What City Observatory did this week

1. Urban housing is a massive asset. How massive? Well, a comparison to the valuation of our nation’s biggest corporations shows it’s no comparison at all—housing in major cities has them beat, often handily: housing in America’s 50 largest metropolitan areas is worth about $22 trillion, versus $8.8 trillion for the nation’s 50 largest corporations. It’s a good reminder of just how massive the US housing sector is.

2. Tech clusters are widely credited with breathing economic life into the Bay Area, Seattle, the Triangle region in North Carolina, and other metropolitan areas around the country. But that has led many local political leaders to look for ways to create their own tech clusters—often biotech—from scratch. Unfortunately, the track record of these efforts is poor, and promises of new biotech clusters saving struggling cities often don’t add up to much more than 21st century snake oil, with the politicians claiming credit and leaving office before it’s clear that their economic development plans are bust.

3. Last week, we wrote about how the city of Somerville, MA has adopted zoning laws that would have prevented all but 22 of the actually existing residential buildings in the suburb of 80,000 people from being built. This week, we look atsome of the ways we get to situations like that: often, a slow trickle of new rules that sound good in the abstract, or might have worked somewhere else, that add up to nonsense when actually applied in a given place. Another example: Kalamazoo requires more parking than actually fits on a downtown parcel—even before you can build a building.

4. Research suggests that places where states are more involved in housing development laws tend to be less segregated than places with more powerful local control. Now, two states with major housing affordability problems are taking steps to rein in overly restrictive local governments: California by allowing housing proposals that include low-income units and meet local zoning to bypass an additional level of environmental review; and Massachusetts by requiring municipalities to allow some amount of multi-family housing, as well as accessory dwelling units, or backyard cottages. The hope is that allowing more, and more cost-effective, housing will ease some of the shortage that has pushed up prices.

The week’s must reads

1. The USDOT announced the winner of its $50 million Smart City Challenge, and it was (drum roll) Columbus, Ohio. The city’s proposal focused on connecting low-income neighborhoods to job centers with public transit; the nitty-gritty ranged from logistical fixes like creating a single fare payment system across multiple kinds of transportation, to more futuristic-sounding programs like a fleet of self-driving cars.

2. While new streetcars in Atlanta and Washington, DC, have come under fire for paltry ridership, a new two-mile system in Kansas City is seeing surprisingly high numbers, including over 10,000 riders on weekend days. (That’s particularly impressive given Kansas City’s extremely low overall levels of transit use compared to DC, or even Atlanta.) It’s too early to say whether these figures can keep up, but if Kansas City’s relative success persists, it may be worth investigating what makes its line different from other short pilot streetcars.

3. Is a future with cheap self-driving cars a future of even vaster, even more auto-dominated suburbs? That’s the idea behind this Wall Street Journal piece by Christopher Mims (paywalled; here’s a brief summary by Gawker), which posits that if the cost of driving is dramatically reduced—both in money terms, because renting a self-driving car just for when you need it is cheaper than owning and maintaining it yourself; and in psychological terms, because self-driving cars will allow you to read, work, or nap as if you were on a train—then people will put up with much longer commutes, and create demand for housing even farther from jobs, stores, and other people.

New knowledge

1. At a London School of Economics blog, Naji Makarem writes that one of the reasons for the divergence of the economic fortunes of San Francisco and Los Angeles since 1980 doesn’t have to do with traditional understandings of individual human capital, but social networks. The idea is that more fragmented, fractured social networks reduce the spreading, exchange, and refinement of ideas, and hold back innovation and productivity.

2. Harvard’s Joint Center for Housing Studies has released its “State of the Nation’s Housing 2016” report. Among the major findings: new household formation has finally reached expected levels for the first time since the recession, a good sign for the economy, and housing production increased by 11 percent over the previous year. Single-family starts, while up, remain far below historic levels, while multi-family housing starts are at a 27-year high. The national homeownership rate continued to decline and now stands at 63.7 percent, near a 48-year low. Home prices continue to rise, but nationally are still 20 percent below their inflation-adjusted peak, and more than 4 million households are still underwater on their homes. Meanwhile, the apartment vacancy rate is at its lowest rate since 1985, pushing prices up faster than inflation.

3. Does an increase in households using housing vouchers increase crime in neighborhoods? Leah Hendey, George Galster, Susan Popkin, and Chris Hayes find that the answer is mostly not, in a new paper that looks at changes in Chicago neighborhoods. There’s no association with higher rates of violent crime; in high-poverty neighborhoods, or areas that exceed a certain threshold of voucher-holding households, there is an associated increase in property crimes.

The Week Observed is City Observatory’s weekly newsletter. Every Friday, we give you a quick review of the most important articles, blog posts, and scholarly research on American cities.

Our goal is to help you keep up with—and participate in—the ongoing debate about how to create prosperous, equitable, and livable cities, without having to wade through the hundreds of thousands of words produced on the subject every week by yourself.

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