The permitting process for new housing in California is the bureaucratic equivalent of American Ninja Warrior. Localities use restrictive zoning and discretionary approvals to block new construction. When faced with state level oversight, California cities have historically leaned on bad faith requirements to ensure theoretically permitted and approved housing remains commercially infeasible. And as if that weren’t enough, “concerned citizens” can use the ever popular CEQA lawsuit to kill projects themselves (independent of direct involvements from electeds). 

This year’s housing package helps reduce the difficulty of getting a project through the gauntlet. Still an obstacle course, but with a few less water hazards and a slightly shorter warped wall.  Still suboptimal, but directionally correct in a very big way.

There are several pro-supply bills in the package, but two are especially worth calling out. 

SB 6 allows for residential development in areas currently zoned for commercial office or retail space. The bill would also create opportunities for streamlined approval if some portion of a proposed project site has been vacant. This last bit seems to be intended to encourage redevelopment of dead malls and similar retail heavy areas that could be better put to use as housing. 

SB 9 allows for duplexes and lot splits in single family zones by right. This type of missing middle housing could – at least in certain parts of California – be new housing that’s less expensive then existing stock; that’s a great outcome from a policy perspective, but would also come with the political upside of breaking the association between market rate and luxury. 

There are several other pro-supply bills in the package, but most of them deal with the more arcane minutiae of California’s land use system. Folks can check out SPUR’s legislative explainer (see the Land Use, Zoning and Streamlined Approvals section) for the TLDR on each.

The big takeaway is that we’re nowhere near a bill that institutes Japanese style zoning with by-right approval state wide, so continued progress pulling apart the gordian knot of California’s land use regime is something to be excited about. 

Beyond the potential policy wins, it’s worth appreciating where we’re at politically. Every year for the last several, we’ve had more and more state legislators authoring more and more pro housing supply bills. Yimby Activism has taken a settled policy debate as a foundation and begun building a sustainable political movement on top. I’m sure all of us are hoping this year is better than the last. In the area of state housing policy in California, I’m at least hopeful we’ve got a chance.

The post California Housing Reform: 2021 Edition appeared first on Market Urbanism.

This video and its logic are impressively wrong, for several reasons.
First, I’ve been to Houston and most of what I saw looks nothing like the video – there are plenty of blocks dominated by houses and the occasional condo.

Second, most of the photos in the video could have easily happened in a zoned city, because one block in a neighborhood could be residential and the next block could be commercial, so the commercial or industrial activities can be easily viewable from the residential areas (not that anything is wrong with that).

Third, most other automobile-dependent cities aren’t any prettier than Houston; a strip mall in Houston doesn’t look any worse than a strip mall in Atlanta.

Fourth, it completely overlooks the negative side effects of zoning as it is practiced in most of the United States (many of which have been addressed more than once on this site). Typically, residential zones are so enormous that most of their residents cannot walk to a store or office. Moreover, density limits everywhere limit the supply of modest housing, thus creating housing shortages and homelessness.

Finally, Houston’s negative characteristics are partially a result of government spending and regulation; as I have written elsewhere, that city has historically had a wide variety of anti-walkability policies, so it is far more regulated than the video suggests.

The post Why Houston Isn’t An Argument for Zoning appeared first on Market Urbanism.

A recent paper by three Hong Kong scholars is quite relevant.  They point out that housing supply in Hong Kong has grown sluggishly in recent years.  They write that in the late 1980s, housing supply grew by 5 percent per year. But since 2009, housing supply has grown at a glacial pace.  Between 2009 and 2015, housing supply typically grew by around 0.5 percent per year;  in the past couple of years, it has grown by between 1 and 1.5 percent per year.   The authors note that these numbers actually overstate supply growth, because they do  not include housing that has been demolished.

Not surprisingly, housing prices have grown more in recent years.  In the 1980s, housing costs increased by roughly 1 percent per year; in the past decade, costs have risen by as much as 3 percent per year. (Figure 4d).   Thus, Hong Kong data actually supports the view of many American scholars that housing prices tend to be highest in places where housing supply fails to grow. 

Why is supply stagnant?  The authors point out that in Hong Kong, as in some U.S. cities, government limits housing density through floor area ratio regulations. And because Hong Kong land is government-owned, the local government can restrict housing supply by refusing to sell vacant land.  Because high land costs mean more revenue for the government, government has an incentive to sell land slowly in order to keep land prices high.  Finally, government has not made up for this supply gap by building public housing; the percentage of the city budget devoted to public housing has decreased from 14 percent in 1989 to 7 percent today.

*I have criticized that argument here and here.

The post What’s Wrong With Hong Kong? appeared first on Market Urbanism.

You might think the North Pole is the most magical place on earth. But behind the magic, our deep dive into the history of Christmas movies reveals that there’s more to it than that. In our firstPop Culture Urbanism holiday special, I explore the urban planning behind the North Pole.

Be sure to follow future episodes by subscribing to the Pacific Legal Foundation on YouTube! We have a lot of content in the hopper that you won’t want to miss.

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Mass homeownership might have had no negative side effects in a society in which most people live in the same house until they are dead, and as a result are not overly concerned with the house’s resale value. 

But in modern America, people often hop from one house to the other, selling houses when they move, retire, or just add another child or two to their families.  And when people expect to sell their homes in a few years, they naturally want those homes to get more expensive (or to use a common euphemism, to “appreciate in value” so homeowners can “accumulate wealth”).

To help achieve this goal, homeowners have a strong incentive to lobby government to use zoning codes and other regulations to limit housing supply, in order to help homes get more expensive (or in zoning-talk, “increase property values”).  And because government has been quite successful in doing exactly that, housing costs have exploded in many metro areas, which in turn means that more and more people cannot afford homes any more (at least not without considerable dislocation of some sort, such as moving to someplace with minimal economic opportunity).

So perhaps we’d all be better off if government stopped encouraging home ownership, right?  Well, maybe not.  After the 2008 recession, homeownership rates declined from a postwar peak of 69 percent to its current level, which in turn meant that the number of non-homeowners in search of rental options increased.  And when the demand for rental housing increased, the cost of renting of course increased as well. So declines in homeownership are bad too. The only real solution is to this dilemma is to create institutional firewalls to protect landowners’ right to build, such as statewide laws that limit the discretion of local governments.

The post Are increased levels of homeownership good for affordability? No… and yes. appeared first on Market Urbanism.

A recent study discussed in Transfers Magazine shows otherwise, by focusing on recent reforms in Seattle. That city eliminated parking requirements in its most dense areas and reduced parking requirements in some other areas. If minimum parking requirements were irrelevant to developer decisions, developers would have built as much parking as they did before the reforms. In fact, this was not the case. For example, in areas where no parking was required, 30 percent of residential developers built parking-free housing. Even developers who built some parking usually built less than was required under pre-reform standards.

The post yes, minimum parking requirements do limit development appeared first on Market Urbanism.

Arlington County policymakers have issued a call for ideas on improving housing availability and affordability. If you’d like to submit your own ideas, you can do so here through the rest of the day. The ideas that I submitted are below.

Arlington County is a national model for transit-oriented development. Permitting dense, multifamily housing to be built on the County’s transit corridors has contributed to making the Washington, DC region more affordable compared to other high-income coastal regions. Nonetheless, housing prices in Arlington are high and rising due to increasing demand for access to the job market, schools, and other benefits that Arlington offers. County policymakers have opportunities to reform land use regulations to permit both dense multifamily housing and missing middle housing to improve access to Arlington’s opportunities.

Zoning for Transit Oriented Development

Ahead of Metro’s arrival in Arlington, county policymakers adopted the well-known “bulls eye approach” to planning, which calls for dense development surrounding the Rosslyn-Ballston corridor Metro stations. This plan calls for dense development to be permitted within one-quarter mile of these stations. Unfortunately, this plan has never been realized in the zoning ordinance. The County maintains single-family or townhouse zoning within one-quarter mile of four stations on this corridor and a relatively low-density multifamily zone within one-quarter mile of the Rosslyn station. The County needs more townhouses and low-rise multifamily housing, but it also needs more high-rise multifamily housing as the bulls eye plan recognized. Given the high and rising land values and house prices along this corridor, it’s past time to realize this decades-old planning objective.

Further, planning for urban villages around Metro stations should be extended to the area around the East Falls Church station area, where residents of multifamily housing have to walk past land zoned exclusively for single-family houses to reach the station. The Federal Highway Administration finds that pedestrians are willing to walk up to one-half mile to transit stops and considerably farther to heavy rail. The bulls eye plan supports permitted density that gradually tapers off farther than one-quarter mile from Metro stations. But, in many cases, the County’s zoning transitions abruptly from dense multifamily zoning to single-family zoning with substantial minimum lot size requirements.

Zoning for mid-rise, multifamily housing outside the densest zone around all the County’s Orange and Blue Line stations would carry out the 1960s vision and improve housing affordability in Arlington. Permitting new multifamily construction in parts of the county where land is particularly valuable, including on land zoned for single-family or commercial development close to Metro stations, is the policy most likely to preserve existing market-rate affordable units in parts of the county where land is currently less expensive.

Zoning for Missing Middle Development

Arlington has room to improve in zoning for large multifamily developments near transit, but this is an area where Arlington county policymakers have been leaders nationwide. In zoning for missing middle housing, however, Arlington County is lagging behind several jurisdictions that have shown the way to zone for missing middle housing that is economically and politically feasible. Here I use missing middle to mean housing with low-rise construction costs but that requires no more than 2,500 square feet of land per unit. Eliminating single-family zoning to permit more, lower-cost housing across Arlington is a key step policymakers could take to promote housing affordability. Several jurisdictions discussed below provide successful models for permitting missing middle housing.

Houston, TX

Houston, famous for its lack of use zoning and policy environment that facilitates new, greenfield development also has a successful model for missing middle housing reform. In 1999 Houston policymakers reduced the minimum lot size for single-family houses from 5,000 square feet down to effectively 1,400 square feet within the city’s I-610 loop. In 2012, they extended this reduced minimum lot size across the entire city. This reduction has resulted in the construction of tens of thousands of townhouses. Prior to the reform, Houston policymakers were granted variances to permit townhouse construction, primarily in low-income parts of the city. But after the reform, as-of-right construction shifted to take place in higher-income parts of the city. Houston’s openness to all types of housing construction has helped it maintain median house prices across the city that are below the national median.

Palisades Park, NJ

Palisades Park in Bergen County, NJ provides another model of facilitating missing middle construction. When Palisades Park policymakers adopted the city’s first zoning ordinance in the 1940s, they implemented two-family zoning rather than single-family zoning with a 5,000 square foot lot size requirement for either one or two units. The borough was developed with primarily single-family houses through the 1960s like its suburban neighbors. However, as land prices have increased, many of these single-family houses have been replaced with duplexes, accommodating nearly a doubling of population through infill construction. Relative to its neighboring jurisdictions, land prices in Palisades Park are higher, reflecting the option landowners have to build two units per lot rather than one.

One lesson that successful models of missing middle construction show is that flexible rules are key to realizing infill construction. Today, the majority of Palisades Park’s housing units are in two-unit structures. But some neighboring jurisdictions that appear to permit two-unit housing have not seen the same results. In some cases, these jurisdictions ban side-by-side duplexes, permitting only up-down two-family construction. This model is less appealing to home buyers and has resulted in much less construction. Other localities permit two-family construction but effectively cut it off with a subjective review process.

Houston’s townhouses and Palisades Park’s duplexes are not inexpensive. They are large, new construction units in desirable locations. However, they are making important contributions to new regional housing supply and contributing to affordability through the filtering process. Arlington policymakers have expressed concern that some of the County’s missing middle construction similar to the Houston and Palisades Park models are not meeting the County’s goals. New, large townhouses and duplexes in Arlington are perhaps not the cost-effective missing middle units policymakers have in mind. But large missing middle units are not the problem; constraints that prevent any type of missing middle or multifamily housing on the majority of residentially-zoned land in the County are. Permitting housing at the density of Houston townhouses or Palisades Park duplexes would permit three to six households to live on lots currently designated for single-family houses, substantially improving access and affordability in the region.

Washington, DC

Attempting to restrict townhouse or duplex development is not the answer, but DC’s RA-2 zoning provides a model that is resulting in a wide variety of types of missing middle units in the Carver-Langston and Kingman Park neighborhoods. The RA-2 zone allows for buildings up to 50-feet tall with no side setbacks and up to a 1.8 floor area ratio. It has resulted in small walk-up apartment buildings with a variety of unit sizes to meet the needs of different types of households, from one– to four-bedroom units.

RA-2 buildings in DC have the affordability characteristics of missing middle housing, in that they have the relatively low construction costs of single-family housing while allowing multiple households to share expensive land. However, new construction and conversions in RA-2 zones add square footage in addition to new units relative to existing rowhouses. Policymakers have sometimes sought a goldilocks missing middle outcome in which new missing middle units are built, providing a lower-cost housing choice relative to single-family housing that doesn’t change a neighborhood’s built form.

Minneapolis, MN

Earlier this year, Minneapolis implemented zoning reforms to permit triplexes on every lot in the city where only single-family houses were permitted previously. This important reform is one step to reverse the effects of exclusionary zoning restrictions that drive up the cost of housing and limit low- and moderate-income households’ choices of where to locate.

However, prior to implementing its famous triplex reform, Minneapolis policymakers passed zoning rules intended to prevent “McMansion” construction. These rules limit structures in the city’s lowest-density residential zoning district to 2,500 square feet and limit their height to 28 feet. Now that three units are permitted rather than one, these anti-McMansion rules are standing in the way of triplexes, according to homebuilders.

This experience demonstrates the importance of flexible rules for allowing housing construction to respond to changing demand. So far, the reform has resulted in a disappointing level of missing middle construction with just three triplexes permitted so far, several months after they have been permitted. Minneapolis’ triplex reform proved to be politically feasible, but it may not be an economically feasible way to actually gain missing middle construction.

The Minneapolis Planning Commission has recommended new built form regulations that would make triplexes more feasible to build, but it would continue to set lower limits on the size permitted for new single-family houses. However, converting large, single-family houses into apartments years after they’ve been built can result in one of the lowest-cost source of apartments. Choking off large, new single-family houses stands in the way of this opportunity. In general, permitting greater flexibility for homeowners to provide a flexible housing supply in response to changing housing market conditions is key to maintaining affordability.

Housing in Arlington and the Environment

Arlington residents and policymakers regularly raise concerns that development of any type could reduce the County’s tree canopy. This is true, but policy decisions should consider the regional and global environmental benefits of permitting construction in Arlington in addition to the local costs. Allowing more people to live closer to the region’s job center and transit offers major environmental benefits. A study of residents of Boulder, CO, found that on average, residents who live in city limits commute 12.8 miles compared to nonresidents who work in Boulder who commute 29 miles, resulting in a substantial difference in greenhouse gas emissions and traffic.

Similarly, allowing more people to live in Arlington presents substantial opportunities to reduce the environmental impact of commuting. And permitting more people to live in attached housing is more energy-efficient to heat and cool relative to detached, single-family housing. To address the concern of tree canopy loss, New York City’s street tree program provides a model. It has resulted in close to 700,000 trees, providing shade, visual amenities, and stormwater management benefits.

Conclusion

Arlington has shown the potential for transit-oriented development to make room for residents in high-opportunity suburban jurisdictions. Yet more work remains to be done to open up the County to more residents at more affordable prices. Increasing flexibility for homebuilders to provide both more apartment buildings near Metro stations and more missing middle housing across the County will allow Arlington to remain a model of a suburb open to new residents of all income levels.

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