In this episode of UCLA Housing Voice, we talked about the rationale behind mandating affordable units for developments on upzoned land, and what can go wrong when costs and benefits are out of balance. Seattle's MHA program offers a cautionary tale. 🧵
For comparison, Manhattan has 200,000 more people than San Antonio on 1/20th the land. If everywhere was built like Manhattan we could fit the entire US population in a space 200x this size; instead, we destroyed tens of thousands of spaces like this to accommodate sprawl.
I gotta say, the line landlords use about needing to raise rents the inflation rate rings pretty hollow when you consider that their two biggest costs — a mortgage & property taxes — are usually fixed and capped, respectively. 7% inflation does not mean a 7% increase in expenses.
In most cities and towns in the U.S., you're allowed to build parking without housing, but you can't build housing without parking. That says a lot about our priorities, and all of it bad.
Santa Monica, ever the innovator, is breaking new ground in the field of blocking new homes by appropriating the language of social justice. This proposed initiative would require developers to pay up to 2.7 times the prevailing wage, which is of course completely infeasible.
This overlay of the NYC Metro on Los Angeles by Oren Ben-Joseph is a good illustration of why "Manhattanization" shouldn't be a dirty word. We use so much more land than NYC for a similar population, with severe negative consequences for mobility, equity, and the environment.
Homeowners in high-demand cities, pick:
1) Allow few new houses, prices rise, kids can't afford to stay so you rarely see them; they inherit your home when you die
2) Allow more new houses, prices stabilize, live near your kids + grandkids; they own their own homes nearby
My question for every LA-area elected official: What are you doing to ensure that the home I purchased for $500k in 2017, and is worth $750k today, isn't worth $1 million or more in 2030? If you don't have a plan for that then you're not serious about solving this crisis.
"Developers are parasites."
-- Person in their home, built by a developer, which has appreciated in value by 1000%, using their post-retirement free time, which is supported by a publicly subsidized pension, to call into a public meeting to oppose new housing
Regular reminder that water scarcity probably isn't a valid excuse for your high-income, job-rich coastal city blocking the construction of new homes. Los Angeles added over a million people over the past 50 years and it *reduced* its total water use.
It costs at least $400,000 per unit to build new homes in LA. At that cost, and assuming no profit, maintenance/repairs, or management, you'd have to charge $1,900/month to break even. If you want rents that cheap, or lower, you've gotta spend public dollars.
I don't understand how people can say stuff like "we don't need to build unsubsidized housing because people who can afford it already have plenty of options" and not realize that "rich people moving into older, cheaper homes" is exactly the problem we're trying to avoid.
My neighborhood is relatively poor; it has a median household income around $50K. The median home is valued over $800k. When people say new housing isn't affordable to the people who live here, they tend not to mention how the drafty 100-year-old homes aren't affordable either.
"I'm a homeowner so my opinions should count for more than some transient renter."
No. Even if that renter *does* eventually move away, they're likely to be replaced by another renter. Their interests are probably similar, and someone needs to express them.
Them: "The market will never produce affordable housing"
The market, when regulations change to allow taller and denser buildings in neighborhoods that previously banned apartments:
A lot of people will see this and respond "whatever, the people who can afford $800k are rich too." But apartments were also banned here when the house cost $500k and apartments could've been built for $250k each. The problem just gets worse the longer we let it fester.
Single-family zoning is a giveaway to the rich:
A rich person could buy this house for $2.5M. Or, a dozen people could each spend $800K to construct an apartment building. The dozen could easily outbid the one, but zoning makes it illegal to build apartments.
There's a sort-of-understandable intuition that new housing is mostly for new people — people from some other city or region; this is wrong. In big metros across the US, 75-90% of the people who moved into new housing in the previous year came from the same metro area.
California has been permitting about 110,000 new homes per year. Two facts about that number:
1. At that pace, the average house needs to last 130 years just to maintain the current number of homes.
2. Subsidizing that many homes would cost ~$50 billion/year.
Organizations that can't get on board with mixed-income housing built by union labor on commercial land -- where renter displacement is all but impossible -- are not interested in solving the housing crisis. I don't know how else to interpret this.
U.S. housing policy of the past ~40 years is often framed as a case of bad outcomes caused by a market (and developers) run rampant. That seems clearly wrong. But as a case of regulatory capture supported by an alliance of land/home-owners and large developers, it works.
Imagine someone is born in LA, grows up here, goes to college, moves back and takes a $40k/year job, and 10 years later they're living with a partner earning a combined $150k/yr. This is a very common type of person. It'd be good if they could live here w/o crowding others out.
A small number of cities had the good fortune to attract a bunch of high-paying jobs in the tech sector, and instead of turning that to their benefit, they decided to do nothing and enrich property owners at everyone else's expense, then blame it all on those well-paid workers.
$840,000 per unit. In a city where unsubsidized projects cost <$500k/unit. The average unit is 675 sqft, so this is well over $1,000 psf. It also required demolishing 36 rental units. Failures like this erode support for the affordable housing investments we so desperately need.
L.A. City Council approves $53M in funding for affordable housing near MacArthur Park - Abode Communities is building 100 apartments at 714 S. Grand View Street
In 2020 we started producing fewer new cars than people wanted, and after two years used car prices have increased by 50%. We've been producing fewer new homes than people want for decades.
Oh to have the housing problems of Tokyo, where, due to falling prices, long-term tenants actually pay somewhat higher rents than those moving into market rentals today.
If you're on the lefty end of the political spectrum and you can't get on board with the government building housing and using any "profits" generated to subsidize rents for low-income households then you are truly lost
Another day, another survey showing that about two thirds of people support apartment buildings in their community. And that renters are more welcoming than homeowners.
It's so galling to see people in positions of power, homeowners in most cases, describe 20- and 30-somethings paying $2500/month in rent as "the new elites." That mindset is a big part of why there are so few new houses and the older ones keep getting more expensive.
A senior advisor to the White House on housing:
"I think the new elites like the younger folks who work in tech need to refuse to stop paying ridiculous amounts of rental housing. For their own good and for the market as a whole."
Ummm... No...
What are some mid-size cities you think are doing great stuff on urban planning, and housing in particular? Please include examples of specific policies or projects if possible, and bonus points for non-coastal cities.
Some regulations are good! Others are bad! "Regulation" is neither inherently good nor inherently bad. Sometimes "deregulation" is progressive, other times it's not.
The relationship between vacancy rates and rent increases is astonishingly clear. When vacancy rates are low, rent growth is high; when vacancy rates are high, rent growth is low (or negative). H/t to
@yhdistyminen
for link:
There's some truth to the fact that younger, upwardly mobile pro-housing advocates got involved in housing for self-interested reasons. What's overlooked is how older homeowners have been doing the same thing for decades, but with the goal of making housing less affordable.
We have absolutely got to start taxing cars by weight. This thing will cause, uhh, roughly 50x more road damage than a typical car? Fourth power equations are a trip.
What if YIMBYism is a big hoax and we allow more people to live in socially liberal, environmentally sustainable, economically productive cities for nothing?
This insight (and graphic) by
@alfred_twu
has always stuck with me. In California, at least, rent control policies tended to come years after downzonings that created housing shortages and put upward pressure on housing prices.
Get ready for a bunch of less expensive market-rate housing and tons of additional below-market homes in transit-accessible neighborhoods. This is one of the biggest housing affordability, transportation, and climate bills in recent history. All of them at once.
CA is making housing cheaper & easier to build by eliminating parking requirements for new housing near transit and daily destinations like jobs, grocery stores, & schools.
Thanks to the work of
@laurafriedman43
, we’re prioritizing people and the planet over cars.
The most unaffordable city in America is on the verge of restricting use of the most affordable and sustainable construction material (wood) because of fearmongering by an astroturf concrete industry lobbying group. I can't believe this is happening.
It's very clear that we can't rely solely on the private market to meet everyone's housing needs, but I really don't understand how people can just wave away the decades of affordability in the mid-20th century that was mostly a result of large-scale private construction.
Pick your favorite unaffordable city. There's no question that if over the past 30 years it had built 50% more housing, that city would be more affordable and sustainable than it is today. Every day we don't act, or take half measures, we are choosing to repeat this mistake.
There's a difference between people who are critical of the US because they believe it can and must be better, and those who believe it's essentially evil and irredeemable, and I'm not sure I've ever felt the distinction between those two groups as sharply as I do today.
People who want developers to build more affordable housing before they support zoning reform are making exactly the same mistake—or committing exactly the same sabotage—as people who don't want transit agencies to increase bus service until more people start riding.
I support well-designed rent control laws, but I also agree with the aphorism, "the best rent control is housing abundance." One big reason is it aligns incentives: Landlords with long-term RC tenants want them to leave; when housing is abundant, landlords want tenants to stay.
Someone should write a book about how we've forgotten to do things fast, especially in the public sector, and all the problems that come along with that -- high costs, out of date designs and procurement, more disruption, lack of public motivation and trust, etc etc. I'd buy it.
Here's my contribution to the SRO discourse: Single-room occupancy hotels/units are good. As with all other housing typologies, they aren't for everyone and there are trade-offs. Whether you personally would live in a given housing type shouldn't determine whether it's legal.
My take on why the SF vacancy tax proposal is controversial: For many, it's confirming the worst intuitions about what some people are in this advocacy space for. It's like if YIMBYs proposed an upzoning bill that exempted all affluent white neighborhoods.
Having owned a home for five years now, it's absolutely baffling to me that a California homeowner could feel even a little bit beleaguered by state or federal policy. It's just a constant stream of subsidies and rebates and incentives.
It'd be great if we just approved as much housing as it took to reduce prices rather than focusing on pseudoscientific estimates of "housing need." If we fail? "Oh no, lots of new higher-quality homes and more people living in our most productive and sustainable cities!! 😱😭"
In other words, we should build homes. All kinds of homes. As many subsidized homes we as a society can afford, and as many unsubsidized homes as individual households are willing to buy or rent. The number for both types is much more than we're building today.
Fresh renderings for District NoHo - the $1-billion mixed-use complex which would bring more than 1500 homes, offices, and retail to land surrounding Metro's North Hollywood Station
I'm really blown away by the selfishness of some suburbanites. It's one (bad) thing to prohibit inexpensive housing choices in your own community, but it's a whole other level to oppose it in cities 10 or 20 miles away because it'd make parking there more difficult for you.
People are constantly unhappy about nearly everything to do with cars and driving — traffic, parking, gas, other drivers. Yet somehow, the people who get the angriest are also the biggest proponents of pouring more resources into... cars and driving.
So apparently AB 946, which would eliminate mortgage interest deductions for *second homes* in California, isn't moving forward this year. A similar bill failed a few years ago too. It blows my mind that there are any Democrats who oppose this.
The biggest bias in media is the over-representation of college graduates and the under-representation of homeowners. 75%+ of Millennial households will eventually own homes, despite what people on this website might think.
Something we don't talk enough about are the massively asymmetric consequences of undersupplying vs oversupplying housing.
Undersupply: high rents, long commutes, outmigration, homelessness
Oversupply: temporary vacancies, affordable housing, developers lose a bunch of money
Home (i.e. land) value appreciation is really just a straight transfer of wealth from future homebuyers to current homeowners and from younger people to older people. It's not creating wealth for anyone, just moving it around in extraordinarily inequitable ways.
From what I understand, this is a converted single-family house, and because it's Palo Alto it's probably worth at least $3 million. This is exactly the kind of thing YIMBYs are trying to avoid by making normal apartments and condos legal and cost-effective to build.
If we'd had SB 9 in place 30 years ago the median home price in Los Angeles would probably be around $400k or $500k today, instead of $900,000. It's why places like Houston are so smart to have addressed their housing barriers *before* getting incredibly expensive.
I cannot get over how some people can argue—with a straight face!—against state preemption of housing policy on the grounds that local governments are best suited to addressing housing needs. Local control has been the norm for generations and the result is unequivocal failure!
Would you want a Wall Street hedge fund living next door? Neither would I.
That’s why I introduced a bill to stop hedge funds from taking over the housing market, driving up prices, and making homes even more unaffordable. Homes are for raising families, not increasing profits!
I know it's not all bad faith out there, but the emphasis on "public land for public housing" feels increasingly misguided and counterproductive. Nowhere in the US has a shortage of land; we have a shortage of land where it's legal to build dense, relatively inexpensive housing.
More people got to live in my amazing city, rents went down slightly, and it didn't cost the public a dime, but I'll be damned if I'm not still mad about it.
That sound you hear is the goalposts shifting from "gentrification buildings raise prices so much and push people out 😭😭😭😭" to "oh actually these buildings don't lower prices enough 😭😭😭😭😭"
Housing politics is exhausting. No matter how much evidence accumulates that new homes help mitigate rising prices, to say nothing of their other benefits, every single project gets attacked for causing gentrification by people who know better and offer no realistic alternatives.
I'm amazed that someone could say this with a straight face. Virtually every city in the world that ranks highly on productivity, upward mobility, livability, sustainability -- name your priority -- is also relatively hostile toward cars. It's not a coincidence, it's a necessity.
New paper connecting market-rate housing production to reduced rents, this one in Germany. A pretty big effect, seen pretty much immediately. Nice to see this finding in another market, after several recent studies in the U.S. with similar findings.
File this under: "It's not taxes driving people out of California, it's housing prices." Funnily enough, high-income households are the only ones CA is adding, on net. We're losing low- and middle-income households to Texas because they can afford housing there; that's it.
In honor of today's IPCC report, I am literally begging people to support incremental and/or imperfect solutions rather than hold out for their perfect solution that's probably never going to happen -- certainly not in one fell swoop.
This paper is several years old, but I'm regularly re-amazed that we spend tens of billions of dollars on mortgage interest deductions each year only to increase housing prices, reduce homeownership, increase debt, and make society worse off overall.
It is just nuts that an infill project in Downtown LA is being held up on its perceived impacts to greenhouse gas emissions and construction noise. Meanwhile, we'll keep building 3,000 sq ft houses in the suburbs of Phoenix and Las Vegas.
A Los Angeles Superior Court Judge has overturned the approvals and environmental impact report for a proposed mixed-use project that would replace part of the Southern California Flower Market
#DTLA
It's amazing how most of Auckland, New Zealand's housing production since citywide zoning reform has come from smaller multifamily like townhouses and flats, as compared to larger apartments. This kind of development is absent from most US cities — because it's mostly illegal.
We all know that Prop 13 makes it harder for people to become homeowners by raising property values, but I can pretty much guarantee that it also encourages a lot of would-be home-sellers to instead become landlords so they can maintain their low property tax rates.