It's about Neoliberal Governments abandoning building (any) affordable housing since the 80s (Thanks Ronald Regan & the myth of Trickle Down Economics)
It's about allowing privatization of public land
Its about unrestricted hoarding of housing as an "investment" that eats up every bit of affordable "supply"
Its about "seeing" housing not a housing but AS an investment
Its about a banking & finance system that gives more "leverage" to "housing as an asset" holders
It's about the exponential feed back loop of wealth aggregation that leaves regular folk at the bottom of the bidding block...
It's all these thing, but definitely not zoning... this has been shown repeatedly as SFH zoning is removed there is near zero % uptick in building.
Building rates positively coorelate only profitability...
As long as you have a speculative profit motive in housing you won't have affordability.
This is a provocative and interesting framing. My only twist would be to specify that it’s the sort of famine that occurs in a war, when food supplies are cut off by human choices; rather than the sort of famine that arises from drought or other natural causes.
Land use policy is indeed a big part of the cause. Before the early 20th century, urban land was largely unregulated. People built small houses, large tenements, cheap hotels -- and everything in between -- which meant that there were a lot of ugly, crowded neighborhoods, but very few people lived on the street or had to leave a city entirely due to its “cost of living”. After WWII, suburban growth took the pressure off cities for two generations. But now we are seeing the consequences of a century of urban distortion by zoning. While planning reform was needed in the Industrial era, this end point is an absurdity of the opposite extreme.
Also interesting: nobody seems to question how (where?) the influx of millions of economic migrants will be housed, in an already bursting housing market that is too regulated to respond to population growth.
I think this is an underappreciated part of the problem. We have put ourselves into a Malthusian context. Escaping the Malthusian limit was a boon to human ethics because the option of shared growth became widely available. Under a resource limit, every birth necessitates a death, and this is devastating to ethical norms. We take for granted that our norms allow for good things. For progress. Our received ethics demand progress. Capping our housing stock has pushed us back into this barbarian state, and you can see the effects everywhere - anti-immigrant and anti-growth positions that essentially treat fundamentally good things as bad things. It is so twisted, to the ear of our modern ethics, that, for instance, city leaders will "blame" corporations for having created well-paying jobs in their region.
Famine is close to being a complete framework, but it has problems insofar as famines are temporary, sudden shocks, when this is a permanent and institutional problem in nature. Famines are crises too.
You might be interested in Janos Kornai's framework of the 'shortage economy' as applied to the former Eastern Bloc as an alternative that captures this chronic nature of our housing problem and its political origins: https://www.centreforcities.org/publication/planning-for-the-future/
When I first started reading this piece I thought wow, the use of "famine" is bit hyperbolic. But by the time I got to the end I kind of agree. Where the metaphor does break down is in your closer, that it is a mess of our own making. Given the opposing forces that govern supply (the need for housing scarcity to keep prices high since it's such an integral part of our economy and that more people need affordable housing), I really wonder if it will every end? I think sadly that the stasis between the two forces is so strong, it will only end organically if demand (ie population) decreases and that outcome has a whole set of problems on its own. So, yeah, long term famine.
In other words, density increases as you leave the urban core.
It was a very strange feeling I had when someone brought up to me that Cobb County, GA has a higher population density (slightly) than the city of atlanta
Yes, but you are falling into the same category of catastrophizing. Zoning limits are a HUGE issue, with property owners protecting their perceived higher property values by guarding one-acre zoning, protesting multi-family housing, etc. Massachusetts, California, and other states are having to create laws that supercede local zoning restrictions due to the need for more housing. At the same time, housing is more and more investment vehicles and less constructed by people who need to live in the housing they are building. So what is built is increasingly "luxury" condos or homes with high price tags. And developers are often not helping with the loads they will place on infrastructure even though there are ways to build more energy- and water-efficient buildings. At the same time, the housing demand is driven by 3 trends (among others): Huge population increase in the U.S. (no, it is not all immigrants), the trend predicted in the 1990s that half the world will live in cities, another 1990s-forecasted trend that half the U.S. will live on the coasts, and, again, the commodification of shelter. Let's look to more strategic higher density building areas, lower-impact building, and owner-occupied building (so fewer of the empty houses owned by offshore investors as we see in California). It will have to be strategic and precise. Lifting zoning alone can create more problems.
In America, you can see this happening because older neighborhoods closer to the city, built decades ago in a different time, frequently oppose the continuation of natural, organic urban growth
"
Heard a story about a buddha statue in Oakland CA the other day ( old 99% podcast ). It's just 1 1/2 from the heart of downtown Oakland. A lot of old SFHs mixed with quads and 12-plexes. Is it really the zoning in Oakland that's prevented these changes? Or has the the costs of building - which go far beyond zoning - made it difficult to build these smaller buildings and make money?
There's no housing shortage in the United States or Britain or anywhere else in the developed world, so that's where the famine analogy breaks down.
Unaffordable housing and housing inequality are entirely political and due to deliberate restrictions on the supply of Federal funding for high risk consumers. Approximately 60% of Americans live paycheck to paycheck and are therefore high risk consumers.
The belief that there's a housing shortage is simply false. In the United States in 1970, there were approximately 60 Million Households and approximately 70 Million Housing Units. In 2022 there will be approximately 127 Million Households and approximately 143 Million Housing Units. The normalized Households to Housing Ratio has fluctuated around the middle of the range. This suggests that the availability of housing units relative to households has been quite stable over time.
The normalized Rent to Household Income Ratio, on the other hand, has shown a clear upward trend, suggesting that rent has become a steadily increasing proportion of household income over time. This indicates a trend towards decreasing housing affordability.
Zoning has nothing to with the real problem which is Neoliberalism and the false assumption that the private market can solve allocation problems without direct competition from the public sector.
Since 1980, when Progressives jumped on the private market bandwagon, necessary goods and services such as shelter, healthcare, childcare and education have been privatized and the risk pool reduced to include only those that win the birth lottery and are able to establish a credit rating above 700 early in their working life. The result is rapid inflation in these sectors. The solution is to break up the private banking, real estate, healthcare, childcare and education cartels that dominate these sectors. The only lasting way to do that is for the Federal government to underwrite high risk consumers of necessary goods and services by direct funding of of such necessary goods and services in every community.
As the primary currency issuer and treasurer of all future output of the nation, the federal government could achieve affordable housing for all Americans in a matter of a few years. (Same with health care, childcare, and education). Sweden did this in the 1960s, ’70s, and ’80s. It’s very straightforward, but Conservatives and Libertarians have internalized an ideology that defines anything outside their narrow definition of markets as “Socialism.” They ignore the historical performance of the Swedish stock market, the fact that rates of innovation are higher in Sweden than in the U.S. and that thriving Swedish capitalism is a historical fact.
Instead of allowing incomplete markets and real estate speculation to destroy communities, local governments should hold referendums on population limits and growth, seek Federal funding for housing cooperatives, buy private market properties, set aside a certain percentage of the housing stock for local residents, and lease that residential and commercial housing to local residents with proven seniority at an affordable percentage of the local median household income.
The belief that we will be able to build our way to housing affordability is disconnected from reality, and there is no private market solution to high housing costs. There is no private market solution to equitable housing allocation because housing is a financial asset. The private market will never provide enough supply to increase vacancy rates to the degree required to make housing affordable for all members of society
I really like the framing of it as a famine.
Question - Of the 100 largest US metros, where do we see more density on the outside than inside? THat feels like at best a speculative claim.
It's not a "crisis" if it is systemic.
It's not about zoning...
It's not about supply...
It's about affordability...
It's about Neoliberal Governments abandoning building (any) affordable housing since the 80s (Thanks Ronald Regan & the myth of Trickle Down Economics)
It's about allowing privatization of public land
Its about unrestricted hoarding of housing as an "investment" that eats up every bit of affordable "supply"
Its about "seeing" housing not a housing but AS an investment
Its about a banking & finance system that gives more "leverage" to "housing as an asset" holders
It's about the exponential feed back loop of wealth aggregation that leaves regular folk at the bottom of the bidding block...
It's all these thing, but definitely not zoning... this has been shown repeatedly as SFH zoning is removed there is near zero % uptick in building.
Building rates positively coorelate only profitability...
As long as you have a speculative profit motive in housing you won't have affordability.
See Vienna & Singapore
This is a provocative and interesting framing. My only twist would be to specify that it’s the sort of famine that occurs in a war, when food supplies are cut off by human choices; rather than the sort of famine that arises from drought or other natural causes.
Land use policy is indeed a big part of the cause. Before the early 20th century, urban land was largely unregulated. People built small houses, large tenements, cheap hotels -- and everything in between -- which meant that there were a lot of ugly, crowded neighborhoods, but very few people lived on the street or had to leave a city entirely due to its “cost of living”. After WWII, suburban growth took the pressure off cities for two generations. But now we are seeing the consequences of a century of urban distortion by zoning. While planning reform was needed in the Industrial era, this end point is an absurdity of the opposite extreme.
Also interesting: nobody seems to question how (where?) the influx of millions of economic migrants will be housed, in an already bursting housing market that is too regulated to respond to population growth.
Great post.
I think this is an underappreciated part of the problem. We have put ourselves into a Malthusian context. Escaping the Malthusian limit was a boon to human ethics because the option of shared growth became widely available. Under a resource limit, every birth necessitates a death, and this is devastating to ethical norms. We take for granted that our norms allow for good things. For progress. Our received ethics demand progress. Capping our housing stock has pushed us back into this barbarian state, and you can see the effects everywhere - anti-immigrant and anti-growth positions that essentially treat fundamentally good things as bad things. It is so twisted, to the ear of our modern ethics, that, for instance, city leaders will "blame" corporations for having created well-paying jobs in their region.
Famine is close to being a complete framework, but it has problems insofar as famines are temporary, sudden shocks, when this is a permanent and institutional problem in nature. Famines are crises too.
You might be interested in Janos Kornai's framework of the 'shortage economy' as applied to the former Eastern Bloc as an alternative that captures this chronic nature of our housing problem and its political origins: https://www.centreforcities.org/publication/planning-for-the-future/
When I first started reading this piece I thought wow, the use of "famine" is bit hyperbolic. But by the time I got to the end I kind of agree. Where the metaphor does break down is in your closer, that it is a mess of our own making. Given the opposing forces that govern supply (the need for housing scarcity to keep prices high since it's such an integral part of our economy and that more people need affordable housing), I really wonder if it will every end? I think sadly that the stasis between the two forces is so strong, it will only end organically if demand (ie population) decreases and that outcome has a whole set of problems on its own. So, yeah, long term famine.
In other words, density increases as you leave the urban core.
It was a very strange feeling I had when someone brought up to me that Cobb County, GA has a higher population density (slightly) than the city of atlanta
May I add building codes to the list of causes?
Matt Yglesias has a nice piece on how the two-fire escape rule makes it difficult to build a family friendly, larger apartments.
Yes, but you are falling into the same category of catastrophizing. Zoning limits are a HUGE issue, with property owners protecting their perceived higher property values by guarding one-acre zoning, protesting multi-family housing, etc. Massachusetts, California, and other states are having to create laws that supercede local zoning restrictions due to the need for more housing. At the same time, housing is more and more investment vehicles and less constructed by people who need to live in the housing they are building. So what is built is increasingly "luxury" condos or homes with high price tags. And developers are often not helping with the loads they will place on infrastructure even though there are ways to build more energy- and water-efficient buildings. At the same time, the housing demand is driven by 3 trends (among others): Huge population increase in the U.S. (no, it is not all immigrants), the trend predicted in the 1990s that half the world will live in cities, another 1990s-forecasted trend that half the U.S. will live on the coasts, and, again, the commodification of shelter. Let's look to more strategic higher density building areas, lower-impact building, and owner-occupied building (so fewer of the empty houses owned by offshore investors as we see in California). It will have to be strategic and precise. Lifting zoning alone can create more problems.
"
In America, you can see this happening because older neighborhoods closer to the city, built decades ago in a different time, frequently oppose the continuation of natural, organic urban growth
"
Heard a story about a buddha statue in Oakland CA the other day ( old 99% podcast ). It's just 1 1/2 from the heart of downtown Oakland. A lot of old SFHs mixed with quads and 12-plexes. Is it really the zoning in Oakland that's prevented these changes? Or has the the costs of building - which go far beyond zoning - made it difficult to build these smaller buildings and make money?
https://maps.app.goo.gl/nRZqanpQpNpQgLPv6
There's no housing shortage in the United States or Britain or anywhere else in the developed world, so that's where the famine analogy breaks down.
Unaffordable housing and housing inequality are entirely political and due to deliberate restrictions on the supply of Federal funding for high risk consumers. Approximately 60% of Americans live paycheck to paycheck and are therefore high risk consumers.
The belief that there's a housing shortage is simply false. In the United States in 1970, there were approximately 60 Million Households and approximately 70 Million Housing Units. In 2022 there will be approximately 127 Million Households and approximately 143 Million Housing Units. The normalized Households to Housing Ratio has fluctuated around the middle of the range. This suggests that the availability of housing units relative to households has been quite stable over time.
The normalized Rent to Household Income Ratio, on the other hand, has shown a clear upward trend, suggesting that rent has become a steadily increasing proportion of household income over time. This indicates a trend towards decreasing housing affordability.
Zoning has nothing to with the real problem which is Neoliberalism and the false assumption that the private market can solve allocation problems without direct competition from the public sector.
Since 1980, when Progressives jumped on the private market bandwagon, necessary goods and services such as shelter, healthcare, childcare and education have been privatized and the risk pool reduced to include only those that win the birth lottery and are able to establish a credit rating above 700 early in their working life. The result is rapid inflation in these sectors. The solution is to break up the private banking, real estate, healthcare, childcare and education cartels that dominate these sectors. The only lasting way to do that is for the Federal government to underwrite high risk consumers of necessary goods and services by direct funding of of such necessary goods and services in every community.
As the primary currency issuer and treasurer of all future output of the nation, the federal government could achieve affordable housing for all Americans in a matter of a few years. (Same with health care, childcare, and education). Sweden did this in the 1960s, ’70s, and ’80s. It’s very straightforward, but Conservatives and Libertarians have internalized an ideology that defines anything outside their narrow definition of markets as “Socialism.” They ignore the historical performance of the Swedish stock market, the fact that rates of innovation are higher in Sweden than in the U.S. and that thriving Swedish capitalism is a historical fact.
Instead of allowing incomplete markets and real estate speculation to destroy communities, local governments should hold referendums on population limits and growth, seek Federal funding for housing cooperatives, buy private market properties, set aside a certain percentage of the housing stock for local residents, and lease that residential and commercial housing to local residents with proven seniority at an affordable percentage of the local median household income.
The belief that we will be able to build our way to housing affordability is disconnected from reality, and there is no private market solution to high housing costs. There is no private market solution to equitable housing allocation because housing is a financial asset. The private market will never provide enough supply to increase vacancy rates to the degree required to make housing affordable for all members of society