Large actors in the US housing market and building more homes

Derek Thompson argues those interested in more housing in the United States should be more concerned with local NIMBY activity than private investment firms buying up homes to rent:

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Far worse than corporations taking a few thousand units off the market for owners are the governments and noisy NIMBYish residents taking millions of units off the market for owners and renters alike—by blocking construction projects in the past few decades. (California alone has an estimated shortage of 3 million housing units.) From New York to California, deep-blue cities and states have amassed a pitiful record of blocking housing construction and failing to meet rising demand with adequate supply. Many of the people tweeting about BlackRock are represented by city councils and state governments, or are surrounded by zoning laws and local ordinances that make home construction something between onerous and impossible.

One of the issues at play here is a numbers one: who exactly is acting within the US housing market and how much sway do they have. Concerns about corporations and housing can be placed in the larger context of how many housing units there are and how many are being built. Here are the numbers Thompson provides:

The U.S. has roughly 140 million housing units, a broad category that includes mansions, tiny townhouses, and apartments of all sizes. Of those 140 million units, about 80 million are stand-alone single-family homes. Of those 80 million, about 15 million are rental properties. Of those 15 million single-family rentals, institutional investors own about 300,000; most of the rest are owned by individual landlords. Of that 300,000, BlackRock—largely through its investment in the real-estate rental company Invitation Homes—owns about 80,000. (To clear up a common confusion: The investment firm Blackstone established Invitation Homes, in which BlackRock, a separate investment firm, is now an investor. Don’t yell at me; I didn’t name them.)

If I am calculating correctly, institutional investors currently own 2% of the single-family rentals. Of course, this number could grow if these firms find this to be a good investment.

Also of interest is the number of new homes being constructed. Thompson links to figures from the National Association of Home Builders that shows 6.8 million new single-family units were created in the 2010s. So, concerns about big investors buying homes could be considered alongside housing construction: if the investors are buying more quickly than new homes are being built, this could be an issue.

Thompson settles on local actors – governments and residents – as holding back housing construction. In this numbers game, restrictions on a local level collectively are holding back the construction of single-family housing. If these restrictions were lifted or lessened, concerns about institutional investors would presumably diminish because there is a larger supply of houses to choose from.

One problem I see with this among the larger numbers: while local actors might in the aggregate have oversight over millions of units, they individually have control over relatively few units. Let’s say a particular suburb in the Bay Area (and this NIMBY argument often comes back to California) is against building new single-family homes. Depending on the size of the community and the availability of land, this might affect just a few homes to several thousand. This is not many. Zoom out to the whole region and many suburbs doing this adds up to tens of thousands of potential homes. Do this across all of California’s metro areas and the numbers add up. Similarly, you could do this across all the metro areas in the United States.

However, convincing all these municipalities to act in the interests of the region, state, or country as a whole regarding housing is a difficult task. Housing is local and this makes legislation at the state or federal level very difficult. California’s recent efforts with SB 50 did not go through. Illinois just recently gave some teeth – but not all the teeth – to affordable housing guidelines for communities set almost two decades ago. Federal guidelines are met with the suggestions that the suburbs are going to be abolished. One reason Americans like suburbs in the first place is that local government, presumably more responsive to the needs of residents, has the power to exclude (particularly on race and social class) and protect the existing single-family homes.

All of this does not necessarily mean Thompson is wrong. Yet, to get to the numbers of new homes constructed that would make a significant difference – whether in reducing the need many metro areas have for more affordable housing or outweighing the actions of investment firms – would require a lot of change across many communities. State or federal legislation may or may not be successful and would be unpopular in many places without a significant public groundswell of support that this is an issue that all or even most communities need to address.

Together, municipal changes regarding zoning and NIMBY could add up. But, changes would need to come across communities to make a big difference.

Targeting the right subset of suburban voters for the 2022 midterms

Politicians, strategists, and the media are looking ahead to the 2022 midterm elections. Just like recent elections, the outcome may depend on particular suburbanites:

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That’s one reason Democratic strategists are taking steps now to set the terms of the debate in the midterms. To this end, they say they’ve homed in on a key demographic: suburban women who support President Biden but are at risk of either backing Republicans in 2022 or staying at home.

This demographic is somewhat distinct from the relatively affluent, educated White suburbanite demographic that is often discussed as central to the suburban shift to Democrats in the 2018 and 2020 elections.

Instead, this group is a subset of suburban women who are more likely to be non-college-educated and somewhat less affluent, and tend to be drawn from the working class or lower middle class, or the ranks of small-business owners…

As Sena notes, for Republicans to win the House, they’ll have to win back some suburban voters in areas where Biden did very well. “The very first place Republicans are likely to go will be the suburbs, especially with non-college-educated White women,” Sena told me.

Fighting over suburban voters, and the variations within, is a regular part of American politics. Some suburban voters can go back and forth in their national political preferences and both parties would like to swing them to their side to insure victory.

As the article notes, the messaging has already begun in some parts of the country. It sounds like the ads thus far are for television. With the shift in recent years toward social media and text campaigns, does this suggest operatives are making use of all the possible tools or are particular demographics easier to reach through certain media?

If this is indeed one of the groups to reach for 2022, does this mean we can expect major political personas to make numerous appearances in certain suburban areas throughout the United States? It could be worth tracking which candidates and political figures visit which suburban locations in the next 20 months.

The suburbanization of Islam in America

A new study of mosques in the United States highlights the locations of the surveyed respondents:

The location of mosques in terms of the urban-suburban-town parameters are changing significantly. Mosques in downtown areas and in town/small city locations are decreasing. In 2010, 20% of mosques were in towns/small cities, but in 2020 that percentage is down to 6%. One of the reasons for this decline might be linked to the dynamic that the children of mosque participants are moving away to seek education and better jobs. Many town and small city mosques were established by doctors from overseas who were incentivized in past decades to set up practices in underserved locations. These doctors are now retiring, and mosque attendance is dwindling. The decrease in downtown mosques is most likely tied to the decline of African American mosques and the general move of immigrant mosques to the suburbs.

Mosques are moving and being established in suburbs. Mosques in older suburbs went from 21% in 2010 to 33% in 2020. Mosques in new suburbs went from 7% in 2010 to 15% in 2020. The age-old pattern of immigrants achieving financial success and moving away from cities seems to be repeating itself in the American Muslim community.

If I am reading these categories correctly, the percent of mosques in the American suburbs is close to the percent of Americans overall who live in the suburbs (just over 50%).

But, perhaps more interesting, is the change from 2010 to 2020. Mosques became more suburban over this time frame. The explanation with Figure 4 gives reasons for this: specific migration patterns and general migration patterns in American life with immigrants moving from cities to suburbs over time (known as spatial assimilation). It would be interesting to see if the established research in recent decades on segmented assimilation – or other kinds of assimilation according to scholars – has more to say about different groups of Muslims who may or may not follow these general patterns.

For more on this, I recommend the 2018 book Suburban Islam which examines the experience of a Muslim institution in the suburbs of Chicago. Similarly, the 2015 book Religion & Community in the New Urban America considers congregations in a number of religious traditions in the Chicago region (city and suburbs).

Illinois finally providing some teeth to affordable housing guidelines for communities set in 2003

In 2003, the Illinois legislature passed guidelines saying communities with less than 10% affordable housing needed to provide a plan to address this. Only recently did lawmakers set out consequences for not following this:

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A sweeping affordable housing bill, recently passed by Illinois state lawmakers, has strengthened the Affordable Housing Planning and Appeal Act (AHPAA). That law requires cities, with at least 1,000 residents and with less than 10% affordable housing, to submit affordable housing plans to the state. The law also allows for affordable housing developers to appeal the decisions of municipalities who reject their affordable housing proposals. Those appeals are heard by the Illinois Housing Appeals board.

The AHPAA, originally passed in 2003, is intended to encourage affordable housing, but resistance is rampant. As of October 2020, the Illinois Housing Development Authority identified 46 municipalities that met the law’s requirements. At that time, fewer than half had submitted plans or indicated that they intended to do so. Some municipalities cited home rule as the reason why they didn’t comply. The revised law says that doesn’t matter anymore. It gives the Illinois Attorney General enforcement powers, including seeking court relief, if the municipalities continue to flout the law…

Schecter said the next hurdle is getting units built — not just submitting plans. She said deadlines are needed for when municipalities must turn in their plans and by when they must achieve the 10% affordable housing requirement.

I have followed this particular Illinois statute as affordable housing, particularly in wealthier suburban areas, has been a contentious issue for decades. In some places, this has been addressed through court cases; see the example of Mount Laurel in New Jersey. Elsewhere, it is often left to market forces and municipal ordinances, which typically means that few communities explicitly address providing affordable housing (and not just housing for people groups they would like to have in their community) and local leaders and residents push back against living near cheaper housing (see the example of resistance to apartments).

The last paragraph quoted above suggests there is still work to be done. The recent changes suggests there are now consequences if communities do not submit plans. But, I would guess the real goal of the 2003 guidelines and the update is to lead to new affordable housing units. Even if tomorrow Illinois moved to push communities to submit plans, it would take years for the actual housing to be planned and built. According to various groups, there at least tens of thousands of affordable housing units needed in the Chicago region. If these legislative changes make a sizable dent in this number, this could help a lot of people.

The random name generator for Chicago suburbs

After thinking about Chicago suburbs with elevation clues in their names, I was reminded of the names of Chicago suburbs more broadly. To quote again from the WBEZ story:

One-hundred years ago we named places very differently, Callary says. Places were named after a town founder, or family member, or after something that indicated the place’s actual, physical presence in the world. Today, it’s more common to name a place after what you want it to be, rather than what’s actually there.

So how exactly did developers and local leaders come up with all of the existing Chicago area names? It could have looked like this:

I had to check on Willowridge because it puts together two commonly used words in suburban place names. I found some companies with this name as well as one suburban street but no official place.

Here are the next ten names generated:

Romeowoods

Franklinsville

Elmburn

Hillhurst

Musmukda

Glenside

Rolling Bluff

Hillwoods

Highfield

Crystalfield

Out of these, I would vote for Glenside as the most probable.

On one hand, this all makes sense: suburbs often want to invoke nature and idyllic settings. On the other hand, such anodyne names invoke the conformity and dullness of suburbs many suburban critiques have noted.

Far right-wing militias in the Chicago suburbs

Who lives in the (Chicago) suburbs? According to WBEZ, far right-wing militia leaders:

Traditionally, extremists interested in rightwing paramilitary activities have had to make a special effort to locate and join private paramilitary groups, said Friedfeld. The effort itself was enough to deter many from even bothering. But with hundreds of unlawful militias featured on the site, MyMilitia has reduced the process to a matter of a few clicks. Moreover, the website has pioneered the concept of so-called “area code militias,” which directs users to others living nearby…

Joshua Ellis is 41-years old and lived in Naperville until recently. Bankruptcy court documents indicate he has relocated to Antioch, Illinois. Ellis works in mold remediation and water damage. He calls himself an Army veteran, although his record was just six months with the Iowa Army National Guard, which he acknowledges he left before finishing advanced individual training. He has lived in several states, has a long history of not paying taxes and has filed for Chapter 7 bankruptcy protection at least three times…

The fact that a far right extremist social media site would be run from someone’s home in Chicago’s suburbs has been no surprise to Alexander Reid Ross, a professor at Portland State University and a fellow at the Centre for Analysis of the Radical Right. Reid Ross began tracking far right street activity after police in Minneapolis killed George Floyd. He found that, in the weeks before the 2020 presidential election, the Chicago region was a hot spot…

“I ran the data, and I found out that, demographically, places where these far right incidents were taking place were actually demographically more diverse and actually had slightly higher median household income than the national average,” he said. “That narrative was true that these guys are rising up in the suburbs. They’re feeling like the world is getting more diverse and they’re losing their white power.”

That the front line of right-wing militia activity could be in the suburbs makes sense for several reasons:

  1. Suburbs are split politically with voters closer to big cities leaning Democratic and voters on the edges leaning Republican. The example of Ellis above fits this.
  2. The demographics of many American suburbs have changed in recent decades with more minority, immigrant, and poor residents.
  3. Numerous suburbs have experienced tensions over changes in recent decades. This includes controversies in local government, schools, public activities, and among neighbors.
  4. The majority of Americans live in suburbs.

At the same time, I suspect many suburbanites would be surprised by this. I remember reading a book years ago about Timothy McVeigh and the rural locations in Arkansas and elsewhere of the groups he interacted with. I can imagine the typical news report about something shocking in the suburbs: “We had no idea our neighbor was doing X. This is a quiet community with friendly neighbors. Person Z was a recluse but we did not imagine this.” How would reactions to this news compare to other negative activities? Or, could such group carry out activities in public without receiving pushback?

Where are the heights, mounts, hills, and ridges referenced in the names of Chicago suburbs?

WBEZs’s Curious City looks into the elevation implied by the name of multiple Chicago suburbs:

Mount Hoy offers views of Chicago thirty miles to the east.

For real: Highland Park, Park Ridge, Arlington Heights, Mount Prospect, Prospect Heights, Palos Heights, Chicago Heights, Ford Heights, Barrington Hills, Palos Hills, Rolling Meadows.

And before you say: “But wait! There is some elevation out in the ‘burbs!” Let’s make something clear: You’re not wrong. Chicago’s Loop is at about 570 feet above sea level, and the high point of Cook County is near Barrington Hills at 950 feet. That height difference is just under 400 feet, and that’s spread over 40 miles. If we were talking about any other state in the country (besides Florida) you’d barely notice the difference. In other words, in Illinois, the default standards are low for what’s considered high…

Chicago suburbs end up with names that imply elevation in these two ways: crowd-sourced rebranding and straight-up marketing…

One-hundred years ago we named places very differently, Callary says. Places were named after a town founder, or family member, or after something that indicated the place’s actual, physical presence in the world. Today, it’s more common to name a place after what you want it to be, rather than what’s actually there.

Real estate development is a powerful driver. How could developers and communities differentiate themselves from the hundreds of other suburbs in the Chicago region? Pick an idyllic name and hopefully the moniker plus the new development brings in people and businesses. The image of a mountain or hill would be an attractive one; they are both pleasant to look at and offer vistas from the top.

While none of the communities near me are named after a higher elevation, this story did remind me of the highest height around (see the picture above): a small hill made out of a landfill. Because the area is so flat, on a clear day you can see the tallest buildings in downtown Chicago thirty miles to the east. All this from an artificial 150 foot hill:

Starting in 1965 trash collection agencies and community members were invited to drop off junk and other discarded garbage items. At the end of each day county workers spread the clay, which they had excavated, onto the growing pile of garbage named Mount Hoy after the pioneering family.

Mount Hoy quickly earned its nickname of Mount Trashmore. As the Chicago Tribune article in 1973 announcing the competition of the project read, the hope was to create a popular ski destination by literally “turning garbage to ski slopes.” Although the idea seems a bit farfetched, the City of Evanston was undertaking a similar project and many were trying to convince the City of Chicago to do the same thing.

Overall three millions cubic yards of garbage and clay went into Mount Hoy, becoming a 150 foot hill. By 1974 Mount Trashmore was supposed to host four ski slopes, a snow machine and a chair lift along with two toboggan slides, however a less elaborate setup welcomed skiers and tubers to the area.     

Ignore the venting for the gasses in the landfill and it is almost like a real hill…if we know what those are in northeastern Illinois.

Bringing S.R.O.s to the suburbs in the form of extended stay hotels

Where can people with no other housing options stay? An extended stay hotel can work:

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The company’s resilience suggests the S.R.O. housing model never really disappeared. It was reinvented for the suburbs, where, since the mid-2000s, more poor people have been living than in cities, according to research by Elizabeth Kneebone and Alan Berube, the authors of the 2013 book “Confronting Suburban Poverty in America.” And it morphed in accord with broader economic trends — captured, above all, by two statistics: One in five adults who “wanted more work” were doing without full-time work in late 2019, according to the Federal Reserve; and 53 million people have low-wage jobs, research from the Brookings Institution shows. An expanding industry built on informal and impermanent housing is a reflection of the precariousness that increasingly defines daily life for millions of Americans.

And one company sees it as a business opportunity:

The Siegels see no end to demand and seized on the pandemic as an opportunity to expand beyond Nevada. Last July, the Siegel Group announced the purchase of two Budgetel hotels, 15 miles from downtown Birmingham, Ala.; in November, the company said it was buying a HomeTowne Studios with 130 units in Baton Rouge. The most recent purchase, announced in early May, is an Amerihome Inn & Suites in Houston, five miles north of the beltway in the city’s outer suburbs. That brought the chain to 60 sites nationwide, which now also include Toledo; Memphis; Jackson, Miss.; and Shreveport, La. As Stephen Siegel put it to me, “Our business model is great in a good and a bad economy.”

As the article notes, there are much bigger problems here masked by the opportunity or reliance on extended stay hotels: there are limited housing options for people with limited income, evictions on their record, and poor credit. Government assistance can be lacking or very slow. Landlords have their own worries. Suburban safety nets are thin or do not reach very far. Non-profits and religious groups are not as involved in housing. As sociologist Matthew Desmond showed in Evicted, the housing issue is a big one.

What suburban community would want to address this? Many suburbs want to be a higher-status community and this generally means avoiding having cheaper housing. Depending on the suburb, cheaper housing might be everything from smaller single-family homes to apartments to trailer homes. Hotels might be more acceptable because they could be used by a wide variety of people, including business visitors and potential tourists. If there are problems at such hotels, this could lead to issues.

This also connects to another issue facing suburbs and other American communities: the need for housing for single people and changing family structures. SROs offered housing for single people but were primarily located in cities. The largest number of households in the United States are people living alone and this does not work well in suburbs are usually organized around family housing with multiple bedrooms. Could extended stay hotels have different room configurations that could cater to different needs?

McMansions as a symbol of excessive consumption, end of life satisfaction edition

One of the more interesting definitions of McMansions I encountered in my 2012 study involved the homes serving as a symbol of excessive consumption. Here is a recent example:

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The survey shows—and it’s not even close—that the No. 1 way in which people define a good life is “having family and friends that love me.” The answer was nearly universal, cited by 94% of respondents. After this came “making a positive impact on society (75%). Having a high-powered job or bunking down each night in a McMansion might be nice, but in the end such things don’t mean that you’re loved or respected or that you’ve made your community a better place.

This finding is a common one: people at the end of life say relationships matter more than what they bought or consumed. For example, see the results of the Grant Study:

“When the study began, nobody cared about empathy or attachment. But the key to healthy aging is relationships, relationships, relationships,” Vaillant says. Close relationships, the data indicates, are what keep people happy throughout their lives. The study found strong relationships to be far and away the strongest predictor of life satisfaction, and better predictors of long and happy lives than social class, wealth, fame, IQ, or even genes. That finding proved true across the board among both the Harvard men and the inner-city participants.

Yet, the comparisons made to what really matters – relationships – are interesting as they target key markers of success in the United States. The first is a high-status job. Adults often define their worth and status by their job. Second is the home. In a country that idealizes owning a single-family home, this makes for a striking alternative to prioritizing people.

Why pick a McMansion here as opposed to a typical suburban single-family home? There could be several reasons. A McMansion is a particular symbol of success, a home whose facade tries to exude status. A McMansion is larger than a typical single-family home, usually coming in between 3,000 and 10,000 square feet. And, perhaps most important here, the McMansion is a symbol of the wrong kind of consumption. Owners are trying too hard with their home to show off. The home is poorly designed. Compared to life-giving relationships, the McMansion pales in comparison. Rather than think of people who are McMansion-rich but house poor, think of people who own a McMansion but have poor relationships…a furthering of a long-standing suburban plot where people look like they have achieved the American Dream but their lives are falling apart.

Flamin’ Hot Cheetos: from urban corner stores to suburban corporate headquarters back to cities

Where exactly did Flamin’ Hot Cheetos come from? According to Frito-Lay, the impetus for the popular Flamin’ Hot Cheetos came from Northern cities and Plano, Texas:

Flamin’ Hots were created by a team of hotshot snack food professionals starting in 1989, in the corporate offices of Frito-Lay’s headquarters in Plano, Texas. The new product was designed to compete with spicy snacks sold in the inner-city mini-marts of the Midwest. A junior employee with a freshly minted MBA named Lynne Greenfeld got the assignment to develop the brand — she came up with the Flamin’ Hot name and shepherded the line into existence…

Six of the former employees remember inspiration coming from the corner stores of Chicago and Detroit. One of the earliest newspaper articles about the product corroborates that detail: A Frito-Lay spokesperson told the Dallas Morning News in March 1992 that “our sales group in the northern United States asked for them.”…

Over the next few months, Greenfeld went on market tours of small stores in Chicago, Detroit and Houston to get a better feel for what consumers craved. She worked with Frito-Lay’s packaging and product design teams to come up with the right flavor mix and branding for the bags. She went with a chubby devil holding, a Cheeto, Frito or chip on a pitchfork, depending on the bag’s contents, she recalls, a memory independently corroborated by newspaper archives…

“In response, Frito-Lay launched a test market of spicy Lay’s, Cheetos, Fritos and Bakenets in Chicago, Detroit and Houston” beginning in August 1990, the company wrote in a statement.

The article focuses more on the controversy of exactly how Flamin’ Hot Cheetos came about but I think the geography is pretty fascinating. Here is why I think the geography matters:

  1. The impetus were existing products in urban stores. Even as more Americans lived in the suburbs than cities by the 1980s, a large company like Frito-Lay cannot ignore consumers in the city.
  2. The product was developed in the Dallas suburbs. Plano is a notable suburb because of its growth and wealth (and McMansions). But, there are plenty of suburban office parks where ideas are discussed. Who knew the snacking fate of America was decided in a relatively anonymous suburban facility by business professionals? (And how many other products have a similar story?) Across the street is Toyota American Headquarters and then each direction on major roads leads to strip malls, fast food, and highways.
  3. The product was tested in cities and the idea developed in the suburbs took flight. Now, Flamin’ Hot Cheetos are widely available (though it would be interesting to see the sales breakdown by geography).

Modern capitalism was able to span these disparate locations and churn out a product loved by many. From a suburban office park to snack aisles everywhere…