“You can’t build your way out of a housing affordability problem.” That’s conventional wisdom. I hear it all the time: Prosperous, growing, tech-rich cities from Seattle to the Bay Area and from Austin to Boston are all gripped by soaring rents and home prices.
But what if you can build your way to affordable housing? What if, in fact, building is the only path to affordable housing? What if cities around the world have been building their way to affordability for decades?
You can. It is. And they have.
There—even before Hurricane Harvey wreaked havoc on the housing stock in August—housing cost less , adjusted for inflation, than it did in 1980, as this Economist graphic illustrates. The median price of a single-family house in Harris County, Texas, which surrounds Houston was $141,000. In King County, Washington, which surrounds Cascadia’s first city of Seattle, the median-priced home now costs $658,000, more than four-and-a-half times as much.
And Houston is no rust-belt basket case of decay and outmigration. It is the fourth largest city in the United States, among the fastest growing, and likely to rebound with surprising rapidity from the armageddon storm that just struck it. It’s also the most diverse large metropolitan area in the country, a demographic forerunner of the United States overall, with no ethnic or racial group in the majority. (Unlearn some of your stereotypes about Houston in Ed Glaeser’s Triumph of the City, this recent article by Nolan Gray, or this eye-opening lecture by Rice University sociologist Stephen Klineberg.) Houston has built its way to affordable housing.
Of course, the way Houston has achieved such extraordinary affordability may not suit Cascadia: it has sprawled. That’s not all it’s done. It’s grown much taller in its core, enabling housing construction everywhere, both dense and sprawling, with little red tape or delay. It’s no libertarian dreamscape: covenants, setback requirements, and off-street parking quotas temper private property rights, but it has no conventional zoning, and compared with other North American cities, it’s much more welcoming of homebuilding. Partly as a consequence, it has spread across an enormous area: you could fit all of the cities of Baltimore, Chicago, Detroit, and Philadelphia simultaneously inside the city limits of Houston. Greater Houston covers an area the size of the state of Massachusetts, despite the fact that Houston’s suburbs do have conventional zoning. Professor Klineberg calls it, “the most spread out, least dense, most automobile-dependent city in America.” Automobile dependence is expensive, and if you add the cost of transportation to the cost of housing, Houston’s advantage shrinks some—but not by three-quarters. Greater Houston is still a screamingly inexpensive place to live compared with Cascadia’s big cities.
The question left after examining Houston is not whether you can build your way to affordable housing, but whether you can do it without sprawling. The answer, again, is yes, you can.
The largest city in the world, with a metro-area population of 38 million, Tokyo is one of the world’s densest, most transit-oriented, lowest-carbon urban agglomerations. Given its size, you’d expect the Japanese capital to be expensive, because population size itself tends to raise housing prices. More people bidding on housing raises its cost.
Rent in Tokyo has decreased in the past decade, as building has actually outpaced population growth.
Growing populations, at whatever size, also tend to raise prices, because home construction often cannot keep up with demand. And Tokyo itself is growing, even though Japan overall is not. Yet despite these trends, which would be expected to jack up prices, housing in Tokyo is a bargain. A detached, single-family home in a close-in prefecture of Tokyo might sell for $300,000, less than half the $748,000 median home price in the city of Seattle. What’s more, rent in Tokyo has decreased in the past decade, as building has actually outpaced population growth, according to Next City.
The reason for Tokyo’s affordability? Like Houston, Tokyo makes home construction extremely easy, imposing few legal barriers and rarely delaying construction with red tape. Japanese zoning rules give property owners enormous flexibility. Takahiro Noguchi, head of the planning section in Tokyo’s Minato ward, told Robin Harding of the Financial Times, “People have the right to use their land so basically neighbouring people have no right to stop development.” And build they do! In Tokyo proper, with a population of 13 million, builders started construction of more than 142,000 homes in 2014. That’s far more than the 84,000 new homes started that year in the entire state of California, which has three times the population, as Harding reports.
Tokyo’s homes may be smaller than Cascadia’s, but they’re growing. Residential space per person has doubled in Tokyo over the last 50 years. Some critics dislike Tokyo’s unplanned, eclectic neighborhoods or balk at the idea of a high-rise metropolis (which is a misperception about Tokyo anyway). But if Houston proves you can build your way out of an affordability crunch, Tokyo proves you can do it in a dense, walkable, transit-oriented form. Tokyo’s per-capita carbon dioxide emissions are one fourth of Houston’s and a third of those from western US cities such as Denver and San Francisco.
I repeat: Tokyo, the world’s largest city, is much cheaper than Cascadia. It has built housing faster than its population has grown, and it has grown denser along the way.
Of course, Tokyo has a radically different land-use governance system, with strong national control and little influence for neighbors. “Local government,” says Junichiro Okata of University of Tokyo, “has almost no power over development.”
Meanwhile, Houston is the great exception to North American zoning regimes, with no conventional zoning at all inside city limits. What about more typical cities? Can you build compact, walkable cities that are affordable under conventional North American zoning?
As the figure below illustrates, both rental and for-sale homes in greater Chicago are, if not as cheap as in Houston, still available at fire-sale prices compared with Seattle (to say nothing of San Francisco). As of May 2017, the median price per square foot of a home in Chicagoland was just 55 percent of greater Seattle’s price. Rent was one-quarter lower too, though Chicago’s population is almost three times bigger than greater Seattle’s.
As of May 2017, the median price per square foot of a home in Chicagoland was just 55 percent of greater Seattle’s price.
Since 1990, greater Chicago, unlike many Midwestern cities, has been adding population (though in the last two years, it’s lost an increment). Chicago is conventionally zoned and governed, but its pro-housing policies—faster permitting, less-restrictive zoning—make homebuilding far easier and housing choices far more numerous than in many similarly blue US cities. “Between 2002 and 2008,” writes economist Ed Glaeser in Triumph of the City, “Chicago issued 68,000 housing permits . . . [while] Boston issued 8,500 housing permits. . . . Chicago issued more than three times as many housing permits as San Jose, California, a city that is almost as large and far less dense.” Chicago’s story is not exclusively one of abundant housing choices; it’s also growing more slowly than Seattle, for example, and its growth is concentrated in the densifying urban core. Still, compared with other great North American cities, it’s doing a good job of keeping up with demand without simply sprawling to the four directions.
Canada’s second most populous metro area is vastly less expensive than greater Vancouver, BC–––less than half as much for a typical house. It’s even cheaper than much-smaller cities such as Saskatoon. Part of the explanation, as in Chicago, is that population is growing more slowly than in Cascadia’s large cities and their tech-booming counterparts elsewhere. But this difference amounts to less than you might think. For one thing, Montreal is growing, as traffic engineer and Montreal blogger Simon Vallee points out: Montreal in recent years has grown 1.2 percent a year, while Vancouver has grown 1.3 percent a year. Not a staggering difference! More important is that greater Montreal keeps building residences, adding more homes over the last decade not only than Vancouver, BC, but also than similarly sized US metro areas such as Seattle and San Francisco, according to US and Canadian census data.
Montreal demonstrates the power of “missing middle” housing on a massive scale.
Beyond the numbers alone, Vallee argues, is that much of the metropolitan area is dominated by land zoned for low-rise—typically three-story—flats and mid-rise apartment buildings. Montreal’s zoning is the inverse of Portland, Seattle, and Vancouver’s. The latter give most of their land to detached single-family houses, then concentrate high- and mid-rise buildings along arterials and in pockets. Montreal gives most land to low- and mid-rise apartments, and little land to detached, single-family houses or expensive-to-build high-rises. Instead, it builds three-story walkup apartments and the like by the square-mile section, both in the city and the suburbs: such neighborhoods are dense enough to support transit, cycling, and walking and are also made up of the cheapest form of housing to build and operate. Overall, metropolitan Montreal is the second densest city in Canada, trailing greater Toronto by a whisker and substantially leading greater Vancouver, despite the famous skinny residential towers of the latter’s downtown skyline.
Montreal demonstrates the power of “missing middle” housing on a massive scale.
In the cities I’ve mentioned so far, private enterprise has supplied the homes, but building your city all the way to affordability does not necessarily require that. What matters is building enough homes for all the people who want to live there, not whether the builders are private, public, or a blend.
There, a far-left government in the 1920s, began erecting vast new housing blocks in structures and complexes designed by leading architects and admired by urbanists to this day. This cityscape, plus later generations’ additions, now accommodates some 62 percent of the city’s population: a cumulative total of 220,000 municipal rental units along with a similar number of dwellings owned by limited-profit housing associations. Some 70 to 80 percent of new housing construction in Vienna is publicly subsidized, as it has been for many years. In Cascadia, the equivalent figure for existing buildings is in single digits: in Seattle, for example, it’s about 8 percent.
70 to 80 percent of new housing construction in Vienna is publicly subsidized.
Compared with Seattle (or Vancouver), Vienna’s housing is much denser: the city is mostly apartments and lacks even one acre of single-family zoning. At the same time, its parks and open space are four times as ample, covering half of the city. And its development process is both more streamlined and more participatory. Most housing is developed through competitions among developers, judged by committees of experts based on a set of criteria. Among these criteria are social cohesion and integration (to make racial, nationality, and class disparities matter less), environmental sustainability, beauty, and community. Because Vienna’s dense, walkable neighborhoods mix incomes, nationalities, and races, they provide more equitable access than Cascadian cities to parks and public spaces, public schools and libraries, and job openings: the Viennese housing market does not ration opportunity the way Cascadia’s housing market does.
Vienna’s housing model is impressive, if no panacea. Of course, the city, like Tokyo, operates in a completely different political context than Cascadia. City government controls huge areas of land, which it can award to homebuilders with strings attached. Rental laws nationwide in Austria function like rent stabilization programs, giving tenants predictability. At the same time, home ownership is rarely a path to financial gain in Austria, and private property rights are less sacred than in North America. Massive expenditures from the national government bolster Vienna’s housing. (Astute observers may note that the same is true in the Northwest states, through the US mortgage interest deduction and other tax preferences, which funnel hundreds of billions of dollars to US homeowners. The difference, of course, is that Austria subsidizes construction of housing, while the United States subsidizes mortgage borrowing. Naturally, Vienna gets more homes, and the Northwest gets more mortgage debt. Furthermore, in Austria, the subsidies increase as you go down the income ladder, while the US subsidies flow up the ladder.)
Vienna’s political left, unlike Cascadia’s, actively supports housing construction, perhaps because homebuilding in Vienna is not a conventional, profit-seeking business but is a closely regulated industry, almost a public utility. Consequently, with ample political support, housing construction usually keeps up with demand in Vienna; the city gains far more new dwellings each year than does Seattle, for example, despite similar population growth.
And Vienna is not the extreme case of government-led housing abundance.
The city-state surrounded by Malaysia goes even farther than Vienna: some 82 percent of residents live in apartments built by the state Housing Development Board, and nine-tenths of them own those apartments, purchased—curiously—out of their social security accounts. As in Vienna, public subsidies flow disproportionately toward the bottom rather than the top of the income ladder. Unlike in Vienna, though, the state housing board is not only builder or subsidizer of apartments but also the mortgage banker and even law enforcer: failure to pay parking tickets can get you evicted.
Singapore is a jaw-dropping story: nearly a million publicly built homes, in a short period, erected in dense, walkable, transit-oriented, energy-efficient, highrise “new towns,” surrounded by parks and green space (more here and here). Housing prices are modest, and housing policy leads to greater social equity, not widening wealth gaps. But of course, Singapore is a political outlier, a technocratic government with authoritarian tendencies that’s been under one-party rule for a half century. Singapore’s housing model seems inseparable from its political system, so it’s likely not replicable in Cascadia?
One more example with lessons, but this time from neither a city nor a city-state but a large nation:
Housing prices are dramatically lower in Europe’s cornerstone economy than in hot housing markets elsewhere in Europe or North America: more like Houston than San Francisco or London. Like in Houston, German home prices have declined, not increased, over the past three decades. The explanation is that Germany encourages homebuilding, lots of it. For each increment of population growth in recent years, for example, Germany has built three times as many new homes as has the United Kingdom. For one thing, public funding flows to local government in proportion to local population, so local agencies have a strong incentive to make land available for housing and to keep regulations tuned for efficiency. Economics blogger Steve Waldman writes:
Germany’s path is ideologically mixed. On the one hand, German property owners have a right to build within broad planning parameters. On the other hand, what we in the United States call rent controls are universal in Germany. . . . Lending for home buying is regulated and conservative in Germany, preventing joint credit/housing booms. . . . Homeownership and renting are roughly balanced, and home prices have had no tendency to increase dramatically. Homes in Germany are what a naïve economist might predict they should be, a very durable consumption good that provides a stream of housing services, not a ticket to financial gain at all.
Germany, like Austria, stabilizes rents through its lease laws. It does so without the collateral damage to housing choice that rent control has typically brought in North America, because other German policies consistently encourage building enough homes for all. When homes are abundant, Germany teaches Cascadia, rents remain stable anyway, so regulatory limits on rent increases provide peace of mind to tenants without appreciably undermining incentives for builders.
Lessons from unexpected places
Houston, Tokyo, Chicago, Montreal, Vienna, Singapore, Germany—all these places have built their way to affordable housing. They’re not alone. Housing economist Issi Romem has detailed the numerous American metro areas that have done the same: Atlanta, Charlotte, Dallas, Las Vegas, Orlando, Phoenix, Raleigh, and more. Many more. They have done so mostly by sprawling like Houston.
In fact, Romem’s principal finding is that US cities divide into three groups: expansive cities (sprawling cities where housing is relatively affordable such as those just listed), expensive cities (which sprawl much less but are more expensive because they resist densification, typified by San Francisco), and legacy cities (like Detroit, which are not growing).
Romem’s research makes clear that the challenge for Cascadian cities is to densify their way to affordability—a rare feat on this continent. Chicago and Montreal are the best examples mentioned above.
In Cascadia’s cities, though, an ascendant left-leaning political approach tends to discount such private-market urbanism for social democratic approaches like that in Vienna.
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Unfortunately, the Vienna model, like the Singapore one, may not be replicable in Cascadia. Massive public spending and massive public control work in both Vienna and Singapore, but they depend on long histories of public-sector involvement in housing plus entrenched institutions and national laws that are beyond the pale of North American politics. No North American jurisdiction has ever come close to building enough public or nonprofit housing to keep up with aggregate housing demand. This statement is not to disparage subsidized housing for those at the bottom of the economic ladder or with special needs. Cascadia’s social housing programs provide better residences for hundreds of thousands of people who would otherwise be in substandard homes or on the streets.
But acknowledging the implausibility of the Vienna model for Cascadia may help us have realistic expectations about how large (well, small) a contribution public and nonprofit housing can make in solving the region’s housing shortage writ large. Accepting that reality may help us guard against wishful thinking.
Because adopting a blinkered view of housing models is dangerous. Adopting the view that Vienna, for example, is the one true path to the affordable city—a view that fits well with a strand of urban Cascadia’s current left-leaning politics, which holds that profit-seeking in homebuilding is suspect and that capitalist developers, rather than being necessary means to the end of abundant housing, are to be resisted in favor of virtuous not-for-profit or public ventures—runs the risk of taking us to a different city entirely.
In the political, legal, and institutional context of North America, trying to tame the mega-billion-dollar home building industry—and the mega-trillion dollar real-estate asset value held by homeowners and companies—in order to steer the entire housing economy toward a Viennese public-and-nonprofit model may end up taking us not to Vienna at all but to a different city. It might end up delivering us to San Francisco. So . . .
Consider San Francisco
A city bifurcated between rich people in multi-million-dollar homes and multi-thousand-dollar apartments, poor people in nonprofit or public housing, and a slim slice of middle-class people in old and deteriorating rent-controlled apartments that they inhabit by virtue of inheritance, luck, or extreme persistence; a city that has averaged the addition of little more than 1,500 new dwellings a year for decades, when at least three times that many would have been needed to keep up with the tsunami of would-be neighbors, according to planning research and advocacy group SPUR—San Francisco is so severely afflicted by a self-imposed housing shortage that, as noted in the figure above, home prices per square foot are almost six times higher than in Houston and more than twice as high as in still-astronomical Seattle. Rents too are massively elevated.
Home prices per square foot in San Francisco are almost six times higher than in Houston and more than twice as high as in still-astronomical Seattle.
San Francisco is the second city of the American West. It centers what may be the biggest innovation- and wealth-generating agglomeration of people on Earth. The information revolution is issuing like an economic waterspout from the San Francisco Bay area. Yet the municipalities that make up the greater San Francisco Bay area have permitted the construction of just 14,752 new homes a year, on average, from 2006 to 2016, according to data from the US Bureau of the Census (combining the San Francisco and San Jose Census Metropolitan Statistical Areas). During the same period, greater Houston—which has the same population, or did by the end of this period—built more than three times as many homes, some 47,616 a year. Adjusting these figures for population shows a similar result: Over the same period, the Bay Area averaged 2.3 new dwellings per year for every 1,000 residents, while greater Houston averaged 7.9—a 3.4-fold margin.
Part of the problem in California is the perverse and pervasive effects of the 1978 tax revolt ballot measure Proposition 13, which slashed, froze and distorted property taxes statewide, granting long-time homeowners huge windfalls while penalizing cities for allowing new dwellings, but not new offices and stores, within their borders (for example). This policy also severely constrains the turnover of houses from one owner to the next. But more of the problem is misguided neighborhood obstructionism.
I won’t belabor the point. The housing travails of the City by the Bay have been told well and often. The key lesson of San Francisco is that the city’s own closely held social-democratic values have made the city a housing nightmare, as artfully explained by Gabriel Metcalf of SPUR. The same dynamic comes through strongly in journalist Kim-Mai Cutler’s tour de force “How Burrowing Owls Lead to Vomiting Anarchists (Or SF’s Housing Crisis Explained).” San Francisco’s antideveloper politics have dug it into a self-perpetuating cycle of self-righteousness and displacement.
San Francisco’s lesson for Cascadian cities is that Viennese-style values are not enough. To replicate Vienna’s affordable housing model, a city would also need Vienna’s history, legal powers, and national revenue. Lacking those things, San Francisco has succeeded only in starving itself of housing, not building a housing economy that lives out its progressive values. It has the power to stop private developers from building enough homes, but it does not have the power to build them itself.
A different, hybrid model is called for in Cascadia, one that can work in Cascadian context, one that harnesses the private sector to public ends. Which is not to say lessons from Vienna are not transferable. They are. Where large blocks of public land are available, for example, Cascadia too could develop them through design competitions among developers. Vienna’s zoning and open space policies are inspiring, too: Vienna achieves beautiful density combined with vastly more natural spaces than Cascadian cities.
But the lessons of other places are just as relevant. Houston, for example, can be Cascadia’s model for how easy it ought to be to get permits to build homes—if we believed, as Houston does, that building homes is in itself a good thing, our permitting processes would encourage rather than discourage it through endless months of hoop-jumping and politicized reviews. Tokyo, meanwhile, reminds us that placing control over development at senior levels of government, and making development of urban property a right of its owner, helps to elevate the broad public interest in abundant housing choices over parochial opposition to change. (Leaders in California have recently succeeded in passing a raft of new laws to act upon this lesson.) Chicago teaches that a pro-housing political orientation can provide abundant housing even under conventional zoning in a deep blue city, while Montreal offers Cascadia a model of a cityscape no longer of single-family homes but of three-story rowhouses, walk-up apartments, and condominiums on quiet, tree-lined streets close to transit and neighborhood centers. Singapore’s lesson is the promise of erecting high-density, park-like “new towns” on underused city land. And Germany shows us that a future is possible where housing is no longer an investment vehicle but “a very durable consumption good that provides a stream of housing services, not a ticket to financial gain.”
More prosaically, one version of a Cascadian hybrid is what Seattle’s Housing Affordability and Livability Agenda (HALA) recommended in its 2015 report, and the city has been energetically if imperfectly implementing ever since: citywide upzones matched with affordable housing mandates, parking reforms, reliberalization of rooming house rules, legalization of in-law apartments and backyard cottages, and much more.
The larger lesson, though, comes not from the detailed HALA plans and proposals, but from all these places.
And it is simple: Yes, you can build your way to affordable housing. Aside from economic decline and depopulation, it is the only strategy that actually works. You can do it through a state monopoly as in Singapore, an array of public and limited-profit associations as in Vienna, or private developers as in Chicago, Germany, Houston, or Montreal. But to have affordable housing, you have to build homes in great abundance, and without that, other affordability strategies such as rent control and inclusionary zoning can be fruitless or counterproductive, as in San Francisco. Building plenty of housing is not just one way to affordability, it is the only way—the foundation on which other affordability solutions, measures against displacement, and programs for inclusion rest.
Thanks to Dan Bertolet and Margaret Morales for research assistance and to reviewers Joe Cortright, Kim-Mai Cutler, and Issi Romem for their helpful critiques. All remaining errors are my own.
Alan, great piece.
While you only alluded to it, I believe that the single most effective barrier to these models is the idea that the single family detached house is the ideal form of housing
Moreover, that it must be protected from any incursions by other housing types by local zoning codes.
No other country holds that myth. Indeed, there is absolutely no evidence in the social sciences that this is the best housing type for raising children, despite the common assertion by many people in the U.S.
Nailed it. Tho… Much of Canada also holds that myth. But there is no single family zoning in Germany or Austria (or, for that matter, Switzerland) – and most of their urban lands aren’t zoned for even the lowest zones. In Vienna, the lowest building zone still allows small scale residential – and in fact most of it is 2-unit buildings, even though it’s category is ‘einfamilienhauser (one family homes)’ a Much greater share of city v. Seattle is zoned for greater than 4 story buildings – even though most of the residential buildings were built after WW1. Much of the city is denser than 26k/square mile (100 einwohner/ha): https://www.wien.gv.at/stadtentwicklung/grundlagen/stadtforschung/gis/karten/images/einwohnerdichte-2014-g.jpg
And yet despite this, it is routinely rated as the most livable city in the world.
I wonder if there is a connection…
I linked to Mike’s pieces on Vienna in the article above. Let me just plug them here. Great work!
I would love to hear what you think of deBlasio’s building initiatives in NYC. I see buildings going up all around me in the Bronx, but I can’t guess what effect all these buildings will have on rents, either locally or citywide.
Not informed enough to comment, I’m afraid.
I don’t know enough to comment either, but I did read something recently (and confirmed at census.gov) that the median household income in New York County (= Manhattan) is less than $75,000 a year. That means more than 3/4 of a million people – equal to or more than Seattle’s population – are able to live in Manhattan on that or less.
So NYC may not be perfect, but perhaps we ought to be doing a lot better than we are on affordability…
Nope, much if that is rent control grandfathered in but NY is almost impossible to find affordable housing in, especially the city. Even Brooklyn etc. are skyrocketing in prices, slightly offset by not really needing a car.
NYC IS NOT DOING BETTER AT ALL!
Homelessness and apartments are shared from 5 to 10 roommates. Maybe that skews the numbers you read about. NYC is spiraling into affordable housing dispare because so many people come with a dream and are willing to pay dearly for it in a variety of ways. And yes, people trapped in shitty or grand rentcontrols who are afraid to make the slightest move in fear of ending up in the streets.
Number data’s are not realities
Two things would make this more interesting. First, compare “affordability” in the US today to what it was like when Federal and State transfers paid for infrastructure and services. What’s left? Are all the states the same? What do we load on the cost of a home/dwelling unit, and is the same everywhere? Second, look closely at the structure of the homebuilding industry. Who builds what? Megacorps or small builders? In a previous study of the cost of housing in Oregon from about 30 years ago, the structure of the homebuilding industry in Oregon itself, characterized by mostly small builders unable to capture economies of scale, was identified as a significant and unaddressed cost factor. But, what are the implications of doing development 1000 or 3000 or 25,000 acres at a time? Is that a useful model for a rainforest? Anyhow, though I agree that zoning in Cascadia needs a major shake-up, the breezy treatment here of intergovernmental transfers and the nature of the homebuilders themselves deserves better.
Thanks for your comment, Ethan. (And all your great work!) I’d welcome a reading list on your two suggestions.
Sure, you can reduce the price of housing with (as Houston has done):
a) no land use regulation
b) no impact fees to protect existing residents
c) no union labor, no living minimum wage, and no workplace safety enforcement
d) private disability insurance, that leaves disabled workers without help
e) no stormwater management system
But, when you do that, you end up with…Houston. I’ve been there. It sucks.
I grew up in a sprawling low-cost city (Las Vegas). I moved here for a reason: quality of life.
Yes, we can do things better. But what we learn from Houston is what NOT to do.
Better we should learn from Portland, Vancouver, Santa Barbara, Copenhagen, Barcelona, and Carmel: places with vitality, beauty, and culture.
Klalch - KIng of the Mole People
Vancouver? You’re kidding of course. It has had, for number of years running, the distinction of being in the top 3 for least affordable cities in the world. (Full disclosure – I live there).
“No union labor” so things are done cheaper, faster, and better. “No living wage”–funny that, when it’s more affordable to live in Houston on an “un-living” wage than in the vast majority of cities on a “living wage.” “No workplace safety enforcement”–balderdash. “No land use regulation”–exactly. “No impact fees to protect existing residents”–really doesn’t hurt existing residents; have you SEEN how much nicer Texas school buildings are than most of the nation???? “Private disability insurance”–that works just fine.
“No stormwater management system”–completely and utterly untrue. The only problem with Texas’ water management is that they take the outlook of Western states, were the big problem is people hoarding water, when certain areas actually have Eastern levels of rainfall, where the big problem is runoff and flooding. A one-size-fits-all solution has caused problems for the wetter part of the state and should be addressed, but this isn’t indifference or a lackadaisical approach. Texas has one of the EARLIEST water management state agencies in the US–and many states still don’t have one. It’s been focused on drought issues, though, not flooding.
As far as city stormwater management, at that level, Houston is literally 200 years ahead of the East Coast, where people still think it’s A-OK to put poop and rainwater in the same tube and hope nothing bad happens.
Hi Jim, we met recently at the Harbor House.
I agree that Vancouver is not a good model and add that I wouldn’t want to replicate Portland, either. Both lack affordable housing options, presumably because of high demand and low supply.
I’m enamored by the example of Montreal provided above – an affordable, incremental approach to increasing density that can support access to local businesses and parks while avoiding the environmental impacts of skyrise cityscape.
“Which is not to say lessons from Vienna are not transferable. They are. Where large blocks of public land are available, for example, Cascadia too could develop them through design competitions among developers. Vienna’s zoning and open space policies are inspiring, too: Vienna achieves beautiful density combined with vastly more natural spaces than Cascadian cities.”
Is this the best suggestion you have? No large blocks of public land are available (except our former military bases which are required to prioritize low-income housing or schools). Instead, we have Roger Valdez’ clients demolishing older, affordable single-family homes for new, unaffordable town houses, as “infill.”
Virtually none of the new multifamily units are family-sized 3-bedroom. Unless we build more courtyard buildings and stacked apartments and require family zoning, we are tearing down the older, single-family houses that are the only option for families, especially extended families of immigrants. Please address your solution for family-sized 3+-bedroom housing.
Chicago is probably the world’s purest street grid, with a bus route arterial every 4 blocks, making every place just two blocks from transit. In Chicago, I never needed a bus schedule, because buses just came. Because of geography and having voted down light rail, we are decades away from building out a transit spine and we will never have frequent, reliable transit in all parts of the city. Without access to frequent, reliable transit, the areas closest to the water will never achieve your ideal of walkability. And virtually all of Seattle north of 85th lacks sidewalks, at a potential cost of $2 billion to complete the 11,600 missing blockfronts. So let’s agree that those stories are interesting, but don’t make the mistake of applying Houston’s or Chicago’s lessons to Seattle.
Let’s agree that mother-in-law apartments and backyards cottages *are* already legal (please correct your piece) and should be encouraged, as Portland does, by relaxing regulations and eliminating permitting fees for MILs. We could easily achieve 2,000 more mother-in-law apartments within 10 years, all of them naturally affordable, because the owners value trustworthiness over maxing out the rent. This is 1/3 of all the promised HALA affordable apartments, without angst and without rezoning. What’s the difference between a duplex and a mother-in-law apartment? The owner is sharing their house, keeping it affordable.
” Unless we build more courtyard buildings and stacked apartments…”
Exactly why we should zone every inch of Seattle’s residential land to allow courtyard buildings and stacked apartments.
This piece does not address the need to conserve the heritage nature of many neighbourhoods, which is often embodied in single family homes. Densification and more housing yes, but respecting the existing built form and heritage character please! And where has the zoning-free approach left Houston, when much of its stock is built on floodplain?
That heritage nature is usually a direct result of redlining and other exclusionary policies, not of any inherent quality of the location where the neighborhood exists. It’s just that the arguments for resisting change have now shifted – not the effects.
Agree on the terrible environmental impacts from Houston’s lack of zoning.
Disagree vehemently regarding preserving historic character, which serves relatively few at the expense of many. Lack of housing is a humanitarian crisis largely caused by economically privileged NIMBYist bent on preserving their property values and the luxury of living in a neighborhood with their preferred superficial values.
Decipher City, LLC
This is nonsense. The market is global, and while people worship at the altar of “supply and demand,” all this ideology just makes developers rich. Consider Boulder, CO and Austin, TX, where every development is luxury and wages have declined and the buildings lie empty. What about the failure of the housing market to respect that home ownership is going to be an impossibility for the populations making that low wage? What about the housing crisis of 2008? What about transit and food deserts? What about the nation’s aging infrastructure? No, no one can build a way to affordable housing like no one can build a way to no traffic. In the words of Julia Ormond in Sabrina, “More isn’t always better, Linus. Sometimes it’s just more.”
The article discusses a few systems that push development to serve low and middle class renters. The model presented I’d believe is most applicable for Seattle is German – predictable streams of subsidies for building coupled with rent controls.
Rent control is currently illegal in Washington State, but hopefully is about to change:
Great article, and thought provoking. The timing on Houston isn’t great (though after a Seattle earthquake people will make similar arguments). The real challenge is embodied in the three comments above: “we should be like these other livable but expensive cities (because I own and don’t think about rents all the time); “we should do x small solution (because 2000 units seems like a lot)”; “we need to preserve single family homes” (because I like it this way). All of the examples you cite rely on a serendipitous path that the city took or technocratic leadership, not a widespread public debate (except maybe Vienna, as you say). Public debates are hard with status quo bias, innumeracy (2k~20k), and wishful thinking.
Good points, Michmill. I wrote almost all of it long before the hurricane hit Houston, which makes the timing unfortunate — though the argument still hold.
Captivating reading, but I’m having a hard time relating to the examples used. We need to look at the housing+transportation cost of living to make our comparisons. Drive or wilt in Huston.
I believe more housing supply will help, but also, For all sorts of reasons including more affordable housing, more people need to be paid more for their labor.
Houston was near bankruptcy prior to the hurricane because they built with no concern for the cost of maintenance of public facilities. The other affordability factor that we need to consider is the long-term cost of building less dense/fewer taxes per mile or square foot. Increasing density increases long term financial stability for a municipality. See https://www.strongtowns.org/the-growth-ponzi-scheme
Your article entirely ignores the Housing Trilemma as described by Josh Lehner at the Oregon.gov’s website (link below). There are natural tradeoffs between Housing Affordability, Quality of Life, and Economic Strength that are difficult, if not impossible, to overcome.
Because of the Housing Trilemma, no a single coastal city in the US has succeeded in achieving all three. You will likely achieve your goal of housing affordability when Seattle destroys its quality of life. Good luck with that!
Here’s the link to the Housing Trilemma article on the Oregon.gov site:
Really interesting article, but the narrow focus may completely miss the point of what housing advocates in many cities dealing with a housing affordability crisis are trying to accomplish. They are often most concerned with how building housing can address the goals and vision of the community residence and activist. Simply building housing doesn’t address these issues for the existing community. This article would be fantastic if it included interviews from community activist from these cities and how building more housing was the best way to get affordable housing. I bet that in those interview you will find that housing was only part of what they are looking to get out of any new developments (i.e. local hire, local sub-contracting, amenities, transportation issues, length of rental agreements, access to education, access to job training, access to health facilities, language, outreach plan, etc)
Often affordable housing due to the public subsidy dollars is expected to also solve for every socio-economic issue as mentioned above, which often makes it a lot more expensive to implement. All that is fine, but the public dollars often do not match additional funds or incentives to solve for the additional issues.
Thanks for the outstanding article, Alan. Our population boom continues to outstrip our new home permitting many times over, and we’ve been behind the building curve for nearly a decade already. The only outcome from that kind of constriction is continued appreciation of prices and rising rents.
Change is inevitable in Seattle. We either choke out our growth and business development by becoming too expensive, or we aggressively engage in smart growth planning to put more units, and more affordability, in the places where density belongs but doesn’t yet exist. This doesn’t mean trampling every single family neighborhood. It does mean removing barriers and creating greater incentives for large scale condo construction in urban villages–condominiums being the ideal starter home for a dense metropolitan area, and units that can be built at scale quickly and affordably when the regulatory environment is right.
“Give me. Give me.” “I deserve to have the same things you have.” “You have some, so give me some.”
The problem with this generation and the people demanding premier (but economical) housing options is that no one wants to earn it any more. Your parents and their parents and their parents never expected anything without hard work. Now, everyone believes it’s their right to live in the same ideal locations as people who’ve spent decades actually earning the right. I saved for 25 years and lived in crummy apartments while commuting to jobs I didn’t love while working towards my first home. Too bad I’m not a millennial. I’d just sit in the street and pout until someone built me a new house and made someone else pay for it.
Thanks for the article. Now I know what I definitely don’t want in my neighborhood.
Rich, the problem in Seattle is that the cheap options for people trying to work their ass off to save like you did barely exist anymore. So the scenario you described is simply not possible. There is very little housing that is priced for people who want to do what you did in all of King County. My generation, the millennial generation, IS working, but can you blame us for complaining when we come out of college with crippling debt and the world around us seems to be devouring itself and leaving a trail of destruction in its wake? Not exactly inspiring. I’ll also admit that my generation and younger generations (and increasingly older generations) have succumbed to the cruel lure of the internet, and at exceedingly distracted, disengaged, and becoming over-saturated with information. These are strange, strange times. But I have to vehemently disagree with your assertion that we’re not working hard. We are, but what is bothering is that we’ve decided to ask the question “For what?” and are very disturbed by the answers we’ve found so far.
The reality is that the Boomers are by far the most entitled, born-on-third-base generation alive today. Their guilty projection and paranoid self-absorption would be hilarious if it weren’t also destroying the fabric of society. Oh well.
When you grew up there was a different ratio of income to rent.
Millenials are defined by the most visible people, who often don’t work much. But that’s misleading and untrue:
And, taking inflation into account, we get paid less for doing the same work more productively – I make the same amount repairing yachts today as what a friend of mine made in 1990. It’s more than anecdotal:
Not all ‘neighborhood obstructionism’ is misguided. If all neighborhoods had sufficient power to exert local control over local building, developers would have less sway over public officials, and solutions that encompass entire regions rather than pave over neighborhoods with less power. It all starts at home — the key is to extend that understanding to all:
From In Praise of the Nimby:
“Not in my backyard”, then, is not a cry to be disparaged or dismissed: it is a rallying call to gladden the heart. The yard, the garden, the village green, the town square, the local plot of land, inhabited, visited and protected by those who know it, is the well from which democracy springs, and the bench at which government and its grand projects are judged. This is why politicians, housebuilders, planners, bureaucrats, civil engineers and “global citizens” everywhere hate Nimbys with such a passion. Nimbys have power, and they are not afraid to use it.
Proposition 13 parallels the New Zealand experience, where gullible investors who lost big in the 1987 crash turned to tax-exempt property investment. The end result is a housing bubble that overwhelmingly favours an incumbent home-owner class with the equivalent power of an unelected Senate.
Only a bubble burst would be guaranteed to dislodge it, but it would be even more ruinous than 1987, and whoever’s in charge if it happened could well be remembered for collapsing the NZ housing market.
Excellent piece Alan.
One note to back up this – Portland’s massive $258m housing bond is only touching 5% of the need for affordable housing on a good day. We will never get caught up with this model.
I’d love to see this article a bit edited, with the paragraphs about Montreal and Germany moved to the top, they seem to provide the most replicable solutions for the PNW.
I’m live in Olympia and we expect to see a population boom. Our city council just shifted dramatically and is actively looking for solutions like these.
I am at a loss to understand the vehemence with which some single family homeowners fight off the encroachment of accessory dwelling units. If sufficient regulations exist to keep such units within the height and size restrictions and the character rules of a homeowners association, they would be no different, from the outside, than any number of non-dwelling accessory buildings like storage sheds, artists’ studios, and detached garages.
So what’s different? Someone *lives* in an ADU, and because it’s a renter, and the rent is naturally low, that someone, de facto, couldn’t afford to buy in the neighborhood, or to rent an entire house there. Therefore one must surmise that the opposition is not to the unit, but to its purpose, and specifically, to its inhabitant. (It is hard to imagine that there would be, for instance, hellbent opposition to a social movement that called for people who could afford it to house their elderly relatives in ADUs on their property.)
It’s not NIMBY, it’s KOTRR (keep out the riff-raff.)
We should not be looking at this in isolation from other impacts.
Houston may have lower housing costs, but the city is a sprawling mess, that is so amorphous that it essentially requires residents to drive everywhere and commute long distances.
Tokyo has the most incredible transit system I have ever experienced. They also have protections for some of the ancient homes and there is a respect for history and culture inherent in the residents that a property owner is less likely to make the abuses that strict-for-profit, disposable construction developers in the U.S. It is a cultural thing – that there are more important things than converting all of our history into dollar signs.
Chicago, too, has a very frequent AND EFFECTIVE transit system. They are currently experiencing pretty significant pressure to tear down 150 year old brick duplexes. Developers have an incentive to tear down these old buildings to create new three-flats. They lose hundreds of historic and beautiful old structures every year in the name of profit. Chicago has a very vibrant condo market, as well – something that Seattle lacks and which would provide much-needed ownership opportunity that we currently lack. One could easily create a new 3-flat condo building in Seattle inside the envelope of a large, old bungalow… but our Councilmembers are not interested.
The article appears to completely ignore the upward pressures on pricing that “building new” places on housing in Seattle. There is a very real and significant presence of “deep pockets” out-pricing folks that simply want a place to live, funded by corporate real estate interests and out-of-state investors. Treating housing as a commodity, rather than as a place for people to live, is likely the primary factor behind the rapid run-up of prices in Seattle. Adding this pressure to ADU/DADU seems unwise, which is a primary objection to the waiving of owner-occupancy.
Understanding the total mix of factors that enables success in each example, is elusive.
Singapore, for example: all land is lease-hold, not free-hold. This completely avoids the “economic rent accumulation” problem of private ownership of sites. Furthermore, there is nil NIMBYism or even democratic or “public consultation” processes regarding redevelopment: the government has total powers to do what it likes.
Tokyo and Japan’s cities generally, have an amazing unique institutional arrangement for their Transit systems, where there are multiple enterprises who own all the sites served by their own systems and develop these sites so as to attract tenants and hence ridership. Instead of transit-served sites inflating in price (literally capitalized value of public subsidies of the Transit) and being popular speculative holdings as in our cities, the Japanese enterprises that have owned these sites for decades (and more than a century in some cases) furiously compete for tenants (and redevelop regularly) so as to earn their revenue in rent and fares. Most of the time, they get no public subsidies.
This system is absolutely brilliant and it is a shame that it is not understood by anybody of any influence. It is a serious error (akin to cargo-cultism) to assume that “form” is all that matters. One needs to understand the path-dependent economic evolution that underlies a given successful form.
It is a very good point that a historical norm of smaller housing units on average, allows for better affordability in the long term. But for affordability to have resulted, there has to have been elastic enough expansion of the urban footprint. There are plenty of examples of dense, small-average-housing-size cities that have not expanded fast enough and have had a chronic affordability problem. The UK’s cities are like this, but there are others in Europe.
The big mistake in the USA’s suburban-sprawl era, was ever-increasing large-size lot mandates, and Glaeser suggests that this is a perverse consequence of education policy and school zoning. Everywhere else in the western world, the lowest common suburban densities involve lots of less than 1/4 of an acre, with 1/10 of an acre being common. This kind of suburban expansion enabled the same systemic affordability of the housing market as a whole, as the USA’s much lower-density suburban expansion.
I argue that apart from perverse incentives, overwhelming majority of people do not want the up-keep of extremely large lots; these are an inconvenience. The evidence from the rest of the western world supports this. But I do say that it is crucial for affordability, that the choice exists in adequate quantity, to have a multi-bedroom house with a yard or garden. The absence of this choice in sufficient quantity, is what makes the UK’s cities so unaffordable in spite of their high density.
In fact, I argue that there is a certain level of density above which no mature city is affordable (in the absence of special institutional arrangements like Singapore or Tokyo). The availability of lower-density choices is crucial. There seems to be a density level above which the economic rent in the land underneath the people, is exponentially more expensive. For example, with twice as many people, the land might be merely 4 times as expensive, but with ten times as many people, the land might be 100 times more expensive. This is probably because the tighter that people are crammed in, the more vicious the bidding war among them for more space.
If you refer to Demographia (or other good data on urban area density) you will find that most western European cities are significantly less dense than their equivalents in the UK. They are nowhere near as low-density as US cities, but nevertheless, they had decades of automobile-based footprint expansion, merely at higher densities than the USA (and of course their ancient cores were extremely dense, giving them a head-start). The UK’s disallowance of the same extent of expansion, created a chronic affordability problem there.
There is a new problem created when an explicit growth boundary policy is imposed; the urban land market is changed thereby into a condition where “site values become elastic to allowed density of development”. Upzoning always fails under these conditions, to enable the “housing supply” expected by the planners, because site owners capture all the value from upzoning. This disincentivizes actual redevelopment; speculation in sites is more popular, and capital is diverted away from actual redevelopment and construction. Ironically, existing properties are more expensive under these conditions, than if the upzoning had not taken place. This is why cities like Auckland NZ end up with a house price median multiple of around 10 after only 15 years of a growth boundary and upzoning policies; and actual housing supply is completely stalled in spite of the planners having zoned for hundreds of thousands of potential new housing units.
There is of course much less demand for multi-room housing in nations like in Western Europe where many more people are living alone, and not co-habiting and not bearing children. This allows for a smaller proportion of true suburban family homes, without triggering a “limited-options” price-inflationary effect.
Germany has several contributing factors that work well in combination besides their reasonable allowance of expansion and true suburban housing. They are known to utilize powers of compulsory acquisition (eminent domain) to discipline hold-out site owners. In fact this is the case in most of Europe, they do not have the same aggressiveness of “personal property rights” that we do in the Anglo world.
Germany also has generous tax breaks for rental housing development, along with the rent controls. Rent controls without some sort of incentive to suppliers of rental housing, merely collapses the supply of rental properties (yes, New York). Compensating landlords with tax breaks, is the corollary that averts this perverse consequence of rent controls. This makes renting more attractive and relieves pressure on the stock of housing for “ownership”. (Ironically, home ownership is also low in Houston, possibly because renting there is by some other means, a very competitive option).
Another factor that many people may not have noticed, is that German rural towns are actually quite competitively-priced, as are most US ones; however, in Germany, because of the very high speeds automobiles are allowed to drive, the distance able to be reached from the fringes of a city is very much greater, bringing a lot more rural towns into the effective housing options for workforces in the city. And there seems to be relative freedom of development in many rural areas, even for actual industry.
In contrast, rural towns in the UK and New Zealand are affected by anti-development regulations to sufficient extent, that they are not effective “drive to qualify” options. And the road networks between them and the cities are far less adequate than Germany’s.
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Great list! I’ve bookmarked each and every blog for future reading!