Comparing “Trickle-Down America” (urban) and “Stagnant America” (rural)

Recent comments from Hillary Clinton praising American “places that are optimistic, diverse, dynamic, moving forward” leads to this comparison between “trickle-down” and “stagnant” Americas:

Over the past 40 or so years, the U.S. has been fragmenting into two parallel societies, which I’ll call Trickle-Down America and Stagnant America. Each one looks upon the other with suspicion and hostility. Trickle-Down America is the America of our biggest metropolitan areas, and it is defined by comparatively high levels of density, diversity, and economic inequality. Importantly, the richest people in Trickle-Down America are typically white, while the service-sector workers who enable them to work longer hours are disproportionately brown and black. Stagnant America can be found in rural regions, small cities and towns, and outer suburbs across the country. This America is largely white and relatively equal, though it too is scarred by poverty, particularly among Hispanics and blacks. America’s most and least educated workers are concentrated in Trickle-Down America, while Stagnant America is home to most of America’s working- and middle-class white voters.

Is Trickle-Down America morally superior to Stagnant America? A good starting point is to reflect on the sources of Trickle-Down America’s wealth. In New York City, my hometown, the local economy has long been dominated by the financial-services sector, which has grown mightily in recent decades. Has the financialization of the U.S. economy been an unadulterated good for the country as a whole? There are many thoughtful people who’d argue otherwise. Indeed, some argue that rents flowing to the financial sector have badly distorted the U.S. economy, and have contributed to the devastation of tradeable sector employment in Stagnant America. Corporations headquartered in America’s cosmopolitan cities have profited immensely from the emergence of a globalized division of labor. Yet many of these same multinationals have pioneered tax-avoidance strategies that have made it harder for the federal government to compensate those who’ve lost out with globalization, all while deploying their considerable influence to get the U.S. government to pressure other countries to adopt intellectual-property protections that serve their interests. And then there is the federal government itself, and its vast, growing army of private administrative proxies—contractors, non-profits dependent on public subsidies, and the like—that has helped make Washington, D.C., and its environs one of the country’s most affluent and educated regions. It’s hard to disentangle exactly how much of Trickle-Down America’s success relative to Stagnant America is a product of straightforward rent-seeking. I certainly doubt that it accounts for all of it, or even most. But surely it accounts for some, and that should give Trickle-Down America’s champions pause.

One important thing to keep in mind is that Trickle-Down America is, overall, characterized by more stringent land-use limits than Stagnant America. These limits have raised housing costs in affluent coastal regions, which has redounded to the benefit of incumbent homeowners. Yet high housing costs have deterred inward domestic migration while driving out large numbers of working-and middle-class residents…

For now, though, Trickle-Down America’s affluent professionals find themselves in a sweet spot, which surely accounts for some of Clinton’s triumphalism. The food is better. Beautiful old houses are being renovated everywhere you turn. An abundance of low-wage immigrant labor adds diversity and dynamism to cosmopolitan cities, yet the noncitizen working class isn’t in a position to press for a more egalitarian social order—one that could prove discomfiting for local elites. Best of all, opposition to Trump is helping to obscure simmering discontent over Trickle-Down America’s business model.

This is a different way of categorizing the stark urban and rural political divides of recent years. Yet, it also highlights a key issue simmering within the leading cities and metropolitan areas that are so important to American life: who really benefits in the major cities? Are the high levels of innovation, growth, development, and cultural excitement accessible to all urban residents or do the spoils disproportionately go to the top?Inequality cuts across multiple strata of society. Certainly there are stark differences within cities as well as between urban and rural areas. I’ll add a third area that complicates the story above (though these are likely lumped in with the Trickle-Down America segment): the inequality present in American suburbs. Even as the majority of Americans live in suburbs and seem to have achieved the American Dream of suburban life, life outcomes can differ dramatically across suburban communities.

What makes this suburban inequality more interesting for the realm of politics is how is affects voting: areas generally closer to the big city or with demographics more like the big city vote Democrat and wealthier communities and areas further out in regions vote Republicans. Will these same sort of voting cleavages arise in rural areas in cities as various inequalities receive more attention?

How communities limit the construction of manufactured housing

Manufactured homes might be a viable solution to affordable housing but it is not easy to place such homes:

While courts today are unlikely to uphold outright exclusions, barriers for manufactured housing come in other forms. Some towns require manufactured homes be in a manufactured housing community. Others restrict them from residential zones.

Unequal treatment—including aesthetic rules, like a pitched-roof requirement, that exclude mobile homes by default—is common. Conditional use laws require pre-approval before a manufactured home can go up, and often approval is denied. Advocates for manufactured housing lobby for by-right use, which would allow someone to put up a manufactured home without pre-approval.

But zoning issues are a matter of state and local policy, not federal policy, so HUD has little power to influence restrictions on manufactured housing. Still, Mandelker believes HUD could play a role in destigmatizing manufactured housing.

“If they start working on a model state [zoning] law and start funding pilot projects, that would bring some attention,” he said. “I think that would be very helpful.”

Two features of manufactured homes are likely to scare off numerous communities from providing space for many units: (1) the property values of the units compared to stand alone single-family homes (since higher housing values are perceived to be signal a better quality of life) and (2) negative perceptions of residents who live in such homes (viewed as lower-class residents). So what could prompt more local governments to allow manufactured homes?

There are various ways that incentives or sanctions could be used. As an incentive, perhaps there could be some extra Federal money given to communities that provide space for such homes? Or, perhaps those constructing new developments could receive extra opportunities if they set aside land for manufactured homes or paid into a fund for purchasing land for manufactured homes. Sanctions would likely provoke resentment but they could also push multiple communities into helpful conversations.

Ultimately, providing the necessary affordable housing needed in the United States will likely require multiple approaches. Manufactured housing could be part of the solution but it will be difficult to destigmatize it.

Maybe affordable housing will be addressed when more seniors need it

The retirement difficulties facing many American seniors includes finding decent housing:

What can be done to help today’s seniors and generations to come? There are two approaches, Prindiville says: help people save for old age and make retirement more affordable. As for the first approach, some states have been trying to establish programs that help people save for retirement through payroll deductions even if their employers don’t offer any retirement-savings accounts, for example. But the Trump administration in May repealed an Obama-era rule from the Department of Labor that would have made it easier for states to help people to set up these plans. And the federal government is winding down a program, called myRA, that tried to encourage middle- and low-income Americans to save for retirement. “There are no new initiatives or strategies coming out of the federal government at a time when the need is growing,” Prindiville said.

The second approach might mean expanding affordable housing options, creating programs to help seniors cover medical costs, and reforming the Supplemental Security Income program so that poor seniors can receive more benefits.But there does not seem to be much of an appetite for such ideas in Washington right now. In fact, the Trump administration has proposed cutting money from SSI as well as the Social Security Disability Income program.

These initiatives can make the difference between having a home—and some semblance of stability—and not. Roberta Gordon, in Corona, was barely scraping by when I talked to her. A few months later, she was much more stable. Why? She’d gotten off a wait list and been accepted into the housing-voucher program known as Section 8, which reduces the amount of income she has to put towards housing. She’s still working at 76, but she feels a little more secure now that she has more help. She knows, at least, that she’s one of the lucky ones—able, in her older years, to keep food on the table and a roof over her head.

Many Americans are opposed to helping the poor who they feel should be helping themselves. There is probably more support for providing food or temporary shelter intended to help people get through a rough patch. But, housing is something different.  Why should the government provide funds or other help in finding housing when others are working hard to rent a unit somewhere or scrap together funds to purchase a home?

But, Americans in the last century have been more willing to provide help for seniors. They have contributed to society over their lifetime. They deserve a retirement after decades of work. Society should care for the aged. This does not necessarily mean senior centers or nursing homes are welcomed everywhere; indeed, many residents do not want to live right next to one (see an example from the Chicago area). Yet, many communities also are willing to do things to help seniors stay and thus there are property tax caps or programs to help seniors pay for utilities.

Maybe this is how affordable housing will start to be addressed in many American communities: seniors will need it in the coming years and decades. Once some of this housing is present, perhaps neighbors will see it is not as bad as they feared.

Getting established suburbs to build denser housing

A new study suggests higher levels of housing density in older suburbs could provide a lot of affordable housing:

But according to a report released today by urban housing economist Issi Romem of Buildzoom, many urban cores are actually developing and densifying. And lots of housing continues to get built at the suburban periphery. Romem argues that America’s real housing problem—and a big part of the solution to it—lie in closer-in single-family-home neighborhoods that were built up during the great suburban boom of the last century, and that have seen little or no new housing construction since they were initially developed…

The reality is that most of the housing stock and most of the land area of America’s metros is made up of relatively low-density suburban homes. And a great deal of it is essentially choked off from any future growth, locked in by outmoded and exclusionary land-use regulations. The end result is that most growth today takes place through sprawl…

But if America’s dormant suburbs are a big part of its housing and growth problem, they can also be part of the solution. Relaxing zoning rules in these neighborhoods would spread population growth more equitably and sustainably across a metro, relieving the pressure of rising housing prices and gentrification around the urban core, and unsustainable growth at the periphery.

“The dormant suburban sea is so vast that if the taboo on densification there were broken,” Romem writes, “even modest gradual redevelopment—tearing down one single-family home at a time and replacing it with a duplex or a small apartment building—could grow the housing stock immensely.” Many of these suburbs are located relatively close to job centers or along major transit lines. They are the natural place to increase density.

While this may be true, I tried to think of the incentives for suburbs in between cities and the growing metropolitan edges to do this. Here is my quick pro/con list:


  1. Population growth is often associated with progress or a higher status. More housing means more people.
  2. New residents could help provide a new energy, particularly if they are higher-income residents who can contribute monies to the community.


  1. Changing the existing character of a suburb, particularly for denser housing, is often met with opposition by existing residents.
  2. New residents mean new demands for local services.
  3. Denser housing might mean cheaper housing and this means attracting fewer higher-income residents.
  4. Why should we build denser housing if other communities around us are not doing the same?

Based on my quick lists, I do not think too many individual established suburbs will be jumping on this bandwagon. Even higher-income suburbs that would build higher-end dense housing would face opposition from residents who prefer the exclusivity of single-family homes.

The main thing that could break this logjam would be pressure from above – think the federal or state government – or groups of suburbs making decisions together to build denser housing. Still, these efforts will have to overcome those who will want local governments to stay their own course.

Proposing rent control for Chicago and Illinois

Political efforts will put the idea of rent control in front of some Chicago voters in the coming months:

Real and tangible, indeed, for the Lift the Ban coalition, a bloc of community groups that has been leading a two-year campaign against Illinois’ ban on rent control. The group is pushing for a repeal of the state’s 1997 Rent Control Preemption Act, a law that prohibits municipalities from enacting any form of regulation on residential or commercial rent prices.

“Because of the preemption act, it’s essentially illegal for any municipality to explore the idea of regulation,” said Jawanza Malone, Lift the Ban leader and executive director of the Kenwood Oakland Community Organization. “It just doesn’t make sense. The food we eat is regulated; there are environmental protections. Why is it that rent isn’t regulated? We’re just advocating for economic well-being for all of our communities.”…

The coalition’s efforts have already resulted in a question about rent regulation slated for the March primary ballot in nine wards and about 100 precincts around Chicago, Malone said. Couple that with state Rep. Will Guzzardi, D-Chicago, introducing a bill to the state House last year repealing the rent control ban and Democratic gubernatorial candidates J.B. Pritzker and Daniel Biss expressing support of a repeal and you have a number of people optimistic about the repeal coming to fruition…

But rent regulation is not a tool that economists and realty professionals want to pull out of the tool kit. In fact, Brian Bernardoni, senior director of government affairs and public policy for the Chicago Association of Realtors, likens it to “throwing a hand grenade on your lawn to get rid of dandelions.”

The issue of affordable housing needs to be addressed in some way in the Chicago region. If there are plenty of people opposed to rent control – and I assume at least a few business leaders will fight against the idea – what alternatives will they propose? At the least, perhaps a public discussion of rent control will push other parties to put some other ideas on the table.

I know the various problems in Illinois are vast but it would be great to hear a business leader or a government official step up soon and say that they had plans to build thousands of affordable housing units. I do not know how this could be done but could this not lead to a significant improvement for residents as well as positive public perception to whoever makes this happen?

Watching for the rise of Accessory Dwelling Units

A new book suggests Accessory Dwelling Units – ADUs – are going to become more common in the United States:

Eight years later, Peterson works full-time helping others build ADUs, preaching the granny-flat gospel via classes for other Portland homeowners. The number of ADU permits the city issues has risen dramatically; in 2016, it was 615. In Vancouver, Canada—an ADU pioneer—more than 2,000 ADUs have been built citywide in the last decade. But for most cities in North America, steep legal barriers are preventing this form of housing from taking off: Many cities ban them outright, and those that don’t often have severe restrictions on size, owner occupancy, and parking. Only a handful of cities have adjusted their regulations to encourage more ADUs—mostly on the West coast, where severe housing affordability is a growing problem. But Peterson and other ADU advocates are predicting that the country is on the verge of welcoming more of them.


And a short portion from the interview with Peterson regarding the benefits of ADUs:

ADUs allow people housing flexibility over time. You can design an ADU in which to age in place, and then rent out your main house, allowing you to stay in your neighborhood as you grow older, and at less cost. Parents, caregivers, or adult children can also live in ADUs.

ADUs use fewer resources like gas and electricity due to their size, and because they’re often built in walkable and bikeable areas, their residents generate less of an environmental impact that way as well. They also reduce the per capita residential footprint. This is important because there are a lot of one- and two-person households in cities, but not the housing to match that demographic. ADUs can help fill this need.

And ADUs generally don’t have a significant infrastructural impact on a city, in contrast to, say, a 400-unit apartment building. They bring more housing to an area organically, and the city doesn’t have to build new infrastructure to accommodate it.

If these do catch on, in which neighborhoods would be become most popular? I would guess they would be most attractive in working-class and up-and-coming neighborhoods where homeowners are looking to generate extra income and where they are more open to having close neighbors. In contrast, I think it would be more difficult for these to catch on in wealthier neighborhoods. After all, don’t Americans tend to think that one of the benefits of having a larger and more expensive home is the ability to be separate from other people?


Wealthy San Francisco residents may have their private street back but this may not bode well for the city

Remember that private street with wealthy residents in San Francisco that fell behind on its taxes and was sold at auction to some other California residents? The street is now back in the hands of the well-off residents:

For now, Presidio Terrace belongs to its residents again. Their victory isn’t cause for celebration, either. The city’s first-ever tax sale reversal smacks of preferential treatment. It’s hard to imagine elected leaders going to bat for, say, each homeless individual who has had property seized by the city. Farrell, the city council member quoted above, is also the author of Prop. Q, a controversial measure approved by San Francisco voters in 2016 that allows the city to clear homeless camps given 24 hours notice.

But the saga of Presidio Terrace may not be over yet. Although the city promised they’ll get their $90,000 purchase price back, Cheng and Lam have said they plan to sue. For progressive politics, San Francisco was once a city upon a hill. Now it’s rich people squabbling over one.

While New York City rightfully gets a lot of attention for its mix of world-leading buildings, residents, activities, and expensive housing, San Francisco may be a more fascinating case. A limited amount of land (both due to local policies and different topography) plus rapidly increasing wealth in recent decades (with the tech industry leading the way) plus consistently liberal politics yet sharp divides between the rich and poor makes for big housing problems. Kind of like how President Trump regularly uses Chicago as a case of how crime is not being addressed, San Francisco has become a common conservative rallying cry for how not to address housing and growth.

At the same time, many of the housing issues facing San Francisco also are issues for many other American cities: how to construct more affordable housing when few want to live near it? How to encourage jobs for many residents that provide good standards of living (which then gives people access to more housing)? How to encourage economic growth and development across the city rather than within particular trendy or desirable neighborhoods?