The housing crisis

For 21st century urbanists, the hardest thing to remember about cities in 1950 is how bad the housing stock was. Lowe hardly mentions it because it’s the one thing every reader knew: old housing was awful. One New Haven resident complains about rehabilitation because his cold-water flat costs only $50 a month (equivalent to about $500 in 2024). To find conditions remarkable, she has to go to the worst streets of a Black ghetto:

Mary White, her husband and seven children were shoe-horned into a two-bedroom alley house that had no heat, electricity or hot water. They shared a backyard privy and faucet with neighbors

p. 215 (third printing, a Feb. 1968 hardcover)

Or to Pittsburgh:

Street and office lights used to burn all day when rivers vapors rose and held the region’s soft coal smoke in suspension over the city, casting a midnight gloom of smog throughout the day. Smog would turn office workers’ collars gray by noon; coughing and colds were an unhealthy commonplace in Pittsburgh. Even in the suburbs, housewives had to wash curtains weekly to cleanse them of soot. Airline pilots had a particular dread of landing at the Pittsburgh field with its “ceiling of black ink.”

p. 112

To me, and other 21st century skeptics, she would surely say what she says of Pittsburgh: “One needed to know the city as it had been to fully appreciate the extent of the change.” The steelman (or better, steelcity) case for urban renewal might be that it only looks like the worst villain around because it obliterated greater monsters.

What is urban renewal?

This was urban renewal. The enactment of urban renewal [in 1954] as an expansion of Title I, coming so hard on the heels of the scarcely tried redevelopment program, caused even greater public confusion. Most people used the terms interchangeably, an error…

p. 34

What is urban renewal? It is a bundle of powers and funds that afford cities a uniquely versatile tool for bringing about many different kinds of planned changes and improvements in their blighted areas and for carrying out comprehensive development goals. While it is difficult enough to bring about these changes with renewal, such improvements would generally be impossible without it.

p. 560

Lowe opens her book with a narrow, technical understanding of the phrase “urban renewal”, and closes it with a capacious one. But the several case studies that compose most of the book’s considerable girth focus principally on the replacement of slum housing and the rebuilding of downtowns on modernist lines. Her final case, New Haven, is a single 150-page chapter that communicates the impossible weight of the task. Heroic mayor Richard C. Lee and his lieutenant Ed Logue threw everything at his city’s problems – a downtown highway, code enforcement, extensive residential rehabilitation, school investments, community programming. In Lowe’s judgment, New Haven is the true standout of the era. But she still worries that it’s unsustainable:

Will someone keep New Haven moving when Lee is no longer Mayor? Or will the city ride along on recent improvements until it sinks once more into decay…?

p. 546

Half a century on, Wikipedia has a short article about Mayor Lee. The pitiful section on his legacy notes that the downtown highway he built – the Oak Street Connector – is now named the Richard C. Lee Highway. But highways are a sidenote in Lowe’s narrative – there’s much more about the various approaches to replacing slum housing.

To eliminate this omnipresent evil

With the newly liberal Congress that was elected in 1936 and the Supreme Court’s broadened definition, in 1937, of the federal responsibility for the public welfare, the way appeared clear and the purpose justified for using federally collected income taxes to help financially disabled cities to eliminate this omnipresent evil.

p. 26

The new Congress responded to the consensus that cities needed “positive powers – especially eminent domain and public funds – to acquire and demolish slum buildings, as was being done in some European countries.” It passed the Housing Act of 1937, which established power and purse for demolishing slums and building public housing.

But this approach was too expensive. So Alvin Hansen and Guy Greer filled in the gap with the idea of “write-down” financing:

1. With federal funding, a city buys slum dwellings via eminent domain , relocates the residents, and clears the land.
2. The city offers the land for sale below market rate (the “write-down”)
3. Developers create new, better, less-dense housing on the site

The willful disregard of economic information inherent in this formula is stunning. Not only were the new buildings economically inferior to the old; they were economically inferior to vacant land at market rates. The urban economy was screaming its need for density, but planners infected with the Howard–Corbusier mindset wear deaf to its calls.

Making Title I Work

Hansen and Greer’s write-down became Title I of the Housing Act of 1949, although urban renewal work did not start in most cities until the Housing Act of 1954 made more funding available. One city – nay, one man – dominates the history of Title I.

[Robert] Moses created in New York the biggest Title I program in the country – one with more results by 1960 than all other cities combined.

p. 48

Moses already had experience with redevelopment; his 1949 Stuyvesant Town was a popular success (although “planners and architectural critics” condemned its high density) on a similar model.

But the greater reason New York got so much done so fast is that Moses rewrote the Hansen-Greer formula, daring Washington to withhold funding. The New York method was more efficient:

1. A developer tells Robert Moses which piece of land he wants.
2. Robert Moses buys it using eminent domain and sells it – uncleared and for much less – to the developer (the “write-down”).
3. The developer milks the slum for a while, relocates the residents (maybe), and builds new, less-dense housing.

In 1957, federal administrator Albert Cole threatened publicly “to cut New York off from all federal housing funds”; Moses called his bluff in days. (p 91).

Lowe’s 50-page chapter on Moses is of unique interest because it predates Robert Caro’s The Power Broker by six years. But her biography and evaluation of the man are largely the same. In light of 2024’s re-appreciation of Moses and present-day concerns with finding people who can Get Things Done, her chapter’s conclusion (headed Men to Run Programs) is prescient:

Can a city today attract the talent needed to meet the demands of the new programs? Mediocrity at the technical-managerial level and lack of effective leadership at the top are major urban problems of today.

p. 109

Gut the heart

What New Haven intended to do with federal aid under the Housing Act was to virtually gut the heart of its downtown – removing the crazy quilt of “taxpayers,” cobblers’ shops, gin mills and hundred-year-old half-empty lofts and unattractive buildings.

p. 432

Along with Philadelphia and Pittsburgh, Lowe praises New Haven for having the boldness to reimagine its central business district (“A DARING CONCEPT”). But the thirty-page tale is one of debilitatingly slow fits and starts: finances are promised and lost, offers are made and retracted. In the end, even upgrading a slummy center into high-end office and hotel space cannot pencil out:

That New Haven’s downtown redevelopment actually went through seems to be a commentary on Roger Stevens’ unusual character… [If] Stevens had been a conventional developer or an ordinary man, he would surely have walked away from the project long ago (as his close advisors had counseled). Even with redevelopment aid, the project was not a market place transaction and could not be done through conventional financing mechanisms…

Where special financial reserves or guarantees were available, things got built.

p. 463

The more hopeful signs

Among the many virtues of extemporaneous reading is the chance to view the past as future. Lowe could hardly have picked a worse time to offer predictions about the future of cities. Just two months after my volume was printed, Martin Luther King, Jr.’s assassination lit the powder keg that 1960s urbanists had only half-acknowledged.

But for our purposes, her timing is ideal. She tries to see a hopeful future, with urban renewal dogging the heels of the spreading slums and abating their evils with clean, public or affordable housing. But even in 1967, doubts have crept in. She worried about the lack of talent and commitment among mayors and staff. “Urban renewal”, tightly defined in the 1950s, has opened out to encompass almost any urban policy.

There are only inklings, glimmers of the post-1970 urban crisis. She writes about “juvenile delinquency”, not “crime.” Drugs barely appear; firearms not at all. She has no idea that landlords will soon set the match to their own buildings. In the strangest passage of the book, she sees the colors of the new and terrible dawn and praises it as hope:

Many landlords found it cheaper to vacate a building than to continue operating a slum… The boarded-up houses, and the growing vacancy rate in these neighborhoods (almost double [Philadelphia’s] average of 6 per cent for rental housing) were among the more hopeful signs in the blighted inner city. The impressive improvement in housing revealed by the 1960 census could be attributed in part to this “slum cleansing operation.” When the gray areas are cleared, as called for by the comprehensive plan, it is hoped that the costs, both in human and site acquisition terms, would be greatly reduced.

p. 360

The post A Case for Urban Renewal appeared first on Market Urbanism.

Most master plans are a costly effort by a team of temporary consultants, spread over two to three years, to prepare a blueprint that is usually obsolete as soon as it is completed.

This article appeared originally in Caos Planejadoand is reprinted here with the publisher’s permission.

Master plans for cities had two original objectives: first, to coordinate investments between various city departments, and second, to inform and allow public participation in proposed urban investments and land use regulations.

The objective of the first city plans in ancient Greece—much like New York City’s Commissioners’ Plan of 1811, L’Enfant’s grand plan for Washington, and Cerdà’s layout of Barcelona—was to create clear boundaries between private lots and public spaces, like streets, parks, and public buildings. They were not master plans in the modern sense, as they didn’t define how private lots were to be developed or restrict their use. The public hotly debated these plans, because they showed how much land would be subtracted from private properties to accommodate these public spaces.   

The master plan for the city of Brasilia, the capital of Brasil, was probably the first one to provide a complete blueprint that included not only roads, parks, and public buildings but also housing and commercial areas, all designed in detail. After the Second World War, the national governments of most countries imposed on major cities the obligation of preparing decennial master plans. These plans took more of their inspiration from the Soviet Union’s five-year plans than from the street layouts created by L’Enfant and Cerdá. In the last century, the drawbacks of such heavy-handed top-down planning have become more apparent, but many world cities must still prepare a master plan at regular intervals. In Brazil, cities of more than 20,000 people have to prepare a plan every ten years, with periodic updates. The concept of the modern master plan rests on a misunderstanding of the nature of cities. Cities, except for Brasilia and other new capitals created on a tabula rasa, are not just enormous, static buildings that planners and architects must design in detail before their construction. Modern cities are like dynamic, living organisms, built mainly through the talent, creativity, and enterprising spirit of their inhabitants and firms. They continually respond to market constraints and external shocks like conflicts, inflation, technological changes, or, lately, pandemics and the emergence of remote work. The flexibility and agility required to respond to unpredictable shocks in real time are ill-served by a detailed master plan prepared once every decade.

Municipal government remains essential, but it should support the innovations of entrepreneurs and households as they adapt to evolving conditions. The government should not direct change, but rather provide the primary infrastructure that allows rapid communication between different parts of expanding cities; ensure universal access to social services like justice, education, and health; monitor the quality of the environment; and regulate nuisances.

The flexibility and agility required to respond to regularly occurring but unpredictable external shocks are ill-served by a detailed blueprint prepared once every ten years in the form of a master plan.

To do this work, municipal governments require strong, well-staffed planning departments. Planners should monitor their city’s demographic and economic development at least quarterly. This monitoring should include indicators reflecting land and housing prices and the commuting times of various neighborhood and income groups. Planners should also develop indicators reflecting the performance of social services’ housing affordability,  and the city’s environmental quality. Elected officials should establish the minimum or maximum indicator values that trigger urgent municipal action and require priority investments.

I am not proposing that technocrats run cities. On the contrary, the selection of municipal priorities has to rest with strong mayors and city councils; there is no scientific way to choose the priorities of a city constrained by tight municipal budgets. Municipal investment priorities and who will pay for them through taxes are decisions that must be made through transparent political processes. However, political action plans and implementation strategies should be supported by a well-equipped, competent planning staff that has access to real-time urban data. 

This proposal contrasts sharply with the way master plans are currently used. Most master plans are a costly effort by a team of temporary consultants, spread over two to three years, to prepare a blueprint that is usually obsolete as soon as it is completed.

Traditional master plans are necessarily top-down, even when city planners claim to have conducted fair public hearings. Master planning adequate to the rigorous demands of modern cities must be reimagined as a set of tools that supports innovative growth by providing accurate, up-to-date monitoring and reporting. A well-informed public can better participate in decision-making by having access to clear indicators that show how the city performs over time under different strategies and political leaderships.

The post The Master Plan: An Obsolete Urban Management Tool appeared first on Market Urbanism.

Jane Jacobs wasn’t optimistic about the future of civilisation. ‘We show signs of rushing headlong into a Dark Age,’ she declares in Dark Age Ahead, her final book published in 2004.  She evidences a breakdown in family and civic life, universities which focus more on credentialling than on actually imbuing knowledge in its participants, broken feedback mechanisms in government and business, and the abandonment of science in favour of ‘pseudo-scientific’ methods. Jacobs’ prose is, as always, rich, convincing and successful in making the reader see the importance of her claims. Yet the argument that we are spiralling into a new Dark Age, similar to that which followed the fall of the Roman Empire, is not quite complete and I remain unconvinced that the areas she identified point towards collapse as opposed to merely things we could, and should, work to improve.

Let us start with the idea that families are ‘rigged to fail,’ as she puts it in chapter two. Jacobs, urbanist at heart, cites ‘inhumanely long car commutes’ stemming from the disbanding of urban transit systems, rising housing costs, and a breakdown in ‘community resources’ – the result of increasingly low-dense forms of urban development – as a significant reason why families are now set up for failure. She suggests our days are filled with increasingly vacuous activities, leading to the rise of ‘sitcom families’ which ‘can and do fill isolated hours’ at the expense of ‘live friends.’ That phenomenon has now been replaced by the ‘smartphone family’ where time spent on TikTok, and consuming other forms of digital media have supplanted the ‘sitcom’ family of the past. There has been significant literature on the detrimental effects of digital technologies to our physical and mental health, not least in Jonathan Haidt’s most recent book, The Anxious Generation. A similar picture is painted by Timothy Carney in his book Alienated America, where drawing on both his travels throughout the United States and on significant empirical data, Carney shows how significant parts of the United States have witnessed a complete breakdown in community and civic life over the past several decades. And yet – it is not clear that all of this points to a catastrophic ‘decline’ in civilisation as Jacobs puts it. We are fortunate to live in a country where there continue to be dynamic pockets of civic and social engagement. One might look at New York City, the suburbs of Washington D.C., or even the communities of Upstate New York, which I was recently fortunate enough to visit during a friend’s wedding, to see that there continue to be exceptions. This should lead to hope and optimism, for it suggests that whilst there are very real problems, so too do we have the tools to solve them and areas from which to draw inspiration. We could, and should, work to ensure our cities permit mobility, create the dense, lively and liveable neighbourhoods so brilliantly described by Jacobs in The Death and Life of Great American Cities, and encourage civic life by creating spaces instrumental to these activities. Yet so too should we recognise that different patterns for this exist, including in suburbs like Arlington and beyond. That diversity does not mean we are doomed for failure – quite the opposite as it can be seen as a form of experimentation and pluralism of values.

Now let us turn to the idea that our universities focus primarily on ‘credentialing’ rather than ‘educating’ – that higher education is now pursued primarily as a status symbol as opposed to for the inherent value it imparts to its participants. As a rising senior at Columbia University, one of these elite institutions, anecdotal evidence may be relevant here: there is definitely a pressure to excel in one’s GPA and secure the best grades possible, even to the detriment of actually learning. I have observed, amongst friends and coursemates, a tendency to pick classes that are easier and where teachers grade more nicely purely because of how it will look when applying to grad school and other professional endeavours. This is, in part, the price of a move towards meritocracy where individuals are (in theory) assessed on talent rather than on their connections or class and which therefore requires ever-more standardised measurements of individual success. Yet at the same time, coming to the United States has revealed that there exists a flourishing realm of liberal arts colleges and institutions that aim to go beyond pure credentialling and that do value education for its own sake. Hillsdale, Amherst and Middlebury are excellent examples of this. The pressure to attend elite schools goes beyond the status; these places are genuinely filled with some of the smartest and brightest people I have met, both from a faculty and student perspective. Jacobs is right to warn about the danger of higher education being sold to students as a ticket to some ‘elite’ strata of society, particularly given the significant expense and debt that students incur. And indeed university is not the right path for everyone, research has shown that other factors make a lot more difference to one’s professional success. Whilst Jacobs’ warnings are therefore valid, the issue is less acute in the United States where there is a significant financial reason to select a major and school that will impart actual knowledge and more of a problem in the United Kingdom and in Europe where subsidised higher education does mean that without a college degree, one will face significant difficulties in securing a position afterwards.

In the remaining portions of Dark Age Ahead, Jacobs identifies several other areas in very real need of reform, from the breakdown in self-policing of business and government to the abandonment of the scientific technique in areas like ‘traffic management.’ Her examples are vivid and teach the reader something, but they again fail to point to a wholesale breakdown in society as it is today. Most significant, however, is Jacobs’ analysis of the ‘dysfunctional’ financial arrangements of local and national governments which expand on Cities and the Wealth of Nations. National governments, in their current form, have a set of incentives at cross-purposes with how economies actually grow. By funnelling money away from cities and into ‘dead-end’ economic causes – in effect dispensing largesse – governments detract from the ability of individuals and firms within those cities to reinvest, innovate and find ever-more ingenious ways of ‘adding new work to old.’ Welfare, subsidies, and redistribution cannot drive a civilisation’s success. Only innovation and progress can, and if current trends persist, we may spiral into decline.

Where Dark Age Ahead excels in its analysis of the historical and theoretical concept of Dark Ages. The book ought to be read more for its historical analysis and its applicability to political economy and economics, than for its analysis of the contemporary issues identified, for as important as these are, more recent and accurate analyses can be found in Jacobs’ other books and those of other scholars. This book underscores the importance of not taking our institutions for granted, of promoting entrepreneurship and innovation so as to move ahead, and of constantly revisiting the Great Thinkers from the past.

In conclusion, Dark Age Ahead contains some real golden nuggets and makes for a compelling read for those wanting to understand the historical dynamics of dark ages and some of the dangers we currently face. Yet for the reader unaccustomed to the work of Jane Jacobs, I would instead suggest reading The Economy of Cities, which better urges one to rethink where growth happens and why cities are the driving force of civilisation.

The post Are we spiralling into a new dark age? | Analysis and review of Jacobs’ Dark Age Ahead appeared first on Market Urbanism.

• The Historical Housing Prices Project gives rents and home prices from 1890 – 2006 for US cities. It’s based on newspaper listings and was led by Ronan C. Lyons, Allison Shertzer, and Rowena Gray. I’ve added Ronan’s blog, Time & Space, to the links below.
• City Density displays and compares the population density of scores of world cities across their linear transects. I’ve added Aussie creator Jonathan Nelson’s substack to the links as well.
• Human Terrain shows the same data, I believe, but in a 3D map format.

The post Dataviz links: Over time, across space appeared first on Market Urbanism.

At the heart of Jane Jacobs’ The Economy of Cities is a simple idea: cities are the basic unit of economic growth. Our prosperity depends on the ability of cities to grow and renew themselves; neither nation nor civilisation can thrive without cities performing this vital function of growing our economies and cultivating new, and innovative, uses for capital and resources. It’s a strikingly simple message, yet it’s so easily and often forgotten and overlooked.

Everything we have, we owe to cities. Everything. Consider even the most basic goods: the food staples that sustain life on earth and which in the affluent society in which we now reside, abound to the point where obesity has become one of the leading causes of illness. Obesity sure is a very real problem and one we ought to work to resolve (probably through better education and cutting those intense sugar subsidies). Yet this fact alone is striking! For much of mankind’s collective history, the story looked very different: man (and it usually was a man) would spend twelve or maybe more hours roaming around in the wild to gather sufficient food to survive. Our lives looked no different to the other animals with which we share the earth. An extract from The Economy of Cities:

‘Wild animals are strictly limited in their resources by natural resources, including other animals on which they feed. But this is because any given species of animal, except man, uses directly only a few resources and uses them indefinitely.’

What changed? Anthropologists, economists, and historians will tell you it was the Agricultural Revolution, which occurred when man began to settle in small towns and cultivate the agricultural food staples that continue to make up the bulk of our diet: wheat, barley, rice, corn, and animal food products. But this merely raises another question: how did the Agricultural Revolution that took place ten millennia ago come into being? Jane Jacobs’ (very compellingly argued) answer is that we’ve got it all backwards: the city is what makes civilisation possible. Agriculture, and everything that proceeded from it, is merely an export of the city, just like the factories, automobiles, and microchips which first arise in cities and are then spun out into a region’s wider territory.

Here’s how it might have happened: at some point in the distant past, the world was parcelled up into territories controlled by various packs of hunter-gatherers. But hunter-gatherers need tools to hunt. Those tools, in turn, are produced by a couple of basic commodities: at first primitive stone tools, then increasingly complex spears made from obsidian and glass, and finally weapons made with copper and iron. As our tools became increasingly complex, their production necessitated resources obtained from particular locations – not available everywhere by obtainable through trade. Hence the rise of the world’s first cities: places where people would come together and barter for those primary sources of production, necessitating permanent civilisations. The surplus from trade, captured and enabled by the city, could then be allocated to new and innovative uses of labour.

Animals, for example, were held for the local trading population, at first for immediate consumption, but then it made sense, as the surplus increased, to breed them in new and innovative ways. Hence the rise of animal agriculture – first in cities, then as land became more valuable, spun off into the surrounding countryside. So too for the seeds which led to plant agriculture: initially for immediate consumption, their storage (and the surplus entailed) permitted experimentation with cross-pollination and paved the way for more advanced plant agriculture. Agriculture, Jacobs shows us, was perhaps the very first significant export spun off from cities!

Jacobs herself notes the idea is surprising, for it completely reverses the typical chain of cause-and-effect that we are so familiar with and that comes so intuitively. After all, in our everyday observations, it is rural areas which become developed into cities, hence why we might believe that first came agriculture. But this cannot be the case: further archaeological research has indeed confirmed Jacobs’ theories, showing that large-scale urban centres in Mesoamerica and Mesopotamia (see the example of Göbekli Tepe) preceded the agricultural revolution. Civilisation, made possible by the agricultural revolution, quite literally emerged with the advent of the world’s first cities.

The striking thing is that this is still the case today. Just like in the earliest cities, which permitted innovation when new work was added to old work and advancements in technique were made – quite literally creating new industries and products through the experimentation that surplus permits – cities continue to be the base of all human innovation and ingenuity. For it is in the city that ideas permeate most effectively, that humans collaborate and learn from one another, building on previous knowledge and success.

For new firms to start, they require a rich ecosystem of existing knowledge on which to base new ideas and innovation. They require capital to turn ideas into reality, that capital being just one of the many exports that cities provide. In turn, as innovations and products emerge in cities, these are added to a city’s exports, growing its markets for additional goods imported from elsewhere.

Every city is, in this way, deeply interconnected and reliant on the success of the cities that came before. What’s curious is that Jacobs doesn’t define the city in terms of scale; rather, to be considered a city (as opposed to a large town), an agglomeration must have the capacity for economic self-generation – in other words, it must be able to sustain itself through this innovative process of adding new work to old work, innovating at every increment.

There is no end to the potential growth that might emerge from cities. In Jacobs’ words: ‘once we stopped living like other animals, on what nature provided us ready-made, we began riding a tiger we do not dare dismount, but we also began opening up new resources – unlimited resources except as they may be limited by economic stagnation.’ The potential growth stemming from cities is precisely because they draw on more than the immediate resources provided in their vicinity. Rather, cities grow, replacing imports and imports, through human ingenuity, talent and the application of ideas to concrete problems.

It has often been proclaimed, particularly in the environmentalist movement, just like the Malthusians that came before, that the human race faces an impending destruction for there comes a point at which we simply run out of resources. That is not the case, when one understands the process that Jacobs is describing. Planet Earth contains almost the same resources that it did twelve millennia ago when absolute poverty was the rule everywhere. In bringing millions of people together in one place and setting in motion this process of constant economic renewal and improvement, wealth was created as ideas about how to reorganise those same resources spread so much faster, setting off a process of ‘cataclysmic reciprocal growth.’

It’s hard to let go of old ideas in favour of new, sounder ones, especially when they are so deeply entrenched. Yet despite there being evidence, quite literally all around us, that it is cities that create growth, policy remains firmly grounded in the old paradigm. Policies aimed at spreading or redistributing wealth across nations as a way of developing them achieve nothing of the sort. It might provide temporary relief (more likely the gains will be captured by some vested interest) but does little to kickstart the self-generating, reciprocating growth process that allows cities to grow. Nor can industrial policy, subsidies to lure big enterprises, or tariff barriers create the growth or desired effects. Big companies, Jacobs goes at length to explain, are highly efficient because they are very vertically integrated. Yet the real growth engine for cities is smaller companies, operating with some level of slack that permits them to expand into new markets and carry out the process of adding new work to old (or in other words, further specialisation).

Then there is the countryside and rural areas. The Economy of Cities is brilliant because Jacobs’ shows us that their development is entirely dependent on the development of cities, and not the other way around. Cities, and the activities that occur within, are what produce the growth that is then expanded out into the countryside as space becomes scarce and new innovative uses for capital and land are found in cities. The success of our cities is therefore not a zero-sum game, it is something of importance to every single one of us.

Politicians, city planners and those in the development space ought to pay close attention to these. Growth cannot be bought; the only way to achieve it is to focus on cultivating its underlying drivers.

The post Lessons from Jane Jacobs on The Economy of Cities appeared first on Market Urbanism.

We provide evidence of intensified discriminatory behavior by landlords in the rental housing market during the eviction moratoria instituted during the COVID-19 pandemic. Using data collected from an experiment that involved more than 25,000 inquiries of landlords in the 50 largest cities in the United States in the spring and summer of 2020, our analysis shows that the implementation of an eviction moratorium significantly disadvantaged African Americans in the housing search process. A housing search model explains this result, showing that discrimination is worsened when landlords cannot evict tenants for the duration of the eviction moratorium.

Alina Arefeva, Kay Jowers, Qihui Hu & Christopher Timmins

The paper is “Discrimination During Eviction Moratoria”, released as an NBER working paper this month.

The post No Solutions, Just Tradeoffs appeared first on Market Urbanism.

I pulled American Community Survey data via IPUMS to get a better grasp of the numbers and the geography. Nationally, the rate of owner occupancy drops from 15% to 5% for multifamily units built in the 2000s to 2010s:

The easiest explanation for any change is composition. But that doesn’t appear to be the case.

The state of the states

One suspect is condo defect law, which has (at least in some states) swung so far that most builders and insurers won’t touch condos. Another is the fact that older condos have appreciated less than houses over time suggests that it’s not just construction problems.

Going to the data, I’ll use owner occupancy rate as a proxy for condo status. It’s imperfect: some condos are rented out; some owner-occupants in smaller buildings own the entire structure. But it’s broadly available and allows comparisons across buildings of different vintages.

The most striking piece of data is the extreme variation in owner occupancy of newish multifamily (5+) buildings:

Hawaii is in a league of its own: 40% of multifamily units are owner-occupied. The next highest are New York, at 15%, and Illinois and DC at 12%. I left out 11 states that had fewer than 150 relevant respondents in the ACS.

Learning from Hawaii?

If state-level changes are to blame, we should see big differences in the declines across states; if it’s mostly tax or mortgage policy driving the decline, we’d expect declines everywhere.

We can look at the same data in percentage terms:

A few states worth are worth flagging:

• Hawaii and New York are strong condo states that barely declined. If I were going to research condo defect laws that work for both buyers and sellers, I’d start here. Utah and Iowa also good candidates.
• Florida, Connecticut, Illinois, Massachusetts, and New Jersey were all strong condo states where that market has drastically collapsed.
• Washington is the state where I’ve heard the most about condo defect law – it passed reforms in 2019 and 2023 intended to restart condo creation, but it remains to be seen if that will work.
• Other than New York and Hawaii, the states with small declines in owner occupancy were mostly places with low base rates.
  • Texas is among those – it build condos at a much lower rate than peers such as Florida, Arizona, and Utah. Among the big Texas metros, Austin is the only one where new owner-occupant multifamily units exceed 1.5%.

Research agenda

There’s room for more explanatory and policy research on this topic. Why did the collapse hit Florida so hard? Have condos underperformed houses in appreciation terms everywhere? Why has Texas never built a significant number of condos? What can we learn from Utah about crafting a balanced condo-defect law? This won’t be my next project – but if it’s yours, let me know.

The post The sudden death of the American condo appeared first on Market Urbanism.

But is supply really increasing that rapidly? Federal statistics on housing construction are at a Census housing data webpage. I looked at the “New Housing Units Completed” table and found that about 216,000 housing units in structures with over five units were completed in the first half of 2023.

On the positive side, this is definitely an improvement over the 2010s, when the economy was still recovering from the 2008 recession. For example, in the first half of 2019, just over 169,000 such units were built, and 2018 was pretty similar.

But is construction still up to Reagan-era levels? Not really. In the first half of 1986, almost 258,000 relevant units were completed. And in the first half of 1973, just over 378,000(!) such units were built.

And these levels of construction were in a less populous country. Today the U.S. population is about 335 million, up from about 240 million in 1986 and 212 million in 1973. So if construction had kept up with population, our new unit count would be about 1/3 higher than in 1986, and almost 60 percent higher than in 1973. Instead, construction went down.

To put the facts another way: our half-year multifamily construction rate is about 644 per one million Americans for 2023, down from 1075 per million in 1986 and 1783 per million in 1973. That’s not my idea of a “50-year high.”

The post Is there really a building boom? Not as much as you might think appeared first on Market Urbanism.