheap houses in homeowner zones, or even for-sale condos. But homeowners have a financial incentive to do the opposite: to make home ownership as scarce and expensive as possible, so they can sell their house for as much money as possible (or to use a common euphemism, to “build wealth”).  And they usually favor zoning policies that do exactly that- that is, by excluding smaller, cheaper-to-build houses, inflate home prices and make homeownership unaffordable for many people. In other words, government can encourage home ownership as a source of alleged good citizenship, and can try to make home ownership a source of vast wealth- but it can’t do both. In the United States (and especially on the coasts) local government has chosen the latter path.

More on Subways and COVID-19

After reading an article suggesting that New York’s subways seeded COVID-19, Salim Furth’s response to that article on this blog, and one or two other pieces, I decided to write a more scholarly piece summarizing the various arguments. The piece is at https://works.bepress.com/lewyn/196/ For those of who you don’t feel like downloading the full paper, here’s a summary: Jeffrey Harris of MIT (whose article seeded this controversy) wrote that COVID-19 infections rose most rapidly before subway ridership began to decline; this alone, of course, is not a strong argument because as subway ridership declined, many other crowded places (such as restaurants) were also shutting down. Harris also notes that infections rose more slowly in Manhattan, where ridership declined most rapidly. However, a majority of the city’s jobs are in Manhattan. Thus, Manhattan’s lower subway ridership may have been a reflection not of changed behavior by Manhattan residents, but of the citywide loss of jobs as non-Manhattanites stopped riding the subway to Manhattan jobs. Furthermore, Alon Levy writes that ridership did not decline as rapidly in residential parts of Manhattan (which nevertheless have low infection rates). Levy also asserts that Harris’s reliance on data from subway entrances is misleading in one technical but important respect.  If a Manhattan stops riding the subway to a Manhattan job, this means there are two fewer subway entries for that person.  On the other hand, if a Queens resident stops riding the subway to a Manhattan job, this means there is one fewer Queens entry and one fewer Manhattan entry.[  Why does this matter?  Suppose that on March 1, there were 100 Manhattan-to-Manhattan commuters and 100 Queens-to-Manhattan commuters, and a week later 30 of each group stop riding the subway.  Because there were 90 fewer entries at Manhattan stations (60 from the first group and […]

The “everybody left Manhattan” argument (updated 5-15 to reflect recent data)

The COVID-19 epidemic has led to a lot of argument about the role of urban form; defenders of the Sprawl Faith argue that New York’s high infection and fatality rate is proof that transit and density are bad, bad, bad. On the other hand, urbanists point out that within the New York metro area, there is no correlation between transit use and COVID-19. Manhattan is the most dense and transit-oriented part of the metro area, and yet every outer borough, including car-dependent Staten Island, has higher death and infection rates. In fact, three suburban counties (Nassau, Rockland, and Westchester) are also worse off than Manhattan. Two more (Suffolk and Orange) have higher infection rates but slightly lower death rates. So it seems obvious that density and transit have been blamed a bit too much by some people. But this argument has led to a counterargument: that all the Manhattan statistics are useless because most Manhattanites are rich people who fled the city, so of course there are few records of Manhattan infections. This argument contains a grain of truth. In fact, more people did leave Manhattan than the outer boroughs: according to a New York Times story based oha few estimates based on monitoring smartphones, between 13 and 19 percent. But the gap between Manhattan and the outer boroughs is far greater. Currently, Manhattan’s COVID-19 death rate is 11.7 per 10,000 residents. By contrast, the Bronx’s death rate is 21.3 per 100,000- 82 percent higher. The Queens death rate is 20.6 per 100,000- 76 percent higher. Brooklyn’s death rate is 17.9- 53 percent higher. It could be argued that even if borough-wide data is still useful, neighborhood COVID-19 data is not, because some Manhattan neighborhoods lost far more than 20 percent of their population. For example, the neighborhood that has […]

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