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Tag zoning

Urban[ism] Legend: The Free Market Can’t Provide Affordable Housing

Over at Greater Greater Washington, Ms. Cheryl Cort attempts to temper expectations of what she calls the “libertarian view (a more right-leaning view in our region)” on affordable housing.  It is certainly reassuring to see the cosmopolitan left and the pro-market right begin to warm to the benefits of liberalization of land-use.  Land-use is one area the “right,” in it’s fear of change, has failed to embrace a widespread pro-market stance.  Meanwhile, many urban-dwellers who consider themselves on the “left” unknowingly display an anti-outsider mentality typically attributed to the right’s stance on immigration.  Unfortunately, in failing to grasp the enormity of the bipartisan-caused distortion of the housing market, Ms. Cort resigns to advocate solutions that fail to deliver widespread housing affordability. Yes, adding more housing must absolutely be a part of the strategy to make housing more affordable. And zoning changes to allow people to build taller and more usable space near transit, rent out carriage houses, and avoid expensive and often-unnecessary parking are all steps in the right direction. But some proponents go on to say relaxing zoning will solve the problem all on its own. It won’t. Well, if “relaxing” zoning is the solution at hand, she may be right – relaxing will only help a tad…  While keenly aware of the high prices many are willing to pay, Cort does not seem to grasp the incredible degree to which development is inhibited by zoning.  “Relaxing” won’t do the trick in a city where prices are high enough to justify skyscrapers with four to ten times the density currently allowed.  When considering a supply cap that only allows a fraction of what the market demands, one can not reasonably conclude “Unlimited FAR” (building density) would merely result in a bit more development here and there. A radically liberalized land-use regime would […]

On the Mixing of Incompatible Uses and Incumbency

I noticed an interestingly ironic thing today. The usual argument for the necessity of use-based zoning is that it protects homeowners in residential area from uses that would potentially create negative externalities – ie: smelting factory, garbage dump, or Sriracha factory. Urban Economics teaches us that such an event happening is highly unlikely in today’s marketplace. (nevermind the fact that nuisance laws should resolve these disputes) The business owner who is looking for a site for a stinky business would be foolish to look in a residential area where land costs are significantly higher. However, as Aaron Renn pointed out in the comments of my last post on Planned Manufacturing Districts, the inverse of this is happening in many cities as residential uses begin to outbid other uses in industrial areas: I think part of the rationale in this is that once you allow residential into a manufacturing zone, the new residents will start issuing loud complaints about the byproducts of manufacturing: noise, smells, etc. I know owners of businesses in Chicago who have experienced just that. They’ve been there for decades but now are getting complaints from people who live in residential buildings that didn’t even exist when the manufacturer located there. This puts those businesses under a lot of pressure to leave as officials will almost always side with residents who vote rather than businesses who don’t get to. It’s clear this is a more relevant defense of use-based zoning than the one we usually hear. Of course, I’d argue that segregating uses through zoning isn’t a just way to resolve these disputes, and my last post discusses some of the detrimental consequences for cities. It seems ironic, because it inverts the usual argument in-favor of zoning.  Residents are choosing to move near established industrial firms, and PMDs are a tool […]

Planned Manufacturing Districts: Planning the Life Out of Districts

They are called different things in different cities, but they are similar in form and intent among the cities where they are found.  For simplicity’s sake, a Planned Manufacturing District (PMD), as they are called in Chicago, is an area of land, defined by zoning, that prohibits residential development and other specific uses with the intent of fostering manufacturing and blue-collar employment. Proponent of PMDs purport to be champions of the middle-class or blue-collar workers, but fail to consider the unintended consequences of prohibiting alternative uses on that land.  At best, PMDs have little effect on changing land-use patterns where industrial is already the highest-and-best-use.  At worst, they have the long-run potential to distort the land use market, drive up the costs of housing, and prevent vibrant neighborhoods from emerging. A Race to The Bottom Before getting into it further, it is important to examine the economic decisions industrial firms make in comparison to other uses.  Earlier in the industrial revolution, industry was heavily reliant on access to resources.  Manufacturing and related firms were very sensitive to location.  The firms desired locations with easy access to ports, waterways, and later railways to transport raw materials coming in, and products going out. However, the advent of the Interstate Highway System and ubiquitously socialized transportation network have made logistical costs negligible compared to other costs.  Where firms once competed for locations with access to logistical hubs and outbid other uses for land near waterways in cities, they now seek locations with the cheapest land where they can have a large, single-floor facility under one roof.  This means sizable subsidies must be combined with the artificially cheap land to attract and retain industrial employers on constrained urban sites. Additionally, today’s economy has become much more talent-based rather than resource based, and patterns have shifted accordingly.  In contrast to industrial, residential and office uses are […]

Selling the Rights to Greater Density

At Next American City, Mark Bergen has an interesting long-form piece on municipal infrastructure financing. He argues that the property owners who benefit from public policies, such as infrastructure investment, should be required to fund these policies. He suggests infrastructure improvements should be paid for with Tax Increment Finance or value capture (PDF). I don’t necessarily agree with his infrastructure funding prescriptions, and may take these up in a future post. What I found even more interesting, though, is his suggestion that developers should pay for zoning changes. The basis for this proposal comes from the Georgist land tax. Because in urban settings, land’s value largely comes from the amenities surrounding it, landowners do not have the exclusive rights to this value, according to Henry George. The suggestion that developers should pay for the rights to build on the land they own is based, Mark explains, on a policy from São Paulo, called Certificates of Additional Construction Potential (CEPAC). These bonds, representing rights to build, are transferable and are publicly traded. He quotes Gregory K. Ingram of Lincoln Institute of Land Policy: “They’re essentially selling zoning changes,” explained Ingram. Crucially, the building fees have not eaten away at developers’ profits. By some accounts, the rates of return for real estate in the districts increase. […] The notes, sold by municipalities, are one of the world’s most innovative public financing techniques. Across many sections of São Paulo, if a developer hopes to build or do nearly anything with her property — adjust its uses, expand outward or upward — she must first buy a CEPAC. On a fairness level, selling zoning changes seems wrong to me. Current zoning policies are an arbitrary starting point, so it doesn’t make sense that developers should have to pay for permission to change a policy that […]

The Zoning History of Barcelona’s Eixample

Server glitch wiped the last few articles, so here’s a repose of the Barcelona one. Also, comments should be working now, should you deign to leave one… Somehow I managed to visit Barcelona a few years ago and not learn about the history of the city’s Eixample (x pronounced sh in Catalan), or extension/widening (ensanche in Castilian). So to spare you all that fate, I’ve assembled a short history of Barcelona’s Eixample, which has parallels in eixamples/ensanches/zabalgunes (Basque!) across Spain. So here’s the history, as told by Eduardo Aibar and Wiebe E. Bijker! (.pdf) It starts in 1714, when Philip V, the Bourbon King of Spain based in Madrid and supported by the Castilians, conquered the Catalan capital of Barcelona, creating modern, unified Spain. Catalan culture and language was suppressed for more than a century, but more relevantly for urbanists… The technical shape of society was also checked. An enormous military engineering project was launched to put the city under continuous surveillance of the Bourbon troops. A huge pentagonal citadel, designed by the Flemish military engineer Prosper Verboom, was built near the harbor to dominate the city. The army thus could bombard any target within Barcelona with heavy mortars. A high wall, fortified with bastions and fronted by a moat, zigzagged from the western face of the citadel up the north side of the city, around its back, and down south again to the port, meeting the sea at the ancient shipyards. This way, Barcelona became an enormous fort in which the military installations covered almost as much space as the civilian buildings. The result of Philip V’s project was to enclose Barcelona in a rigid straitjacket of stone that prevented any further civic expansion and industrial development. The walls soon became the main urban problem of Barcelona, and the […]

The Zoning History of New York’s White Brick Apartments

The rehabilitation of the postwar glazed white brick apartment building continues apace, with the condoization of 530 Park Ave., a 1941 (okay, almost postwar) 19-story white brick building. I happen to like New York’s postwar white brick buildings, and am even warming up to the red brick variants – I’ve always consider anonymous white brick to be the most New York of New York buildings. One reason that I like them is that because of the history of New York City zoning, they have the form of prewar buildings, with the embellishments (or lack thereof) of the postwar era. Up until 1961, New York’s developers were still building under essentially the 1916 code. While the 1916 code definitely restricted and guided growth in the dense commercial core, where it encouraged set backs and discouraged Equitable Building-like dense massings, developers in residential neighborhoods like the Upper East Side generally did not bump up against the zoning limits. The setbacks on 530 Park are slight and decorative, and likely built according to the style of the day (which was heavily influenced by larger buildings downtown whose shapes were dictated by zoning). So buildings erected before the 1961 code took effect tended to be lower than those that came after, but they covered more of the lot and their façades were flush with the sidewalk. Some of them included garages for the newly-motorized middle- and upper-classes, but they were small compared to those that came after. Above all they were governed by the laws of supply and demand. If you ignore the materials and lack of ornament, they were a lot like prewar buildings. But the brick apartment buildings of the ’40s and ’50s were the last in New York City built according to supply and demand, which is why I think we’ll come to hold them […]

“This is the dirty secret of California’s Density Bonus law…”

Inclusionary zoning – everyone wants to talk about it! Dave Alpert at GGW started the discussion with his pro-IZ piece, and hot on the heels of Emily’s post earlier today, I got an email from a California developer who wishes to remain anonymous: This is the dirty secret of California’s Density Bonus law: it’s primarily a way to give 100% affordable projects easy land use concessions. It has barely any effect on market-rate projects, despite all the attention it gets from affordable housing advocates. Incidentally, the number of affordable units in market-rate density bonus projects – 212 – over the total number of units produced in L.A. during the same period – 53,000 – is 0.4%. Vanishingly few. The number of units produced exclusively with the parking concession – the 6 condo conversion units – is 0.01%. Statistically the same as zero. If people really want to get affordable housing built, they would do much better to find more direct ways to pay for it – like through property tax revenues or other sources where everybody pays. Trying to pay for affordable units by constraining market-rate development and trying to the capture value that is “created” when those constraints are released is not only a pretty ineffective way to create affordable housing, it’s an excellent way to make market rate housing more expensive. I’ve got some thoughts of my own on inclusionary zoning and the anti-density sentiment it can engender among some affordable housing activists, which I’ll hopefully post tomorrow.

Look beyond Fourth Avenue in Brooklyn for solutions to a lack of retail

Robbie Whelan’s got a column in today’s Wall Street Journal on Brooklyn’s Fourth Avenue, which is something I’ve been thinking a lot about since I moved to Brooklyn earlier this year. If you don’t recall, last year the City Council passed a zoning amendment to require new residential developments on the transit-rich, pedestrian-unfriendly avenue in South Brooklyn to include a certain amount of ground-level retail, to appease the ghost of Jane Jacobs and to stop burning the souls of all who walk the avenue. Robbie’s column is outwardly critical of the city (he blames “bad decisions by Amanda Burden’s City Planning Department”), but on another level, he’s just cheering on what DCP already did (“the city finally got wise and passed another zoning change last year”). But walking down Fourth Avenue, and seeing all the vacant retail storefronts in apartment buildings sprinkled around the neighborhood from the last development cycle, it seems obvious that the real problem is a lack of demand, which Robbie derides as “the profit-above-all-else motive of some developers” (“some”…ha!). Namely: the neighborhoods around Fourth Avenue are too auto-bound and not dense enough to support the retail and pedestrian traffic that would make Fourth Avenue a vibrant place. (The lots bordering Fourth Avenue may one day grow dense enough to support retail without the help of their side streets. But for now, only mid-rise development is allowed, so I don’t see Fourth Avenue being self-sustaining any time soon.) Perhaps the biggest problem is the industrial zoning around the Gowanus Canal and Bay, a few avenues over from Fourth Avenue. Capital has replaced labor in U.S. non-service-sector jobs over the last century, and the only business that can take advantage of the zoning around Third Avenue are auto-oriented (manufacturers these days ship their goods by highways, not canals!). […]

TRD: Bushwick is staying industrial – no residential rezoning for East Williamsburg!

The Real Deal says that Bushwick, a neighborhood on the L that’s seeing a lot of housing demand spill over from Williamsburg, is not getting a residential rezoning. TRD describes how the “sought-after northwestern area […] is zoned for manufacturing, so residential building is largely banned there,” but then buries the lede deep down: And while the city passed a high-profile rezoning for the Williamsburg and Greenpoint waterfront in 2005 — paving the way for high-density housing in formerly industrial sites — no such rezoning is on the horizon in Bushwick, the department of City Planning said. The North Brooklyn Industrial Business Zone, which encompasses a portion of Bushwick, was created in 2005 by Mayor Michael Bloomberg as “a sort of policy statement: ‘Hey, these are industrial and are currently used for manufacturing — and should stay that way,’?” explained Mitchell Korbey, head of the land-use department at law firm Herrick Feinstein. The Bloomberg administration has done a record number of rezonings, but sources said the mayor, along with Brooklyn borough president Marty Markowitz, wants to keep Bushwick’s zoning predominantly industrial to preserve the city’s manufacturing base. Dolgin, for example, said he recently sold a 46,000-square-foot parcel at McKibbon and Bogart streets for $4.37 million, and the site will be used as storage for scaffolds. In some southern portions of Bushwick, a mixed-use building can be redeveloped as residential, but a variance is required to do that in most of the popular East Williamsburg area, and they are rarely granted, Dolgin said. The article says that the SoHo loft law is occasionally being used to convert existing structures, and that hotels and hostels are being built since they’re allowed by zoning. Then again, Bloomberg’s rezoning days are over after the Midtown East upzoning, so his opinion on rezoning Bushwick isn’t […]

Garden apartments and letting go, then and now

In doing research for a post the other day, I stumbled upon this excerpt from a book called A History of Housing in New York City by Richard Plunz that I think has a useful lesson about development and regulation: The garden apartment would not have emerged unless it was profitable. In this aspect the garden apartment represented a major change in developers’ perceptions of profitability in relation to the issue of coverage for moderate-income housing. Prior to the 1920s, it was always assumed that of reduction of coverage [sic] would increase costs and reduce profits. The arguments for reduced coverage remained exclusively within the realm of social good, or of marketing, in the belief that apartments associated with better conditions for light and air could be expected to demand higher rents. This common wisdom changed, especially with the new accessibility to cheap outer borough land. It became apparent that reduced coverage on low-cost land might reduce costs enough to increase profits, in spite of the lower number of apartments. Thus, the financial imperative in New York City for moderate-income housing evolved from the 25-by-100 food lot mandated by the Tenement House Act of 1879 to the 100-by-100-foot lot of the Tenement House Act of 1901, to the perimeter block of the 1920s. A key these larger-scale developers was the use of a unified open space, with simplified construction detailing and reduced investment costs per room while raising rental rates. Higher tenement densities with less open space were less desirable because they required more complex and expensive spatial organization in order to provide adequate light and ventilation. The new economic formulas applied especially to housing for the arriving middle class, whose space standards were far less stringent than for tenement design. In the developing outer areas, open land and reduced values permitted reduced site coverages. The “garden apartment” is essentially […]

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