The high cost of affordable housing and the shortage of cities: notes from a panel

Averting a housing crisis: Panel Discussion from oregonmetro on Vimeo.

Last week, City Observatory’s own Joe Cortright took part in a panel hosted by the Portland regional planning agency, Metro, where a standing-room-only crowd heard him, TechCrunch’s Kim-Mai Cutler, Elissa Harrigan of the Meyer Memorial Trust, and developer Eli Spevak talk about whether Oregon’s largest city is heading the way of San Francisco’s overheated housing market.

It’s worth watching the whole video above, but from our perspective, a few points really stood out:

  • First, Kim-Mai Cutler focused on the exorbitant cost of providing affordable housing in high-housing-cost markets, with the result that even large sums of money just don’t buy relief for very many people. As an example, an affordable housing project in San Francisco’s Mission neighborhood is coming out to nearly $900,000 per unit, and a $300 million city bond issue is expected to produce only about 500 units of housing. That’s obviously great for the families who get one of those units, but in a city of over 800,000 people where Zillow pegs the median rent at $4,600, it’s not even a drop in the bucket in the broader affordability crisis.
  • Joe argued that the underlying issue in San Francisco, as in many other places around the country, is a shortage of cities: the demand for housing in inner neighborhoods, with their growing access to amenities, jobs, and cheap non-car transportation options, greatly outstrips the housing available.
  • Finally, Joe also pointed out that parking requirements are one of the elephants in the room: “inclusionary zoning for cars” that drives up the price of housing, since parking gets bundled in before tenants or owners even make the decision to have a car, and reduces housing supply by limiting the amount of space that can be used for housing.

You can read more about the panel at The Oregonian and Willamette Week—or at Metro’s own writeup.

When it comes to transit use, destination density matters more than where you live

At City Observatory, we’ve written quite a bit about the phenomenon of city center job growth. We did a whole CityReport about the phenomenon, showing that since the Great Recession, urban cores have been outperforming the rest of their metropolitan areas on employment, reversing earlier trends. And just this week, we covered new job numbers showing that larger metropolitan areas—those with at least a million inhabitants—are growing more quickly than smaller ones, and that those regions’ center cities are growing more quickly than their suburbs.

Screen Shot 2015-09-30 at 9.52.19 AM

Why do we care about this? Well, for one, we’re partisans for cities, so that makes us happy. But even if you’re not, there are major benefits to re-concentrating jobs in and around downtowns. And in large part, they have to do with access.

Recall from one of our earlier posts that in many places, suburbanites who take public transit to work are actually richer on average than suburbanites in the same neighborhoods who drive. Why is that? Because in places where high-end jobs are concentrated downtown, those high-end earners can take convenient express buses or commuter rail to work. In contrast, lower-end service workers, whose jobs are scattered around the region, don’t have that option, because suburb-to-suburb transit is often infrequent, slow, and unreliable.

In fact, we can demonstrate that, in many places—particularly those with decent express buses or commuter rail serving their downtown—job location actually matters more than home location in determining how people get to work. That’s very different from how we normally think about the kind of person who takes transit and the kind of person who drives: we generally imagine that the former must live in a relatively dense urban area, and the latter probably lives in a more outlying, suburban one. But while those correlations are true, if the urbanite works in the suburbs, she almost certainly drives; and if the suburbanite works downtown, there’s a good chance he takes the train.

Using data from the 2013 American Community Survey, we’ve put together a few maps that show this. The ACS tracks “mode share” (how people get to work) both by home location and work location. In the “home location” map, transit use is heavily concentrated in central cities, but you can see elevated levels of use in a handful of suburbs, too, often along express bus or commuter rail lines. In the “work location” map, however, almost everywhere outside the center city goes blank: virtually no one uses transit to get to jobs in the suburbs, even in “transit-rich” regions like Chicago or Philadelphia.

Source: ACS
Source: ACS
The darkest city in both maps is Minneapolis. Just to its right is St. Paul. Note that this data comes from before the opening of the Green Line light rail to downtown St. Paul.


This principle—that what really matters for how you get to your job, even more than where you live, is where you work—is a big reason that growing employment in city centers benefits everyone in the region, even if they’re planning on remaining in an outlying neighborhood or suburb. (And, importantly, we can extend that principle to other destinations: grocery stores, schools, and so on. What matters is “destination density” near transit.) Creating the option to get to your job via transit does several important things: by reducing driving, it reduces the number of serious accidents, injuries and deaths; it reduces greenhouse gas emissions and pollution; and it dramatically reduces transportation costs, giving households more room in their budgets for other important expenditures. And as a bonus, transit use helps keep the metropolitan footprint smaller.

Those are things that benefit you no matter where you live in a metropolitan region. They offer a lesson for cities, which ought to make the most of these dynamics by zoning more land for a density of jobs, amenities, and other destinations near central transit stations. And it’s part of why we’re cheering on the return of center cities as the engines of America’s job growth.

The Week Observed: September 25, 2015

What City Observatory did this week

1. Zoning in everything—even the education gap. By now, thanks to renewed attention in major media outlets from writers like the New York Times‘ Nikole Hannah-Jones, many observers of housing policy debates are aware of the role of exclusionary zoning in promoting residential segregation. We look at a paper by Jonathan Rothwell that applies that insight one step further in showing that not only does that residential segregation result in more segregated public schools, but that those segregated schools in turn enlarge the gap in test scores between white students and students of color. Rothwell’s work in showing a straight line from more restrictive zoning policies to bigger “achievement gaps” is an important step forward in our understanding of the broader impacts of segregatory housing policies.

2. Why are metropolitan areas more “equal” than their central cities? In almost every one of the 50 largest metropolitan areas, central cities show more income inequality than their surrounding suburbs. But while at the national level, more inequality is generally unambiguously bad, at the local level, it’s a very different story. Take, for example, Flower Mound, TX—a Dallas suburb with one of the lowest levels of “inequality” in the country. Flower Mound’s average income is more than twice that of the Dallas area as a whole, and is well over 20 percentage points whiter, meaning that its “equality” is really a result of excluding the people of color and low-income residents who have to find homes somewhere else.

3. What else does the new “severely rent-burdened” report tell us? Digging beyond the headlines predicting a sharp increase in the number of renters paying over half of their income for housing, we find several other lessons from the report from Harvard’s Joint Center for Housing Studies and Enterprise Community Partners. One of them: a huge proportion of new renter households will be single people—some Millennials, but largely the elderly, and especially elderly women. Building housing that can accommodate them affordably is a crucial challenge.

4. The immaculate conception theory of your neighborhood’s origins. Many debates about today’s housing development involve nostalgic calls to return to the supposedly more humane, sustainable construction of earlier eras. But a closer look reveals that, say, the early 20th century bungalow era doesn’t actually look anything like the idyll we imagine. If we’re going to take lessons from the past, we need to be realistic about what really happened. Part of the story is that new housing is almost always expensive—and that our cities have historically relied on modestly-sized homes in multifamily buildings to provide homes for the working class and people of modest incomes.

The week’s must reads

1. At the Washington Post, Emily Badger and Christopher Ingraham havecharted the number of housing units by type—single family homes, rowhomes, two flats, and so on onto large apartment buildings—for cities across the country. They find that almost everywhere but older cities in the North and East, single family homes dominate. Also evident: the huge role of rowhomes in places like Baltimore, Philadelphia, and Washington, DC.

2. Well over a million Americans live in public housing today, even after decades of declining stock. At The Atlantic, Alana Semuels covers the case, largely from University of Minnesota professor Ed Goetz, that public housing’s stigma is mostly undeserved, and it still has a major role to play in affordable housing. Semuels traces the history of public housing, from a program aimed largely at the working class towards its stigmatization as “housing of last result” for the poorest of the poor—but points out that even at its nadir, the sort of epic dysfunction publicized in places like Chicago’s Cabrini-Green always represented a relatively small minority of project sites.

3. “Shut up and take my money—before I board,” says “the Transportationist,” University of Minnesota professor David Levinson. Levinson makes the case that one of the greatest missed opportunities to improve bus service is off-board fare collection—with either turnstiles or, much more cost-efficiently, pre-pay kiosks that allow passengers to tap their cards before the bus arrives, dramatically speeding up the boarding process.

New knowledge

1. At Tech Crunch, Kim-Mai Cutler reports on a study by the rental market analyst firm Zumper, indicating that up to a third of the rental cost in cities like San Francisco is a result of venture capital funding. Even after controlling for income, home values, vacancy rates, and rent control ordinances, Zumper found that amount of venture capital funding in a metropolitan area had a major upward effect on rents. Two caveats: first, the study didn’t take into account local zoning practices, which have been shown to have major effects on housing prices; and two, many organizations like Zumper have rental listings that are skewed towards the higher end of the market for various reasons. Still, this is some empirical evidence to support a plausible theory: the speed at which venture money can be grown and invested vastly outstrips the speed at which housing construction can respond, which would lead to these sorts of rent increases.

2. Another z-named housing market analysis firm, Zillow, reported this week that in many of the nation’s largest, most successful metropolitan areas, a significant proportion of homes actually lost value over the last year. Boston, Washington, DC, and Philadelphia all had over 40 percent of their homes lose value—while in Seattle, Portland, and Dallas, that number was under 10 percent. Zillow’s report didn’t indicate any geographic trends within metro areas—whether, say, homes with declining prices were concentrated in city cores or the suburban periphery. Look for City Observatory to do some follow-up work on this question.

3. The Lincoln Institute of Land Policy released a report looking at inclusionary zoning—an affordable housing policy used in cities across the country that requires private builders to include low-income units in their developments, or pay for them somewhere else. Among the conclusions: the need to perform analysis to make sure that affordability requirements can be absorbed by developers; track the program’s impact to see how many units are actually produced (in our opinion, this number is often far too small to make a real difference in affordability); and ensure that the geographic distribution of affordable units is promoting integrated neighborhoods.

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. You can sign up to get it in your inbox by clicking “Subscribe” at the top of the page!

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The immaculate conception theory of your neighborhood’s origins

Last week, a columnist in Seattle Magazine, Knute Berger, expressed his discontent with modern housing development. As Berger sees it, today’s homebuilding pales in comparison to the virtues of early 20th century bungalow development:

In a rapidly growing city where the haves have more and the have-nots are being squeezed out, the bungalows offer a lesson we ought to relearn. They recall a city figuring out a way to house its people affordably, without excess. To me, they reflect a lack of materialism, housing built not for profit, but for living in. They reflect a modest approach to life, one steeped in a conservation ethic—don’t use more than you need. Seattle culture needs to find a way to get back to those values, and create a built environment that reflects it.

This is one of the more eloquent expressions of something you might call the “immaculate conception theory” of neighborhood development. This narrative is common all around the country, in communities of many ages—from colonial Boston to postwar Minneapolis—and sets powerful background assumptions about what affordable, friendly neighborhoods can and should look like that inform many of our debates about housing. These assumptions mostly revolve around the idea that older housing was built the right way: ethically, modestly, with an eye to community rather than profit. These older values, in turn, highlight the faults of modern buildings: gaudy and wasteful, disruptive to existing communities, and motivated only by money.

Old building: virtuous. New building: villainous.

The problem with the immaculate conception theory is that, like parents swearing that they would never have behaved the way their kids do, it is conveniently forgetful about what actually happened in the past. Taking, just as an example, the kind of housing that Berger romanticizes—the early 20th century bungalow boom—a closer look reveals that it was defined not by mass affordability, efficiency, and respect for traditional communities, but something very nearly the opposite.

To begin with, many of the arbiters of taste at the Seattle Magazines of the bungalow era believed those new bungalow neighborhoods “ruined” the character of the places they were built, just as new apartment buildings are maligned today. They even had a snappy put-down for it: “bungalow disease.” “Tradition has broken down,” wrote the British planner Thomas Sharp, describing a proliferation of bungalows on both sides of the Atlantic, and “taste is utterly debased…. The old trees and hedgerows…have given place to concrete posts and avenues of telegraph poles, to hoardings and enamel advertising signs.” Closer to Berger’s home, Architectural Record reviewed Seattle’s building boom in 1912 and, in an otherwise positive article, pronounced the quality of its new homes “disappointing.”

Critics accused new bungalow neighborhoods not just of being ugly, but of ripping apart the social fabric of the city. One writer argued that in new neighborhoods full of many separate houses, “each building is treated in isolation, nothing binds it to the next one,” and as a result they lacked an “essential” “togetherness.” Another pointed out that the rise of bungalow neighborhoods coincided with the rise of decentralized business districts, as these sprawling areas—bungalows took up much more space per person than either the more modest single family homes or apartment buildings that had come before—encouraged outlying commercial development and car ownership.

Another lovely open field built over and ruined. Credit: Skokie Heritage Museum
Another lovely open field built over and ruined. Credit: Skokie Heritage Museum


Which brings us to our next point: Far from being based on an ethic of efficiency and conservation, early 1900s bungalows represented a dramatic leap to neighborhoods that required higher energy consumption than ever before. This was true, first of all, because bungalows tended to be much larger than existing homes. While Berger marvels that one 1910 bungalow was just 1,600 square feet, the average home size at the time was closer to 1,000 square feet—making the 60 percent larger home look like a veritable McMansion. In addition, many of these new single-family-home neighborhoods, which were built much further from job centers and at much lower densities than older communities, were enabled by the boom in energy-consuming automobiles, and encouraged their use. By the 1920s, one in every two American families had a car—a figure that was much higher in bungalow neighborhoods—and public transit began losing many of its customers to driving. In the same decade, suburban population growth outpaced that of cities for the first time ever.

Finally, the idea that bungalows represented a housing type that was affordable and open to all—and an ethic that valued community instead of money—simply doesn’t describe actual American cities in the 1910s or 20s. Home prices in the 1920s were rising rapidly, leading many people to talk about a housing crisis in terms not so terribly different from today’s. But as Gail Radford describes in her book Modern Housing for America, bungalows weren’t holding the line on cheap homes: in many cases, they represented the luxury housing of their day. Bungalows were so much more expensive than the more modest homes that had preceded them that while the overall cost of living increased by about a factor of two between the 1890s and 1920s, the cost of an entry-level home had increased by a factor of five and a half. Even before the economic crash of 1929, there was a growing foreclosure crisis, strongly suggesting that “housing costs were simply too high in relation to incomes for many families.”

Moreover, the bungalow era coincided with the development of zoning codes—codes that were essential, in fact, to preserving many bungalow neighborhoods’ all-single-family character. The people who advocated for these zoning codes did so by explicitly arguing that they were needed to protect the property values of homeowners and other landowners. In other words, the denizens of the early 20th century cared so much about their houses as a financial investment that they invented an entire new regulatory infrastructure to ensure that they wouldn’t lose their value.

And of course, “not losing their value” was very closely tied to excluding any kinds of people who might threaten the neighborhood’s desirability. It’s impossible to talk about the development of urban American neighborhoods in the early 20th century without acknowledging that this was the period in which modern residential racial segregation emerged—a system of exclusion enforced by covenants, zoning, and violence carried out by the residents of all kinds of neighborhoods. This isn’t some separate issue from how those who were excluding, rather than excluded, built their homes and communities: it’s an integral part of the story, without which those bungalow neighborhoods may have looked quite different.

Community values were also quite contentious in the first half of the 20th century.
Community values were also quite contentious in the first half of the 20th century.


Why have we forgotten all of this? Partly because all the people in these stories are gone. We can’t see the developers laying roads and streetcar tracks to open up huge new areas for subdivisions; we can’t see the disproportionately wealthy people who were able to buy homes in a pre-FHA era when required down payments routinely hit 50 percent. We can’t talk to the people who remember, and miss, what existed in these places before bungalows. All that’s left are the buildings, which over the years have lost their sheen of newness, often becoming more affordable in the process, and allowing us to imagine our own stories about where they came from.

The point here is not that bungalows are “bad.” Given what has happened in the intervening century, a return to bungalow-scale living would be a huge win for sustainability and efficient living in the many postwar suburbs and neighborhoods where homes have ballooned to much larger sizes, and development has become much more sprawling. In many urban communities, bungalows today represent a prized architectural tradition, and a form of single-family home that fits neatly into the kind of mixed urban neighborhood—along with small apartment buildings and local shopping districts—that we have long since made illegal.

But there are important lessons to be learned by looking at what the bungalow era actually looked like, rather than our romantic imagination of it.

One is that everything old was once new, and new things often provoke a backlash. We ought to be humble in believing that our opinions represent some timeless, objective truth, looking backwards or forwards. The same bungalows that seem to us quaint and charming were tacky and soulless to many of the people watching them be built; it seems more than possible that the new apartment buildings we vilify today will be thought of sentimentally by future generations who know them only as an important part of their city since they were born.

A second lesson is that American cities have an impressive history of growing to accommodate new arrivals. Berger leaves out of his column, as is frequently left out in “immaculate conception” stories, that the bungalow era was also the fastest period of urbanization in American history: Between 1900 and 1930, Seattle’s population grew more than fourfold, from 80,000 to over 360,000—a rate of growth approached or exceeded by many other American cities at the time. In the process, millions of rural Americans and immigrants were given the opportunity to live in newly industrializing cities where wages and quality of life were dramatically higher. Today, most of our cities have shut the door on that kind of growth. (Seattle’s growth rate today, while much higher than many other central cities, pales in comparison to the bungalow era Berger wishes we would return to.) As a result, our doors are no longer open to as many people, from this country and others, who would like to make better lives by moving to places where job openings and quality of life are high.

Finally, the bungalow era suggests that building new market-rate housing that’s affordable to working-class and low-income people in urban areas is hard, especially if that housing takes the form of single-family homes. And it’s worse today: while the bungalow builders had the advantage of lots of open land relatively close to center cities, today, that “frontier” has closed. And we’re well aware of the costs—environmental, social, and financial—of continuing to push all of our growth out further and further onto the fringe.

An old Seattle neighborhood with both bungalows and small apartment buildings—which were and are much more affordable and energy efficient.

Rather, the deeply affordable and decent homes of the bungalow era were largely in multifamily buildings. It’s curious that, though more than four in ten of the homes built in the 1920s were in apartment buildings, that kind of construction—and those kinds of people—are entirely absent from Berger’s romantic musings about the time. But they were a crucial source of urban accommodations for people of modest incomes. As the Sightline Institute has pointed out, rooming houses and other small, multifamily homes made up a huge proportion of the affordable housing stock in cities around the country in the early 20th century. Unfortunately, a combination of regulations and market conditions has virtually eliminated that stock in most places. If we want to go return to something the 1910s and 20s got right, bringing back modestly-sized homes in multifamily buildings is a good place to start.

The past does have lessons for us—we’ve made a point of championing the now-“illegal neighborhoods” that American cities built up through the bungalow era. But we have to look at it as it really was, and not through rose-colored glasses, if we want to get them right.

Cities’ role in growing our nation’s economy

Cities have always played a vital role in the national economy, but in the past few years their importance has increased.

Last month, we highlighted the “Dow of Cities”—how the rising value of housing in the most central portions of the nation’s metropolitan areas signals the market’s verdict about the growing demand for urban living.

Another indicator comes courtesy of our friend Josh Lehner, an economist in the Oregon Office of Economic Analysis. Josh uses Bureau of Labor Statistics employment data to track employment growth by size of metropolitan area. His analysis divides the nation into four groups: the 51 metropolitan areas of 1 million population or more, two groups of mid-sized and smaller metropolitan areas, and nonmetropolitan America.

There’s no question that large metros are important to the economy. These 51 metros with a million or more population are home to 168 million Americans, and account for about 65 percent of the nation’s gross domestic product. But the big question is, how important are they to national growth?

The latest data show that, as a group, large metropolitan areas have dramatically out-performed the rest of the country in the last economic cycle (dating from the peak of the economy in December 2007). In the aggregate, metros with 1 million or more population have fully recovered the employment lost in the Great Recession, and grown to 3 percent above their pre-recession peak. As of March 2015, smaller and mid-sized areas had barely made it back to the peak. And non-metropolitan America is still 2.1 percent below where it was in 2007.


What makes this finding even more striking if one cares about cities is that it represents a dramatic shift from the pattern of the last economic expansion. Using Josh’s data, we prepared a second chart, showing the growth in employment for large, middle-sized and small metros and non-metros, for the period 2002 through 2007. During that growth period, small and mid-sized metros decidedly out-performed larger metros in job growth.  The smallest metros grew their employment by 7.5 percent, mid-sized metros grew about 6.5 percent, and large metros grew about 5.5 percent.


As we’ve pointed out in our report, Surging City Center Job Growth, the last few years have witnessed a historic reversal in the patterns of job growth within large metropolitan areas. After decades of steady decentralization, employment growth in urban centers substantially outpaced that in more peripheral locations from 2007 through 2011. We think there’s strong evidence that this process is driven by employers looking to tap the growing labor market in city centers, which itself is a product of the movement of well-educated young adults back to cities (as we documented in Young and Restless).

All this evidence points to one thing: City centers are the big drivers of national economic growth. Big metros are significantly out-performing smaller metros, which in turn are out-performing rural areas. Within large metros, the decades-long pattern of job decentralization has reversed—and jobs are growing faster in city centers than in the metropolitan periphery. In this economic expansion, the nation’s economic growth is tied to the performance of its large metros and their robust city centers.

Many thanks to Josh Lehner for compiling this data and sharing it. Be sure to visit the Office of Economic Analysis blog for more detail, including a national map showing patterns of county-level job growth since 2007.

Zoning in everything—even the education gap

A few weeks ago, Nikole Hannah-Jones produced a tour de force report on school segregation in America, which became a two-part episode on the public radio show This American Life. In the first part, she dove into the complex legal and racial geography of the St. Louis metro area, explaining how the imaginary lines of municipal and school district borders sort children who might otherwise think that they belonged to the same community into dramatically separate and unequal educational institutions.

How is it that, more than sixty years after Brown v. Board of Education and generations after the Fair Housing Act, places like suburban St. Louis—and New York, and Austin, Texas, and cities around the country—maintain these boundaries between wealthy and disproportionately white “high-performing” schools and resource-starved and disproportionately black “underperforming” schools?

A 2012 study from Jonathan Rothwell for the Brookings Foundation has a big part of the answer: exclusionary zoning. While fair housing advocates have known for decades that local regulations that outlaw low-cost housing and otherwise artificially inflate home costs are closely tied to residential segregation—and it doesn’t take a social scientist to make the leap from residential segregation to racial and economic separation in schools—Rothwell’s was one of the first studies to try to directly link zoning to school segregation. And it turns out the link is quite strong indeed. (We would also be remiss not to mention that Hannah-Jones has done quite a bit of work on zoning herself, including telling the little-known story of the Nixon Administration’s aborted plan to enforce the 1968 Fair Housing Act by ending exclusionary zoning.)

The chain from zoning to school segregation

Exclusionary zoning works two ways: first, by requiring that all homes be relatively large and luxurious; and two, by limiting the total number of homes, regardless of how much demand there is for housing in a given community. The effect of both measures is to increase home prices, and keep out anyone who can’t afford the inflated costs.

Rothwell finds, right off the bat, that schools that perform well on standardized tests are both larger and much more costly than others. In the 100 largest metropolitan areas, homes near “top” schools have 1.5 more rooms than homes near “bottom” schools. They also cost over $200,000 more—which means a typical family would need to pay an additional $11,000 per year in mortgage costs to afford such a home.

But, of course, people want their children to get a good education and are willing to pay for it. In economic terms, the value of good local schools gets “capitalized” into the price of housing: All else equal, a home in a good school district should command a higher price than an identical home in a worse school district just because of the value of that education. How do we know that this cost premium isn’t just a natural result of the intersection of the housing market and the varying quality of school districts?

Credit: Brookings Institution
Credit: Brookings Institution


What Rothwell shows is that these gaps look very different from region to region, in a way that’s highly correlated with zoning practices. The home price differential between high-scoring schools and low-scoring schools is 40 to 63 percentage points greater in metropolitan areas with the most restrictive zoning, compared to those with the least restrictive zoning. That shaves tens of thousands of dollars off the average price of housing near high-scoring schools. And within metropolitan areas, tightly-zoned municipalities have home costs that are nearly $4,000 a year more expensive than the regional average.

Those higher prices, in turn, foster segregation along the axes of income, race, and school quality. Cities and towns with high levels of exclusionary zoning have student bodies that are nearly 20 percentage points less Hispanic and black, and 17 percentage points less low-income, than their regions as a whole. Their elementary school test scores are also more than 16 percentage points higher.

Credit: Brookings Institution


In the end, connecting the dots, Rothwell estimates that metropolitan areas with the tightest zoning (places like Boston or Buffalo) had developed under relatively open zoning (like Portland or San Diego), their test score gaps between low- and high-income students would be more than seven percentage points smaller.

Housing—and zoning—in everything

When it comes to issues of urban equity and opportunity—from crime to health to education—a good rule of thumb is that housing is in everything. And a good corollary is that if you scratch a housing issue, you’re likely to find a zoning issue. Rothwell’s paper, though a few years old, is a valuable contribution to our understanding that the same regulations that make traditional neighborhoods illegal are also contributing to school segregation, and the “education gap” between haves and have-nots.

What else does the new “severely rent-burdened” report tell us?

This week, Harvard’s Joint Center for Housing Studies and the affordable housing organization Enterprise Community Partners released a report sketching out various scenarios of rental cost and income growth for the next ten years. The headlines are fairly bleak: JCHS and Enterprise project the number of “severely rent-burdened” households to grow under almost any scenario. (The report uses the common definition of households paying more than half of their income for housing as “severely rent-burdened.” About which more at the end of this post.) Even if income growth moderately outpaces rent increases—something that hasn’t happened for over 20 years—demographic trends, including the rising number of elderly households, will push the severely rent-burdened totals higher.

But a few other parts of the report stick out, too.

For one, JCHS and Enterprise write that there is a huge national rental supply crunch, which is a major source of rising rents. The paper notes that while the number of rental households is growing at record levels, the growth of rental housing units is lower than it’s been for generations. JCHS projects that there will be 4.2 million more rental households ten years from now—though it notes that may be an underestimate, as the Urban Institute has placed its guess closer to 6 million. But in the last ten years—in large part because of the Great Recession—the number of rental homes grew by only 2.2 million, a pace slower than any since the early 1970s. As a result, vacancy rates are historically low, putting upward pressure on rental prices.

Second, a huge proportion of the growth in rental households in every scenario that JHCS and Enterprise sketched out is made up of single people. Partly, that’s Millennials putting off having families. But it’s also in large part about the growing number of elderly adults, and especially elderly women, living alone. While much of the discussion and debate about “tiny houses” or “microapartments” centers on the lifestyles of young, highly mobile, relatively wealthy urbanites, this report is a reminder that many of the housing types we’ve made illegal in our neighborhoods—the studios, small one-bedrooms, and backyard cottages—are needed by, and have historically served, a broad range of demographics. In other words, they’re called “granny flats” for a reason: because the elderly as well as the young have relied on a small, flexible, affordable housing types to remain living independently in the communities they value. As the number of single households, and single renters, continues to grow, making sure we haven’t outlawed the kinds of housing they need is a key challenge.

An apartment above a garage can provide a modest, affordable home for single elderly adults on a fixed income.
An apartment above a garage can provide a modest, affordable home for single elderly adults on a fixed income. Credit: radcliffe dacanay, Flickr.


Finally, we feel the need to note that, like the 30 percent housing-cost-to-income ratio that usually denotes “cost-burdened,” the 50 percent ratio that JCHS and Enterprise used to denote “severely cost-burdened” suffers from some serious flaws. In particular, it may overstate the problem of high housing costs in the upper end of the market (someone who earns $200,000 can choose to pay a huge amount for housing and still afford all of life’s other necessities), while understating the burden on low-income families who need a much greater percentage of their smaller incomes to buy food, clothing, and so on. Nor does the report’s metric touch on other location-based costs, like transportation, which adds meaningful and important context as the geography of housing demand, poverty, jobs, and transit service changes.

The JCHS/Enterprise report is a valuable reminder that housing costs remain a serious problem in many parts of the country. But we shouldn’t just take it as a general alarm: it contains concrete lessons for those working to improve housing policy—especially the need to grow the rental housing supply where there is demand and reform zoning laws to allow the full range of housing options to accommodate single people in all neighborhoods—that, along with more aggressive subsidized housing programs, offer at least the outlines of a path forward.

The Week Observed: September 18, 2015

What City Observatory did this week

1. Great neighborhoods don’t have to be illegal—they’re not elsewhere. Daniel Kay Hertz follows up on our earlier piece about illegal neighborhoodsto point out that most other wealthy countries allow the kinds of mixes of density and uses that most American cities have outlawed. Based on Sonia Hirt’s great book, Zoned in the USA, Hertz shows that, for example, in places like Great Britain or Germany, even low-density residential zones allow small multifamily housing and everyday commercial uses.

2. The prisoner’s dilemma of local-only planning. While contemporary planning places a great deal of emphasis on the idea of the “local,” Daniel Kay Hertz argues that we may be underestimating the costs of focusing planning decisions at small levels of geography. In fact, much of the move to localism in the last half-century has been associated with exclusionary policies, both in “white flight” suburbs and urban neighborhoods. As a result, metropolitan areas with more “local” governance are both more segregated, and have greater health disparities between blacks and whites, than other places. Many of our challenges around housing and segregation may require action and planning at higher levels of government.

3. Is WMATA’s transit cost problem a national issue? Daniel Kay Hertz takes a look at a potential threat to sustaining and growing transit services in America’s metropolitan areas: rapidly rising operations costs. While reliable bus service is key to linking together compact, livable urban neighborhoods, the increasingly expensive “price” of an hour of service means that agencies must receive larger and larger subsidies just to tread water. Though it’s not entirely clear what’s going on, this is something that people who care about urban neighborhoods need to look into before it becomes an even bigger issue.

4. What does it mean to be a “smart city”? Joe Cortright writes that while the “smart city” movement has a lot to offer, looking at cities as “systems of systems” or “information flows” to be optimized runs the risk of overlooking what really matters: people. “Smart” cities create and attract talented people and create opportunities for their residents to meet and build things that add to their city’s economic and cultural life.

The week’s must reads

1. Jed Kolko goes through the new 2014 American Community Survey data at UC-Berkeley’s Terner Center for Housing Innovation. Among the big findings: the homeownership rate fell nearly half a percentage point in a single year, to 63.1 percent from 63.5 percent; all growth in occupied housing has been in rentals; housing cost burdens are easing slightly (though measured by the 30 percent of income ratio method we’re not crazy about); and vacancy rates are falling for multifamily units, but rising slowly for single family.

2. In a throwback to earlier housing battles (like Mount Laurel or Arlington Heights), the housing advocacy group San Francisco Bay Area Renters Federation, or SFBARF, has announced a new campaign to battle against exclusionary zoning: “Sue the Suburbs.” San Francisco Magazine takes a look at SFBARF’s plan to sue the town of Lafayette for failing to live up to its responsibility under state law to build some amount of affordable, multifamily housing.

3. Probably no major American city is currently thinking in as comprehensive a way about affordability as Seattle. The Urbanist blog reviews the recommendations of that city’s Housing Affordability and Livability Agenda Advisory Committee (or HALA), released recently, and picks out some of the most exciting. From increasing low-cost housing supply with accessory dwelling units to using tax levies to support truly large numbers of subsidized units, there’s a lot here for other cities to take notes from.

New knowledge

1. Via the New York Times, researchers at the Center for American Progress released a study showing that growing up in a metropolitan area with higher union membership is associated with a small but statistically significant increase in economic mobility for the low-income. Using data and methodology from Raj Chetty’s groundbreaking work published earlier this year, CAP found that a 10 percent increase in a region’s union membership is associated with a 1.3 percentile point increase in income for low-income children, a relationship roughly as strong as a neighborhood’s high school dropout rate. They also found that children of non-college-educated fathers earned 28 percent more if their father was a union member.

2. Researchers from the University of Cincinnati and West Virginia University used a paper to argue against a “one size fits all” approach to affordable housing. Specifically, they evaluate the accusation that housing vouchers simply drive up market prices by increasing the total rent that low-income households can afford to pay. It turns out that in housing-supply-constrained metropolitan areas, where it’s difficult to add new housing, vouchers do raise prices for apartments just below the “fair market rent” (the highest amount that vouchers will pay). In places where it’s easier to add new housing, vouchers do not raise prices. We would add that this is another reason that allowing more housing in urban neighborhoods is an important policy for social equity.

3. Jie Huang of the University of Leeds and David Levinson of the University of Minnesota use a new paper to look at the effect of “circuity”—that is, the ratio of the actual distance between two points and the distance one actually has to travel over roads or transit services—on mode choice. They find that transit use is heavily correlated with low transit circuity, but that for most people, driving circuity is much less than transit circuity. The bottom line, without jargon: people like taking direct trips.

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. You can sign up to get it in your inbox by clicking “Subscribe” at the top of the page!

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Why are metropolitan areas more “equal” than their central cities?

To butcher Orwell, all cities are unequal, but some cities are more unequal than others. While working with some of the Census-calculated income inequality numbers—in particular, the Gini index—we noticed an interesting pattern: the central city of a metropolitan area is almost always more unequal than its metropolitan area as a whole. What’s going on?

Previously, we’ve made the case that applying the sort of income inequality metrics that we apply to our country is a tricky business. At the national level, having more income inequality is pretty much unambiguously bad. (Theoretically, of course, some amount of inequality is desirable, but we’re way past the point of where diminishing returns become negative.)

Given a certain amount of national inequality, however, more local inequality isn’t necessarily bad. In fact, it may be good. For one, economic productivity tends to be concentrated in metropolitan areas, and so you’d expect there to be disproportionately more very wealthy people—executives of major corporations and nonprofits, star performers in the arts and sports, and so on—just like you’d expect Fortune 500 CEOs and major theater directors to be underrepresented in rural areas and small towns. A city without those economic and cultural institutions is probably a city in trouble.

Traditionally, American cities have also had a disproportionate share of people whose incomes are very low. There are a lot of unsavory historical reasons for this, from redlining to exclusionary zoning, but there are also some advantages for low-income people to living in cities. A big one is transportation costs: a household can save thousands of dollars a year by living in a place where they can walk or take transit to most of their destinations instead of driving. And, as jobs and amenities increasingly re-concentrate in central cities, they improve low-income residents’ access to essential quality-of-life goods.

Subsidized housing and market housing in a desirable Manhattan neighborhood: high inequality.

To get a low level of income inequality, then, a city has to either lack the high earners who, in an unequal country, suggest the presence of a strong local economy, or be so unfriendly to low-income people—usually via exclusionary zoning and inflated home prices, as well as bad public transit service and high transportation costs—as to essentially banish the poor.

So, for example, one of the most “equal” cities in the country is the Dallas suburb of Flower Mound, where the median household income is $120,000 (compared to $48,000 in the metro area), and 78 percent of people are white (compared to 50 percent in the metro area). Flower Mound hasn’t turned itself into a Scandinavian-style social democratic utopia; it’s simply figured out how to get all the poor people in the Dallas area to live somewhere else.

And this isn’t rare or accidental: as Robert Reich (and others) have been pointing out for a long time, municipal borders are frequently drawn to facilitate the “secession of the successful” and ensure that public services funded by their taxes can’t be used for the benefits of the less wealthy.

Homes only affordable to the wealthy in Flower Mound, TX: low inequality.

Which, in turn, gets to the actual heart of the issue: given a national level of inequality, the role of cities is in large part to create either Flower Mound-style enclaves of the wealthy (and, on the flip side, places with extreme concentrations of poverty) or neighborhoods that are home to people across the income spectrum.* The former allows for the hoarding of public resources and has found by researchers to be a major mechanism for the reproduction of inequality from generation to generation; the latter is much better, from the perspective of social mobility and the civic commons—but will also lead to having a higher level of “income inequality” in these integrated neighborhoods.

So we would argue that the fact that central cities tend to have greater measured income inequality is actually mostly a good thing, as it suggests that the same municipalities are able to be home to both the wealthy and the poor. That’s far superior to the many smaller suburban municipalities that use zoning and other techniques to create a more homogenous population.

Unfortunately, of course, in a large city, simply having rich and poor inside the same city limits doesn’t mean that individual neighborhoods are also integrated. While segregation within a single city is, all else equal, better than between municipalities, because it makes it easier to share a tax base and the public resources that come with that tax base, it’s still a generally rotten situation. But the point is that, at the local level, the real question isn’t “inequality”: it’s a question of integration.

* Do cities not have any role in actually reducing inequality? Well, sure: fostering integration rather than segregation meaningfully reduces inequality of quality of life, and improves intergenerational equity. Cities can also pass measures like local minimum wage increases to lift low-end workers’ income. But given that even New York makes up less than 3 percent of the country’s population, it’s unlikely that any of this is going to change national inequality levels, at least in the short or medium term.

Is WMATA’s transit cost problem a national issue?

A recent post from the excellent DC blog Greater Greater Washington has made a few ripples among transit advocates. In it, David Alpert takes the growth rate of WMATA’s operating costs (about 6% annually) and its operating revenue (about 1% annually) and makes the straightforward point that this isn’t really sustainable.

Source: WMATA, via Greater Greater Washington
Source: WMATA, via Greater Greater Washington


After all, these rates of growth suggest that WMATA is either going to have to grow its operating subsidy significantly every year just to maintain the same level of service—or start cutting service, which in turn will reduce revenue, which may lead into the kind of transit death spiral that has affected cities around the country.

Unfortunately, it looks like the DC area isn’t the only place dealing with inflated operations costs. Going off of our work on the decline in bus service in many parts of the country, we took a look at bus operations costs since 2000. To take into account changes in service levels, we measured operations costs per “vehicle revenue hour”: that is, how much it costs, on average, to run a bus for an hour. Among all urbanized areas with at least a million residents, the “price” of an hour of bus service increased by an average of almost 14 percent between 2000 and 2013—after taking into account inflation.

(Note that this chart has a second measure: costs per “vehicle revenue mile,” or the “price” of a mile of bus service. For various reasons, hours are probably a better metric, but we’re including both here for the sake of transparency.)

Now, this all needs some caveats. We got this data from the National Transit Database, which in turn got it from the transit agencies themselves. In previous work with the NTD, we’ve been appraised of various inconsistencies that make the numbers not always directly comparable, either from agency to agency or sometimes year to year. But the strength and breadth of the trend here—plus the fact that it appears to confirm other reports of rising transit operations costs, like at WMATA—make this something we think is worth looking at more closely for anyone who cares about cities and public transit.

Because every increase in the “price” of an hour of transit means that agencies need more money just to maintain current levels of service, let alone add new lines or increase the frequency of existing ones. In Houston, for example, operations costs per vehicle revenue hour have increased nearly 26 percent after inflation since 2000—requiring either massive increases in ridership to boost revenue or massive increases in subsidies. Or, worse, requiring massive service cuts to match funding with the new cost of providing transit.

And, in fact, metropolitan areas where bus service costs went up the most over this period were also likely to have seen some of the largest service cuts.

It’s not clear, however, which way the causation runs. On the one hand, this is exactly what you’d expect to see if rising operations costs were causing transit agencies to cut service. On the other, there are large fixed costs to operations—administration, scheduling, garages, and so on—which means that reducing service probably won’t reduce operations costs proportionally, and so costs per mile, or per hour, will go up, even if there’s no underlying efficiency problem. So we can’t say for sure what these charts mean—but they’re certainly consistent with a story in which WMATA’s unsustainable path is a situation lots of transit agencies find themselves in.

If that’s the case, it means a pretty dire prognosis for the future of transit services that form the backbone of low-cost, highly-space-efficient urban transportation. Why hasn’t this become an issue earlier? Partly, it may be that transit costs (like road costs) are mostly invisible to users: they pay their fare, but don’t see the underlying subsidy.

If operations costs continue to rise, of course, they will—either through higher taxes or reduced service. The numbers we’ve presented here are just a first stab at whether this is something we ought to be concerned about nationally. We think they suggest that there is something to look into—and we hope to be joined by urbanists with better data and more local knowledge to give us a better idea of what exactly is going on.

And just for fun, here’s an interactive graph where you can see the change in operations costs by urbanized area, by year:

What does it mean to be a “smart city”?

In light of Smart Cities Week, we’re updating this post from March about the role of smart technology, people, and successful cities.

The growing appreciation of the importance of cities, especially by leaders in business and science, is much appreciated and long overdue. Many have embraced the “smart city” banner. But what does that mean?

People tend to see cities through the lens of their own profession. CEOs of IT firms say that cities are “a system of systems” and visualize the city as a flow of information to be optimized. Physicists have modeled cities and observed relationships between city scale and activity, treating city residents as atoms and describing cities as conforming to natural “laws.”

In part, these metaphors reflect reality. Information flows and physical systems are an important part of what makes cities work. But cities are also something more—and their residents need to be viewed as something other than mindless atoms to be optimized.

The prescriptions that flow from partial and incomplete metaphors for understanding cities can lead us in the wrong direction if we’re not careful. The painful lessons of seven decades of highway building in U.S. cities is a case in point. Led by people like New York’s master builder, Robert Moses, we took an engineering view of cities, one in which we needed to optimize our transportation infrastructure to facilitate the flow of automobiles. The massive investments in freeways (and the rewriting of laws and culture on the use of the right of way) made cities safer for long-distance, high-speed—but at the same time produced massive sprawl, decentralization, and longer journeys, and eviscerated many previously robust city neighborhoods.

Robert Moses, great optimizer. Credit: Metropolitan Transportation Authority, Flickr
Robert Moses, great optimizer. Credit: Metropolitan Transportation Authority, Flickr


If we’re really to understand and appreciate cities, especially smart cities, our focus has to be elsewhere: it has to be on people. Cities are about people, and particularly about bringing people together. We are a social species, and cities serve to create the physical venues for interaction that generate innovation, art, culture, and economic activity.

So what does it mean for a city to be smart?

Fundamentally, smart cities have highly skilled, well-educated residents. We know that this matters decisively for city success. We can explain fully 60 percent of the variation in economic performance across large U.S. metropolitan areas by knowing what fraction of the adult population has attained a four-year college degree. There’s strong evidence that the positive effects of greater education are social—it spills over to all residents, regardless of their individual education.

Educational attainment is a powerful proxy measure of city economic success because having a smart population and workforce is essential to generating the new ideas that cause people and businesses to prosper.

So building a smart city isn’t really about using technology to optimize the efficiency of the city’s physical sub-systems. There’s no evidence that the relative efficiency of water delivery, power supply, or transportation across cities has anywhere near as strong an effect on their success over time as does education.

It is in this process of creating new ideas that cities excel. They are R&D facilities and incubators, and not just of new businesses, but of art, music, culture, fashion trends, and all manner of social activity. In the process Jane Jacobs so compelling described, by juxtaposing diverse people in close proximity, cities produce the serendipitous interactions that generate what she called new work.

Downtown Miami. Credit: Phillip Pessar, Flickr
Downtown Miami. Credit: Phillip Pessar, Flickr


We don’t have an exacting recipe for how this happens. But we do know some of the elements that are essential. They include density, diversity, design, discovery and democracy.

Density. The concentration of people in a particular place. Cities, as Ed Glaeser puts it, are the absence of space between people. The less space, the more people, and the greater the opportunities for interaction. Cities are not formless blobs; what happens in the center—the nucleus—matters, because it is the place that provides key elements of identity and structure and connection for the remainder of the metropolitan area it anchors.

Diversity. We have abundant evidence that a more diverse population—by age, race, national origin, political outlook,and other qualities—helps provide a fertile ground for combining and recombining ideas in novel ways.

Design. We are becoming increasingly aware that how we populate and arrange the physical character of cities matters greatly. The arrangement of buildings, public plazas, streetscapes, and neighborhoods matters profoundly for whether people embrace urban spaces or abandon them. We have a growing appreciation for places that provide interesting variety and are oriented to walking and “hanging out.”

Discovery. Cities are not machines; citizens are not atoms. The city is an evolving organism, that is at once host to, and is constantly being reinvented by, its citizen inhabitants. A part of the attraction of cities is their ability to inspire, incubate, and adapt to change. Cities that work well stimulate the creativity of their inhabitants, and also present them all with new opportunities to learn, discover, and improve.

Democracy. The “mayor as CEO” is a tantalizing analogy for both mayors and CEOs: CEOs are used to wielding unitary, executive authority over their organizations, and many mayors wish they could do the same. But cities are ultimately very decentralized, small “d” democratic entities. Decision-making is highly devolved, and the opportunities for top-down implementation are typically limited. Citizens have voice (through voting) and the opportunity to “exit” by moving, appropriately limiting unilateral edicts from City Hall. Cities also give rise to new ideas, and when they work well, city political systems are permeable to the changing needs and values of their citizens—this is when many important changes bubble up.

All of these attributes of cities are susceptible, at least in part, to analysis as “information flows” or “systems of systems.” They may be augmented and improved by better or more widespread information technology. But it would be a mistake to assume that any of them are capable of being fully captured in these terms, no matter how tempting or familiar the analogy.

Ultimately, when we talk about smart cities, we should keep firmly in mind that they are fundamentally about people; they are about smart people, and creating the opportunity for people to interact. If we continuously validate our plans against this key observation, we can do much to make cities smarter, and help them address important national and global challenges.

The prisoner’s dilemma of local-only planning

One of the most broadly popular ideas about urban planning today is that decisions should be made locally. After all, who knows better what a neighborhood needs than the people who live there? And what better way to squash any would-be Robert Moses than by empowering the people whose homes he would claim for some new megaproject?

The move to greater local democracy since the disastrously inhumane urban renewal period of the 20th century was undoubtedly necessary. But it has also created new problems that some officials, activists, and residents have been slow to acknowledge.

To begin with, it’s worth noting that “local” is a concept without a solid definition. When people object to policies coming out of Washington, DC, they often say that power needs to be brought back to the states. When they disagree with state policy, they’ll often discover a strong attachment to their region—say, downstate Illinois rather than Chicago. When they dislike something happening in their region, they reinforce the importance of their own particular municipality. And when their city government makes a decision they don’t like, they’ll appeal to the power of their neighborhood—which itself may expand or shrink its boundaries based on the issue.

2 way window decal 4 11 13


In other words, there’s no given geographic level at which people magically all agree with each other about what the “right” thing is. Instead, “local” politics tends to be about strategically choosing an arena in which there’s a strong enough coalition in favor of whatever policy you want.

Which, to be clear, is a totally legitimate way to go about democracy. But while the popular image of local power might be a diverse and representative group of families planning a new school or beating back an invasive and unwanted project from City Hall, localism also has a darker side. Much of the move to local planning since World War Two has taken the form of suburban municipalities created largely as a way to segregate their residents from “undesirable” people—generally blacks and the low-income. In fact, places with more fragmented governments (that is, places that are governed more “locally”) also tend to be more segregated. Partly as a consequence, they also have worse outcomes for people at the losing end of that segregation—so that, for example, health disparities between whites and blacks are significantly worse in metropolitan areas with more local governments per capita.

One of the greatest victories of this kind of exclusionary localism came in 1974, when a federal judge ruled that white parents who had moved beyond the Detroit city limits were exempt from any mandatory school desegregation programs, because to bus children across school district lines would be an affront to local control of education. But anyone who listened to the white parents in Nikole Hannah-Jones’ This American Life documentary excoriate their suburban St. Louis government for allowing non-local—and, of course, black—students to attend “their” schools just two years ago knows that this justification for local control is alive and well.

But localism doesn’t just give outlet to some of America’s less savory impulses. It can also pit municipalities or neighborhoods against each other, encouraging people who might be okay with, say, a moderate amount of affordable housing to advocate for having none at all.

To understand why, it’s useful to think of “the prisoner’s dilemma,” a kind of thought experiment that explains why people behave in ways that don’t lead to their own ideal outcome. (We should note that we didn’t come up with the idea to liken neighborhood development to a prisoner’s dilemma. Here’s an excellent interview with David Schleicher, a professor at Yale Law, making a very similar point.)

Imagine two middle-class neighborhoods, A and B. Each can choose a bundle of policies that are either “inclusionary” (allowing multi-family and subsidized housing, providing services attractive to the low-income, and so on) or “exclusionary” (allowing only large, expensive single family homes, eliminating social services, and so on). The residents of both places would like to be inclusive, as long as their neighborhood will remain predominantly middle class.

If both neighborhoods choose “inclusionary” policies, they’ll each become mixed-income, but mostly middle-class, communities. But if only one chooses “inclusionary” policies and the other chooses “exclusionary,” the “inclusionary” community will become disproportionately low-income, because it’s the only attractive, welcoming place for people who need affordable housing and social services.

In this situation, residents of both neighborhoods will be extremely wary of being the first to choose “inclusionary” policies, because unless the other neighborhood also chooses “inclusionary” policies very soon afterwards, their community will become disproportionately low-income. Any doubt about the other neighborhood’s commitment to choosing “inclusionary” policies—doubt that is more than justified, given the current state of American urban policy—will push them to choose “exclusionary” ones for their own community.

The fundamental problem here is that local communities don’t have the power to get other communities to commit to doing the “right thing”: only higher levels of government can do that. Importantly, though, creating this commitment doesn’t have to be any less democratic than smaller-scale decision-making: elected officials in a city hall or state capitol can work with their constituents to craft a policy that ensures all communities reflect the best values of their residents. This might look like a statewide law that requires every municipality to have a certain percentage of its housing designated as “affordable,” or a citywide plan that allows people from different neighborhoods to commit together to certain distributions of accessible housing and social services. Or, taking an international view, it might look like a state- or provincial-level government setting limits on the kind of zoning that municipalities can choose, restricting their ability to outlaw working-class and low-income housing types.

Unfortunately, there are precious few examples of higher units of government imposing rules that break this prisoner’s dilemma for cities. Massachusetts’ “anti-snob zoning” law, which allows affordable housing developers to ignore local exclusionary zoning in places where more than 90 percent of existing housing is considered unaffordable, is one. Another is in Oregon, where communities are required to zone land for a range of housing types, including apartments.

Research suggests that these kinds of laws can significantly improve the housing affordability landscape. Given the growing economic divides between our communities, we would do well to give them a second look.

Great neighborhoods don’t have to be illegal—they’re not elsewhere

Ah, Paris! Perhaps one of the world’s most beautiful cities, a capital of European culture, and prosperous economic hub. What’s its secret? Zoning, of course!

RM-6? Maybe DX-2? Credit: Peter McConnochie, Flickr
RM-6? Maybe DX-2? Credit: Peter McConnochie, Flickr


Just kidding. Actually, Paris went for the better part of a millennium (until 1967) with nothing that an American might recognize as district-based zoning, a prospect that would surely horrify the planners who have been one-upping not just Paris, but pre-zoning American neighborhoods from brownstone Brooklyn to Midtown Memphis, with postwar sprawl for the last several generations.

Midtown Memphis: Despite the shops on an otherwise residential street, people seem to like it. Credit: Google Street View
Midtown Memphis: Despite the shops on an otherwise residential street, people seem to like it. Credit: Google Street View


Today, we live in cities and neighborhoods where zoning has made the kinds of places we used to take for granted, and that still make up some of our most prized communities, illegal to build. These laws are so pervasive that even relatively small changes are considered radical, experimental, and potentially dangerous methods of social engineering. Partly, that’s because we ignore the lessons in our own cities about what works in neighborhoods built before modern zoning. But it also may have something to do with the fact that our conversations about urban planning tend to be hyper-local: we might try to take cues from other neighborhoods, or another city in our region—or maybe another American city several states away. But even many big-time urban wonks would be hard pressed to tell you much about how cities in other countries do it.

Which is just one reason why Zoned in the USA, a book published by Virginia Tech’s Sonia Hirt earlier this year, is so valuable. An entire section is dedicated to describing the zoning and planning processes of countries from Sweden to Australia, and contrasting them to the American system. It’s absolutely worth reading the entire book—including for her arguments about the origins of American zoning, which seek to modify the property-value-based ideas put forward by writers like William Fischel in The Homevoter Hypothesis—but in the meantime, here are some big conclusions about how foreign zoning is different from our own.

1. The single-family-only district is not king

Hirt’s major claim is that what really sets American zoning apart is its orientation, explicit or implicit, to putting the single-family residential zone at the top of the hierarchy of urban land uses. Not only are single-family zones listed first in many zoning codes, but they make up significant pluralities, or even majorities, of total land area in most American cities. Interestingly, Hirt points out that this wasn’t necessarily true when zoning was first introduced: New York’s famous first zoning law didn’t even have a single-family zone at all.

A zoning map of Marietta, GA. Yellow areas are zoned for single-family homes only; brown areas are set aside for apartments. The large brown area in the southeast corner contains apartments to be razed. Pink is commercial. Source: Marietta, GA website
A zoning map of Marietta, GA. Yellow areas are zoned for single-family homes only; brown areas are set aside for apartments. The large brown area in the southeast corner contains apartments to be razed. Pink is commercial. Source: Marietta, GA website


Cities in other countries remain closer to our origins, then. In Great Britain, for example, local development plans generally set limits on residential density by the number of housing units per given land area, rather than dictate the form that those housing units must take. In the Paris area, too, land use intensity is determined by something like FAR, or the ratio of total floor area to lot area, rather than prescribing apartments or detached homes. The German zoning system, which in some ways appears very similar to ours, does not even have a single-family category.

As Hirt points out, Americans appear to be unique in believing that there is something so special about single-family homes that they must be protected from all other kinds of buildings and uses—even other homes, if those homes happen to share a wall. The recent revolt in Seattle over a proposal to soften that city’s single-family districts, in other words, would not be possible anywhere else in the world, not least because very few people live in single-family districts to begin with.

2. “Residential” doesn’t mean what we think it means

Not only do other countries lack single-family zones, or at least use them much, much more rarely, but the separation of residential from other uses is much softer. Whereas placing a shop in the middle of a residential block would be counter to the very purpose of an American “residential” zone, it’s considered an essential part of neighborhood planning elsewhere.

The “residential protection sector” zone in Paris, for example, allows a certain percentage of buildings to be used for non-residential uses, as long as they don’t create “nuisance.” In Germany, the “small-scale residential” and “exclusively residential” zones—the lowest-density residential designations possible—actually allow a range of retail and other uses as of right. The general principle is that businesses that serve everyday neighborhood needs, like small bank branches, corner stores, or medical offices, ought to be allowed within walking distance of people’s homes. Bigger uses that might attract more regional traffic are separated out. And in Sweden, although amendments (or what we might call “variances”) are needed to place a shop or other commercial use in a residential district, such amendments are regularly granted.

Is this really an "incompatible use" in a residential neighborhood? Credit: Google Street View
Is this really an “incompatible use” in a residential neighborhood? Credit: Google Street View

3. State and national law is as important as local

In the U.S., states generally have something called a zoning enabling act, which gives municipalities the legal authority to regulate land use through zoning. But these enabling acts tend to be extremely loose in terms of dictating what that land use should look like: the principle here is that planning ought to be done as locally as possible.

In many other rich countries, however, national and state or provincial governments play a much stronger role in urban planning. In Great Britain, the 1947 Town and Country Planning Act sets land use guidelines nationally; local communities are required to create their own land use plans, but using a pre-determined set of categories. Unlike American cities, then, British ones cannot invent their own ultra-exclusionary zones. Even next door, Canada gives its provinces significant power to set the framework of local zoning, resulting in very different systems from one province to the next.

That may offend American ideals about local autonomy. But it also helps prevent some of the problems with hyper-local decision-making, including the tendency for neighbors to use zoning to exclude the kinds of people they don’t want: most often the low-income, or people of color. How to combat that tendency has become one of the central challenges for American housing policy, as evidenced by the recent high-profile Supreme Court case on the Fair Housing Act and the Obama Administration’s new, more aggressive rules around affirmatively furthering fair housing.

4. There are other ways to plan

So zoning laws abroad tend to more flexible and permissive than their American counterparts, which means that many of the things we’ve outlawed here—like a mix of single-family homes and apartments in the same neighborhood, creating homes that are sized and priced appropriately for a diverse range of people; or having local businesses integrated within walking distance of where people live—are still legal in the rest of the industrialized world.

But Hirt points out that this doesn’t mean that other countries necessarily have a more laissez-faire approach to urban planning, letting private actors run wild over the visions that residents have for their communities and cities. Rather, other countries have a broader range of tools at their disposal to shape how their cities work and feel. In the Netherlands, for example, the government purchases land at the edge of a metropolitan area and then uses that ownership to manage the growth of the region. That and other kinds of public ownership, or more aggressive tax and subsidy policies, allows many other wealthy countries to direct their cities’ growth, and meet planning goals, without the kind of limiting prescriptions on land use that prevent our postwar neighborhoods from recreating what works about pre-zoning neighborhoods, while fixing what doesn’t.

Of course, the U.S. can’t, and shouldn’t, just ape other country’s systems; there are very different urban histories and values here that ought to be respected. But it’s worth pointing out that one of the biggest ones—the ideal of homeownership—is actually less uniquely American than we often suppose. In fact, many of the European countries mentioned in this article have higher levels of homeownership than the U.S., even though their land use systems don’t prioritize the homogeneous single-family neighborhood to nearly the extent that we do, or at all.

Source: Eye on Housing
Source: Eye on Housing


As we recognize the ways that our neighborhoods and cities could be improved, then—by encouraging less segregation by income and race; reducing travel times by bringing destinations closer together; encouraging more walking and physical exercise; and creating more public places where people can gather and build community—it seems only reasonable to look at what’s different in the places that may do some of those things better.

The top ten reasons to ignore TTI’s Urban Mobility Report

Since the Texas Transportation Institute released its 2015 “Urban Mobility Report,” urban transportation experts and advocates have unleashed thousands and thousands of words poking holes at its methodology, assumptions, and political agenda. (We’ve pitched in our fair share of those words, and perhaps more.)

Not a kind of urban mobility you'll find in the Urban Mobility Report. Credit: Chad Kainz, Flickr
Not a kind of urban mobility you’ll find in the Urban Mobility Report. Credit: Chad Kainz, Flickr


As one last entry to this conversation, we wanted to put together a sort of Cliffs Notes version of the problems with the UMR, skimmable by people who just want a quick overview of the issues, without all the background. So without any further ado, the top ten reasons to be skeptical of the “Urban Mobility Report”:

  1. Both TTI and media outlets claim that the UMR proves traffic is worse than at any time since 1982—but a major methodological change in 2009 makes comparisons before that date completely invalid.
  2. The UMR, in the words of Victoria Transportation Policy Institute executive director Todd Litman, “ignores basic research principles,” including failing to allow other experts to review its data and findings—the sort of “peer review” that is foundational to social science investigations.
  3. As the Brookings Institution’s Rob Puentes notes, the UMR measures mobility, not access. That is, cities get high scores if you can drive really fast—not if you can actually reach jobs or amenities in less time.
  4. In many cases, the UMR counts an inability to drive faster than the speed limit as “congestion.”
  5. Since 2009, the UMR has used traffic data from Inrix—but their reports tell a very different story than the numbers that Inrix reports publicly, which suggest that congestion has actually decreased, while the UMR claims that congestion has increased. TTI hasn’t explained how it reached the opposite conclusion as the organization that provides its data.
  6. Despite claims that they favor a mix of measures including transit and more density, the TTI’s travel time index actually penalizes cities that undertake measures that shorten work trips. The TTI scorecard perversely incentivizes sprawl and ignores the costs associated with longer trips.
  7. The UMR’s prediction that traffic will get much worse in the coming years is based on a model that simply pretends the last decade didn’t happen.
  8. In fact, the US reached “peak driving” in 2005, and the average number of miles driven per day has fallen by nearly 7 percent since then.
  9. The UMR says that adding road capacity will reduce congestion—but 92 of the top 99 places where congestion increased according to the UMR increased their roadway miles per capita. Building more roads won’t reduce congestion or improve access without land use changes and other transportation investments.
  10. The “Urban Mobility Report” is in fact a report just about driving. Public transit, walking, and biking—essential parts of the transportation network in any city—are almost entirely left out. If you walk, bike or take transit you simply don’t exist in the eyes of TTI.

The Week Observed: September 11, 2015

What City Observatory did this week

1. My illegal neighborhood. Guest Commentary writer Robert Liberty describes all the things he loves about his neighborhood in Northwest Portland—and then explains why all of them would be illegal to build in a new development today. The mix of apartments and single-family homes doesn’t fit modern ideas about proper zoning; the streets are too narrow for today’s traffic engineers; legally-mandated separation of uses would disallow the local businesses where people congregate, banishing them to far-off designated commercial strips; and everything would need more parking. Of course, despite these many “flaws,” home prices in Northwest Portland have been growing faster than the rest of the region—suggesting that maybe we need more of these illegal neighborhoods.

2. What do we know about neighborhood change, gentrification, and displacement? Daniel Kay Hertz summarizes a review of the academic research on neighborhood change by the Federal Reserve Bank of San Francisco. He picks out four big findings: 1. Income segregation is increasing, driven by the “secession of the rich,” but cities with wealthier cores (as opposed to suburban peripheries) have relatively lower levels of this kind of segregation. 2. Transit accessibility is a valuable asset, but housing price increases near stations depend on the local transportation network and the tightness of the housing market, and can be outweighed by transportation cost savings. 3. Thanks to wildly different definitions of key terms and approaches to measurement, we’re nowhere close to an academic consensus on the scope of the problem of displacement. 4. Changing in-migration can be a powerful force for neighborhood change without changes in out-migration.

3. The top ten reasons to ignore the TTI’s Urban Mobility Report. One last look at the widely-read traffic congestion study, looking at a sort of “greatest hits” of the report’s flaws and misrepresentations. Highlights: counting a failure to speed as “congestion,” penalizing cities that actually manage to shorten work trips, and a refusal to submit findings to peer review.

The week’s must reads

1. German Lopez at Vox and Daniel Denvir at CityLab take on a spate of stories about a “murder spike” in American cities. Criminologists interviewed by both reporters point out that while some places, like Baltimore or Milwaukee, have seen surprisingly large increases in their homicide counts this year, that’s not a pattern seen across the country—of the 20 largest cities, just three had statistically significant increases. And even where this year’s increases appear not to be random noise, it’s far from clear that it’s part of a long-term trend.

2. Seattle-based KUOW looks at what has quietly become one of the most successful affordable housing programs in the country: a property tax levy, approved by voters in the 1980s, dedicated to the construction of subsidized housing units. In the last 10 years, this levy has helped pay for nearly 550 affordable homes per year. (By contrast, the higher-profile inclusionary zoning approach, in which new developments must set aside a certain percentage of units for low-income households, has produced about 25 apartments per year in Chicago and about 400 per year in New York City, which is more than ten times larger than Seattle, through 2013.)

3. At the Washington Post, Emily Badger reports on a new Surgeon General report that prescribes…walking. After decades of designing communities where it’s impossible or unsafe to walk—because of long distances between sprawly houses and sprawly jobs, or because there just aren’t any sidewalks—that lack of regular exercise is taking a toll. But as Badger points out, these features didn’t just crop up: they were actively encouraged and enabled by federal policy. Now that they’ve been officially labeled hazardous to your health, maybe we should change them?

New knowledge

1. The popular but empirically questionable “broken windows” theory of crimewas the focus of a study by Daniel O’Brien of Northeastern, Robert Sampson of Harvard, and Christopher Winship of the Boston Area Research Initiative. Using 311 and 911 call data, the study concluded that public signs of physical and social disorder—which “broken windows” says should lead to more serious violent crime as potential criminals take cues about the likelihood of punishment from their surroundings—were poor predictors of public violence. Rather, private conflicts appeared to escalate towards public violence.

2. The Urban Institute put together a great visualization tool looking at where we send our housing subsidy dollars. Those who think that we spend too much on housing for the poor might want to look further up the income chain: while low-income housing subsidies add roughly $800 to the annual income of a typical household at the 10th percentile of income, mortgage interest and real estate tax deductions add nearly $2,000 to the income of a typical household at the 95th percentile of income.

3. The No Child Left Behind school reform law may have had some odd effects on housing. A paper by researchers at the University of North Carolina at Charlotte and the University of Connecticut find that provisions that allow children within the attendance zones of failing schools to transfer to other schools have incentivized parents with strong school preferences to move close to those failing schools, and then apply to transfer to a higher-performing one. As a result, housing prices within the attendance zones of failing schools actually rise in comparison to surrounding neighborhoods.

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. You can sign up to get it in your inbox by clicking “Subscribe” at the top of the page!

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My illegal neighborhood

Editor’s note:  City Observatory is pleased to provide this guest commentary by our friend Robert Liberty a keen observer of and advocate for cities.


by Robert Liberty

For many years I lived in Northwest Portland, Oregon.

It was a part of the city first settled by white pioneers in the 1860s, but development really took off when the streetcar arrived in the first half of the 1900s. (A century later, the old streetcar tracks had to be dug up so they could put down the new streetcar tracks.)

I first moved there in the 1980s by renting a part of a house. Then I moved a few blocks away into a courtyard apartment building of a type built all over the city in the 1940s. There were a dozen one and two-bedroom apartments on two floors around a small courtyard, built on a 15,000 square foot lot (about one-third of an acre, roughly the size of many suburban house lots). There were storage areas and a laundry room in the basement.

Next door to the west was a large single family house, built around World War I. To the south was a one-story three-plex: three tiny apartments slotted into a narrow strip between our building and a large old home.

Kitty-corner across the street was a small restaurant that served breakfast at a few booths and a counter. For a few years, every Saturday, a long black limousine with tinted windows would park near the restaurant and the chauffeur would deliver a hot breakfast to the occupant and then take away the dirty dishes. I never found out who was in the limousine.

Diagonally across the street to the northeast was a warehouse that processed large volumes of “direct mail”—i.e., spam.

Across the street to the north sat another Edwardian house used for offices, a bland three-plex built in the 1970s, and a four-plex that looked like a large single-family home in Dutch Colonial style. I lived in that four-plex happily for many years.

The rest of the street was a mix of large older homes on small lots and small apartment buildings. Both young families and older couples lived in the houses and apartments.

The street was shaded by big trees and it was usually very quiet. The street was so narrow that bigger cars had to queue to pass each other, partly because so many people parked their cars on the street since the apartment buildings provided few or no parking garage spaces.

At the other end of the block was a park that was also served as part of an elementary school’s grounds. The school was built of blond-colored brick and rose three stories. It’s locally famous as being on the migration path for Vaux’s Swifts. Early each fall thousands of the birds would swarm and then spiral down into the decommissioned smokestack of the school incinerator and boiler. Beside the school were some community tennis courts.

Not far from the school was a senior center and some subsidized housing for families of modest means. Scattered here and there in the nearby blocks were grand old houses—some beautifully maintained and very expensive, other cut up into legal and illegal apartments.

Three blocks away was an arterial street, but it wasn’t too much wider than the street in front of my apartment building. I often walked there to buy groceries from a small grocery store and drop off my dry cleaning. Another block or two farther along the arterial was a branch library. Across the street from the grocery store was a small sheet metal fabrication business.

Once, when I was explaining to a reporter how our neighborhood had every possible kind of use and service, I gestured to the sheet metal company to illustrate the presence of light industrial uses. It was then that I realized is was called Schmeer Sheet Metal Works and Fabrication. “See,” I said, “we have the whole schmeer.”

That neighborhood is typical of many older neighborhoods in American cities. And in almost all of American cities and suburbs, that neighborhood would be illegal.

It is illegal to build an apartment building in a district of single family homes. Residential zoning was adopted in order to prevent single family neighborhood property values and families from being degraded by the presence of apartments where immigrants and low-class people lived. (If you think this is an exaggeration read the early history of zoning including the various state and federal supreme court decisions upholding challenges to the constitutionality of residential zoning.)

Residential zoning today has carried class separation to great extremes, which you can see if you travel by air: Over here, big single-family homes on big lots. Over there a mobile home park. In another direction, a pod of apartment buildings. A place of every income, and every income in its (separate) place.

Some affluent cities use their power to regulate development to exclude entire categories of housing from within their border, like apartments and mobile homes.

Typical city zoning makes it illegal to build or operate a warehouse or a light industrial use next to homes and a grocery store. The separation of industrial and commercial uses from residential uses was the very foundation of zoning a century ago.

It is illegal in most cities to build apartment buildings without providing one or more parking spaces for every apartment. The same would be true of grocery stores or office buildings. The neighborhood’s grocery store has fewer than 20 parking spaces.

The street in my old neighborhood does not meet more current design requirements, because it is considered inappropriate to design a street so that car cannot pass each other at any time or location. The street is 27 feet wide, curb to curb. That includes parallel parking on both sides, leaving a travel lane about 12 feet wide. That violates the standards for a local road recommended by the American Association of State Highway and Transportation Officials.

In most cities, you cannot operate a business out of your home if you have employees or customers arriving from other locations.

In too many places, it is effectively illegal to build subsidized housing for families of modest means. Even when it might be legal, local officials can interpret nebulous phrases like “preserve neighborhood character” or complex regulations in way that such housing is never approved.

A senior center, even though it is not a business, would be treated like a commercial use that cannot be allowed next to single family homes.

The elementary school would probably be illegal too because the school property would be too small to meet many state’s standards. The school is located on about 9.8 acres but many of those acres are occupied by a park open to the public at all times. The school, which has 685 students, would require a site of 11.85 acres in California, Texas and Connecticut, 15 acres in New Mexico and 18-20 acres in suburban Pennsylvania.

And then there is the absence of parking places; according to Virginia’s 2010 school design standards, the school should provide parking for all the staff, visitors and about a third of the students. (Apparently the legal driving age in Virginia is much younger than in Oregon.)

Of course, a jumbled neighborhood like mine would probably be regarded by many residential realtors, local officials, and even prospective home purchasers as a bad investment. After all, it’s about as far from the suburban residential model as possible. But in fact, this neighborhood, while providing many apartments (formerly) affordable by lower-income renters, was and is highly sought after.  According to Zillow, homebuyers in this neighborhood pay more than twice as much per square foot to live here than they would in the region’s suburbs.

One reason the prices are so high is because the supply of this kind of neighborhood has been limited by zoning, parking regulations, street design standards, school design standards, and building codes. We need many more neighborhoods like this all across America, so that all of the increasing numbers of people who want to live in places like this can afford to live in them.

Does that mean do away with all regulations? No. But it does mean that we need to stop assuming that everyone wants to, or can afford to, live in a big-house on a big lot in a residential-only neighborhood.  We shouldn’t be making it illegal to build the kind of neighborhoods, like mine that are increasingly popular and in short supply.

An illegal neighborhood in NW Portland.

Robert Liberty has worked over the last 34 years as an attorney, elected official and university program administrator to help implement plans to create livable, sustainable and equitable cities and to conserve the rural lands and resources we need for food, fiber and wildlife.  He has called Portland home for almost half of a century.

What do we know about neighborhood change, gentrification, and displacement?

In last Friday’s The Week Observed, we flagged an exhaustive literature review from the Federal Reserve Bank of San Francisco, summarizing what we know about gentrification and neighborhood change over about 40 pages. We focused on one of the takeaways Richard Florida picked out in his article about the study in CityLab, on the connection between public transit and gentrification, but it would be a shame to reduce an amazingly wide-ranging study to that one issue. (Florida has since published a second piece on the connection between displacement and gentrification.)

A building under renovation in Cincinnati's Over the Rhine neighborhood. Credit: David Brossard, Flickr
A building under renovation in Cincinnati’s Over the Rhine neighborhood. Credit: David Brossard, Flickr


So on the off chance that your post-Labor Day plans don’t involve wading through 45-page Fed Reserve PDFs, we’ve pulled out four of the most interesting findings from the report’s coverage of the academic literature on neighborhood change and gentrification.

  1. Even as racial segregation declines, income segregation continues to grow, driven by the “secession of the rich.”

From 1980 to 2010, the proportion of lower-income households living in majority low-income Census tracts increased modestly, from 23 to 25 percent. But the proportion of upper-income households living in majority upper-income Census tracts doubled, from 9 to 18 percent. Moreover, the rich aren’t just moving to wealthy neighborhoods: they’re increasingly moving to their own suburban jurisdictions.

One bright spot is that the trend towards revitalization of central cities may be some kind of counterweight to the “secession of the rich.” In cities where upper-income households tend to live in the suburban periphery, like Houston or Dallas, the rich are more segregated than in denser cities with wealthier cores, like Philadelphia or Seattle.

  1. In most contexts, people value public transit accessibility enough to pay a premium for it. (And its value can partially or entirely offset higher rents.)

The value of living near a transit station depends heavily on how useful your city’s transit network is. That, in turn, depends on a) how extensive, efficient, and reliable transit service is, and b) how (in)convenient and expensive driving is. But in most cases, the value of living near transit is clearly reflected in the fact that people are willing to pay more for that access.

This does not mean, though, that we ought to avoid making transit investments for fear of provoking “gentrification.” In fact, that’s the opposite of what a broad reading of the research suggests. To begin with, transportation costs associated with driving can eat up well over 20 or 25 percent of low-income households’ budgets—meaning that low-income residents who are able to switch to using transit may be able to absorb some rising home values and still save significant amounts of money. In fact, those savings seem to be a major reason that many low-income households choose to live in transit-served neighborhoods.

But the literature also suggests that, in general, the effect of investments like transit on housing costs and displacement depends to a huge extent on the local housing market. These sorts of gentrification-related problems are mostly an issue in places with extremely tight markets, where lots of people are competing for relatively small numbers of homes. In other words, the problem, once again, is a shortage of cities and the kind of neighborhoods that many people want to live in. The solution isn’t to further restrict the growth of these neighborhoods—it’s to make sure we have as many as we need to allow everyone who wants to live in them to do so, and to use subsidized housing to fill in the gaps.

A light rail train in Charlotte. Credit: James Willamor, Flickr
A light rail train in Charlotte. Credit: James Willamor, Flickr


  1. Despite decades of research, we are nowhere close to a consensus understanding among academics of what exactly displacement is, how to measure it, or how big of a problem it is.

Displacement has been a serious topic of research since the urban renewal programs of the 1950s, and received another big boost as gentrification became a major concern beginning in the 1990s. But conflicting definitions of such key terms as “gentrification” and “displacement,” along with varying approaches to interpreting the “significance” of findings, makes it extremely difficult to summarize any findings across the many papers on the subject.

One big issue, for example, is how to measure a counterfactual: What would have happened to people in a neighborhood without any gentrification pressures? For people like Lance Freeman, the correct comparison is poor neighborhoods that don’t gentrify. Those types of communities tend to have high levels of mobility, which makes the number of potentially displacement-related moves in gentrifying areas look smaller than if you use city-wide averages or less-mobile neighborhoods as the baseline.

Researchers do agree that rising rents predict increased displacement, though some studies suggest that the effect is lessened because existing residents are willing to pay more in rent as their neighborhood gains gentrification-related amenities. And, partly as a result of the issues outlined above, researchers differ wildly on how much displacement actually happens, and to what extent it’s a problem. Freeman’s national study in 2005 found that a household in a gentrifying neighborhood had only a 1.3 percent chance of being displaced nationally, while Kathe Newman and Elvin Wyly, using a different baseline of comparison, concluded that as many as 10 percent of all moves in New York City between 1989 and 2002 were a result of displacement. (The fact that these two measures are not actually directly comparable reflects another serious, yet typical, problem in trying to synthesize the research on gentrification.)

  1. Changing in-migration patterns can transform neighborhoods quickly, even without displacement pressures.

As we’ve written about previously, neighborhood change happens because of two types of moves: people moving in and people moving out. Often, we conceive of gentrification as reducing the number of low-income people in a neighborhood mainly because the number of people moving out increases dramatically as housing prices increase.

But a shift in the kinds of people moving into a neighborhood can also create major demographic change, even if the number of people moving out stays relatively stable. A paper by Freeman and Branconi suggests that it’s theoretically possible for a neighborhood to reduce its poverty rate from 30 percent to 12 percent in just ten years, without any “displacement,” if the pool of people wanting to enter the community changes dramatically and low-income households who would have left anyway are replaced by higher-income residents. That explains how it’s possible, as they found, that low-income households in gentrifying New York City neighborhoods are actually less likely to move than in high-poverty neighborhoods that aren’t gentrifying.

In practice, of course, it’s unlikely that there would be an influx of middle- or upper-income residents to a neighborhood without some effect on housing prices. But especially in cities with looser housing markets, or in cases of neighborhood change that don’t involve rising incomes, this suggests that we ought to be very wary of assuming that demographic shifts are always the result of displacement.

Who’s really rent-burdened?

Back in July, we published a threepart series about what exactly it means for housing to be affordable. Our basic argument was that the most standard measurement—whether your housing costs are more or less than 30 percent of your income—is inadequate to the task, for several reasons:

  • First, it doesn’t allow for lower-income people to need a larger percentage of their income for other necessities, or for people of the same income levels to have different financial obligations, like children or medical expenses;
  • Second, it leaves out other location-based costs, like transportation;
  • And finally, it doesn’t account for the quality of housing or the surrounding community.

Instead of the 30 percent threshold, we endorsed something called the “residual income” approach. That method suggests that you determine what a household needs to spend on all non-location-based (that is, housing and transportation) necessities, and then whatever’s left is “affordable.”

But what’s the difference in the real world? Well, an astute reader, Josh Lehner, put together a table that compares the ratio of rent to income and the residual of income left over after rent for each ZIP code in Oregon. Here’s what that looks like:

As you can see, there’s a clear relationship between the two measures: as the ratio increases, the residual mostly decreases, which in each case suggests that housing is less affordable. (Note that this chart doesn’t include transportation-based costs. Ideally, of course, it would—but for the purposes of this illustration, it’s not crucial.)

But despite that general pattern, there’s an enormous amount of wiggle room. If you look just above and below the line that separates ZIP codes where median income is below 30% of median rent from those where it is above, you see some of the starkest contrasts.

ZIP code 97630 (rural Lakeview Oregon), for example, is just below the threshold of affordability, with the rent-income ratio at 29.2 percent. But the median household in that area makes only $23,500 a year; at the median rent, they would have just $16,636 left over to spend on everything else: food, clothing, medical care, child care, and so on. For many households, that’s likely not enough.

Meanwhile, ZIP code 97002 (Aurora, a small farming town within commuting distance of Portland and Salem) is just above the threshold of affordability, with a rent-income ratio of 31.8 percent. In this community, median household income is $47,173, and the after-rent residual income is $32,173—a much more comfortable cushion. Yet the most common measurement of housing affordability would declare the median resident of ZIP code 97002 “rent burdened,” and the median resident of ZIP code 97630 not “rent burdened.”

Obviously, this is a very simplistic exercise that’s missing quite a bit—including many of the considerations we included in our original series. But even the simple act of plotting rent cost ratios against residuals adds an important dimension (if you’ll excuse the graph pun) to our understanding of what housing affordability actually means: we can see, not with theoretical arguments but real-life data, that simply knowing whether a rent cost ratio is above or below 30 percent leaves out a lot of other very important information.

Updated: Is traffic worse now? The “congestion report” can’t tell us

Part 1: Resurrecting discredited data to paint a false history

The Texas Transportation Institute claims that traffic congestion is steadily getting worse.  But its claims are based on resurrecting and repeating traffic congestion estimates from 1982 through 2009 that were based on a deeply flawed and biased model.  Since 2009, TTI has used different data and a different estimation approach, which means it can’t make any accurate or reliable statements about whether today’s congestion is better or worse than a decade ago—or two or three decades ago.

Earlier, we went over some of the big problems with the Texas Transportation Institute’s (TTI) new “Urban Mobility Report.” Today, we want to focus on one claim in particular that’s been repeated by many media outlets: that traffic is worse now than before.

An Associated Press article, for example, highlights the Urban Mobility Report’s (UMR) claim that traffic is now worse than in 2007:

Overall, American motorists are stuck in traffic about 5 percent more than they were in 2007, the pre-recession peak, says the report from the Texas A&M Transportation Institute and INRIX Inc., which analyzes traffic data.

Four out of five cities have now surpassed their 2007 congestion.

And heres the Wall Street Journal claiming that the UMR proves that traffic is worse now than at any time since at least 1982:

In a study set for release Wednesday, the university’s Texas Transportation Institute and Inrix, a data analysis firm, found traffic congestion was worse in 2014 than in any year since at least 1982.

The basis for this claim is that TTI’s 2014 measured level of congestion was higher than what TTI now reports for the entire period since 1982.

Traffic in New Orleans. Clearly, this highway isn't big enough. Credit: Bart Everson, Flickr
Traffic in New Orleans. Clearly, this highway isn’t big enough. Credit: Bart Everson, Flickr


The problem is that the TTI has changed its methodology many times—fourteen, according to the authors’ own estimates. In 2009, it totally abandoned its two-decades-old approach, and began using traffic speed data gathered by the traffic monitoring firm Inrix. As a result, the post-2009 data simply aren’t comparable to the pre-2009 data, which means it’s not possible to truthfully claim that traffic is worse (or better) than it was before the recession or in 1982.

Prior to 2010, TTI used an entirely different—and now discredited—methodology to estimate the travel time index. Before the advent of real time speed monitoring, TTI could not directly measure the congestion it reported on. Instead, it built a mathematical model that predicted what the speed would be based on the volume of traffic on a road. It turns out that the model predicts that roads will automatically slow down as more traffic is added, an assumption that is not always correct. As total traffic volumes increased in the 1980s and 1990s, the TTI model mechanically converted higher volumes into lower speeds at the peak hour, and automatically generated a steadily increasing rate of congestion.

In 2010, we published “Measuring Urban Transportation Performance,” which showed that the TTI model lacked statistical validity. The modelers essentially ignored the underlying data and fitted their own relationship by eye. We also showed that the supposed speed declines generated by the model were inconsistent with real world data from the Census and transportation surveys which showed increased speeds. After 2009, UMR simply dropped this methodology. But they didn’t stop reporting the flawed pre-2009 data.

For the technically inclined, here are the details of the critique of the 1982-2009 TTI methodologies. Many transportation experts have noted that TTI’s extrapolation of speeds from volume data was questionable. Dr. Rob Bertini—who was for several years Deputy Administrator of US DOT’s Research and Innovative Technology Administration—warned that the lack of actual speed data undercut the reliability of the TTI claims:

No actual traffic speeds or measures extracted from real transportation system users are included, and it should be apparent that any results from these very limited inputs should be used with extreme caution.

Bertini, R. (2005). Congestion and its Extent. In D. Levinson & K. Krizek (Eds.), Access to Destinations: Rethinking the Transportation Future of our Region: Elsevier.

The report’s authors conceded that they “eyeballed” the data to choose their volume-speed relationship:

…when trying to determine if detailed traffic data resembles the accepted speed-flow model, interpretations by the researcher were made based on visual inspection of the data instead of a mathematical model.

Schrank, D., & Lomax, T. (2006). Improving Freeway Speed Estimation Procedures (NCHRP 20-24(35)). College Station: Texas Transportation Institute. (emphasis added)

The data they used (blue diamonds) and the relationship that they guesstimated (the red line) are shown in the following chart:


The red line that the researchers drew by eyeballing the data not only has no mathematical basis, but predicts speeds that are slower 80 percent of the time than a simple quadratic curve (the downward-sloping black curve) fitted to the data. For example, the TTI model predicts that a road carrying 30,000 vehicles per lane per day will have an average speed of 40 miles per hour; the real world data show that actual speeds on roads with this volume average more than 50 miles per hour. This has the effect of biasing upward the estimates of delay associated with additional travel volumes.

The UMR authors can’t show that the congestion numbers that they estimated based on their flawed, pre-2009 model are in any way comparable to the post-2009 Inrix data. And in any event, the pre-2009 data is statistically unreliable. The data presented here can’t be squared with the fact that the average American is driving fewer miles today than any time since the late 1990s, and that travel surveys show we’re also spending fewer hours traveling. The bottom line is that there’s simply no basis for the claim that congestion is worse today than any time since 1982.

The fact that TTI makes this claim, and continues to publish its pre-2009 data even after the errors in its methodology have been documented, should lead policy makers—and journalists—to be extremely skeptical of its “Urban Mobility Report.” George Orwell famously observed in 1984 that “He who controls the past controls the future. He who controls the present controls the past.” A fictitious and incorrect history of transportation system performance will be a poor guide to future transportation policy.

In theory, TTI claims to have overcome these problems by switching to actual traffic speed data gathered by Inrix.  Tomorrow, in Part 2 of this post, we’ll examine TTI’s analysis of the Inrix data to see what the real trend in traffic congestion has actually been in the era of big data.

Note: This post has been revised and expanded from a version published earlier on September 1.

The Week Observed: September 4, 2015

What City Observatory did this week

1. Looking at housing injustice requires a broad lens. A new research project on Bay Area neighborhood change defines “displacement” as any reduction in the number of low-income people in a given community. Daniel Kay Hertz argues that this way of thinking leads us down the wrong path in thinking about what a just neighborhood looks like, chaining us to the results of past (and present) wrongs related to segregation.

2. Is traffic worse now? The “congestion report” can’t tell us. Joe Cortright picks apart last week’s Texas Transportation Institute “Urban Mobility Report,” pointing out that frequent claims that congestion is worse than it’s been since 1982 are invalid because of a major methodological change in 2009, rendering figures from before and after that date incomparable.

3. Contradictory conclusions and disappearing data. Joe Cortright takes one last look at the problems with the “Urban Mobility Report.” This time, the focus is on what might be causing TTI to reach dramatically different conclusions about both trends and levels of congestion than traffic information collector Inrix—which is TTI’s data source. He also notes that the day after TTI released this year’s report, Inrix took down the contradictory data on its own website.

4. Who’s really rent-burdened? Daniel Kay Hertz follows up on our earlier series about how to measure housing affordability with a reader-inspired graph comparing the most common metric—the rent-to-income ratio—and an alternative we support, the “residual income” approach. A very simple comparison shows how the rent-to-income ratio can skew our understanding of a household’s ability to afford non-housing necessities given certain rental costs.

5. On Monday, Daniel Kay Hertz spoke with Texas Standard at NPR affiliate KUT in Austin about what a more balanced view of urban mobility might look like.

The week’s must reads

1. There’s nothing new in Trulia’s breakdown of rent control laws in New York and San Francisco, but it’s one of the clearest and most readable explanations we’ve seen of policies that are both extremely complex and a crucial part of the housing debate in two of the most high-profile cities in the country. One big takeaway: while SF’s rent control law applies to far more units—as many as 82 percent of all multifamily homes—because rent is decontrolled between tenants, controlled units may be much more expensive than in New York.

2. At The Century Foundation’s blog, Jacob Anbinder writes about the state of New Orleans’ public transit ten years after Hurricane Katrina. He describes federal policies that are seriously hampering the city’s ability to build the kind of network that it needs: first, the general policy of funding capital projects but not operations, which encourages cities across the country to build more infrastructure than they might otherwise, but doesn’t give them help to actually run frequent service. New Orleans is in an even more perverse quandary: as long as they run a very small number of buses, the city does qualify for some operations funding; but it can’t increase service significantly without losing that funding eligibility.

3. The Washington Post has a longread about the decline of U.S. car culture as Americans drive fewer miles, take more alternative modes of transportation, and now the prospect of self-driving cars. One of the most striking numbers: the percentage of 20-to-24-year-olds with a driver’s license has dropped from 91.8 percent in 1983 to 77.5 percent in 2013. Although it appears that both are in play, exactly how much of this trend is about economics and how much is about shifting preferences is debated by experts in the piece.

New knowledge

1. Last week, the Manhattan Institute’s Aaron Renn released a study arguing that far from suffering “brain drain,” most Rust Belt cities are actually increasing their college-educated populations—and about half are growing faster than the nation as a whole. In response, Alex Ihnen at NextSTL performed his own analysis, benchmarking his hometown not against the nation as a whole, but the 50 largest metropolitan areas and the top ten in college attainment. By those metrics, St. Louis’ progress is less conclusive. An important facet of both metrics is to what extent these shifts are driven by changing age cohorts—in particular, the growth of “young and restless” and a decline in older age groups with much lower college attainment levels.

2. Via Richard Florida at CityLab, a team of researchers from UC-Berkeley and UCLA have conducted a review of the literature on public investment and gentrification. The study reinforces findings that show investments in public transit can increase demand for housing nearby, especially where it provides an escape from costly or slow car commutes. Investments in local schools, parks, and highways also produce gentrification effects.

3. Joanna Ganning of the University of Utah and J. Rosie Tighe of Cleveland State University investigate the effectiveness of side-lot sale programs as a vacant land solution in American cities. They find that the programs are far less useful than they might be—less because potential buyers can’t afford to buy empty lots abutting their own than because of sale regulations and restrictions.

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Contradictory conclusions and disappearing data

Part 2: A curious discrepancy between two major congestion reports using the same data

Yesterday, we explained why one of the most common takes on the Texas Transportation Institute’s “Urban Mobility Report” is actually totally unjustified: Though many media outlets repeat the UMR’s claim that traffic delays are worse today than it has been since 1982, TTI completely changed the way it measured congestion in 2009, making comparisons before and after that date impossible. Moreover, its pre-2009 data are based on estimates that have shown to be biased in favor of showing more congestion than actually existed.

Since then, TTI has walked away from its pre-2009 approach, when it couldn’t measure speeds directly and so used traffic volume data to estimate them instead. Since 2009, TTI has used data from Inrix, a company that uses data from vehicles connected to electronic networks to measure travel speeds in real time. In theory, at least, the switch to Inrix data should be more reliable.

But there’s a problem—a very big problem.

There’s a profound and unexplained discrepancy between the travel trends in TTI’s latest report and those reported by Inrix. For the period 2010 to 2014, Inrix says that traffic congestion is down by 29 percent—while TTI says it’s up by 4.7 percent.

The TTI report neither acknowledges nor explains the discrepancy between its tabulation of the Inrix data and and that reported by Inrix.

For years, Inrix has regularly published monthly metro- and national-level data on its National Traffic Scorecard. We’ve been following these data for years, as they provide an unique perspective on shifting travel patterns. The Inrix website reported these data monthly from January 2010 through July 2014. Like the Texas Transportation Institute, Inrix reported both a “travel time index”—ratio of travel times in peak to off-peak hours, and the additional amount of time in hours trips took due to traffic congestion.

Inrix’s National Traffic Scorecard data show that traffic congestion peaked in 2010, declined through 2011 and 2012, and has risen slightly in 2013 and 2014. In a May 2012 press release entitled:  “Traffic Congestion Plummets Worldwide: INRIX Traffic Scorecard Reports 30 Percent Drop in Traffic Across the U.S.” Inrix said its Annual Traffic Scorecard revealed “a startling 30 percent drop in traffic congestion in 2011.”  According to data on the Inrix website, average congestion levels, as measured by the travel time index from August 2013 to July 2014 (the latest 12-month period for which Inrix disclosed this data on its website) were 29 percent lower than recorded in calendar year 2010 (the earliest 12 months in its data reported on the website). A direct reading of the Inrix data suggests that time lost to traffic congestion in 2014 was lower, by nearly a third, than in 2010.

Moreover, it’s interesting to note that INRIX reported widespread declines in traffic congestion in almost all major metropolitan areas between 2010 and 2012. A majority of large metropolitan areas saw traffic decline by more than a third; only one metropolitan area—Austin—recorded an increase in congestion.

(Monthly Inrix data compiled from the Inrix National Traffic Scorecard; see postscript for further details)

In contrast, the Texas Transportation Institute’s 2015 Urban Mobility Report claims that the average peak hour trip took 21 percent longer than a non-peak trip in 2010, and 22 percent longer in 2014—an increase of 4.7 percent over four years. Their annual figures suggest that congestion was flat through 2010 and 2011, and increased in 2014.

To be clear, we don’t doubt that TTI’s numbers are in fact based on the underlying Inrix data. But the fact that they come to such different conclusions from Inrix’s publicly available numbers suggests that something else is going on—some notable set of assumptions, for example. Unfortunately, TTI’s report does not itself explain how it reached these figures, even though this is not the first time we (or others) have pointed out this discrepancy.

On top of this, there’s another issue: in addition to finding different trends, Inrix and TTI suggest very different current levels of congestion, with Inrix’s estimate being much lower than TTI’s. Inrix says that in 2014, congestion caused the average trip taken in the peak hour to be 7.9% longer than the same trip taken at another time. TTI says that in 2014, congestion caused the average peak-hour trip to be 22% longer than off-peak. As a result, TTI claims the average traveler experiences 42 hours of delay per year, while  Inrix estimates that number at just 13.7 hours.

The fact that two different summaries of the same underlying data produce such remarkably different results demands an explanation. There is probably some clear, explicable reason why the two studies produce different results. Again, it’s likely that the two studies used different assumptions. But the fact that different assumptions can produce such wildly different—and in this case, conflicting—results tells us that the conclusions presented here are highly sensitive to the assumptions used. And in neither case are the assumptions or the calculations sufficiently transparent that any independent third party can verify these claims.

And that’s important because the researchers at the Texas Transportation Institute, despite their residence in an academic institution (Texas A&M University), have repeatedly declined to submit their work for peer review. Given the wide variation in the results, the absence of clarity in the methodology and assumptions, and the lack of peer review, no one should put any weight on the claims of the Texas Transportation Institute that it can accurately measure or faithfully report the level or trend of traffic congestion in the nation.

A Post-Script: Disappearing Data

Unfortunately, the Inrix website no longer displays monthly data showing the Inrix calculation of the travel time index and hours of time lost for the US and metropolitan markets. It appears that the link to this data was removed from the Inrix website on August 27, 2015.

At City Observatory, we’ve bookmarked and regularly visited the Inrix National Traffic Scorecard page. For several years, the page has featured a Tableau data presentation which allows users to view current and historic traffic congestion data for entire nations and for selected metropolitan areas. The Tableau page is interactive and shows line charts indicating the travel time index for a selected geography for several months and years. Inrix stopped updating the monthly market-level travel time index data with July 2014.  (These data are the source of the monthly national Inrix congestion numbers reported in the first chart in this commentary).

On August 26th the Scorecard page included data from 2010 through 2014, including an interactive chart that looked like this:


Following the release of the Texas Transportation Institute’s report, the link to the Tableau data was removed from this page and replaced with a page of text with links to the Texas Transportation Institute’s urban mobility scorecard page.

Inrix screenshot as of September 2, 2015.
Inrix screenshot as of September 2, 2015.

Relying on our cache of the original website, and links identified by the Wayback Machine, we identified the address of the Tableau files containing the National Transportation Scorecard. They are located here.