Tag FAR

Transit oriented development in Bengaluru could lead to additional $64 Million per year

A new paper in the Journal of Development Economics by Liming Chen, Rana Hasan, Yi Jiang, and Andrii Parkhomenko estimates the welfare gains of Transit Oriented Development in Bengaluru. The Bengaluru metro or the Namma metro is around 170Km long including the planned sections. Bengaluru has low building heights and the paper’s counterfactual depends on relaxing FSI/FAR from their current level to 2 (only 2!) around 500 meters of the metro line. The paper finds “The complementarity between TOD and the metro unlocks additional gains equivalent to about $64 million per year or one-half of annual operating costs of the metro system.” Paper reference:Chen, L., Hasan, R., Jiang, Y., & Parkhomenko, A. (2024). Faster, taller, better: Transit improvements and land use policies. Journal of Development Economics, 103322.

9 Barriers To Building Housing In Central City Austin

The Austin area has, for the 5th year running, been among America’s two fastest-growing major metro areas by population. Although everybody knows about the new apartments sprouting along transportation corridors like South Lamar and Burnet, much of the growth has been in our suburbs, and in suburban-style areas of the city. Our city is growing out more than up. How come? The desire for living in central Austin has never been higher. But Austin, like most cities, has rules that prevent new housing from getting centrally built. That makes it easier to buy and build on virgin land in the suburbs. Here are some of those rules. 1 MINIMUM LOT SIZE Historically, expensive houses were built on expensive, large lots; cheaper homes were built on smaller, cheaper lots. Austin decided that new houses can’t be built on small lots. Even if you want to build a small, cheap house, you still need a lot with at least 5,750 square feet. In central Austin, that costs a lot of money, even without the house! If somebody owns a 10,000 square foot lot, they aren’t allowed to split it into two 5,000 square foot lots and build two medium-sized houses, let alone three 3,333 square foot lots with three small houses, let alone three 3,333 square foot lots with triplexes! In 1999, Houston reformed its minimum lot size laws. Since then, environmentally-friendly central-city urban townhomes have flourished.         2 MINIMUM SITE AREA For areas that are zoned for apartments and condos, there is a cap on the ratio of number of apartments to lot size known as “minimum site area.” 3 IMPERVIOUS COVER MAXIMUMS Impervious cover is any surface that prevents water from seeping into the ground, including buildings, driveways, and garages. There is a cap on the ratio of impervious cover to lot size. 4 FLOOR-TO-AREA RATIO MAXIMUMS Floor-to-area ratios (aka FAR) maximums are a cap on […]

How to Sidestep FAR Restrictions: Mezzanine Floors

Most municipalities use the Floor Area Ratio (F.A.R.) metric to restrict development within their communities.  F.A.R. is calculated by dividing the total floor area of a building by the area of the site it is built upon.  In achieving planners’ and neighbors’ questionable objective of “preserving the character” of their communities, F.A.R. is a somewhat arbitrary metric that does little to effectively regulate “character”. In what I see as a great example of the silliness of FAR limits, a recent development in Brooklyn used an interesting, yet not unusual, method to build more space than allowed by zoning laws: mezzanine floors.  From Curbed NY: On the blueprints as "storage space" and not calculated into the building’s overall floor-to-area ratio, the zoning-busting half-floors can be converted to living space after the fact, as long as it’s kept reasonably hush-hush—though the broker in this case eagerly told the gadfly, "Those storage spaces can be converted into living spaces after the closing." Maybe a bump on the head is to blame? Photos from original source, Pardon Me For Asking:   The lengths developers are willing to go to subvert zoning, goes to show the extent that restrictions harm the marketplace.  Unfortunately, methods like this aren’t effective against more affordability-destroying restrictions such as limits on the number of units allowed on a piece of land.

Rent Control Part 4: Conclusion and Solutions

Welcome to the final post in the series discussing the consequences of rent control. Thank you to the subscribers who have patiently awaited each new post. I hope everyone found it enlightening. If you haven’t read the entire series, you can catch up with these links: Rent Control Part One: Microeconomics Lesson and Hording Rent Control Part Two: Black Market, Deterioration, and Discrimination Rent Control Part Three: Mobility, Regional Growth, Development, and Class Conflict Conclusion Rent control is not just a simple price control setting the price at which willing renters and landlords are permitted to do business, it is much worse.  It is a coercive act that gives landlords no legal option, but to rent to a tenant against his will, often at a financial loss.  Rent control adds a non-voluntary burden to landlords which deepens over time because landlords do not have the option to rent to a tenant at below market rates.  Not only does rent control cause huge distortions in the housing market, but the burdens fall disproportionately on the poor and underprivileged people it was intended to benefit. Although particular people are able to live with the comfort of low rent payments, even those renters will see their living conditions deteriorate as landlords neglect repairs and maintenance. As the situation gets worse, middle class residents are able to move away, leaving behind the poorest residents who have become reliant on the reduced rent. In effect, rent control grants property rights to renters, that originally belonged to the original property owners. Rent control becomes a redistribution of wealth to rent control tenants away from apartment owners, market apartment renters, and newcomers to the area. Nonetheless, over time the quality of life decreases for all residents of a city where rent control is imposed. Solutions So, it […]