Constructing needed housing and other housing during COVID-19

Even during COVID-19, construction goes on in the Bay Area amidst a need for housing:

California’s shelter-in-place order has forced millions of people to stay home and businesses to close to prevent the spread of the novel coronavirus. Some construction workers, however, are still reporting for work to build and renovate Silicon Valley mansions and San Francisco luxury condos because of carve-outs in shelter-in-place orders that exempt any housing construction as “essential” business.

Local officials say residential construction of all kinds is necessary to address the region’s housing crisis. The exemption means affordable housing projects are moving forward, too…

In Palo Alto, where the median property value is $3 million, according to Zillow, residential construction has been so ubiquitous that the city’s new coronavirus support line was inundated with calls about what kind of construction was permitted under shelter-in-place, according to the city’s daily coronavirus newsletter Monday. This past week, crews showed up to work on single-family homes valued on Zillow at $7.3 million for an eight-bedroom house and $9.6 million for a five-bedroom house…

Backlash from concerned neighbors is predictable, said Laura Foote, executive director of YIMBY Action, a Bay Area network of advocates for increased housing supply at all economic levels. “People find new reasons to believe what they have always believed,” she said. “We have a housing shortage and that is what’s driving up cost. More housing also helps bring down the overall cost.”

The article goes into more detail about the debates over the continued housing. There appear to be multiple issues: whether any construction should go on, whether construction should go on for building luxury or expensive housing, and if construction goes on, whether workers and developers should follow rules about social distancing.

This is both a reminder of the lingering issues in a world very focused on COVID-19 as well as the complications of housing questions in the Bay Area and California more broadly. Fiinding solutions has proven difficult; building more affordable housing in many regions depends on local actions which wealthier communities tend to avoid.

Perhaps the question coming out of the pandemic will be this: will the Bay Area, the Seattle area, New York City, and other tight housing markets be more open to affordable housing conversations and action after everyone had to unite (or at least agree to stay away from each other) for a common cause? Crises tend to reveal inequalities but they do not always lead to efforts to address and rectify the problems.

Argument: Westchester County and affordable housing better off without federal government involvement

The headline summarizes the argument: “Team Trump just called a halt to the Obama-era war on the American suburbs.”

But the big win came last month, when — based on Westchester’s experience and expertise from groups like Americans for Limited Government — the Trump administration replaced Team Obama’s AFFH regulation with its own.

Gone is the federal mandate dictating the modeling of communities based on statistical formulas. Restored to local officials is the power that gives them the flexibility to weigh real-world factors in making housing decisions. Restored, too, is the prosecution of bad actors by the courts — not bureaucrats — under the Fair Housing Act.

And builders are now more likely to build affordable housing, since the attached strings have been removed.

The Democratic candidates for president didn’t get the memo. They continue to support radical, divisive and failed housing policies aimed at abolishing single-family residential zoning. And they’d use billions of our tax dollars to local communities — and the threat of lawsuits — to get their way.

The United States needs affordable housing. By replacing social engineering with common sense, guarded by strong nondiscrimination laws, the country is now better positioned to meet that need — and that’s a victory for everyone.

See more on the exclusionary zoning and housing in Westchester County: more recently under the Obama administration, in the 1970s, and the affordable housing issue in the county.

Conservatives claimed the Obama administration wanted to push Americans away from suburbs and into cities. This claim of social engineering tends to ignore the social engineering of suburbs, with plenty of federal government help, toward whiter and single-family home communities.

More broadly, this gets at a fundamental difference between liberals and conservatives. Liberals will argue that government intervention is needed regarding housing. As noted above, this might start with more serious enforcement of housing laws already on the books. But, this would not necessarily tackle the harder issues of residential segregation or exclusionary zoning, These issues would require communities across metropolitan regions to provide cheaper housing so that certain communities do not carry the burden. The conservative argument is different: the government needs to get out of housing and should let local governments make the decisions that would best serve their residents. Builders and developers will be empowered to construct cheaper housing with fewer regulations. Or, perhaps neither party really wants single-family home suburbia.

I have argued before that free markets for housing will not work. When given the opportunity, wealthier communities will not build cheaper housing as they would prefer to remain more exclusive. Recent efforts in California suggest it will take a lot even at the state level to promote more affordable housing. Plus, major political party candidates do not seem too keen to tackle housing. Americans may not like the idea of the federal government weighing in on local development decision but in many metropolitan regions the preference for local control is not moving the logjam of needed affordable housing.

The spread of upzoning and metropolitan regions

A number of cities and states in the United States have changed zoning guidelines or are considering changes to allow multiple housing units in what used to be areas just for single-family homes:

Minneapolis and Seattle are among cities that have effectively abolished zoning that restricts neighborhoods to owner-occupied, single-family dwellings. Oregon has done so in its largest municipalities, and Californians, like residents of Salt Lake City, are now free to build small cottages, sometimes called “granny flats,” for use as rentals in neighborhoods that were previously single-family only…

Before World War II, only about 13% of Americans lived in a suburb; now more than half of us do, and as the New York Times reported, in many American cities, more than 75% of residential land is zoned for single family use only.

In some cities, the share is even higher: in Charlotte, North Carolina, for example, 84% of residential land is zoned single-family; in San Jose, California, 94% is, according to a Times analysis in collaboration with UrbanFootprint…

Other states with single-family zoning in the legislative crosshairs in 2020 include Virginia and Maryland, where House Delegate Vaughn Stewart says upzoning can correct social-justice issues, as well as housing problems. “For too long, local governments have weaponized zoning codes to block people of color and the working class from high-opportunity neighborhoods,” Stewart told Kriston Capps of CityLab.

Sonia Hirt, quoted in this article, argues that single-family homes drive zoning in the United States as the goal is to protect homes and homeowners from uses they find less desirable, threatening to a residential character, and negatively impact property values.

As someone who studies suburbs, zoning, and housing, here are a few thoughts about the future of these changes:

  1. Making changes at the city or municipal level will be easier or more palatable to more voters who tend to like local control over land use decisions. If zoning changes are made at the state level, it will be harder to enforce the guidelines or penalize communities that do not comply.
  2. Wealthier communities will fight hard to avoid these zoning changes. Part of the appeal for some to move to wealthier suburbs is to keep others out and have a particular aesthetic (and these homeowners usually are not looking for more density).
  3. Adding some accessory dwellings throughout single-family home neighborhoods may not change the character of communities much but asking for bigger changes – multi-family housing, apartments, condos, turning large single-family homes into multiple units – on a bigger scale will be a tough sell in many communities.

These difficulties suggest progress in providing more affordable housing or more housing units could be slow. If change and enforcement primarily happens at the local level, this limits the ability of regions to address affordable housing issues because the problem simply becomes one that other communities should address. Housing, like transportation or water, is an issue that benefits greatly from the cooperation of all actors in a region. While it is a difficult topic to address at this level, let alone a national level, significant progress requires broader cooperation and efforts.

Six suburbs for Generation Z

Homes.com surveyed Generation Z, found their preferences for where they want to live, and then matched those preferences with six suburbs:

In deciding where to buy a first home, each generation has likes and dislikes that reflect its values and priorities. Recently Homes.com surveyed more than 1,000 members of Generation Z to find out more about their home-buying plans, including what kind of neighborhood they prefer.

The survey found preferences centered around four characteristics:

Diversity. More than half prefer neighborhoods and communities that are racially and ethnically diverse;

Accessibility. Three out of four want a location that is accessible to work as well as to friends and family;

Safety. This is a priority when Generation Z-ers evaluate neighborhoods

Affordability. Generation Z is very aware of rising home prices that have kept millions of millennials from becoming homeowner.

And the six suburbs:

-Lilburn, Georgia (outside Atlanta)

-Florin, California (outside Sacramento)

-Shaker Heights, Ohio (outside Cleveland)

-Glendale Heights, Illinois (outside Chicago)

-Valley Stream, New York (outside New York City)

-Stafford, Texas (outside Houston)

Given these four traits and these six suburbs, there is limited representation from some notable big coastal cities including Los Angeles, San Francisco and the Bay Area, Seattle, Boston, and Washington, D.C. Presumably, these metropolitan are too pricey to meet the priority of affordability.

Additionally, it is interesting to not see on the list cultural opportunities or an exciting location. All big cities have hip locations or neighborhoods that might fit the bill or some of this could be rolled into other factors above. Yet, the list also does not include places like Austin and Denver which have a reputation for being cool.

Finally, I do not know the longer histories of these suburbs. Right now, they are quite diverse (at least in comparison to the image of white and wealthy suburbs) but they might not always have been that way and may not have the same composition in the future. If a lot of Generation Z buyers move to these communities, how would they shape the demographics and character of each suburb?

The Democratic debate included several minutes of conversation about housing!

The Democratic debate on Wednesday night included several minutes on the issue of housing. From the transcript:

WELKER: Mr. Steyer, millions of working Americans are finding that housing has become unaffordable, especially in metropolitan areas. It is particularly acute in your home state of California, in places like Los Angeles and San Francisco. Why are you the best person to fix this problem?

STEYER: When you look at inequality in the United States of America, you have to start with housing. Where you put your head at night determines so many things about your life. It determines where your kids go to school. It determines the air you breathe, where you shop, how long it takes you to get to work.

What we’ve seen in California is, as a result of policy, we have millions too few housing units. And that affects everybody in California. It starts with a homeless crisis that goes all through the state, but it also includes skyrocketing rents which affect every single working person in the state of California.

I understand exactly what needs to be done here, which is we need to change policy and we need to apply resources here to make sure that we build literally millions of new units.

But the other thing that’s going to be true about building these units is, we’re going to have to build them in a way that’s sustainable, that, in fact, how we build units, where people live has a dramatic impact on climate and on sustainability.

So we are going to have to direct dollars, we’re going to have to change policy and make sure that the localities and municipalities who have worked very hard to make sure that there are no new housing units built in their towns, that they have to change that and we’re going to have force it, and then we’re going to have to direct federal dollars to make sure that those units are affordable so that working people can live in places and not be spending 50 percent of their income on rent.

WELKER: Thank you, Mr. Steyer. Thank you, Mr. Steyer. Senator Warren, I see your hand raised.

WARREN: Yes. Think of it this way. Our housing problem in America is a problem on the supply side, and that means that the federal government stopped building new housing a long time ago, affordable housing.

Also, private developers, they’ve gone up to McMansions. They’re not building the little two bedroom, one bath house that I grew up in, garage converted to be a bedroom for my three brothers.

So I’ve got a plan for 3.2 million new housing units in America. Those are housing units for working families, for the working poor, for the poor poor, for seniors who want to age in place, for people with disabilities, for people who are coming back from being incarcerated. It’s about tenants’ rights.

But there’s one more piece. Housing is how we build wealth in America. The federal government has subsidized the purchase of housing for decades for white people and has said for black people you’re cut out of the deal. That was known as red-lining.

When I built a housing plan, it’s not only a housing plan about building new units. It’s a housing plan about addressing what is wrong about government-sponsored discrimination, how we need to address it, and we need to say we’re going to reverse it.

WELKER: Thank you, Senator. Thank you, Senator. Senator Booker?

(APPLAUSE)

BOOKER: I’m so grateful, again, as a mayor who was a mayor during a recession, who was a mayor during a housing crisis, who started my career as a tenants’ rights lawyer, these are all good points, but we’re not talking about something that is going on all over America, which is gentrification and low-income families being moved further and further out, often compounding racial segregation.

And so all these things we need to put more federal dollars in it, but we’ve got to start empowering people. We use our tax code to move wealth up, the mortgage interest deduction. My plan is very simple. If you’re a renter who pays more than a third of your income in rent, then you will get a refundable tax credit between the amount you’re paying and the area median rent. That empowers people in the same way we empower homeowners.

And what that does is it actually slashes poverty, 10 million people out. And by the way, for those people who are facing eviction, it is about time that the only people when they show up in rentals court that have a lawyer is not the landlord, it is also low-income families struggling to stay in their homes.

WELKER: Thank you, Senator.

Quick summary of the conversation:

1. It was short – just a few minutes and only three candidates talked.

2. Two candidates, Steyer and Warren, talked about the need for more and cheaper housing units. They did not get into many details about how to fund those units or where they would be located.

3. Two candidates talked in more detail about the inequality in housing with Warren talking about discrimination in housing and Booker discussing tax credits for renters.

Quick thoughts:

1. It is good to have the issue addressed directly. However, the amount of time spent on it, the number of candidates who responded, the lack of follow-up questions, and the quick cut to a commercial suggests it is not an important issue.

2. This is a complex issue with many local variables. Hence, it is not easy to fit housing discussions into sound-bite driven debates. However, the candidates barely got to say anything about actual policy or dealing with thorny problems such as convincing wealthier communities to include cheaper housing. Is it better in the long run to over-simplify a complex issue or not address it at all?

3. Given all the ways that housing intersects with issues that Democrats care about, why couldn’t a candidate start their policy positions with housing? This is probably because it is unpopular to address it from a top-down level but who said politics was easy? Truly addressing inequality will require addressing all the ways it intersects with places and communities.

Reminder: “Americans have no comparable safety net for housing”

Americans generally have limited options in obtaining with housing from the government:

With food and health care, we recognize that some number of people will have trouble paying for the basics, so our government provides a minimum standard of access through the Supplemental Nutrition Assistance Program (for food) and Medicaid (for health care). These programs are designed to expand and contract based on need (setting aside current politics).

Americans have no comparable safety net for housing. While the federal Section 8 program does provide rental assistance to low-income families, inadequate public funding means that fewer than half of eligible households actually receive a voucher. The inadequacy of our response has led to a variety of injustices: growing homelessness, overcrowding in small or substandard apartments, and housing costs that squeeze families’ ability to pay for child care, transportation, and other essential needs. Policymakers and housing advocates, especially some of the great ones we have in Massachusetts, have worked hard to cobble together different low-income housing programs and subsidies that help many of these needy families. But it’s a patchwork approach that leaves far too many behind.

And then those who compete in the “free market” may also have few options:

There’s also a second crisis, which affects middle-income families headed by people such as teachers, salespeople, nurses, and retirees living on fixed incomes. This crisis is more directly tied to housing cost. If our private market was functioning properly and producing diverse, family-friendly housing, these families would be able to afford decent housing options without needing public subsidy. But they increasingly struggle to do so. This problem is especially pronounced in Boston’s suburbs, many of which have a long history of banning the construction of townhomes, duplexes, triple-deckers, and modest apartment buildings that would serve these middle-class families. Thanks to these extreme prohibitions, many of our region’s suburbs have instead seen a trend towards larger, and pricier, McMansion-style homes.

Addressing housing may the toughest issue to address in the United States. Still, ousing is a basic human need and not having adequate or consistent housing has detrimental effects on residents. Providing food, health care, and other necessities can help but may not mean as much without a good home.

As an earlier post noted, Americans have supported/subsidized mortgages for single-family homes but this has not benefited all. The system is not really a free market; it helps some people make money, some residents to benefit from long-term property value increases (and then pass on this wealth to future generations), and others to struggle to get into the system. The federal government – and the American people in general – have had little appetite for big government housing programs. Not even a burst housing bubble in the late 2000s truly altered the rules of the American housing game.

Given the number of people affected, perhaps this will eventually grow into an issue that cannot be ignored. But, given the lack of attention this gets during this election season, I am not hopeful with will be adequately addressed soon.

Move to the big city to live in a capsule

Difficulty in finding cheaper housing means Americans moving to a big city might consider living in a capsule:

Each room contains up to six capsules, which Wilson describes as “cozy.” They contain a single bed, a bar for hanging clothes, a few compartments for storing shoes and other items and an air vent.

By most standards, the accommodation is still not cheap — $750 per month plus taxes. That works out at around $800, which is slightly more than the 26-year-old was paying in Bethlehem, around 70 miles outside Philadelphia…

Cheaper options exist, but UP(st)ART offers a good, central location and modern buildings equipped with a gym, dance classes, recording studio, art workshop and free cleaning and laundry services…

Still, the capsule-living concept is also catching on in other expensive US cities including New York.

The key redeeming feature to these capsule in Los Angeles appears to be that it is located within an artistic community. Capsule inhabitants may not get much in terms of space but they are plugged into a set of like-minded people and have attached facilities they can use.

On the other side, imagine capsules with no community. Would people be willing to rent/occupy those and at what price point? Would it be worth it to have a roughly 31 square foot area for $800 a month in Manhattan? Would the price drop significantly if the capsule was in one of the other boroughs of New York? Or, imagine capsule for people who are not so free to simply pick up and move. Where would you go if you had a spouse? A child?

Both of these could be true:

  1. There is a needed for cheaper housing in many American cities so that young people can get their feet on the ground and start down a path toward adult success.
  2. There might be relatively cheap housing available in many locations, either in smaller cities or neighborhoods beyond the most attractive ones in cities. But, a good number of young adults want to go to the most exciting places such as New York, Los Angeles, Seattle, neighborhoods with lots of millennials such as in Chicago, etc..