Tag Archives: metropolitanization

Considering housing shortages and gentrification together

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An MIT economist looks at the relationship between gentrification and a shortage of cheaper housing:

Unsurprisingly, the geography of a place and the community residing there are linked. Along the most measurable dimensions, richer people tend to live in places with attractive geographies. Conversely, places with undesirable attributes like industrial or transportation pollution, poor access to jobs, and uninviting climates are usually left for the poorest and most marginalized.

Usually—but not always. Occasionally, physically attractive locations come to be occupied by low-income communities, immigrant communities, black communities. Neighborhoods like these are ripe for gentrification. Changes in labor markets, large investments by public or private institutions, or even just changing preferences among the wealthy move these neighborhoods into the sight lines of richer people, and then they gentrify.

The housing shortage, meanwhile, is a region-wide round of musical chairs, in which the winners sat down before the music even stopped. Whereas gentrification reshuffles which communities occupy which parts of the city, the housing shortage can operate at the scale of cities and regions as well as neighborhoods…

Policies introduced to fight gentrification—rent control and tenant protections—may ameliorate the effects of neighborhood change, but they won’t build new homes. We must allow new construction somewhere, despite the changes this will bring. Of course, we must do so in a way that avoids gentrification.

Four quick thoughts on this argument:

1. This reminds me of my post from the other day comparing the perspective that there is not enough housing and there is plenty of housing but it is not cheap enough. This piece suggests there are multiple housing issues at work and policies might tackle one particular issue and not others (or even make other housing issues worse).

2. Does the multiplicity of housing issues require that Americans prioritize which issue matters to them most? If middle-class people want cheaper housing, that will lead to different approaches (public policies, legislation, urban planning, decisions by developers, etc.) compared to a consensus that gentrification is not desirable. Historically, Americans have tended to prioritize housing for the middle-class (broadly defined) at the expense of housing for the poor or homeless.

3. To truly address all of these issues, metropolitan-wide approaches are needed. Individual neighborhoods or municipalities are often left to tackle these on their own even though decisions by nearby neighborhoods or municipalities have significant effects on their housing.

4. Additionally, a comprehensive housing policy is needed, not just one that tackles the most important or noisiest issue at the moment. On one hand, many Americans would not want the government to become involved in such issues even as the government has promoted suburban homeownership for roughly a century.

Keeping track of the Democratic field on housing

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Curbed is tracking the housing positions of the Democratic candidates for president in 2020. Here is part of the overview of YIMBY policies:

Yes In My Back Yard (YIMBY)…

Because these laws are administered at the local level, federal policy can’t do much to directly change these laws and instead attempts to incentivize—or punish—local governments to change them. Castro has proposed a Presidential Commission on Zoning Reform to establish federal guidelines on land use and zoning. O’Rourke would direct HUD to come up with a model for setting zoning and land use policies that let formerly restrictive communities to allow more housing production.

Warren’s plan puts $10 billion into a new grant program communities can use to build infrastructure, but local governments have to reform land-use laws to be eligible.

Booker’s plan uses a similar mechanism by tying more than $16 billion in federal block grant money—including Community Development Block Grants (CDBG)—to local governments reforming zoning laws that serve as barriers to building more housing units. Castro also wants to expand CDBG and rural development programs by $2 billion per year and tie the money to zoning reforms. O’Rourke would double CDBG funding and provide new grants to communities that eliminate restrictive zoning laws.

Klobuchar proposes “prioritizing” local governments that reform local zoning laws when allocating federal housing and infrastructure funds, but doesn’t specify which ones.

Bennet would create a one-time $10 billion competitive grant program for state and local governments that reform zoning laws to allow for more housing density, in addition to increasing the funding of transportation grant program BUILD to $4.5 billion and make it eligible only to local governments that allow for more housing density near transportation hubs. Eligibility for New Starts, a grant program for fixing rail infrastructure, would also be deployed in this manner.

O’Rourke has a zoning-related proposal that’s unique among the candidates. He would allow people to deduct more in state and local taxes from their federal tax returns if they live in areas without restrictive zoning. There’s currently a $10,000 cap on SALT deductions, and that cap affects mostly coastal cities where restrictive zoning is a major issue. He would also pass a $1 trillion infrastructure package to repair transportation lines that would be tied to eliminating exclusionary zoning.

Three quick thoughts:

  1. As the section above goes on to note, it will be difficult to enact change within wealthy communities through federal policy. Without buy-in from whole metropolitan regions regarding housing, would any YIMBY policies at a federal level simply push cheaper housing into communities that already have more of such housing?
  2. The subheadline for this article suggests “Housing policy is taking center stage in the 2020 election.” This is a bold pronouncement as housing seems to attract little attention in debates or drives little national conversation. I would still be interested to see someone really run with the housing issue.
  3. I have not seen recent numbers on this: how does housing as an issue rank among other possible issues among the electorate? There are certain areas of the country – like some of the largest metropolitan areas – where this is a pressing issue while it is less important elsewhere. On one hand, housing effects all possible voters but it rarely attracts national attention, particularly compared to other national economic issues like jobs or income.

What would happen if the Supreme Court addresses inclusionary zoning?

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A legal case involving zoning in Marin County, California may make it to the Supreme Court.

Back in May, authorities in Marin entered into a new voluntary compliance agreement with the U.S. Department of Housing and Urban Development to build new low-income housing outside areas where black or brown residents make up the majority. This is now the county’s second big push since 2010 to satisfy the government’s demand that it work on desegregating its affordable housing.

Fair housing is a challenge for Marin, an enclave of million-dollar bungalows across the Golden Gate Bridge from San Francisco. According to a nonprofit project called Race Counts, it has the highest racial disparities of any county in California. That’s in part because Marin County doesn’t want to build any housing. Homeowners here are at the forefront of NIMBY efforts to stop plans for new construction, whether they’re local, regional, or statewide.

The county’s iron grip on its land is the backdrop for a case that may soon appear before the U.S. Supreme Court. Back in 2000, two Marin County property owners, Dartmond and Esther Cherk, looked to split their undeveloped land into two single-family-zoned lots. As developers, they were liable to preserve some part of the property for affordable housing or pay into a low-income housing production fund. The fee was nearly $40,000; the Cherks sued.

The Marin County case may test the constitutionality of inclusionary zoning, a tool that local jurisdictions rely on to expand the supply of affordable housing, especially in tight housing markets. The court has expressed an interest in the case, which the justices may wind up using as a wedge to reshape property rights. It’s possible the inclusionary zoning ordinances—and local regulations more broadly construed—will not stand under the court’s scrutiny.

I’m on the record suggesting the Supreme Court would approve inclusionary zoning. While this piece suggests conservatives on the court might be spoiling to affirm property rights, the courts more broadly have helped develop plans to promote more affordable housing (think the Gautreaux case in Chicago or the Mount Laurel decision in New Jersey). Earlier decisions did not eviscerate property rights but they did suggest that the responsibility for housing was wider than a single community and its zoning. Additionally, having developers pay a fee into an affordable housing fund or provide some units of affordable housing as part of the larger project is common practice across American communities.

Beyond just the actions of Marin County and its own housing supply and population composition, the bigger issue is this: if a community or township or county restricts development and/or housing, it puts a bigger burden on other municipalities in the same metropolitan region to provide housing. And if many municipalities refuse certain kinds of development, more affordable housing ends up in a limited number of places that are (1) not necessarily located near jobs and (2) relatively lower-class. Housing is an issue best tackled by a whole metropolitan area (as are other issues including mass transit and transportation). More dispersed outcomes would likely lead to better outcomes across the region with the biggest loss being the communities that cannot easily remain as exclusive as they would like.

 

Suburban opposition to drug treatment centers

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The case of opposition to a proposed drug treatment center in Itasca, Illinois sounds similar to opposition last year to a center in Wheaton. On the Itasca proposal:

But opponents said the project would hurt Itasca’s economy. The hotel currently generates around $250,000 in annual tax revenue that would be lost.

Village officials also are trying to determine how the proposal would affect police, fire and emergency medical services.

While they agree DuPage needs treatment options, the residents said they would prefer the facility be more centrally located in the county.

“When direct questions were asked regarding the impact on Itasca, they were all pushed back toward the needs of DuPage,” the residents’ statement reads.

“They (Haymarket) found a facility that fit their needs in Itasca, but we believe overlooked the impact of putting it in such a small town with limited resources.”

Residents say they understand the need for the facility but do not want it in their town. The concerns are similar to those that any suburban residents might lodge against a new development: a loss of tax revenue and concerns about the size of the facility (which could be related to traffic, noise, use of municipal services).

Residents say such a facility should be more in the center of the populous county…like in Wheaton? The problem facing less desirable but necessary land uses is this: what might be good for a region on the whole is often undesirable for individual communities who suggest it should be located elsewhere. Since zoning and development decisions are left to municipalities, whole regions could suffer.

This does not just affect facilities that might be less desirable. In Wheaton, the conversation about a drug treatment center included the people who would be treated as well as crime rates around the facility. But, imagine the case of a hospital or medical clinic. People need medical care and these do not usually have negative connotations. Yet, any medical facility may not generate tax revenues like commercial uses. The size or design of the facility might clash with the character of the community.

There is no easy answer. In an ideal world, the process might look like this: a metropolitan planning board would consider the needs of the population and then find locations throughout the region that would best serve residents. There is just one big problem: Americans, particularly suburbanites, like local control over land use decisions. Few metropolitan regions in the United States can do this and place important infrastructure or facilities where they are needed because Americans place local control as a higher priority.

It will be fascinating to see how Haymarket will respond with this particular facility. If Itasca says no, what is the next suburb to approach? Additionally, how many people will go untreated as the wheels of zoning approval turn?

Consequences of suburbs growing, back to city movement declining

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Willing Frey at The Brookings Institution sums up recent trends in growth rates among cities and suburbs:

As we approach the end of the 2010s, the biggest cities in the United States are experiencing slower growth or population losses, according to new census estimates. The combination of city growth declines and higher suburban growth suggests that the “back to the city” trend seen at the beginning of the decade has reversed.

These trends are consistent with previous census releases for counties and metropolitan areas that point to a greater dispersion of the U.S. population as the economy and housing market pick back up, perhaps propelled by young adult millennials who may be finally departing dense urban cores as they make a delayed entrance into marriage and the housing market…

Primary cities vs. suburbs growth rates

In both regions, city growth exceeded suburban growth in the early years of this decade, where Sun Belt growth in both cities and suburbs exceeded Snow Belt growth. As the decade wore on, city growth declined in both mega-regions while suburban growth remained higher. This is evident when looking at the individual metro areas in each region (download Table C). In 2011-2012, city growth exceeded suburb growth in 19 of the 34 Sun Belt metros, and in eight of the 19 Snow Belt metros. However, in 2017-18 the city growth advantage appeared in just nine Sun Belt metros and two Snow Belt metros. Among these 11 areas that still registered city growth advantages are: Los Angeles, Washington, D.C., San Francisco, Denver, and Boston.

It is helpful to see the longer trends in the data, particularly when lots of media outlets want to jump on one-year estimates (such as Chicago’s recent population loss).

While it is helpful to compare cities and suburbs (and these changes do matter for a lot of reasons, including perceptions), I wonder how much this covers up larger changes across metropolitan regions or feeds narratives that cities and suburbs are locked in mortal competition. All of the above data could be true while Sun Belt regions continue to grow at a strong rates. Regions could think about policies as a whole that would enhance conditions for many more people than just those in cities or suburbs.

Finally, I’ve written before about how it would likely take decades to unseat the primacy of suburban life in the United States. Was the back to city movement or great inversion just a blip on the radar screen? Or, will it cycle back at closer and closer frequencies? The global economic system may have something to do with this – what happens with the next major downturn? – yet overcoming decades of expressed preference for suburbs will not be easy.

Police violence leading to joint suburban and urban activism

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Responses to recent acquittal of a police officer in a shooting of a black man in the suburb of East Pittsburgh illustrates how concern crosses community lines in a metropolitan region:

East Pittsburgh is a small municipality that sits just outside of the city of Pittsburgh. It disbanded its police department in January, largely because of the Rose killing. And while Rashid’s clap-backers are technically correct about the differences between the police departments involved, the spirit of his tweet is still sound. For African Americans in greater Pittsburgh, there is little safety afforded to them when approached by police, whether in cities or suburbs. This is a concern for African Americans in almost every urban setting in the nation, but especially so in suburbs.

For Rose’s case, distinguishing between East Pittsburgh police and Pittsburgh police isn’t entirely clarifying in these moments. The fault line is not between Pittsburgh and its suburbs; it’s between the criminalization of blackness and the exoneration of whiteness. In that regard, the city of Pittsburgh could help bridge that divide if it recognizes that it shares this common problem with its smaller municipal neighbors…

It is true, as some have been quick to point out, that Pittsburgh police have more training than the police programs in surrounding smaller municipalities. Much of that training was imposed on Pittsburgh police after the federal government found a pattern of corruption and brutality throughout the department in the 1990s. Pittsburgh was the first major city entered into a consent decree with the U.S. Department of Justice to reform its police department. Meanwhile, there is no uniform police trainings across the state to ensure that small suburban departments are skilled on par with officers from larger city departments. But this is besides the point: What, to the victim of police violence, does it matter what jurisdiction’s name is on the clothes of the officer who shot him?…

In the event of police violence against people of color, the fate of cities and their suburbs are intertwined. Many of the high-profile police killings of black people of the past few years have actually happened in suburbs. But the neighboring major cities in those instances have felt the impacts regardless. The cries of the oppressed do not recognize municipal boundaries.

In work I have read about metropolitanization and addressing regional issues, policing is rarely discussed. The largest issue is usually economic: how to ensure that the wealth of the region, often limited to certain neighborhoods or suburbs and linked to numerous issues like housing and school funding, can be spread throughout a region to help all residents.

Americans tend to like to have a police force for their own community. Regional policing or ceding police authority to an outside group – like a county sheriff – would strike many as undesirable and only an option if the community could not pay for their own police force. There is something about having even a small local police force that looks out for local residents and answers to those same residents that many suburbanites find reassuring. (Making that link to local suburban control and race and exclusion would be interesting.)

It would be helpful to know if there is a metropolitan region that tackles the issue of police violence and disproportionate responses to minority residents well. Are there regions where police from various departments train together on this issue? Can such an effort help all departments, big and small?

Linking Microsoft giving $500 million for Seattle area housing to tech companies and declining gov’t support for housing

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Microsoft is pledging a substantial amount to address the important issue of housing in Seattle:

Microsoft plans to lend $225 million at subsidized rates to preserve and build middle-income housing in six cities near its Redmond headquarters. It will put an additional $250 million into low-income housing across the region. Some of those loans may be made through the federal programs that provide tax breaks for low-income housing.

The company plans to invest the money within three years, and expects most of it to go to Seattle’s suburbs.

The loans could go to private or nonprofit developers, or to governmental groups like the King County Housing Authority. As the loans are repaid, Mr. Smith said, Microsoft plans to lend the money out again to support additional projects.

This article frames the giving as part of the housing issues wrought by the actions of tech companies:

Microsoft’s money represents the most ambitious effort by a tech company to directly address the inequality that has spread in areas where the industry is concentrated, particularly on the West Coast. It will fund construction for homes affordable not only to the company’s own non-tech workers, but also for teachers, firefighters and other middle- and low-income residents.

From this point of view, the health of a region matters for companies. If workers, whether ones employed by a particular company or organization or others, cannot find affordable housing, it will be harder for the region to find and hold on to workers. Whereas businesses often focus on a good business climate (low taxes, tax breaks, business-friendly governments, etc.), housing is a big factor in finding a strong work force. Additionally, Microsoft can help show through these actions that they care about local conditions in ways that tech companies are often said to ignore because of their global status. Would Microsoft be the same if it were not in the Seattle region?

Another way to view this is that private companies are now taking on what the federal government should address:

The government spent about three times as much on housing programs in the 1970s as it does today, according to the National Low Income Housing Coalition. In the years since, the government has gotten out of the business of building public housing. And capital funds to repair the remaining public housing stock have been cut in half over the last 15 years.

Over this time, federal resources have increasingly shifted away from subsidizing the construction of affordable housing to subsidizing renters who find housing in the private market. And now most new below-market-rate housing is built not by public agencies, but by nonprofit developers leveraging tax credits. The value of those credits has declined recently as well, as a result of changes in the tax bill passed in 2017.

In a sense, Microsoft’s proposal is an extension of this story, as private actors continue to step in where the government once stood.

Ed Goetz, a professor at the University of Minnesota who has studied the history of public housing in America, said: “I don’t want to diminish the magnitude of what they’re doing. I think it’s important, and it will help. But it won’t solve Seattle’s problem.”

This argument suggests that private actors can only do so much to address housing issues. Because so much money is involved and the issue is so widespread, even $500 million may not do much in a single metropolitan region with high land and housing costs. Of course, the government is involved in the housing industry: the federal government for decades has supported single-family homes, primarily in the suburbs. At the same time, the government and the American people have always been more ambivalent about public housing. It is not as if  the housing market is a free market: the United States subsidizes mortgages.

At the least, this will be an interesting experiment: can Microsoft make even a small dent in the housing needs of the Seattle area? Will this help strengthen the metropolitan region or primarily serve as good publicity for the company?

Towns that restrict road access to app users only address the symptoms and not the bigger issue

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The decision in a New Jersey suburb to fight back against drivers directed to their streets by apps raises all sorts of questions:

In mid-January, the borough’s police force will close 60 streets to all drivers aside from residents and people employed in the borough during the morning and afternoon rush periods, effectively taking most of the town out of circulation for the popular traffic apps — and for everyone else, for that matter…

But Leonia is not alone. From Medford, Mass. to Fremont, Calif., communities are grappling with the local gridlock caused by well-intentioned traffic apps like Waze, which was purchased by Google in 2013 for $1.15 billion.

Since Waze uses crowd sourcing to update its information, some people — frustrated at the influx of outside traffic — have taken to fabricating reports of traffic accidents in their communities to try to deter the app from sending motorists their way. One suburb of Tel Aviv has even sued Waze, which was developed by an Israeli company….

“It’s a slippery slope,” said Samuel I. Schwartz, the former traffic engineer for New York City known as Gridlock Sam, and the author of the early 1990s book “Shadow Traffic’s New York Shortcuts and Traffic Tips.” “Waze and other services are upsetting the apple cart in a lot of communities. But these are public streets, so where do you draw the line?”

See an earlier post about a Los Angeles neighborhood that raised similar objections.

I can see the reasoning by small communities: the roads are partly or mostly paid for through local tax dollars and thus they should primarily be reserved for the use of locals. These sorts of situations can become big deals in suburbs where residents are often resentful of ways that their local tax monies serve others.

At the same time, this hints at a larger issue: efforts like this by single communities could end up having deleterious effects on the region as a whole. What if every suburb or community employed such tactics? Traffic would only be worse. This then suggests a metropolitan approach is needed to tackle these congestion issues. This might be difficult to do considering how local residents like to hold onto their own monies but drivers across the region might be too mad at that point to care if there are no alternative routes. The best way to tackle this issue may be to lobby for more mass transit and decreased reliance on cars in the New Jersey suburbs.

Suburbs to respond to companies returning to cities

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Another new issue facing suburbs – in addition to homelessness – is how to respond when companies move their headquarters back to cities:

In Chicago, McDonald’s will join a slew of other companies — among them food giant Kraft Heinz, farming supplier ADM and telecommunications firm Motorola Solutions — all looking to appeal to and be near young professionals versed in the world of e-commerce, software analytics, digital engineering, marketing and finance…

Aetna recently announced that it will relocate from Hartford, Conn., to Manhattan; General Electric is leaving Connecticut to build a global headquarters in Boston; and Marriott International is moving from an emptying Maryland office park into the center of Bethesda, Md…

The migration to urban centers threatens the prosperity outlying suburbs have long enjoyed, bringing a dose of pain felt by rural communities and exacerbating stark gaps in earnings and wealth that Donald Trump capitalized on in winning the presidency…

Long term, the corporate moves threaten an orbit of smaller enterprises that fed on their proximity to the big companies, from restaurants and janitorial operations to subcontractors who located nearby.

It is difficult for any community – whether big city or suburb – to adjust to the move of a large firm out of the community. A number of things are lost: prestige, jobs, philanthropic contributions, and tax revenue. Arguably, suburbs lose more compared to big cities that have broader and more diverse economies: the headquarters in the suburb might be a sizable community anchor.

This may be similar to when suburbs with once-thriving shopping malls try to figure out what to do with that space. It can be difficult to fill the property all at once so suburbs might have to take their time and move one small step at a time.

I’ve argued before that this whole city-suburb competition for headquarters could harm both in the long run as it takes the focus away from a metropolitan effort to encourage business growth. On the whole, it matters less if a company moves from the Chicago suburbs to downtown than if the company decides to leave the entire region for another location. If more businesses move back to major cities, could suburbs find some way to work together to prevent moves? Or, or is the sometimes cutthroat competition between suburbs impossible to stop?

Can a suburb enact a higher minimum wage if others nearby do not?

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Suburbs in Cook County have the ability to opt out of a county ordinance raising the minimum wage but they have to weigh how their decision compares to communities near them:

Home-rule municipalities can opt out of the ordinance that boosts the minimum wage from $8.25 to $10 an hour starting July 1, and dozens of them have done just that since the Cook County Board passed the ordinance in October. That has left neighboring towns in a precarious state, worrying that their businesses will suffer under higher payrolls.

Evanston appeared ready to address those concerns at an emergency meeting Friday morning, after nearby Wilmette decided to opt out of the minimum wage increase…

Skokie Chamber of Commerce Executive Director Howard Meyer said the group at first had no issue with the measure. Because Skokie borders Chicago, where a heightened minimum wage is already in effect, the chamber believed its members wouldn’t be at a competitive disadvantage.

But after more municipalities opted out and Skokie businesses expressed worries about the impact, the chamber spoke out against the minimum wage plan, as well as another county ordinance to mandate paid sick leave.

Suburbs often face this pressure: if we enact a new measure, will residents and businesses respond by leaving for other suburbs? This happens with tax breaks for businesses (I’ve argued this leads to a race to the bottom) as well as tax rates, city services, and other quality of life factors. Economists and others would suggest that residents and businesses vote with their feet: if this doesn’t happen immediately, the long-term effect could be bad for a suburb if the inflow stops.

The best solution to all of this is not to allow suburbs to have separate policies on something like this. Based on the article, it sounds like numerous suburbs are fearful. But, if they all had no choice, they wouldn’t have to compete with each other (though they then would have to compete with communities in other counties). I’m guessing the ability to opt out was important to getting this passed at the county level but it could be highly negative in the long run.

Perhaps then it would be best to enact a region-wide initiative where every community is affected. Of course, this goes against many of the principles of local control and government – we should be able to decide fiscal policies within our borders – and there is not a binding governmental body that oversees the hundreds of local governments in the Chicago region. This could only happen at the state level but then there are other actors beyond the Chicago region.

In the mean time, it will be difficult to put into practice a higher minimum wage within the region if each community can opt out and act upon their fears.