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Apologies to everyone for the light posting – over the next few weeks I may be a bit busy with job and internship applications (any suggestions for work or job offers would be very much appreciated!), but hopefully I’ll still be able to put up a few posts a week. But for now, all you get is this mammoth link dump: 1. Vancouver’s laneway housing program (which we discussed earlier) has been off to a brisk start, and though planners are looking to liberalize sewer rules, they’re also considering only allowing one-story houses as-of-right, and limiting the amount of new laneway houses per block. 2. Former Market Urbanism contributer Sandy Ikeda writes about the urban origins of liberty at the Freeman. 3. The Dukakis Center has released a report suggesting that the gentrification caused by new light rail lines might cause driving to increase, defeating the purpose of TOD. Megan McArdle has also been discussing gentrification. Hopefully I’ll write something about this and gentrification more generally soon, but I wanted to post this in case I don’t get around to it. Any thoughts from the commenters on why this is and how it can be avoided? 4. North Korea “declare[s] war” on its version of the jitney, the “servi-cha.” 5. LA is the only big city in America whose fire department mandates that all skyscrapers have flat roofs so as to allow helicopters to land, but this may be changing (Curbed, parts 1 and 2). 6. Disabled riders file a class-action lawsuit against NYC’s MTA “for not spending a federally mandated 20% of [subway] station rehabilitation budgets on improvements like elevators and ramps.” The ADA’s impact on mass transit and urbanism is something that I’d eventually like to discuss more in depth, but I haven’t seen much research or even many […]
In these days of economists constantly debating the right way to revive the economy, it seems like there is no way to find consensus among economists. Economists don’t spend much time debating the issues they agree on, and to them, rent control is about as dead an issue as the earth revolving around the sun. In 1992, 93% of American and Canadian economists surveyed agreed with the statement “A ceiling on rents reduces the quantity and quality of housing available.” Opposition to rent control among economists spans the political spectrum from Milton Friedman and Walter Block to leftist Nobel Laureates Gunnar Myrdal and Paul Krugman. In fact, it was the socialist Swedish economist Assar Lindbeck who famously said, “In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing it.” (Assar Lindbeck, The Political Economy of the New Left, New York, Harper and Row, 1972, p. 39) Never underestimate opportunistic politicians when they smell blood in the water. With housing prices already falling, politicians want to be seen as champions of the little guy and do something for “affordability” with one side of their mouth, and force housing prices to “recover” with the other. With the economy in disarray, even widely discredited schemes such as rent control are making a comeback in politician’s playbooks of idiotic moves that please certain constituents. Rent control was implemented twice on a national scale in the United States. Rents were first frozen during the difficult years of World War II, and frozen again in 1971 as part of President Richard Nixon’s wage and price controls intended to curb inflation. After Nixon’s wage and price controls expired, many cities kept some form of rent control intact. Could President Obama resurrect an undead Richard Nixon to implement […]
Loyal reader, Bill tipped me off to this blog and I’ve subscribed to the feed ever since. Today’s post was particularly relevant: White People in the News – May 30, 2008 Isn’t this photo classic? The comments on the blog are always fun to read too…
Part One of this series was a refresher on the Microeconomics of Rent Control and touched on how it encourages hoarding Part Two discussed rent controls influence on the black market for apartments, rental property deterioration and housing discrimination. Here in Part Three, we will discuss how rent control hampers mobility, regional growth, tax revenue, apartment development, and becomes a catalyst for class conflict. Mobility As mentioned in Rent Control Part One, duration of residence in a rent-controlled apartment has been observed to be three times as long as duration at market-rate apartments. One can see that the incentive to hoard rent-controlled apartments is also disincentive to relocate. The mobility of both the tenants and newcomers are drastically hampered by rent control. Unless the tenant has the money to rent a second apartment (or Governor’s mansion), it will be difficult for him to relocate closer to better employment. The tenant may rather endure a very long commute in order to maintain the rent-controlled apartment. As Walter Block put it, "They are, in a sense, trapped by the gentle and visible hand that keeps them where they are rather than where they might do better." Difficulties are multiplied if the local economy takes a turn for the worse. A downturn in local employment would not be relieved by people relocating for jobs, thus making the unemployment and poverty situation worse. Employees looking to relocate in the city with rent control are hurt the worst as they will have a difficult time finding available apartments. The drawbacks to the local economy are discussed in the section on regional growth and adaptation. The reduction in mobility is especially burdensome on families with children, since public schools tend to be local. If the local school is under performing, a family under rent-control will lose […]
photo by flickr user paytonc The National Trust for Historic Preservation announced that New York City’s Lower East Side, famous for it’s history of tenements and slums, is one of 11 architectural, cultural, and natural heritage sites that are most at risk “for destruction or irreparable damage.” By “damage”, they mean new luxury towers filled with wealthy people, replacing aged tenements filled with yuppies and hipsters. From the NY Sun: ‘Endangered’ Is Designation as Lower East Side Waxes Professor of Urban Policy and Planning at New York University, Mitchell Moss: “The overall neighborhood is witnessing a transformation. And just as young people move into that area, I certainly hope they are not planning to bring back historically dangerous conditions like cholera, typhoid, and open sewers,” Of course, this comes with downzoning, which will limit supply, drive up rent and land prices, and increase the incentive to tear down more buildings. Thus, quickening demolitions and gentrification. I can understand protecting a few particular locations or buildings, but to downzone the entire area will put a huge burden on the City’s housing supply. Also, Curbed: The Lower East Side is an Endangered Species
Curbed: Rent-Stabilzation War: Tenants Strike Back New York Times: Questions of Rent Tactics by Private Equity Rent-regulated apartments account for 57 percent of the total in the Bronx, 42 percent of the apartments in Brooklyn, 59 percent in Manhattan, 43 percent in Queens and 15 percent of those on Staten Island, the Guidelines Board says. There’s a long way to go. Phasing out the free ride won’t be painless or popular, but New York needs to let the marketplace decide what rents should be and where people locate. By freeing-up units to the marketplace, much of the current supply constraints can be alleviated and rents won’t skyrocket as drastically on the market-rent payers. Not only that, the beneficiaries of the regulation have had a disincentive to relocate closer to better jobs and affordable areas since they don’t want to give up their sweet deal. Rent price control and the resulting supply constraint is more guilty than zoning restrictions in driving up market rents throughout New York. Under the current regulations, some landlords pay more to their lenders than they collect from tenants of rent-regulated apartments. This helps explain the scale of the wealth transfer to each renter: Vantage’s debt service is an estimated $1,098 monthly on each unit, almost 50 percent more than the average rent. Learn more about the consequences of rent control in a informational series here: Rent Control Part 1: Microeconomics Lesson & Hoarding
LA Times: Los Angeles limits ‘mansionization,’ downtown hotel conversions Reason: In Soviet Los Angeles, Housing Affordables You! LA’s City Council voted unanimously to treat the symptoms of the City’s gentrification problem by restricting property owner’s right to improve their property. Did anyone ask the council what would be the long-term effects of restricting the supply of upscale housing? As supply is restricted, eventually what was once considered middle class housing will be needed to meet the needs of the wealthy. With less stock for the middle class to afford, they will move downscale as well and gentrify the most affordable areas. Then, when the affordable housing is gobbled up, the City Council will probably enforce even greater restrictions. It won’t be long before upper-middle-class people will be living in tiny studios just like New York and everyone else is priced out. So, the solution is to do the opposite of what the council did. Remove restrictions on property and allow developers to build densely to meet the needs of the market. Some single family neighborhoods would gradually be redeveloped as multifamily, allowing the city to meet the housing needs of more people. Otherwise, gentrification will sweep over LA faster than ever and affordable market-rate housing will be a thing of the past.
Limousine Liberals aren’t the only ones who oppose change. In Harlem, neighbors fought to keep new people out of their neighborhood, and want to force gentrification upon other neighborhoods. In the process they created such a stir at Wednesday’s Council session, they had to be cleared out. It’s such a strange phenomenon: progressives who act conservative; they preach tolerance, while excluding others from what they feel they own collectively. They applaud “Change” as a buzzword, then fight change when it effects them. NY Daily News: Council OKs Harlem rezoning plan; cops called to clear opponents The Real Deal: Council approves Harlem rezoning AMNY: Council approves controversial Harlem development plan Recent Market Urbanism post: 125th Street Rezoning