How urban geometry creates neighborhood identity

Does geometry bias our view of how neighborhoods work?

Imagine a neighborhood that looks like this:

On any given block, there might be a handful of small apartment buildings—three-flats—which are usually clustered near intersections and on major streets. Everything else is modest single-family homes, built on lots the same size as the three-flats.

What kind of community is this? Well, if you were to walk, bike, or drive around it, you would spend most of your time in front of these bungalows, which make up, on the block pictured above, fully 75 percent of the buildings. Visually, they define the landscape; the three-flats are accents, notable but clearly in the minority.

If you lived in this community—particularly if you lived in one of the bungalows—this visual character might be something you’re attached to, and identify with. You might begin to define your neighborhood by these bungalows, and expect the neighborhood’s future changes to conform with this identity.

And yet there’s something curious here: equal numbers of families live in bungalows and three-flats in the neighborhood pictured above. There are nine bungalows, each with one family; and three three-flats, each with three. (And if any of those three-flats have converted garden apartments, there are more people in the three-flats!)

But basic rules of geometry mean that if there are equal numbers of people in higher-density and lower-density housing types in the same neighborhood, the people in the lower-density housing will take up much more space—and, maybe, have an advantage in defining the identity of their neighborhood. (You’ve certainly noticed a similar dynamic with maps of the presidential race by county: a sea of low-density counties in red visually swamps the fewer, but much higher-density, counties in blue.)

Does this matter? I think yes, because the power to define a neighborhood’s publicly accepted identity also brings with it a great amount of power in shaping its future development. That’s especially the case in cities like Chicago, where local aldermen representing relatively small areas have near-veto power over new housing, businesses, and many transportation decisions within their wards. A group of people who manage to convince their alderman that a particular development, or streetscape, is “out of character” with the neighborhood’s identity is often able to defeat it.

This is especially relevant because the low-density/high-density housing usually corresponds to other axes of unbalanced power: within any given neighborhood, people in higher-density housing usually have lower average incomes, and are more likely to be people of color. What’s more, they’re also likely to be younger and renters rather than owners—and so statistically less likely to sit on a neighborhood board, or attend public meetings. A dynamic that privileges the ability of people in low-density housing to define and shape their neighborhood, then, is likely to reinforce some of the most basic inequalities of American society.

Nor is this only a theoretical issue. I thought of it after reading articles like this one, about Jefferson Park on the far northwest side of Chicago. “Should Jefferson Park Keep Suburban Vibe?” the headline asks, referring to some locals’ opposition to any new multifamily housing. Much of Jefferson Park looks a good deal like my imaginary neighborhood above; it’s generally identified with the city’s much-loved “bungalow belt” of early twentieth century single-family homes. Thus its identity as “suburban,” relative to the denser neighborhoods to the east.

But this widely accepted identity—one taken for granted in the headline of a story about whether the neighborhood ought to accept new high-density residents—is an artifact of urban geometry. According to the Chicago area’s metropolitan planning organization, 72 percent of the residential land in Jefferson Park is taken up with single-family homes. But most people who live in Jefferson Park—52 percent—actually live in an apartment or condo.

There’s obviously no smoking gun here about the power to define the future of the neighborhood. Can a neighborhood where most people live in multifamily housing be said to have a “suburban vibe” in this sense? If not, does that mean any of the people who strongly oppose new multifamily housing, and the people who would live in it, would change their minds? Or would their rhetoric be less powerful to those (probably the vast majority) who don’t have a strong opinion? To the alderman?

It’s hard to know. But it seems unlikely—especially if you believe any of the arguments made by people like Sonia Hirt about the cultural power of the idea of the single-family home—that these sorts of constructed identities don’t have some kind of effect on the paths that neighborhoods take.

Of course, there is a flip side to the way that urban geometry distorts people’s perceptions of how most of their neighbors live. And that’s that it’s possible to add much more housing without changing the visual character of the neighborhood in the same proportion. The question is whether it’s possible to add that housing—contributing, on average, to more diverse, affordable, and sustainable cities—when people believe (rightly or wrongly) that the character of their neighborhood must change to accommodate it.

 

The immaculate conception of your neighborhood

It’s naive to assume that existing housing stock sprang to life magically

(We’re pleased to reprise this classic essay from Daniel Kay Hertz, long-time contributor to City Observatory, and now author of the newly released Battle of Lincoln Park: Urban Renewal and Gentrification in Chicago).

A while back, 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.

The immaculate conception theory of your neighborhood’s origins

A while back, 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.

Brownstone Brooklyn and the challenges of urban change

In the middle of The Invention of Brownstone Brooklyn—a book published in 2011, but no less relevant today—Suleiman Osman turns the tables on the people who have long been the heroes of urbanist lore.

Speaking of the insurgent middle-class professionals who, starting in the 1950s and 60s, began to organize to stop to the massive urban renewal projects of Robert Moses and others, Osman says: “Perhaps the anti-Moses movement deserves an inverted version of the charge thrown at modern planners. If Brooklyn’s new white-collar professionals loved people, they hated the public.”

What does it mean to hate the public? And how could the people who stood up to clearance for highways be villains?

The illusive New York apartment (Flickr: Sharona Gott)

Brownstone Brooklyn tells the story of the first generation of gentrifiers in the rowhouse neighborhoods across the East River from Lower Manhattan. For Osman, it is an essentially countercultural movement. The “brownstoners” struck out for Brooklyn because the Upper East Side and Greenwich Village were getting too expensive, sure. But they also rejected those places—and the people who lived there—as part of a corrupt modern society, caught up in a deracinated, atomized culture increasingly dominated by the impersonal global market. Brooklyn was a place where you could live an authentic life in a “real neighborhood”: one deeply connected to local history (even if, as Osman writes, much of that history had to be rediscovered or simply made up), and where commerce meant a corner bodega owned by a family on the next street instead of a national chain.

But though some brownstoners may have claimed a kind of grassroots populism, from the very beginning they had a tense relationship with the working class Italians and Puerto Ricans they encountered in Brooklyn Heights and Park Slope. On the one hand, their presence created the kind of “diversity” and “authentic” characters that made Brooklyn different from Manhattan to begin with.

On the other, brownstoners’ project of neighborhood renewal often meant restoring townhomes that had been broken up into boarding houses to their original single-family conditions, evicting several low-income households in the process. Many of the people who thought of themselves as refugees from the harsh real estate market of Manhattan may have been anguished to realize they were landlords and villains in Brooklyn. But the fact that their movement was commonly referred to as “unslumming” shows that a kind of economic restructuring was integral, not incidental, to the project.

Moreover, the move from Greenwich Village to Boerum Hill was an escape from larger market forces only in a very incomplete way. After all, most of the new arrivals still commuted back to white collar jobs in Manhattan; a 1971 survey of brownstone owners found they were 99 percent white, 60 percent held graduate degrees, and 98.7 percent had earnings in the top fifth of New York City households. As they brought their purchasing power to Brooklyn, they more deeply implicated their neighbors in the very markets they had supposedly been trying to flee. And in some cases—as in their long campaign to convince skittish banks to make loans to support the purchase and rehabbing of “obsolete” 19th century townhomes—they explicitly lobbied to bring to bear the massive power of Manhattan capital to transform their new neighborhoods.

At this point, brownstoning might have reevaluated what kind of movement it was. As this process pushed the frontier of “authenticity” (and affordability) further south, they might have realized that “modernity” was not something that could be left on the other side of the East River; that their idyllic urban villages were in fact sites of increasing competition for housing and cultural expression.

Instead, in Osman’s telling—and in passages that will ring true to many observers of local politics today—the movement doubled down on a politics of authenticity and local purity. Sometimes this politics had a progressive gloss, as when they opposed the mass displacement of locals for urban renewal clearance. But that reading became harder to sustain when they opposed large middle- and low-income housing developments in an area with rapidly increasing housing prices, or when they lobbied against school desegregation. The common thread here is a commitment to local control as a way of preserving cultural distance, and local authenticity, from mass society—as represented by both freeways and public housing.

And this is where, finally, we get to what it means to love people but hate the public. Brownstoning was a movement that romanticized the participants in Jane Jacobs’ “street ballet,” but which was committed to holding the city as a whole at arm’s length. Ironically—and unfortunately—this way of relating to urban life is the progenitor of much of contemporary gentrification and anti-gentrification thinking. When Osman quotes the very same people speaking of their roles both as “frontiersmen” transforming “wild,” “undiscovered” Brooklyn and as defenders of these wilds from the rapacious, homogenizing forces of capitalism and government-led development, he could just as easily be capturing Crown Heights in 2016 as Brooklyn Heights in 1959.

That is, the people who are most invested in building their ideal environment—which almost always means reshaping an existing community to new specifications—are also the most sensitive to new forces whose influence threatens their own. That’s not just an observation about gentrification: it also applies to the family that bulldozes a farm to build a dream home on the edge of the city, only to complain bitterly when someone else ruins their pastoral view when they bulldoze the next farm over. But it certainly applies to the people who invented Brownstone Brooklyn, “reclaiming” a very particular (and often ahistorical) historical identity, and then just a few years later fought furiously to retain their particular interpretation of the neighborhood against the next wave of newcomers. Maybe debates about gentrification feel so circular and unproductive because what presents as two opposing sides is in fact a snake’s head and its tail.

There are two mistakes holding each other up here. The first is defining “urbanism” primarily as a countercultural project, which inevitably means rejecting any number of “incompatible” cultures and the people who identify with them. In some cases, this looks like brownstoners telling their working class neighbors that the longstanding practice of modifying their homes had to end in deference to professional class ideas about historic preservation. At other times, it looks like a 1970s anti-Burger King campaign that alternated left critiques of mass consumer culture with warnings about people who eat fast food being “purse-snatchers, muggers, and criminals.”

The second, related mistake is retreating to neighborhood-level politics, rather than broader political movements to reshape the city. Osman argues convincingly that the brownstone movement, in both its pro- and anti-gentrification forms, contributed to the breakup of the New Deal coalition, as much of the “new middle class” decided that unions and working class political machines were part of the establishment against which they were rebelling.

Of course, many of their critiques—and those of the unlikely sometimes-allies they found in radical black and Puerto Rican political organizations—were correct and necessary. Modernist planning really was profoundly indifferent to the “collateral damage” of its great public works, and the New Deal coalition really was profoundly influenced by racism.

But the new localist order they helped to create didn’t shed these problems. By closing down boarding houses and preventing the construction of new housing, both market and subsidized, the brownstoners’ “renewal” ultimately created neighborhoods nearly as homogenous as if they had been swept clean by Robert Moses’ bulldozers. (In fact, those modernist campuses are now some of the more demographically diverse parts of New York’s wealthy areas. The Cadman Plaza development, which was furiously fought by new Brooklyn Heights residents in the 1960s, sits in a Census tract that is 64 percent white; across the street, a Census tract with pristinely preserved brownstones is 82 percent white.) And in reinforcing the local power of those increasingly homogenous communities, they created durable coalitions against change, whether in the form of new housing or school integration.

The question Brownstone Brooklyn raises is whether this movement might have taken a different path. Could they have joined an urbanist movement whose first principles were not about a personal search for authenticity, but rather a commitment to a common well-being—the kind of housing, schools, public spaces, and access to regional amenities that anyone might need to build their own version of the good life? Could they have helped to transform Moses-era New Dealism to be democratically accountable without giving up on powerful citywide policy tools—ones capable of reshaping, rather than reinforcing, massive inter-neighborhood inequality?

Most importantly: Can it be done today?

The politics of grand housing bargains: NYC

You might not think it, but New York City has a below-market affordable housing infrastructure that most other cities can only dream of. As one of the only major American cities not to tear down large amounts of its legacy public housing, it has nearly 180,000 units. Many more are in other below-market housing programs. And then, of course, there’s the city’s rent control and rent stabilization policies. In all, just 38.9 percent of New York City’s rental housing is entirely priced by the market.

But overwhelming demand—and the relatively slow pace of market-rate construction, at least up until recently—means that there’s still a massive housing shortage at almost every price range. The bidding war over scarce homes has led to situations like that of Chelsea, in Manhattan, where 29 percent of homes are in public housing or another income-restricted program, creating some space for low-income households—but market-rate units are so expensive that they price out all but the wealthy. And when below-market units do open up, the crush of applications makes affordable housing seem more like a lottery prize than a social safety net.

Chelsea, Manhattan. Credit: Google Maps
Chelsea, Manhattan. Credit: Google Maps

 

Under former mayor Michael Bloomberg, the city attempted to address the crisis in a number of ways. A series of rezonings created corridors in which developers could add more housing to address the shortage. But studies have shown that overall, downzones (reducing allowed density) actually outnumbered upzones (increasing allowed density) under the Bloomberg Administration. In those years, the city also created a “voluntary inclusionary housing” law, giving developers density bonuses in exchange for below-market units. But that program produced a relative handful of actual housing—just a few thousand units through the end of last year in a city of eight and a half million.

Current mayor Bill de Blasio was elected in 2013 on a platform of reducing the gap between New York’s rich and poor, including addressing spiraling housing costs. Soon after, his administration released an ambitious ten-year housing plan, which laid out a sprawling agenda to reform everything from zoning to finance to preservation, leading to the preservation of 120,000 below market rate units, the construction of 80,000 more, as well as the construction of thousands more market rate homes. Many of the plan’s key points were combined into two pieces of legislation: Mandatory Inclusionary Housing (MIH) and Zoning for Quality and Affordability (ZQA).

MIH aimed to remedy what many saw as a fatal flaw of Bloomberg’s voluntary inclusionary zoning scheme: namely, the voluntary part. It proposed that in all newly upzoned districts, developers would be required to set aside a certain proportion of their units at below-market rates. Exactly how many, and at what prices, would be determined by the City Council. MIH proposed a menu of three choices, ranging from 25-30 percent of units and 60-120 percent of area median income; the idea was that the Council would pick the level most appropriate for the neighborhood being upzoned.

ZQA included a raft of tweaks to the zoning code: harder to explain that MIH, but probably more consequential. Among the changes:

  • Parking requirements near the subway would be dramatically reduced, allowing more buildable area to be used as housing for people, rather than being required to be set aside for storage of cars, and reducing the cost of development—a big deal particularly for affordable developers
  • Increases of one to three stories in maximum building height for certain senior and low-income housing developments
  • Adjustments to “contextual” zoning requirements and other regulations aimed at improving the built environment

When MIH and ZQA were released in early 2015, some applauded, but many came out in opposition. Preservationists opposed ZQA’s lifting of height limits by up to 15 feet in “contextual districts”; some affordability advocates argued that MIH’s affordability wasn’t deep enough, and, in some cases, that allowing more market-rate construction, even if tied to subsidized units, would necessarily further gentrification; and in other cases, objections included the time-honored fear of increased competition for “free” on-street parking as a result of ZQA’s parking requirement reductions.

These concerns and others led the vast majority of Community Boards—local advisory bodies to City Council members—to reject the proposals last fall. The votes were widely reported as a major setback for the mayor, though de Blasio remained defiant.

In fact, just a few months later, the City Council overwhelming approved both measures largely intact. Partly, this may reflect that political actors expected the Community Boards, whose local constituencies tend to reflect the same skepticism of development and change as other local bodies around the country, to be critical of any plans like MIH and ZQA. Also important is that de Blasio, whose approval rating climbed above 50 percent early this year, has a working majority aligned with him in the Council that may have been unwilling to torpedo one of his signature policy initiatives.

Mayor de Blasio. Credit: Kevin Case, Flickr
Mayor de Blasio. Credit: Kevin Case, Flickr

 

But his office also brought a strong array of interests to organize and testify in favor of the reforms in front of the City Council in February, even as other advocates argued that the plan didn’t go far enough. Groups urging passage included architects, business groups, the senior organization AARP, affordable housing developers, and several large labor unions, among others.

The Council did make a few tweaks to the initial proposals before passing them. Most notably, in response to concerns about the depth of affordability in MIH, it added a fourth menu option, with 20 percent of units at 40 percent of Area Median Income, and tweaked the third to drop average AMI to 115 percent, with portions required to be at 70 percent and 90 percent. Some of ZQA’s height bonuses were scaled back, and the “transit zones” of the city in which parking reductions would apply were also shrunk somewhat.

How much of an impact will these reforms have? It’s unclear. MIH, in particular, applies only to parcels that the City Council votes to upzone in the future. Several neighborhood rezonings are on the docket, but each presents a politically fraught vote that can be contested, although advocates hope that the menu of affordability options created by MIH will smooth the negotiations process.  One of the first such up-zoning cases–a proposal to add 175 affordable housing units to a proposed apartment building in Manhattan’s Inwood neighborhood was shot down when a local City Councilor–who had voted for Di Blasio’s MIH plan–came out in opposition to the project.

Even if all of the upzones pass, however, most of the city will remain outside the requirements of MIH. Moreover, in some of these neighborhoods, such the low-income Brooklyn community of East New York, it’s not clear that large-scale market-rate construction projects that would trigger MIH requirements are yet financially viable. In addition, the expiration of a state program known as 421a (which provides a property tax exemption for affordable units) may threaten the effectiveness of MIH.

For these and other reasons—including issues that apply to inclusionary zoning strategies generally—MIH is not likely to create a large proportion of the affordable units in the de Blasio administration’s housing plan. In fact, last year, the city’s Association for Neighborhood and Housing Development, which supported the plan, estimated that the original version of the plan might produce 13,800 affordable units, out of the 80,000 new units, and 200,000 new and preserved, envisioned by the Housing New York plan over the next ten years.

ZQA, in contrast, does not require any future action by the Council. It may lead to thousands of new affordable units in several ways, including allowing affordable developers to build more units on parking lots that are no longer required; allowing affordable developers to build more densely; and making affordability incentives for market-rate developers more attractive by better aligning allowed building envelopes with floor area bonuses. Unlike MIH, however, there is no guarantee that the affordable units produced by ZQA will be part of mixed-income projects, or mixed-income neighborhoods, that encourage economic integration.

For observers outside New York, there are several lessons in all of this. Perhaps a major one is that there may be low-hanging fruit in zoning reforms, such as those passed in ZQA, that don’t get immediate recognition as affordability policies like inclusionary zoning does.

Another is that perhaps because of this difference in perception, ZQA-type zoning reforms may be easier to pass in a package with more traditional affordability policies like IZ. The decision to propose and vote on ZQA and MIH together, even though they were separate bills, appears to have been driven by exactly this political calculation.

For larger cities with neighborhoods in many different economic conditions, it will also be interesting to see whether New York’s approach—essentially passing an enabling law that creates a menu of inclusionary zoning requirements for future application—does indeed reduce bargaining costs for future upzonings.

But it’s also important to keep in mind that these represent just part of de Blasio’s larger housing plan. Getting to the headline numbers of 200,000 affordable units created or preserved will depend heavily on other parts of the plan—perhaps most notably a commitment to doubling capital funds for affordable housing, at over $8 billion over ten years. How many other cities have the political appetite, or financial ability, to create that level of funding, even adjusted for New York’s size?

Moreover, though de Blasio’s plan is among the most ambitious in the country, 80,000 new affordable homes, and 120,000 preserved, won’t solve New York’s housing crisis. Even the nation’s largest city is heavily dependent on policies outside of its direct control, from federal subsidies for programs like Housing Choice Vouchers and LIHTC, to state programs like 421a, to the zoning decisions of suburban municipalities who play a major role in the housing shortage that has pushed up market prices across the metropolitan area.

In some ways, New York City has set an example for other American cities by bringing together a coalition of affordability advocates, developers, and labor interests to support zoning changes to increase the supply of low-income and market-rate housing, as well as double the spending devoted to low-income housing. But it also demonstrates the limits of municipalities’ power to address housing issues. For reasons of both resources and coordination, the battle for fair, plentiful, and affordable housing has to be taken far beyond City Hall.

The link between parking and housing

Generally, parking is thought of as a transportation and urban design issue, involving tradeoffs between easing access to a place by car while potentially imposing greater social costs by discouraging other modes and, sometimes, degrading the pedestrian environment and spreading out neighborhoods and entire cities. There’s no shortage of parking craters nominated to compete in Streetsblog’s annual “Parking Madness” competition.

But increasingly, parking is also understood as a housing issue—in particular, because of the near-ubiquitous laws that require new housing developments to include off-street parking. Particularly in denser projects where that parking will be in a garage rather than a surface lot, those spaces can be quite costly. A report from the Chicago-based Center for Neighborhood Technology found that per-stall estimates run up to the tens of thousands of dollars—and given that many municipalities require one parking space per unit, or even one per bedroom, that means that a significant portion of the cost of new housing is often not about space for people, but for cars.

Credit: Streetsblog USA
Credit: Streetsblog USA

 

For obvious reasons, critics have linked that fact with rising home prices in many of the country’s most sought-after urban cores in making the case that parking minimums are an enemy of housing affordability. Seattle’s Sightline Institute estimates that parking requirements add about $200 a month to the cost of rental apartments–whether or not their tenants have cars.

It’s important to note that in many of these overheated markets, reducing the costs of parking in new buildings is unlikely to translate into a one-to-one reduction in the price of new housing. After all, the essence of the affordability crisis is that a shortage of supply has allowed prices to be bid up and disconnected from the cost of providing housing.

But parking costs help constrict supply and have important effects in other ways. For one thing, most Americans don’t live in one of the major American cities with severe housing shortages, and in those places parking requirements directly drive up housing prices. But even in a place like Los Angeles or Washington, DC, parking requirements can be a serious problem, taking up space that might otherwise go to more housing to ease the supply crunch. And parking minimums are especially pernicious for affordable housing developers. They reduce the number of below-market homes that can be built by increasing per-unit costs for nonprofit builders already scrambling to put together financing for their projects—ironically, for tenants who are even less likely to actually own cars.

Fortunately, awareness of the high cost of “free” parking, in the form of requirements is beginning to percolate into policy. In Portland, these sorts of issues are coming up at public meetings where local officials are considering changes to the city’s parking rules. As reported by BikePortland, affordability advocates convinced the City Council to pull a proposed ordinance that would have required parking garages in some large transit-oriented housing projects. Significantly, the higher parking requirements were opposed by local tenants advocacy groups, who made the connection to housing affordability.  In Chicago, testimony from CNT and others about the high cost of parking requirements helped convince aldermen earlier this year to expand that city’s transit-oriented development zone—within which parking minimums fall by half or more—from a quarter mile to a half mile around rail stations.

Of course, municipal leaders will still feel the need to respond to constituent complaints that street parking is too scarce. But there are many more options than simply building more parking garages. After all, as Mike Andersen of BikePortland has pointed out, without a reason to prefer parking in garages, most people will continue to look for street parking as a first option—meaning that more garages are unlikely to solve the street parking issue.

What else might work? One possibility: tradeable, priced permits. Portland, in fact, is considering just such a plan, which would allow residential communities to create parking permits and sell them, calibrating the number and price to avoid competition and overuse of the available space. Perhaps even better—again, echoing Andersen—would be to make the permits tradeable, so that their prices could fluctuate based on changing demand. Essentially, this would be recreating the price-variable parking meter model we’ve written about earlier, in which prices change dynamically to ensure about 85% occupancy—enough that lots of people are actually using the space, but with enough vacancy to ensure that it’s not too hard to find a spot. And as Donald Shoup has recommended, providing discounted purchase prices for neighborhood residents can help address equity concerns.

The CNT report also mentions a number of other possibilities, including parking districts that treat spaces as a community resource, allowing, say, off-street parking behind a movie theater to be used as residential parking during off-peak hours, rather than insisting that every individual use have enough dedicated parking for its own peak period. Municipalities can also give credits for developers that encourage other modes of transportation, for example reducing parking minimums if developers provide tenants with transit passes, bike parking, or carsharing spaces.

It’s clear, though, that current parking requirements are causing more problems than they’re solving. Introducing better pricing, more flexible use, and encouraging other modes are likely to create benefits to both transportation and housing issues.

How do we know zoning really constrains development?

One of the chief arguments in favor of the suburbs is simply that that is where millions and millions of people actually live. If so many Americans live in suburbs, this must be proof that they actually prefer suburban locations to urban ones. The counterargument, of course, is that people can only choose from among the options presented to them. And the options for most people are not evenly split between cities and suburbs, for a variety of reasons, including the subsidization of highways and parking, school policies, and the continuing legacies of racism, redlining, and segregation. One of the biggest reasons, of course, is restrictive zoning, which prohibits the construction of new urban neighborhoods all over the country.

But does zoning really act as a constraint on more compact, urban housing? Sure, some skeptics might say, it appears that local zoning laws prohibit denser housing and walkable retail districts. But in fact, city governments pass such strict laws because that’s what their constituents want. Especially within a metropolitan region with many different suburban municipalities, these governments are essentially competing for residents and businesses. If there were real demand for denser, walkable neighborhoods, wouldn’t some municipalities figure out that they could attract those people by allowing that type of development?

A 2005 study by Jonathan Levine—and explored further in Levine’s 2006 book, Zoned Out—seeks to answer this question. Are local governments just responding to “market” demand in ensuring that new development is low-density and auto-oriented? Or is there really pent-up demand for more urban neighborhoods that can’t be satisfied because of zoning?

Atlanta. Credit: Brett Weinstein, Flickr
Atlanta. Credit: Brett Weinstein, Flickr

 

Levine looks for the answer in two contrasting metropolitan areas: Boston and Atlanta. Boston, as a much older region, has a relatively higher number of dense, walkable neighborhoods, while in Atlanta, which mostly boomed after World War Two, urban neighborhoods are much more scarce. Levine hypothesizes that if dense housing is adequately supplied to match people’s preferences, you should find a pretty good match between the kinds of places people say they’d like to live, and the kinds of places they actually do live. But if zoning really creates a “shortage of cities,” then the greater the shortfall of urban neighborhoods, the worse the matchup between stated preferences and actual living arrangements.

This is an important wrinkle to the “revealed preference” arguments of many defenders of the suburban status quo. Recent Census population figures sparked what were only the latest of a long line of scuffles over whether, or to what extent, the “back to the city” movement is real. But if Levine’s argument is correct, measuring demand for urban areas simply by how many people end up living there is flawed, because some people who would like to live in more compact neighborhoods can’t do so because there aren’t enough to go around.

To begin his analysis, Levine classified neighborhoods in both the Boston and Atlanta metro areas according to their level of “urban-ness” on a five-point scale, with “A” neighborhoods being the densest and most urban, and “E” being the most sprawling and exurban. Levine and his researchers then conducted a survey of residents in each of the zones, asking about their housing preferences and satisfaction with their current housing situation.

In Boston, about 40 percent of respondents said they preferred denser, more pedestrian-friendly neighborhoods, while in Atlanta, just under 30 percent of respondents did so. (Auto-oriented neighborhoods were preferred by 29 percent of people in Boston and 41 percent of people in Atlanta, with remaining respondents neutral.)

And how well did these preferences match actual behavior? Well, in Boston—where neighborhoods in the three most urban categories made up over half of all housing—83 percent of people with strong preferences for urban neighborhoods lived in one of these three urban zones. In Atlanta—where the same top three urban categories make up barely over 10 percent of all housing—just 48 percent of people with strong preferences for urban neighborhoods lived in an urban zone.

In fact, all down the line, people whose stated preferences were more urban were much more likely to actually live in an urban neighborhood in the Boston area than in the Atlanta area—suggesting that in Atlanta something might be preventing them from satisfying their preferences. At the same time, people who expressed preferences for the most auto-oriented neighborhoods were able to satisfy that demand the vast majority of the time in both regions—about 95 percent of those in Atlanta, and 80-90 percent of those in Boston. More rigorous tests prove that this difference is statistically significant.

levin

This seems like strong evidence that there is a “shortage of cities” in Atlanta. Why, otherwise, would there be such a gap between the number of people who satisfy their preferences for urban neighborhoods in the Boston and Atlanta metro areas—and much smaller gaps between people who can satisfy their preferences for more car-oriented areas?

If this is correct, it helps explain a other issues we see. If urban neighborhoods are undersupplied compared to demand for them, we would expect to see urban housing go to the people willing to outbid other households, increasing prices relative to auto-oriented neighborhoods, which are more plentiful. In a place like Atlanta, lots of urban housing would have to be built before this bidding war could be ended, returning prices to a “normal” market level.

It’s also notable that this kind of “shortage of cities” can occur even where there is no overall housing shortage. Atlanta, for example, is not a particularly high-cost region, but it has mostly added new housing on the suburban periphery. So while there’s no bidding war for housing in the metropolitan area as a whole, there is a bidding war for more urban housing, making walkable neighborhoods more expensive than they would have to be. Boston is almost the opposite: walkable neighborhoods appear to be less undersupplied relative to auto-oriented neighborhoods, but the region as a whole has very expensive housing, suggesting that the total supply of housing is too low. Boston could help bring down housing prices by building any housing at all—auto-oriented or more walkable. (Though walkable housing would have lower total location costs.)

Levine’s study ought to be known by anyone who works in urban planning or housing. It’s one of the strongest pieces of evidence that “revealed preferences”—the choices that people actually make about where to live—actually reveal the limited choices that people are given as a result of restrictive land use laws.

Parking meters and opportunity costs

What if we could make parking spaces in high-demand areas more widely available, while also making better use of under-used parking spaces elsewhere?

Think of it as Uber’s “surge pricing,” but for parking. (Though it elicits some grumbles from a consumer perspective, we think surge pricing can make lots of sense: it encourages more efficient choices by riders, and brings out more drivers when they’re most in demand).  

The old model of parking. Credit: Jim Ellwinger, Flickr
The old model of parking. Credit: Jim Ellwinger, Flickr

 

One of the arenas that “smart city” proponents are most excited about is managing the supply of public parking spaces using dynamic prices. In prior decades, cities had very limited options with respect to pricing: they might be able to vary prices by time of day and neighborhood, but they had limited information and resources to really tailor prices to demand, and couldn’t respond to unusual events or changes.

But new technology allows cities to respond to real-time demand, raising prices where there are no available spots to encourage turnover and make sure that people who really need to park have a space to do so, and lowering prices on blocks with lots of extra capacity to encourage more use of the public resource. On both ends, by better reflecting the real value of public parking spots, cities can more efficiently use one of their most precious resources: space.

What New Haven, and San Francisco and other cities are doing is working to operationalize the insights from Don Shoup’s masterwork, The High Cost of Free Parking. One of Shoup’s precepts is that the price of on-street parking ought to be set at a level where there are about one or two free parking spaces on every block (or about 85 percent occupancy). This assures that there are always spaces available for those who want them (and are willing to pay) and cuts down on “cruising” to find free spaces. Since the value of parking varies significantly by time of day, and from block to block, ideally rates ought to change according to those variables as well. But common practice is to charge the same price almost everywhere in the city, and to change prices by time only very crudely. These policies do precious little to reflect demand, and therefore assure adequate supply.

That said, this is one of those instances where getting the right answer depends on asking the right questions. In this case, “What should the price of parking be here?” shouldn’t be allowed to entirely eclipse the bigger question: “What is the best use of this public space?”

A slide from the New York City Planning Department shows where eliminating parking could improve public safety.
A slide from the New York City Planning Department shows where eliminating parking could improve public safety.

 

In some ways, in fact, the rich new data on parking demand and dynamic prices might help cities decide that larger question. If, for example, parking on one street remains under-utilized even when prices are pushed down below a certain level, maybe that space would be better used in some other way: space for street vending carts, or additional sidewalk, or green space, or a bike or bus lane.

But even where prices are high, other uses might beat out the value created by parking. On a downtown street with lots of pedestrian traffic, would a food cart or newsstand owner be willing to pay more for the right to a prime location than potential parkers? Would the benefits to public safety of extra sidewalk space or a bike lane outweigh the revenue of the parking meters? What about creating a bus lane that eliminates a bottleneck for thousands of riders a day, dramatically increasing the road’s efficiency, by getting rid of 20 or 100 parking spaces?

In other words, dedicating public space for one use always incurs the opportunity cost of not using it for something else, and our decisions about what to dedicate public space to ought to take those opportunity costs into account. Pricing parking acknowledges and values these tradeoffs in a straightforward way.

But that’s not all that’s missing here. Proponents of “smart parking” say that one of their goals is to increase the usage of “underutilized” parking spaces. Often, that may mean increasing the total amount of driving. But, of course, driving incurs all sorts of extra social costs: pollution, wear and tear on public roads, injuries and deaths from crashes. When calibrating the appropriate price of parking on public space, should cities take those costs into account?

Parking meters and opportunity costs

What if we could make parking spaces in high-demand areas more widely available, while also making better use of under-used parking spaces elsewhere?

Think of it as Uber’s “surge pricing,” but for parking. (Though it elicits some grumbles from a consumer perspective, we think surge pricing can make lots of sense: it encourages more efficient choices by riders, and brings out more drivers when they’re most in demand).  

The old model of parking. Credit: Jim Ellwinger, Flickr
The old model of parking. Credit: Jim Ellwinger, Flickr

 

One of the arenas that “smart city” proponents are most excited about is managing the supply of public parking spaces using dynamic prices. In prior decades, cities had very limited options with respect to pricing: they might be able to vary prices by time of day and neighborhood, but they had limited information and resources to really tailor prices to demand, and couldn’t respond to unusual events or changes.

But new technology allows cities to respond to real-time demand, raising prices where there are no available spots to encourage turnover and make sure that people who really need to park have a space to do so, and lowering prices on blocks with lots of extra capacity to encourage more use of the public resource. On both ends, by better reflecting the real value of public parking spots, cities can more efficiently use one of their most precious resources: space.

What New Haven, and San Francisco and other cities are doing is working to operationalize the insights from Don Shoup’s masterwork, The High Cost of Free Parking. One of Shoup’s precepts is that the price of on-street parking ought to be set at a level where there are about one or two free parking spaces on every block (or about 85 percent occupancy). This assures that there are always spaces available for those who want them (and are willing to pay) and cuts down on “cruising” to find free spaces. Since the value of parking varies significantly by time of day, and from block to block, ideally rates ought to change according to those variables as well. But common practice is to charge the same price almost everywhere in the city, and to change prices by time only very crudely. These policies do precious little to reflect demand, and therefore assure adequate supply.

That said, this is one of those instances where getting the right answer depends on asking the right questions. In this case, “What should the price of parking be here?” shouldn’t be allowed to entirely eclipse the bigger question: “What is the best use of this public space?”

A slide from the New York City Planning Department shows where eliminating parking could improve public safety.
A slide from the New York City Planning Department shows where eliminating parking could improve public safety.

 

In some ways, in fact, the rich new data on parking demand and dynamic prices might help cities decide that larger question. If, for example, parking on one street remains under-utilized even when prices are pushed down below a certain level, maybe that space would be better used in some other way: space for street vending carts, or additional sidewalk, or green space, or a bike or bus lane.

But even where prices are high, other uses might beat out the value created by parking. On a downtown street with lots of pedestrian traffic, would a food cart or newsstand owner be willing to pay more for the right to a prime location than potential parkers? Would the benefits to public safety of extra sidewalk space or a bike lane outweigh the revenue of the parking meters? What about creating a bus lane that eliminates a bottleneck for thousands of riders a day, dramatically increasing the road’s efficiency, by getting rid of 20 or 100 parking spaces?

In other words, dedicating public space for one use always incurs the opportunity cost of not using it for something else, and our decisions about what to dedicate public space to ought to take those opportunity costs into account. Pricing parking acknowledges and values these tradeoffs in a straightforward way.

But that’s not all that’s missing here. Proponents of “smart parking” say that one of their goals is to increase the usage of “underutilized” parking spaces. Often, that may mean increasing the total amount of driving. But, of course, driving incurs all sorts of extra social costs: pollution, wear and tear on public roads, injuries and deaths from crashes. When calibrating the appropriate price of parking on public space, should cities take those costs into account?

The party platforms on transit

In the first installment of this two-part series, we investigated what each of the major party platforms had to say about a crucial urban policy issue: housing. This time, we’re taking a look at another major concern for American cities: transportation. (It’s also definitely worthwhile to read what other people have written on the subject, including at The Transport Politic, Streetsblog, and the Washington Post.)

It is easy to sum up the space transportation takes up in the Democratic platform: not much. In fact, while housing only gets four paragraphs under its own heading in the 39-page document, “transportation” doesn’t have its own section at all. Rather, the handful of mentions mostly appear under “Infrastructure,” and include promises to:

…make the most ambitious investment in American infrastructure since President Eisenhower created the interstate highway system…put[ting] Americans to work updating and expanding our roads, bridges, public transit, airports, and passenger and freight rail lines.

And that’s about it.

Infrastructure construction. Credit: Washington State DOT, Flickr
Infrastructure construction. Credit: Washington State DOT, Flickr

 

Certainly American public transit could use more and better infrastructure in many places—but the failure to mention improving service funding at all shows a classic misunderstanding, or simple lack of care to understand, of what actually makes for valuable, and useful, public transportation. Moreover, without significant changes to, say, how we judge road performance, or orienting transportation dollars to improve accessibility rather than simply mobility, a massive new infrastructure public works program might make for a good jobs program, but  expensive highway widening projects come at the cost of greater sprawl, decreased long-term accessibility, especially for the low-income, locking in more greenhouse gas emissions, and worsening the public health crisis of vehicle crashes.

The only other detail in the Democratic platform is an infrastructure bank, which we’ve written about before.

But if the Democratic platform skimps on substance, the substance of the Republican platform is more or less openly hostile to urban transportation. After praising a government program that changed the shape of Americans’ lives more than almost any other in the twentieth century—Eisenhower’s highway system—the platform goes on to condemn the “social engineering” of “an exclusively urban vision of dense housing and government transit.” (About 80 percent of the spending in the transportation bill President Obama signed last December goes to roads.) The platform condemns the use of Highway Trust Fund money for “bike-share programs, sidewalks, recreational trails, landscaping, and historical renovations,” and proposes phasing out entirely federal support for public transit.

Both of these platforms are deeply disappointing on urban transit. If it’s perhaps unsurprising that the Republican Party—which has been all but moribund in the vast majority of America’s urban neighborhoods, particularly in large cities, for decades—would be hostile to urban transportation, it’s more surprising that the Democrats—a large amount of whose base resides in cities like New York, Chicago, Los Angeles, and so on—would phone it in on this issue.

Platforms, of course, are not themselves legislation. But as we mentioned in writing about housing policy, evidence does suggest that policies that make it into official platforms have a better shot of making it into legislated policy in the future. Making real urban transportation reforms an acknowledged, specific part of a major party’s platform (at this juncture, almost certainly the Democrats’) isn’t a meaningless exercise. Nor is it something that ought only to appeal to people who read Planetizen, the Overhead Wire, CityLab (or City Observatory): improving car-free access to jobs, schools, and stores within urban areas is an essential part of a more just, environmentally sustainable, and prosperous America. It’s a shame for that conversation not to be happening at the most high-profile political conventions.

The party platforms on housing

Urban policy conversations are largely focused on local policy, though we at City Observatory have occasionally argued that more attention ought to be paid to state and federal policy.

We haven’t had much to say about the presidential candidates themselves this year, but one exercise that’s worth paying a bit of attention to is the writing of each major party’s official policy platforms. These are documents without any legislative power, of course—but they do indicate the state of the public debate within each of the major parties. Moreover, as FiveThirtyEight argues, there’s evidence that what gets put in the platform predicts real policy tomorrow.

So today, we’ll look at what the platforms say about housing. Later, we’ll focus on transportation.

Both the Republican and Democratic platforms focus on homeownership in their (brief) forays into housing. “Homeownership expands personal liberty, builds communities, and helps Americans create wealth,” says the Republican platform; the Democratic one has no such paean but makes increasing access to homeownership the subject of one of its four paragraphs on housing. (Regular readers will know we are skeptical.)

Perhaps predictably, the Republican platform calls for “scal[ing] back the federal role in the housing market,” although there are few details about exactly what this means. It appears to be targeted mainly at programs meant to expand credit to low-income households to buy homes, which the platform blames for the housing crisis of the 2000s. (Many economists do not agree.) They also mention ending Federal Housing Administration mortgage support for “high-income individuals” and ending requirements for federally-insured banks to “satisfy lending quotas to specific groups,” presumably a reference to the Community Reinvestment Act, which is meant to counteract the effects of years of “redlining” by guaranteeing credit access to communities with large numbers of black, Latino, and low-income residents.

Credit: City of Jacksonville
Credit: City of Jacksonville

 

The Democratic platform’s section on housing is much shorter even than the Republicans’. About half of it is dedicated to improving housing affordability; it promises to “substantially increase funding” for the National Housing Trust Fund, and “provide more federal resources to the people struggling most with affordable housing,” though the mechanism is vague. (In case you guys are looking for one, you could try our automatic tax credit idea!) Vouchers, public housing, and anti-homelessness programs are mentioned in the most perfunctory possible way, with promises of more funding.

Perhaps the most interesting, and surprising, issue is zoning. The Republican platform is the only one to explicitly use the word—a change from 2012, when it did not appear. “The current Administration is trying to seize control of the zoning process through its Affirmatively Furthering Fair Housing regulation,” it says. “It threatens to undermine zoning laws in order to socially engineer every community in the country.” This is disappointing inasmuch as some conservatives have argued that the generally anti-regulation party might be an ally in the fight against sprawl-inducing, segregation-promoting local development rules. But it’s also unsurprising inasmuch as many local Republican officials and writers have been enthusiastic defenders of the hyper-regulation of property rights when it comes to urban space.

Meanwhile, the Democratic platform doesn’t include the word “zoning,” but it does say that the party will attempt to “eas[e] local barriers to building new affordable rental housing developments in areas of economic opportunity.” Given the Democratic administration’s ongoing fight with Westchester County, New York, that seems like a clear reference to battling low-density zoning regulations that make below-market housing difficult or impossible to construct in certain areas—and a recognition of the importance of economic integration to opportunity. But it appears to leave out the growing consensus among researchers from across the political spectrum that building market-rate housing is also a key part of any affordability strategy.

Platforms are ultimately political documents, and this year, that’s especially the case as it relates to housing policies. While we’d like to believe that the platforms would clearly spell out the differences between the two parties, and give voters a clear choice of direction. The 2008 campaign, in part, hinged on different approaches to health care reform and helped provide President Obama with a mandate that led to the enactment of the Affordable Care Act. The smaller bore and more muted discussions presented here don’t suggest that either party has much interest in making the election hinge on housing issues, or in building a strong public consensus for bold policy action in this area.  

How gentrification affects small businesses

When we talk about gentrification, we often focus on housing. But another major concern is the effects of rising prices on retail—both because of what it means about the accessibility of goods and services for local residents, and because of questions of “community character.”

The Philadelphia Federal Reserve Bank’s recent symposium on gentrification included a paper from Rachel Meltzer of The New School on just this subject. Meltzer begins by indicating two ways that gentrification might affect small businesses: changing the kinds of goods and services that local residents demand, and changing the cost of doing business, making some lower-margin businesses no longer profitable.

Meltzer then explores data from New York City between 1990 and 2011 to look at how small business retention rates vary between neighborhoods that are gentrifying, and those that aren’t. The overall results, perhaps counterintuitively, show virtually no difference. In fact, the percentage of small businesses that leave their storefront and are replaced by another business—the kind of scenario you’d expect to see in a gentrifying neighborhood, with (say) bodegas getting replaced by artisanal coffee shops—is very slightly higher in non-gentrifying neighborhoods than in gentrifying ones.

Credit: Rachel Meltzer
Credit: Rachel Meltzer

 

The essential fact here is that local storefront businesses have a high rate of turnover generally. So while there are lots of examples of businesses going out of existence in gentrifying neighborhoods, there are lots of examples in other kinds of neighborhoods as well.

At a closer-to-the-ground level, looking at differences in business retention between Census tracts in the same neighborhoods, Meltzer does find some distinctions: Businesses are less likely to leave without a replacement—that is, create a vacancy—but somewhat more likely to leave with a replacement in gentrifying areas.

The takeaway is not necessarily that business displacement never happens in gentrifying neighborhoods—plenty of people in high-cost cities can cite a favorite old business that relocated or disappeared because of rising lease costs.

Rather, the results of this study on retail displacement are strikingly similar in some ways to the results of studies about residential displacement: while there are certainly examples of it happening, systematic studies that compare gentrifying and non-gentrifying neighborhoods repeatedly fail to find that there’s significantly less displacement in non-gentrifying neighborhoods. And just as rising apartment rents may sometimes be offset by an increased willingness to pay because of better neighborhood amenities, rising retail lease prices might be offset by more and higher-income customers who are willing to pay more or buy more high-margin products. More customers with more disposable income translates into higher sales, which can enable businesses to still profit while paying a higher rent. On the other side, just as non-gentrifying low-income neighborhoods usually see a kind of “displacement,” with rapidly declining populations as people leave for areas with stronger neighborhood amenities, local businesses in these neighborhoods may also struggle to remain in a place with a declining customer base. In these struggling neighborhoods, low or stagnant incomes mean relatively lower sales for local merchants, making it hard for them to be profitable, even if rents are low.

In other words, with business displacement as with residential displacement, the reality of gentrification appears to be much more complicated than prevailing narratives. It is not clear that gentrification leads to higher levels of small business turnover.

A change

Last April, I wrote my first ever post for City Observatory, which unfortunately began with a David Foster Wallace quote. But it was up and up from there. Over the last year-plus here, City Observatory has given me an incredible platform to explore urban issues in public, combining intellectual rigor with a variety of subject matter and willingness to embrace heterodoxy that I’m not sure is matched anywhere else.

Fortunately, I will get to keep writing for City Observatory. But after this week, it will be in the capacity of a once-a-month columnist, rather than a full-time Fellow. (And of course, I’ll still be tweeting at @danielkayhertz and writing occasionally at danielkayhertz.com.) Though I’m fascinated by national (and even international) urban issues, I’ve always been a myopic homer at heart, and I have taken an opportunity to work on policy in my hometown of Chicago at the Center for Tax and Budget Accountability.

I’m incredibly proud of the work we’ve done at City Observatory, and very grateful to Joe Cortright for providing the leadership that made it possible, and giving me the opportunity to be a part of it. In the less than two years since its founding, City Observatory has become a staple of the urban policy conversation, getting nominated as one of Planetizen’s top websites (“every single post is required reading”), and routinely showing up in mainstream news stories about important urban issues, both in local media and top-flight national outlets like The Atlantic, Bloomberg, and the Washington Post.

There’s a growing understanding of the ways in which urban policy are at the core of many of America’s greatest challenges, especially issues of economic inequality, opportunity, and climate change. City Observatory plays a crucial role in investigating and explaining both these challenges and possible solutions. I’m excited, both as a contributor and reader, to see how it grows over the next two years and beyond.

Housing can’t be a good investment and affordable

Recently, we made the case that promoting homeownership as an investment strategy is a risky proposition. No financial advisor would recommend going into debt in order to put such a massive part of your savings in any other single financial instrument—and one that, as we learned just a few years ago, carries a great deal of risk.

Even worse, that risk isn’t random: It falls most heavily on low-income, black, and Hispanic buyers, who are given worse mortgage terms, and whose neighborhoods are systematically more likely to see low or even falling home values, with devastating effects on the racial wealth gap.

But let’s put all that aside for a moment. What if housing were a low-risk, can’t-miss bet for growing your personal wealth? What would that world look like?

Well, in order for your home to offer you a real profit, its price would need to increase faster than the rate of inflation. Let’s pick something decent, but not too crazy—say, annual increases of 2.5 percent, taking inflation into account. So if you bought a home for $200,000 and sold it ten years later, you’d be looking at a healthy profit of just over $56,000.

Sound good? Well, what if I told you that such a city existed? What if I told you it was in a beautiful natural setting, with hills and views of the ocean? And a booming economy? And lots of organic produce?

Credit: Olivier ROUX, Flickr
Credit: Olivier ROUX, Flickr

 

Maybe you’ve guessed by now: The wonderland of ever-increasing housing prices is San Francisco. When researcher Eric Fischer went back to construct a database of rental prices there, he found that rents had been growing by about 2.5 percent, net of inflation, for about 60 years. And this Zillow data suggests that San Francisco owner-occupied home prices have been growing by just over 2.5 percent since 1980 as well.

Like I said, over ten years, that gives you a profit of just over 25 percent. But compound interest is an amazing thing, and the longer this consistent wealth-building goes on, the more out of hand housing prices get. In 1980, Zillow’s home price index for San Francisco home prices was about $310,000 (in 2015 dollars). By 2015, after 35 years of averaging 2.5 percent growth, home prices were over $750,000.

Screen Shot 2016-07-19 at 9.46.59 PM

 

Now, if all you cared about were wealth building, this would be fantastic news. The system works! (Although actually even this rosy scenario is missing some wrinkles: San Francisco real estate prices did suffer enormously, if briefly, during the late-2000s crash, and if you bought in the mid-2000s and had to sell in, say, 2010, you would have taken a massive loss.)

But this sort of wealth building is predicated on a never-ending stream of new people who are willing and able to pay current home owners increasingly absurd amounts of money for their homes. It is, in other words, a massive up-front transfer of wealth from younger people to older people, on the implicit promise that when those young people become old, there will be new young people willing to give them even more money. And of course, as prices rise, the only young people able to buy into this ponzi scheme are quite well-to-do themselves. And because we’re not talking about stocks, but homes, “buying into this ponzi scheme” means “able to live in San Francisco.”

In other words, possibly the only thing worse than a world in which homeownership doesn’t work as a wealth-building tool is a world in which it does work as a wealth-building tool.

This also means that the two stated pillars of American housing policy—homeownership as wealth-building and housing affordability—are fundamentally at odds. Mostly, American housing policy resolves this contradiction by quietly deciding that it really doesn’t care that much about affordability after all. While funds for low-income subsidized housing languish, much larger pots of money are set aside for promoting homeownership through subsidies like the mortgage interest deduction and capital gains exemption, most of which goes to upper-middle- or upper-class households.

But even markets with large amounts of affordable housing demonstrate the contradiction. Since at least the second half of the 20th century, the vast majority of actually affordable housing has been created via “filtering”: that is, the falling relative prices of market-rate housing as it ages, or its neighborhood loses social status, often as a result of racial changes. Low-income affordability, where it does exist, is predicated on large portions of the housing market acting as terrible investments.

And to the extent that low-income people do find a subsidized, price-fixed housing unit to live in, that means that they won’t be building any wealth, even as their richer, market-housing-dwelling neighbors do, increasing wealth inequality.

Even the community land trust, which seems to be a way of squaring the wealth-building/affordability circle, ultimately fails. Community land trusts typically provide subsidized or reduced price ownership opportunities to initial buyers, and assure longer term affordability by limiting the resale price of the home. In other words, CLT-financed homes remain affordable only because they restrict how much wealth building the initial owners are allowed to capture. The result is that CLT-financed homes only attract those who couldn’t otherwise purchase a home—which means that the lower-income people in CLTs will be building wealth more slowly than higher-income people in market-rate housing, a fundamentally inequality-increasing situation.

We say we want housing to be cheap and we want home ownership to be a great financial investment. Until we realize that these two objectives are mutually exclusive, we’ll continue to be frustrated by failed and oftentimes counterproductive housing policies.

Housing can’t both be a good investment and be affordable

A fundamental contradiction lies beneath most of our housing policy debates

At City Observatory, we’ve frequently made the case that promoting homeownership as an investment strategy is a risky proposition. No financial advisor would recommend going into debt in order to put such a massive part of your savings in any other single financial instrument—and one that, as we learned just a few years ago, carries a great deal of risk.

Even worse, that risk isn’t random: It falls most heavily on low-income, black, and Hispanic buyers, who are given worse mortgage terms, and whose neighborhoods are systematically more likely to see low or even falling home values, with devastating effects on the racial wealth gap.

But let’s put all that aside for a moment. What if housing were a low-risk, can’t-miss bet for growing your personal wealth? What would that world look like?

Well, in order for your home to offer you a real profit, its price would need to increase faster than the rate of inflation. Let’s pick something decent, but not too crazy—say, annual increases of 2.5 percent, taking inflation into account. So if you bought a home for $200,000 and sold it ten years later, you’d be looking at a healthy profit of just over $56,000.

Sound good? Well, what if I told you that such a city existed? What if I told you it was in a beautiful natural setting, with hills and views of the ocean? And a booming economy? And lots of organic produce?

Credit: Olivier ROUX, Flickr
Credit: Olivier ROUX, Flickr

Maybe you’ve guessed by now: The wonderland of ever-increasing housing prices is San Francisco. When researcher Eric Fischer went back to construct a database of rental prices there, he found that rents had been growing by about 2.5 percent, net of inflation, for about 60 years. And this Zillow data suggests that San Francisco owner-occupied home prices have been growing by just over 2.5 percent since 1980 as well.

Like I said, over ten years, that gives you a profit of just over 25 percent. But compound interest is an amazing thing, and the longer this consistent wealth-building goes on, the more out of hand housing prices get. In 1980, Zillow’s home price index for San Francisco home prices was about $310,000 (in 2015 dollars). By 2015, after 35 years of averaging 2.5 percent growth, home prices were over $750,000.

Screen Shot 2016-07-19 at 9.46.59 PM

 

Now, if all you cared about were wealth building, this would be fantastic news. The system works! (Although actually even this rosy scenario is missing some wrinkles: San Francisco real estate prices did suffer enormously, if briefly, during the late-2000s crash, and if you bought in the mid-2000s and had to sell in, say, 2010, you would have taken a massive loss.)

But this sort of wealth building is predicated on a never-ending stream of new people who are willing and able to pay current home owners increasingly absurd amounts of money for their homes. It is, in other words, a massive up-front transfer of wealth from younger people to older people, on the implicit promise that when those young people become old, there will be new young people willing to give them even more money. And of course, as prices rise, the only young people able to buy into this ponzi scheme are quite well-to-do themselves. And because we’re not talking about stocks, but homes, “buying into this ponzi scheme” means “able to live in San Francisco.”

In other words, possibly the only thing worse than a world in which homeownership doesn’t work as a wealth-building tool is a world in which it does work as a wealth-building tool.

This also means that the two stated pillars of American housing policy—homeownership as wealth-building and housing affordability—are fundamentally at odds. Mostly, American housing policy resolves this contradiction by quietly deciding that it really doesn’t care that much about affordability after all. While funds for low-income subsidized housing languish, much larger pots of money are set aside for promoting homeownership through subsidies like the mortgage interest deduction and capital gains exemption, most of which goes to upper-middle- or upper-class households.

But even markets with large amounts of affordable housing demonstrate the contradiction. Since at least the second half of the 20th century, the vast majority of actually affordable housing has been created via “filtering”: that is, the falling relative prices of market-rate housing as it ages, or its neighborhood loses social status, often as a result of racial changes. Low-income affordability, where it does exist, is predicated on large portions of the housing market acting as terrible investments.

And to the extent that low-income people do find a subsidized, price-fixed housing unit to live in, that means that they won’t be building any wealth, even as their richer, market-housing-dwelling neighbors do, increasing wealth inequality.

Even the community land trust, which seems to be a way of squaring the wealth-building/affordability circle, ultimately fails. Community land trusts typically provide subsidized or reduced price ownership opportunities to initial buyers, and assure longer term affordability by limiting the resale price of the home. In other words, CLT-financed homes remain affordable only because they restrict how much wealth building the initial owners are allowed to capture. The result is that CLT-financed homes only attract those who couldn’t otherwise purchase a home—which means that the lower-income people in CLTs will be building wealth more slowly than higher-income people in market-rate housing, a fundamentally inequality-increasing situation.

We say we want housing to be cheap and we want home ownership to be a great financial investment. Until we realize that these two objectives are mutually exclusive, we’ll continue to be frustrated by failed and oftentimes counterproductive housing policies.

Editors note: This City Observatory commentary was authored by Daniel Kay Hertz.  The version published on October 26 contained an incorrect reference to the author.  We regret the error.

For low-income households, median home prices aren’t always what count

Affordable housing is an issue rife with statistics: median rents, median housing costs, percentage of people who are “housing cost burdened,” and so on. Previously, we’ve written about some of the issues with many of these statistics, including the untrustworthiness of most “median rent” reports and which rent statistics are more trustworthy.

But another issue—which we touched on earlier—deserves more sustained attention: median housing costs are a really incomplete way to understand housing prices. This is especially true if what you really care about is affordability for lower-income households. After all, low-income households are unlikely to be buying mid-priced housing, even in an affordable market. What you really ought to be looking at, then, is housing that is relatively low-priced.

If this doesn’t make sense yet, imagine a town with three families and three houses. Two families are high-income, and one is low-income. In this situation, for the low-income family, it probably doesn’t matter whether the two more expensive homes cost $300,000 or $1,000,000—because they’re going to be getting the cheapest home regardless. What matters is how much that home costs. But the “median housing cost” won’t tell us anything about that.

There’s far less public data about non-median housing prices, but the Census does offer data on 25th percentile home values—that is, homes that are cheaper than 75 percent of all the housing stock in a given area. And that data is illustrative of some of the issues that measuring affordability with downmarket housing can demonstrate.

Take two suburbs in the Chicago metropolitan area, Frankfort and Oak Park. Frankfort is a newer town on the very southern fringe of the region. Predominantly new development—over 70 percent of homes were built since 2000—the housing stock is quite homogenous, with 95 percent of units single-family homes, and 94 percent owner-occupied.

A typical street in Frankfort, IL, with large single-family homes. Credit: Google Maps
A typical street in Frankfort, IL, with large single-family homes. Credit: Google Maps

 

Oak Park, by contrast, lies on the western border of the city limits. With much of its development dating back to before the advent of zoning, it has a much more heterogenous housing stock, mixing large and small single family homes, as well as a large multifamily stock that ranges from a handful of downtown midrises to four-story apartment blocks to three-flats.

These towns have virtually identical median housing values, according to the 2014 five-year American Community Survey: $348,600 in Frankfort, and $354,400 in Oak Park. If the medians were all we looked at, we’d conclude that these two places were about equally affordable for low-income people, with Oak Park possibly being slightly worse.

But the 25th percentile prices tell a very different story. In Frankfort, with its limited range of types of housing, that figure is $269,500. But in Oak Park, where the median home value is slightly higher than Frankfort’s, the 25th percentile home is nearly $50,000 lower: $222,100.

That means a typical low-cost housing unit in Frankfort costs over 20 percent more than a typical low-cost unit in Oak Park. That’s a significant difference—it would increase the income level needed to stay under the (flawed) commonly used “cost burdened” threshold by 20 percent as well.

A street with single-family homes on one side and a multi-family building on the other in Oak Park. Credit: Google Maps
A street with single-family homes on one side and a multi-family building on the other in Oak Park. Credit: Google Maps

 

It’s also probably not a coincidence that Frankfort and Oak Park have very different income demographics. Just 16 percent of Frankfort households earn less than $50,000 a year, compared to 41 percent in the Chicago metropolitan area as a whole; in Oak Park, that number is 33 percent, much closer to the regional average. In other words, there seems to be a straight line from Oak Park’s relatively more diverse housing stock; to more diverse housing prices, as reflected by its lower 25th percentile home price; to more income-diverse residents.

This underscores an issue that we’ve repeatedly emphasized: contemporary zoning codes that widely separate different types of land uses and housing effectively make it illegal  to build neighborhoods that have a wide range of housing types and price points. The kinds of neighborhoods that freely mix large and small houses, apartments, and nearby shops are illegal in most places and and those that do exist are the anachronistic legacy of the pre-zoning era.

Of course, median housing prices still matter, if for no other reason than the shortfall in housing in many major cities has made finding affordable housing difficult for mid-income households as well as low-income ones. And if a place has very high median housing costs, it’s likely that there will be problems further down the scale as well. But to really understand a city’s or neighborhood’s housing cost profile, we do need to go beyond the median, to see what relatively down-market housing looks like. As the examples of Frankfort and Oak Park, Illinois, demonstrate, even places with the same median housing costs can differ significantly at the lower end.

How do I find data on the 25th percentile rent? These data are gathered as part of the American Community Survey.  To get reliable neighborhoood level data, you’ll want to use the Census Bureau’s pooled, five-year estimates; the latest data are from 2010-14.  You’ll want to go to American Fact Finder, and visit Table B25057, “Lower Contract Rent Quartile, Universe: Renter-occupied housing units paying cash rent  more information 2010-2014 American Community Survey 5-Year Estimates.” A table of 25th percentile rents for metropolitan areas is available here.

For low-income households, median home prices aren’t always what count

Affordable housing is an issue rife with statistics: median rents, median housing costs, percentage of people who are “housing cost burdened,” and so on. Previously, we’ve written about some of the issues with many of these statistics, including the untrustworthiness of most “median rent” reports and which rent statistics are more trustworthy.

But another issue—which we touched on last year—deserves more sustained attention: median housing costs are a really incomplete way to understand housing prices. This is especially true if what you really care about is affordability for lower-income households. After all, low-income households are unlikely to be buying mid-priced housing, even in an affordable market. What you really ought to be looking at, then, is housing that is relatively low-priced.

If this doesn’t make sense yet, imagine a town with three families and three houses. Two families are high-income, and one is low-income. In this situation, for the low-income family, it probably doesn’t matter whether the two more expensive homes cost $300,000 or $1,000,000—because they’re going to be getting the cheapest home regardless. What matters is how much that home costs. But the “median housing cost” won’t tell us anything about that.

There’s far less public data about non-median housing prices, but the Census does offer data on 25th percentile home values—that is, homes that are cheaper than 75 percent of all the housing stock in a given area. And that data is illustrative of some of the issues that measuring affordability with downmarket housing can demonstrate.

Take two suburbs in the Chicago metropolitan area, Frankfort and Oak Park. Frankfort is a newer town on the very southern fringe of the region. Predominantly new development—over 70 percent of homes were built since 2000—the housing stock is quite homogenous, with 95 percent of units single-family homes, and 94 percent owner-occupied.

A typical street in Frankfort, IL, with large single-family homes. Credit: Google Maps
A typical street in Frankfort, IL, with large single-family homes. Credit: Google Maps

 

Oak Park, by contrast, lies on the western border of the city limits. With much of its development dating back to before the advent of zoning, it has a much more heterogenous housing stock, mixing large and small single family homes, as well as a large multifamily stock that ranges from a handful of downtown midrises to four-story apartment blocks to three-flats.

These towns have virtually identical median housing values, according to the 2014 five-year American Community Survey: $348,600 in Frankfort, and $354,400 in Oak Park. If the medians were all we looked at, we’d conclude that these two places were about equally affordable for low-income people, with Oak Park possibly being slightly worse.

But the 25th percentile prices tell a very different story. In Frankfort, with its limited range of types of housing, that figure is $269,500. But in Oak Park, where the median home value is slightly higher than Frankfort’s, the 25th percentile home is nearly $50,000 lower: $222,100.

That means a typical low-cost housing unit in Frankfort costs over 20 percent more than a typical low-cost unit in Oak Park. That’s a significant difference—it would increase the income level needed to stay under the (flawed) commonly used “cost burdened” threshold by 20 percent as well.

A street with single-family homes on one side and a multi-family building on the other in Oak Park. Credit: Google Maps
A street with single-family homes on one side and a multi-family building on the other in Oak Park. Credit: Google Maps

 

It’s also probably not a coincidence that Frankfort and Oak Park have very different income demographics. Just 16 percent of Frankfort households earn less than $50,000 a year, compared to 41 percent in the Chicago metropolitan area as a whole; in Oak Park, that number is 33 percent, much closer to the regional average. In other words, there seems to be a straight line from Oak Park’s relatively more diverse housing stock; to more diverse housing prices, as reflected by its lower 25th percentile home price; to more income-diverse residents.

This underscores an issue that we’ve repeatedly emphasized: contemporary zoning codes that widely separate different types of land uses and housing effectively make it illegal  to build neighborhoods that have a wide range of housing types and price points. The kinds of neighborhoods that freely mix large and small houses, apartments, and nearby shops are illegal in most places and and those that do exist are the anachronistic legacy of the pre-zoning era.

Of course, median housing prices still matter, if for no other reason than the shortfall in housing in many major cities has made finding affordable housing difficult for mid-income households as well as low-income ones. And if a place has very high median housing costs, it’s likely that there will be problems further down the scale as well. But to really understand a city’s or neighborhood’s housing cost profile, we do need to go beyond the median, to see what relatively down-market housing looks like. As the examples of Frankfort and Oak Park, Illinois, demonstrate, even places with the same median housing costs can differ significantly at the lower end.

How do I find data on the 25th percentile rent? These data are gathered as part of the American Community Survey.  To get reliable neighborhoood level data, you’ll want to use the Census Bureau’s pooled, five-year estimates; the latest data are from 2010-14.  You’ll want to go to American Fact Finder, and visit Table B25057, “Lower Contract Rent Quartile, Universe: Renter-occupied housing units paying cash rent  more information 2010-2014 American Community Survey 5-Year Estimates.” A table of 25th percentile rents for metropolitan areas is available here.

The Week Observed: July 15, 2016

What City Observatory did this week

1. How safe will the autonomous cars of the future be? The first-ever fatal collision involving a Tesla running on autopilot mode has prompted a debate on that subject. On the one hand, hand-wringing over an uncertain threat may seem somewhat out of place given the normalization of the over 30,000 real people who die on the roads every year in America. On the other, assurances that self-driving cars will surely be a massive improvement are so far still just theoretical: Until this new technology has logged far more miles, on far more types of roadways—and especially urban streets with lots of intersections, crosswalks, jaywalking, and potential obstacles—we shouldn’t take for granted that it offers a solution to the problem of road safety.

2. The elevator pitch for “value capture” makes a lot of sense: Public transit creates value, so why shouldn’t some of that value be funneled back into transit agencies to pay for expansion and maintenance? But as Chicago has landed on the verge of creating one of the largest value capture programs in US history, there are also reasons for pause. Politically, value capture is more fragile than funding campaigns that require building a coalition explicitly in favor of using tax revenue for funding, like LA’s Measure R; logistically, value capture seems to benefit capital construction more than ongoing operations, which in many cases are the more crucial aspect for valuable transit service.

3. What is the future of urban transportation? For many, especially those in the tech community, the answer is autonomous vehicles. But one such advocate wrote in the Wall Street Journal that autonomous vehicles won’t operate at their peak efficiency without serious public policy concessions, including designating certain streets off-limits to all other types of vehicles. This inadvertently reveals what much discussion of the inevitability of self-driving cars elides, which is that public regulation fundamentally shapes evolution and adoption of technology as well as the choices that private individuals make about their transportation. We should not be suckered into the idea that an optimal future transportation system will simply emerge from the private marketplace.

4. In Westchester County, just north of New York City, the results of a seven-year of litigation over fair housing are getting mixed reviews from activists. The Justice Department accused local governments of using various policies, including low-density single-family zoning, to promote racial segregation, but the county government has been openly critical of the case and resistant to some of its recommendations. Evaluating this legal strategy versus state-based legislative tactics—like Oregon requiring minimum amounts of multi-family housing zoning, or Massachusetts allowing developers to sue to overturn low-density zoning in particularly unaffordable municipalities—is important for the future of anti-segregation work.


The week’s must reads

1. In the New Yorker, Kelefa Sanneh reviews a new book about “ghetto” segregation as a lens on current debates about gentrification. Connecting the long history of segregation in America to the relatively shorter history of integration as “gentrification” complicates a lot of the questions about what kind of demographics would hold in a “just” neighborhood. Sanneh also refers to some of the academic literature by writers like Lance Freeman who find that residents of gentrifying neighborhoods often have more conflicted feelings about the process than sometimes assumed. One of the main effects of gentrification, Sanneh concludes, may be that by bring different groups in into closer contact, gentrification makes it harder to ignore inequalities that have been around for a long time.

2. What happens to neighborhoods with housing built for families as their residents age? That’s a challenge investigated by South Carolina’s The Herald, which notes that the proportion of suburban residents 65 and older has doubled since 1950. The problems are numerous, including housing stock dominated by multi-story single-family homes difficult or expensive to retrofit for people with difficulty climbing stairs, and bad public transit access that means limited mobility for people who can’t drive.

3. Interpreting ongoing academic research for a non-academic audience poses serious challenges. In a Twitter essay, FiveThirtyEight’s Ben Casselman reflects on some of those challenges—and on potential best practices—in the wake of an article in the New York Times that highlighted a working paper on police shootings that some argued was less definitive than the Times’ reporting suggested. One takeaway: To the extent possible, it’s better to summarize the entire body of literature on a subject than to present a single paper without that context.


New knowledge

1. The Center on Budget and Policy Priorities has released a new “Chart Book” on the effects of rental assistance programs. The treasure trove of data includes who gets rental assistance (mostly adults with children and the elderly), their effect on homelessness (assistance reduces it), food insecurity (also reduced), and even domestic violence (also reduced). It also shows that when families use rental assistance to live in low-poverty neighborhoods, the benefits are even greater.

2. A new study by Neil Metz and Mariya Burdina of the University of Central Oklahoma suggests that increasing income inequality between adjacent neighborhoods is associated with higher rates of property crime. Importantly, however, increasing levels of income inequality within a neighborhood do not predict higher rates of property crime. At least at first glance, this is evidence thatspatial inequality—that is, income segregation—is associated with greater crime levels.

3. The Transit Center has released a new edition of transit rider surveys. Among the findings: nearly three-quarters of regular transit users walk to their stations, and even occasional riders (once a month) walk more often than they drive. Another interesting finding: Despite the emphasis on transit as a commuting tool, The Transit Center finds that most riders fall into one of two buckets: “Occasional” users who generally don’t use transit to get to work, or “All-purpose” users who commute by transit because they use transit for all sorts of trips. Those who use it mainly for regular commutes make up a relatively small proportion of those who use transit in cities around the country.


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

Lessons of Westchester

Westchester County, the mostly wealthy suburbs just north of New York City, is at the epicenter of one of the nation’s leading court battles over housing segregation.

Last week, the New York Times reported that seven years since the Justice Department accused many of the county’s municipalities of using exclusionary zoning laws and other policies to encourage segregation, the progress made is less than many advocates had hoped for.

A commercial district in Scarsdale, Westchester County, NY. Credit: June Marie, Flickr
A commercial district in Scarsdale, Westchester County, NY. Credit: June Marie, Flickr

 

Racial segregation in Westchester County, as in the New York metropolitan area in general, remains extreme. In a report submitted to the court system, CUNY professor Andrew Beveridge wrote that the “dissimilarity index” between whites and blacks, which represents the percentage of people who would have to move to have perfect integration, is 73. While the county as a whole has a fairly diverse population, less than five percent of Census tracts in the county have both black and white populations that are representative of the overall population of the county.

Moreover, the towns in Westchester County with extremely low black populations are also towns with extremely restrictive zoning laws. Of the 25 municipalities whose black populations are under three percent (versus 16 percent countywide), 21 ban apartments on at least 95 percent of their residential land—and 11 mandate single-family homes on at least 99 percent of their residential land.

And even when they allow multi-family buildings, these towns use zoning as a tool of segregation. Of these 25 towns, professor Beveridge found that 23 had black populations heavily concentrated in small areas where apartments were allowed, separate from the more common, white-dominated, single-family home zones.

Of course, zoning on its own can’t solve the problem. But as Beveridge argues, it’s hard to see how Westchester County could meaningfully allow more racial and economic integration without addressing zoning. That’s both because market-rate multifamily housing tends to be much more affordable than single-family housing built at the same time, and below-market housing in places with high land costs is only financially feasible to build as multi-family housing. Fixing exclusionary planning laws, then, may not be sufficient, but it is necessary.

But most of these municipalities, along with Westchester County executive Robert Astorino, have been defiant. Though they claim they are on pace to create the required 750 below-market housing units (out of more than 340,000 units across the county), fair housing advocates say that many of those are themselves segregated from higher-income neighborhoods.

These results are disappointing, given that the Westchester case may be among the most high-profile legal interventions against segregated housing since an earlier generation of litigation that included the Mount Laurel case in New Jersey. One lesson, perhaps, is that if segregated white and affluent local governments have the tools to enact exclusionary housing policies, they will generally use them—and find other ways to resist court mandates.

Rather, anti-segregation advocates may need to find ways to legislatively curtail the power of exclusionary communities. As we’ve argued before, this is most likely to happen at the state level, because state officials have to answer both to highly privileged, exclusionary communities as well as their less-privileged constituents who may want access to those communities. And in fact, places where states have more power in development policy are less segregated than those with more local power.

These approaches might include measures that disallow regulatory barriers to new housing that don’t serve an important social or environmental safeguard, as with California Governor Jerry Brown’s recent proposals; or they may directly mandate that all municipalities allow a minimum amount of multifamily housing, as in Oregon; or they may allow the state to override local zoning in places with severe affordability issues, as in Massachusetts. But Westchester County—as with the rest of New York state, and the country as a whole—has much farther to come in breaking down public policies that produce and perpetuate segregation.

The Week Observed: July 8, 2016

The Week Observed recently celebrated its first birthday! At the end of June 2015, we sent our first roundup of the most important urbanist news to about 700 people; since then, we’ve faithfully published a new issue every Friday, and we’re proud that today’s message will reach over 1,600 subscribers in every part of the country and beyond, from City Hall planners to university researchers to neighborhood organizers.

Whether you’ve been with us since the beginning or just signed up this week, thanks for being a part of this community!


What City Observatory did this week

1. Each year, Harvard’s Joint Center on Housing Studies publishes a huge “State of the Nation’s Housing” report. Some of it ought not to be a surprise, especially if you’ve been reading City Observatory: Rents continue to outpace incomes, thanks in part to a zoning-induced shortage in many parts of the country; single-family home production is up, but remains far, far below its pre-recession peak, and the occasional reports about the return of “McMansions” are really a statistical glitch: Large new single-family home construction is drastically below its 2006 peak, but moderate-sized single-family home construction is doing even worse. But JCHS’s report is odd in how it manages to compartmentalize housing-related spending: It laments that federal housing subsidies are “dwindling,” but the truth is that total outlays have climbed by tens of billions of dollars—in the form of money given to mostly wealthy homeowners. If we’re going to be serious about finding funds for the kinds of subsidies that will tackle affordability problems, we can’t just ignore that spending.

2. Ask a random person on the street why public transit is good, and they’ll probably be able to name at least three things: It’s environmentally friendly; it’s a cheap option for the poor; and new transit might provide a boost to economic development. But Uber Pool appears to be encroaching on all of those points: Theoretically, electric, autonomous carpool vehicles could emit fewer emissions per passenger; a new Uber pilot in Boston would give monthly passes for less money per ride than public transit; and Uber has sold itself to more than one city on the grounds that it provides a big economic boost. So is there any reason left to use transit? Yes: space efficiency. Even packed carpool vehicles will take up drastically more space per person than trains or buses, making travel impractical or impossible in many dense, walkable areas. This advantage of transit needs to become a part of the broad debate as services like Uber Pool become more common.

3. Blogs like Copenhagenize have helped transform many American cities’ attitudes towards biking in the last decade. What would it mean to make a similar transformation with respect to the workhorse of urban transit: city buses? In this post, we call for American cities to Londonize: commit to common-sense, comprehensive, and mostly low-cost policies that make getting around without a car convenient and reliable. Some of the pillars of London’s excellent bus service, which serves more people than the famous Tube, and nearly half as much as every bus service in the United States put together: Frequent service (no more than 12 minute gaps); simple routes and wayfinding; and prioritizing speed with bus lanes and all-door boarding.


The week’s must reads

1. When we suggested that housing vouchers could be made universal to those whose income qualifies, just like food stamps, we were hardly the first to make such a proposal. Now, Jake Blumgart at Slate has picked up the argument, drawing on data on evictions and the broader problem of housing affordability to make the case that housing vouchers—which currently reach just 17 percent of low-income households—ought to be for everyone. Blumgart also gets into some of the weeds of implementation, like the small-area Fair Market Rent pilot that attempts to make vouchers usable even in high-cost neighborhoods.

2. The US Department of Transportation is planning to overhaul the way it measures traffic congestion—a shift with big implications for the evaluation of future transportation projects. We’ve written that the measures fail on several fronts: Measuring travel by vehicle, not by people, and not taking into account the length of trips in addition to travel speed. Now Transportation for America, which has its own critical take on the proposed rules, is asking people to contact USDOT to comment on its shortfalls, and holding a seminar on the 13th to discuss what a better congestion measure might look like. If you’re interested in better transportation policy for your city, this is a cause you should be concerned with.

3. Many urbanists are highly concerned about road safety. At The Transportist,David Levinson argues that police violence at traffic stops ought to be included in that category. In the wake of another police shooting of a black man during a traffic stop for a broken tail light, Levinson points out that fear of this sort of arbitrary violence during traffic enforcement is a serious issue, especially for people of color, and should be taken into account when urbanists think about how to enforce traffic safety laws. (Similarly, for urbanist advocates of food trucks, street vending, and quasi-legal entrepreneurship like Airbnb and Uber, Emily Badger points out that two high-profile victims of police violence were initially stopped for illegal street vending.)


New knowledge

1. America is aging—but not in the same way all over the country. Governing has put together a report on the shrinkage of the prime working-age population by county, highlighting where demographics are squeezing an important source of economic vitality and tax fiscal health for many cities.

2. The materials that make up a city’s built environment contribute significantly to a neighborhood’s character. Now, Kate Rabinowitz has made a map that shows the building materials of every building in Washington, DC. (Hat tip to Greater Greater Washington.) In this city, the overwhelming majority of buildings are made of brick—but you can see little pockets of other materials, mostly on the outskirts.

3. At The Transport Politic, Yonah Freemark has another entry into the ongoing conversation about whether, and how, population growth is changing in urban areas. He has two main contributions: the first is to show how populations have changed within the footprint of built-up areas in 1960. That reveals that many “fast-growing” cities have grown almost exclusively thanks to annexations and outward growth, rather than infill, with 1960-era neighborhoods losing population. The other is to measure population change both in a broad core—three miles from City Hall, the same measure we’ve used—as well as in a smaller core, 1.5 miles from City Hall.


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

The values of value capture

Late last month, the Illinois General Assembly passed legislation allowing what may become one of the largest transit value capture measures in the US.

“Value capture” is a transit funding mechanism based on the idea that public transit creates broad social benefits—from more housing demand to swifter commerce in newly accessible shopping districts—and ought to be able to monetize some of those benefits to cover a portion of its construction and operation costs. It takes various forms, from special taxing districts to the direct ownership, development, and selling of transit-adjacent land by transit agencies.

In the case of Illinois, the new law authorizes the city of Chicago and a few inner-ring suburbs to create “tax increment financing” (or “TIF”) districts around four prospective transit projects, including the reconstruction of two heavy rail lines, a rail extension, and improvements to a major commuter rail hub. Essentially, regular property tax revenue within these districts would be capped at current levels, and if property values grow above those levels, the extra revenue would be directed into special funds for these transit projects. Because the projects pass through many neighborhoods where residential and commercial demand has been growing very rapidly, and would last for up to 35 years, they may end up contributing hundreds of millions of dollars, if not more, to these funds.

The old Wilson Red Line station on the North Side. Credit: Zolk, Flickr
The old Wilson Red Line station on the North Side. Credit: Zolk, Flickr

 

In the context of a chronically underfunded system that, like many around the country, has a long maintenance backlog and hasn’t had a major expansion for a generation, these funds are a lifeline. But there are also some tradeoffs to consider.

For one, at a conceptual level, the link between increased property values along these lines and the transit services themselves is murky. As with most value capture in the United States, the additional revenue won’t be based on some sophisticated econometric model meant to capture exactly how much extra value was created by transit: it will just assume that all new value is a result of the transit lines—or perhaps even the additional value of the rehabbed lines over their in-need-of-maintenance state. While evidence certainly suggests that rapid transit contributes to growing property values, many neighborhoods in central Chicago outside of rapid transit sheds have been growing in value as well, suggesting that there is a general trend towards the center city that goes beyond just transit access. And in some other cities, a general shortage of housing has been pushing up real estate values across entire metropolitan areas, making the connection even murkier.

Perhaps this is a philosophical splitting of hairs. But if transit advocates justify new revenue by making the standard value capture argument and it doesn’t hold up, expect opponents to exploit that gap.

There is another political issue with this type of value capture as well. Because of the way property taxes work, TIF districts sometimes function as de facto tax increases: municipalities are allowed to collect a given amount of revenue, and so if a TIF district siphons off some money in one neighborhood, the city will simply make up for it by taking more everywhere else.

Again, this isn’t necessarily a problem: it’s perfectly defensible to support raising taxes to support public transit. But if it’s not sold to the public that way, then voters may understandably feel cheated, and be less likely to support such measures in the future. The famous Measure R sales tax referendum in Los Angeles required building a political coalition in favor of explicitly raising taxes to pay for transit. TIF districts may not enjoy any such coalition. Indeed, a Measure R-style campaign to raise taxes in Chicago’s Cook County for transit has so far failed to take off. That leaves this sort of value capture policy potentially vulnerable to backlash.

The Expo Line in LA. Credit: Prayitno, Flickr
The Expo Line in LA. Credit: Prayitno, Flickr

 

On a more nitty-gritty level, value capture generally requires increasing real estate values. But what about neighborhoods where real estate values are stagnant or falling? One of the approved projects in Chicago is an extension of the Red Line on the far South Side, where home prices have struggled to rebound since the economic crash. The law gets around this problem by appearing to allow the transfer of money collected in the North Side Red Line district to the South Side—but that just exacerbates the already-strained “value capture” justification, and allows residents of the North Side to complain that money they thought would be returned to their communities is instead being used twenty miles or more away.

But if these sorts of transfers aren’t allowed—or aren’t available—then value capture has little to offer most working-class or high-poverty neighborhoods, which are often in the greatest need of both economic development and low-cost transportation options.

Finally, the Chicago value capture bill appears to be entirely focused on building new infrastructure, rather than supporting service—more frequent buses or trains, for example. This isn’t a necessary part of all value capture policies, but their structures often encourage it. More frequent service generally makes sense as a policy enacted across an entire system—if not on every line, then on a selection of lines that span many parts of a city—but value capture tends to be focused on particular neighborhoods or lines. TIF districts almost always have a pre-established limited lifespan, and relying on a revenue source that will one day disappear for ongoing expenses like operations makes little sense. Indeed, virtually all of the value capture examples provided by the American Public Transportation Association involve capital construction, not operations. That means value capture is unlikely to help reverse the ongoing deterioration of bus service and ridership.

Value capture has helped pay for significant new transit projects in cities across the country, and the bill in Illinois provide funding for undoubtedly necessary maintenance and rehabilitation that has no other obvious funding sources. But there are political and substantive issues to work through before embracing it as the answer to transit funding problems more generally.

Londonize!

One of the first “urbanist” blogs I found was Copenhagenize. It’s a brilliantly simple name that carries its argument in a single word: Here is a place, Copenhagen, that does something right, so let’s be more like them.

The thing Copenhagenize has in mind is biking. From particular styles of bike lanes, to more general street design, safety management, and so on, Copenhagenize uses real-life examples not to show what a really bike-friendly city might look like on a planning mockup, but what it actually looks like in the world today. It’s not a bulletproof approach, of course—critiques range from standard “but Boston/Dallas/Overland Park is different” objections to calls to hold up non-European cities as urban exemplars—but when your task is to convince people to change to something that’s new to them, you need to have a clear and positive vision of how your changes might function, and an attractive real-life city that has implemented them well is as good as you can get. More than one city planner has been converted to the bike infrastructure gospel on a trip to northern Europe.

Screen Shot 2016-07-07 at 9.54.29 AM

But other forms of urban transportation haven’t been as fortunate. People come back from New York, Paris, or Tokyo and marvel about their subways, but heavy rail is far too expensive and logistically impractical for the vast majority of American cities to consider as a major form of transit. Other people return with photos of street-running trams in Europe or Portland, but the record of the new generation of streetcars has been decidedly mixed—and, again, they’re too expensive to really serve more than a few lines in most places. Visitors to Mexico City or Bogotá might be convinced of the utility of Bus Rapid Transit—but, once more, only as an approach for a few flagship lines, and even then few US cities seem interested in pursuing the full-on BRT treatment adopted widely in Latin America.

What we need instead is a model that can be applied broadly to entire transit systems, like the bike infrastructure highlighted by Copenhagenize, in metropolises and small cities.

Allow me to humbly suggest: Londonize.

Really, any number of cities could fit the bill in terms of smart, high-quality routine bus service, and I don’t make any claim that London is necessarily the best. But London is a city everyone is (at least vaguely) familiar with, and—perhaps more auspiciously—it has those iconic double-decker buses that are a worldwide symbol of friendly public transportation.

Credit: oatsy40, Flickr
Credit: oatsy40, Flickr

 

Moreover, though the Tube might get more glamorous press, London’s bus service really is impressively massive: It carries roughly 2.3 billion passengers per year—much more than the Tube (1.3 billion), close to the New York City subway (2.8 billion), and nearly half as much as every bus service in America combined (5.1 billion), while serving a population roughly 1/35 as large.

So London has buses that are iconically attractive and manage to be useful enough to garner millions of rides per day—without massive, or massively expensive, infrastructure projects. What are the basic building blocks of its success? If Denver or Cincinnati wanted to Londonize, what might they do?

Transport for London (TfL) itself identifies four pillars of its service:

Frequency. TfL says that if it can run buses at least every 12 minutes all day, people will think of that line as “show up and go” service—convenient enough to just turn up at a stop without having to go through the hassle of consulting (and the psychological leap of trusting) a schedule. That makes them much more likely to depend on the bus. Wherever possible, then, 12 minutes is the minimum standard frequency for bus lines. Some American cities have started to reflect this principle in “frequent networks,” which come at least every 12 to 15 minutes—but just like a handful of marquee protected bike lanes don’t add up to much if most streets are bike-hostile, a loose network of “show up and go” bus lines aren’t worth much if most routes remain very infrequent. That’s especially true in networks that rely on transfers for much of their reach.

Reliability. If you say a bus comes every 12 minutes, they should come every 12 minutes—not two every 24 minutes. Bus bunching, and the long gaps between buses that result, is a problem that plagues many systems, but it’s not unsolvable. Technologies like transit-signal priority, which holds green lights and shortens red lights to speed buses, as well as bus-only lanes (about which more in a minute) and good dispatch management, can help maximize reliability.

Simplicity. The bus system should be easy for new and experienced users to ride. At a macro level, this means designing routes that are intuitive and as straightforward as practical. At a micro level, it can mean good signage at the actual bus stops—ranging from metal signs that show where a route goes, how often it comes, and where you might transfer to other services, to electronic signs that can show bus arrival time estimates, real-time notifications about delays or other service changes, and other information. London has more than 2,500 of these boards all around the city, and some US systems like Chicago and Boston have begun to install similar boards as well.

Credit: Tom Page, via Flickr
An electronic bus countdown screen in London. Credit: Tom Page, via Flickr

 

A new static, high-information bus sign in the Twin Cities. Credit: Metro Transit
A new static, high-information bus sign in the Twin Cities. Credit: Metro Transit

 

Comprehensiveness. TfL’s service standards suggest that Londoners ought to be no more than 400 meters, or about a five minute walk, from a bus stop—and in fact about 90 percent of residents are that close or closer. Low population densities in American cities might make that goal impractical, but the principle that people are supposed to be able to walk from their origin to a bus stop and from another bus stop to their destination does mean that extremely wide spacing between lines simply won’t make for a practical network. (See Jarrett Walker for a discussion of the tradeoffs between coverage and ridership.) In sparsely-populated areas where a denser network wouldn’t work, it might make sense to look into subsidies for taxis or rideshare services to solve first/last mile problems.

To these four principles, I would add three more:

Speed. To make buses a time-efficient way of getting around, they need to come frequently and reliably, but they also need not to crawl along once you’re on board. One way to avoid that, especially in cities with traffic congestion problems, is bus lanes—sections of the road that cars and trucks aren’t allowed to travel in. Because of their incredible space-efficiency, buses are able to move many times more people through a single lane than private vehicles, without creating congestion—as long as those private vehicles aren’t allowed to get in their way. For that reason, London has created nearly 200 miles of bus lanes.

Another common problem, especially on high-ridership routes, is the amount of time buses sit waiting for each new passenger to pay their fare. But many London buses have a fare card reader at each door, allowing for much faster boarding than the standard single fare reader at the front door. In the US, San Francisco has also begun implementing this form of “all-door boarding.”

Land Use. Of course, if you’re a regular reader of City Observatory, you know that transportation isn’t just about transportation—it’s also about land use. By American standards, London is an exceptionally compact, walkable city. That means that it’s easier to make sure everyone’s within a five minute walk of a bus stop; easier to ensure that destinations are near a stop; and likelier that trips will be relatively short, which suit a frequent-stop service like most bus lines. But while most American cities won’t be hitting London-level density any time soon, that just means they have lots of room for improvement. “Transit-oriented development” has become a well-known buzzword in the planning world, but research shows that TOD works in places that only have bus service, as well as near rail stations.

And finally: Road Pricing. London put in place a system of a congestion charge for its central area in 2003. It charges private cars 11.50 pounds (roughly $15) per day to travel in the cordoned area between 7am and 6 pm. This simultaneously reduces car traffic, and provides a source of funds to help subsidize transit improvements. In 2015, the charge generated more than 170 million pounds of net revenue to support the transit system. Reducing car traffic helps buses move faster, benefiting a majority of London commuters, and speeding all traffic through the center.  

In large part because of the movement that websites like Copenhagenize have helped push forward, over the last decade or so American cities have made incredible strides in making cycling a safe, viable, attractive option for getting around. It’s time to take the same approach with the most broadly accessible transit mode: the city bus.

The fourth virtue of public transit

For most Americans, public transit basically has three virtues. The first two cater to liberal sensibilities: it’s environmentally friendly, and because it’s cheap, it’s effectively a sort of transportation safety net for the poor. On top of those feel-good benefits, there’s a “business” case, which is that public transit is good for economic development.

These three virtues are broadly understood—or at least, understood as standard arguments in favor of transit, even if not everyone finds them convincing—by most people, even those who couldn’t get into the weeds about dedicated lanes for streetcars or all-door fare payment. They are accessible to average voters and local elected officials alike.

By Ibagli (Own work) [Public domain], via Wikimedia Commons
By Ibagli (Own work) [Public domain], via Wikimedia Commons

But as city centers are changed by both demographic shifts and technological innovation, it seems increasingly necessary to add a fourth virtue to the broad public debate over urban transportation: Public transit is space-efficient.

But the knock on transit is that it’s slow.  Or slower than a private car.  And the results of a recent race in Chicago shows that transit is considerably slower than UberPool, Uber’s carpool like ride sharing service. The race was results were confirmed by a study from DePaul University’s Chaddick Institute for Metropolitan Development, which found that Uber Pool was significantly faster than Chicago’s public rail and bus system for most trips. While Uber Pool also cost more, its price was significantly below that of regular Uber service—and even further below the cost of traditional taxis. The implication of the head-to-head comparison is that, for a significant number of people, switching some proportion of the CTA’s 1.7 million daily trips to Uber Pool might be worth it.

And even Uber Pool’s cost disadvantage over public transit might disappear if a new pilot program in Boston catches on. This month, Uber announced that it would introduce monthly Uber Pool passes—like transit passes—for just $2 per ride, or less than the MBTA’s $2.25 fare. While these temporary low fares are no doubt a money-losing loss leader, if UberPool fares are anywhere close to the price of public transit it would seem like we’re probably looking at a massive shift from public transit to these sorts of ride-hailing services. And wouldn’t that be a good thing, if it’s both faster and nearly as cheap?

But here’s where the importance space-efficiency comes in. When one person switches from the bus to Uber, two things happen. One is that they get a faster trip almost by definition: A vehicle that makes many stops (the bus) is going to be slower than a vehicle that makes few or no stops (the Uber) unless the bus has some other advantage, like transit lanes that allow it to avoid traffic congestion. And the vast majority of American bus lines are given no such benefit.

The second thing is that they switch from a very space-efficient vehicle, where they probably take up only a few square feet on the road, to a very space-inefficient vehicle, where they take up many, many times more.

Screen Shot 2016-07-05 at 9.38.11 AM

Screen Shot 2016-07-05 at 9.38.00 AM

(Yes, the above image isn’t totally fair—Uber and autonomous vehicles could theoretically reduce the space needed for parking by quite a bit, and potentially services like Uber Pool could shrink the space it takes up on the road as well. But regardless, there’s no doubt that while traveling, Uber and autonomous vehicles consume space much more like private vehicles than like public transit, pedestrians, or bikes.)

When one person makes that switch, it doesn’t affect traffic very much. But if many people were to make that switch, particularly on streets that carry a decent number of public transit passengers, the implications are quite serious. Even in an Uber Pool, riders will be increasing the road space they take on manyfold—and thereby radically decreasing the number of people who can use the road at a time. In other words, they will be creating serious traffic congestion.

In many cases, there’s just no plausible way to physically move everyone who currently uses a road if bus riders were to switch to Uber-like services. On Lake Shore Drive in Chicago, roughly a quarter of all the people on the road at rush hour are on public buses, and travel speeds already regularly fall well below the speed limit. Were a large proportion of those bus riders to switch to Uber, they may very well see their own travel times become longer, as they suffer from the congestion that they have helped to create. Uber makes it possible for one person, or even many people, to take a faster trip; but if we were all to take Uber, we’d all have even slower trips.

Crucially, though, no matter how slow traffic gets, Uber will almost always be faster than street-running, mixed-traffic transit services, meaning no one will have an incentive to fix the problem by switching back to the bus. This is an issue that can only be resolved by public policy: Re-prioritizing space-efficient transportation by, for example, creating bus lanes.

The broader point here is that the kind of dense, pedestrian-friendly neighborhoods that are increasingly in demand can’t function without very space-efficient forms of transportation. For very dense areas, like central business districts, that’s often because you literally can’t fit all the people traveling to and from them on roads in cars. In lower-density residential neighborhoods and commercial corridors, travel congestion may be less of a barrier, but parking becomes the pinch point: if everyone arrives by car, the amount of parking required would end up leveling half the neighborhood. (Recall the parking requirements in downtown Kalamazoo, which call for parking lots so big that they wouldn’t fit on their parcels, even without any actual building.)

If this virtue of public transit (and, of course, walking and biking) is understood, then calls for there to be “enough” parking, or to “solve” the congestion problem in popular, dense neighborhoods, stop making any sense: allowing everyone to arrive by car is just physically incompatible with those types of communities.

The Week Observed: July 1, 2016

What City Observatory did this week

1. Last week’s big news was Brexit: the vote by the United Kingdom to leave the European Union. What does that have to do with urban policy on our side of the Atlantic? Well, it turns out that just as urban density predicts voting behavior in America, with denser neighborhoods strongly trending more liberal, the Brexit vote was also highly correlated with urban population patterns: the higher a district’s residential density, the higher the “Remain” vote.

2. A common knock on more compact metro areas is that the cost of living is higher—in particular, the cost of housing. But while it’s true that our policy-induced “shortage of cities” has led to higher housing prices than necessary in many sought-after urban communities, many analyses miss a big part of the cost-of-living picture: transportation costs. Using our own “sprawl tax” estimates of the extra time and money costs of longer commutes in more spread-out metropolitan areas, we show that places with higher housing costs tend also to have lower transportation costs.

3. We’ve previously argued that the difference in housing price growth in urban cores and suburban peripheries can act as a sort of “Dow of cities,” indicating shifting patterns of demand for different kinds of neighborhoods. Now we haveanother such indication that the demand for inner-city neighborhoods is increasing: new housing price data based on repeat-sales models by Zip code for cities across the country confirms that central city property values are growing faster than those on the periphery—especially in larger metro areas.

4. What are the next steps for the urbanist movement? At the “Act Urban” convening in Philadelphia last week, hosted by Gehl Institute, our own Joe Cortright spoke on three challenges for the civic commons moving forward: transitioning from “micro” to “macro” interventions in public spaces; understanding and responding to the market demand for space in urban centers, and its relationship to vibrant public spaces; and adopting metrics that can help drive policy around more than just vehicular traffic.


The week’s must reads

1. Two interesting pieces of Uber news this week: First, Bloomberg‘s Justin Fox looks at the ease with which Uber competitors are challenging the ride-hailing company’s dominance abroad, and notes that the idiosyncratic, city-by-city markets for its services leaves it vulnerable to competition in ways that other companies that depend on network effects to dominate their sectors aren’t. Meanwhile, Uber announced that it would be launching a trial monthly subscription service for just $2 per ride in Boston—an almost public transit-like service package.

2. The Chicago Sun-Times covers the results of perhaps the country’s greatest experiment in public housing reform, the Chicago Housing Authority’s Plan for Transformation. While the teardown of midcentury public housing towers have broken up some of the intentionally concentrated pockets of poverty, providing former residents with vouchers that gives them more of a choice of neighborhoods has not yet to as much desegregation as some proponents originally imagined.

3. Google’s Sidewalk Labs is attempting to leverage the technology company’s tools to improve urban life. The Guardian unearthed some of the documents developed for Columbus’ “Smart City” proposal that include a role for Google technology in transit, parking, and related payments, raising suspicions about the company’s objectives. At CityLab, Laura Bliss countered that there’s nothing nefarious in Google’s approach. In a column at Fast Company, the Labs’ CEO Daniel Doctoroffsheds some light on what they think of as their major problems to solve: understanding travel demand; managing parking supply; supplementing traditional fixed-route transit with ride-hailing services; and more. While many of these ideas hold some promise, we hope that all sides moving forward will keep in mind some of the pitfalls of treating cities simply as engines to be optimized—and that broader social or political questions are sometimes as or more important than technological innovations.


New knowledge

1. At the Washington Post, Emily Badger reviews even more research on the growing demand for inner-city living, but the results are more nuanced than you might think. While there has been a clear pattern of people with greater means moving to city center over the last few decades, these centers remain, on average, populated by people of lower socioeconomic status than residents of outlying suburbs. Badger also digs into the urban demographics of the 1880s to suggest some of the inherent advantages of more central living that may explain some of today’s shifting preferences.

2. There’s a treasure trove of gentrification-related research from this research symposium held by the Philadelphia Federal Reserve (mentioned in the Post story), ranging from whether falling crime triggers more in-moving of higher-income households (it appears so) to the effect of gentrification on small businesses (on average, there is no evidence of “business displacement,” though effects may vary by neighborhood). If you work on gentrification-related issues, this would be a good page to bookmark.

3. New York City has released new data on the performance of their “Select Bus Service” lines, which are given a basket of improvements designed to improve speed and reliability at a relatively low cost. On the Nostrand SBS in Brooklyn, travel times have fallen 15 to 31 percent. A breakdown of the improvement shows significant gains from bus-only lanes, with the amount of time spent stuck in traffic declining by 40 percent—but even bigger gains from “proof of purchase” fare payment, which allows buses to avoid long lines of people paying when the bus arrives by installing prepayment kiosks at stations.


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

States on the front lines of housing affordability

For advocates of less restrictive building regulations, especially in high-cost cities where more homes might help bring down housing prices and create more equitable, diverse neighborhoods, state governments often seem like the best bet. At a local level, for reasons we’ve explained before, the politics are incredibly difficult—not least because local elected officials represent nearly all the people who will see the potential downsides of new development, but not the people who stand to benefit by moving into the area once new housing exists. It’s not an accident that places where states have more power over development policy tend to be less segregated.

Still, it’s not as if states around the country are jumping at the opportunity to revolutionize urban development. So two measures that are moving forward in California and Massachusetts—two of the classic “shortage of cities” states—are worth an optimistic look.

The Massachusetts capitol. Credit: J. Stephen Conn, Flickr
The Massachusetts capitol. Credit: J. Stephen Conn, Flickr

 

In California, Governor Jerry Brown has proposed changes to the California Environmental Quality Act to make it easier to build affordable housing. CEQA mandates an extra layer of local review and discretion over development proposals—a kind of mini-environmental impact statement—even if those proposals meet all existing local zoning requirements. In effect, CEQA eliminates the kind of “as-of-right” development that exists nearly everywhere else in the country, and allows project opponents to tie up routine projects that otherwise meet local zoning codes in months or years of additional review.

Brown’s proposal would exempt projects from CEQA if they 1) meet existing local zoning rules and 2) include a low-income housing set-aside as part of the proposal. Local governments would retain discretion in the form of their zoning codes, but would lose the additional layer of CEQA for projects that include substantial low-income housing. The reaction from many local politicians and residents, predictably, has not been positive, and negotiations in the state legislature are likely to continue for months.

Meanwhile, this month the state Senate of Massachusetts passed a different bill that, in some ways, is bolder: rather than leaving zoning entirely up to local governments, as Brown’s bill does, the Massachusetts proposal would allow accessory dwelling units, or backyard cottages, on the same lots as single-family homes without requiring a special permit, mandate that local governments zone some of their area for multi-family buildings at a minimum zoned density of 15 housing units per acre (or 9,600 per square mile) in urban areas.

A depiction of suburban development at just over 15 homes per acre in suburban Eden Prairie, MN. Credit: Metropolitan Design Center
A depiction of suburban development at just over 15 homes per acre in suburban Eden Prairie, MN. Credit: Metropolitan Design Center

 

While much of the housing debate nationally has focused on local policies like inclusionary zoning, which tends to produce token numbers of below-market units, or community land trusts, which have proven very difficult to scale up, these sorts of state-level policies were a major battleground in the last generation of housing battles in the fair housing fights of the late 1960s and 70s. Massachusetts, in fact, helped lead the charge with the so called “anti-snob” bill, passed in 1969, which allowed a state board to override local zoning codes if it determined that less than 10 percent of the homes in that municipality were affordable to moderate-income households. Studies have suggested that the law, called 40B, has produced a significant proportion of the low-income housing in Massachusetts in the last several decades without a negative impact on market prices. Another major state fight, called Mount Laurel, began in the New Jersey court system in the 1970s, and similarly attempted to mandate the construction of affordable housing in high-cost municipalities, regardless of their local zoning. Those rulings remain embattled, however.

The battle to establish strong state policies and guidelines that will facilitate more housing supply at the local level promises to be a long one. As the experience of Somerville, Massachusetts, shows, the constraints on development have grown by the steady accretion of individually well-intended by cumulatively stifling measures. Even jurisdictions that nominally allow affordable units like granny flats, impose so many other conditions on their construction that they simply become uneconomical. Granola Shotgun relates the story of how the cost of permits, sewer connection fees, and off-street parking requirements effectively amount to a poison pill that makes it impossible to actually build technically permissible accessory dwelling units.  

Still, state-level policies that both encourage or require the construction of below-market housing while potentially increasing production of market housing as well, helping slow the growth of market prices, potentially carry a much greater impact for affordability than local policies like inclusionary zoning. Advocates in other states may want to look to what’s happening in California and Massachusetts now—as well as to the previous generation of affordable housing fights—for breakthroughs beyond the current round of local fights.

More on the illegal city of Somerville

We got quite a bit of interest on our post last week about how the Boston suburb of Somerville, Massachusetts had written itself a zoning code that would have prevented the construction of virtually the entire city of 80,000 people if it had been adopted at its founding. According to Somerville’s own planning department, just 22 residential buildings in the entire municipality met its zoned density standards—and if you added parking restrictions, it’s likely those last 22 would be illegal, too.

The post purposely steered clear of any sort of real economic or political analysis, focusing on the sort of gut-check question about whether building standards that declare entire neighborhoods illegal—neighborhoods that, by all appearances, are attractive and appreciated by their residents—make any sense.

Screen Shot 2016-06-14 at 5.11.38 PM

Somerville. Credit: Google Maps
Somerville. Credit: Google Maps

 

But it’s worth underscoring that this is more than just a funny legal “whoops,” the land use equivalent of those old laws about not whistling on Sundays. These sorts of nonsensical land use rules both have serious consequences and are the results of predictable political dynamics—which have, predictably, led to them being adopted in various forms throughout the country. In other words, though we’re using Somerville as our example here, it’s far from an outlier among American cities.

Even semi-regular readers of City Observatory will know that, particularly in a high-demand region like Boston, overwhelming evidence suggests that regulations that restrict new housing (as Somerville’s do, since required density is set below what already exists) tend to increase prices. To be fair, today the city’s planners recognize this, and are planning large amounts of new housing around an extension of Boston’s Green Line. But according to the Census, before the last year or two, there was an extraordinary drought of new construction in Somerville, with barely 100 new homes built since the turn of the century, contributing to a regionwide shortage. Meanwhile, Zillow puts the median price of a home there at well north of half a million dollars.

And the problem isn’t just housing, per se. It’s a shortage of exactly the kinds of communities that Somerville represents, and that its zoning code outlaws: relatively dense, walkable, transit-accessible neighborhoods. Research by Jonathan Levine and many others have both established that demand for these sorts of neighborhoods outstrips their supply, and that the result, too often, is higher prices, more economic segregation, and less opportunity for lower-income people. And this process, writ large, manifests itself as what we’ve called the “shortage of cities”: the growing demand for living in great urban spaces is far outstripping the limited supply, with the result that nationwide, city center home values are rising much faster than in suburbs.

So how do we end up with these sorts of rules? Well, in an earlier post we’ve covered one version of zoning history. But there also seem to be two dynamics here worth highlighting. The first is adopting rules that sound good in the abstract, but that don’t take into account various real-world tradeoffs. An excellent example of that is actually this story about developing a building in downtown Kalamazoo, Michigan’s, where the required amount of parking would take up more room than actually exists on a downtown parcel—even before you’ve built a building. You can easily imagine the thought process here: People are worried about parking, so who could object to requiring that every new building have its own parking spaces? Until you see that, in practice, that means replacing a continuous, attractive streetwall with parking lots that take up as much, or more, space than the actual building. Or, returning to Somerville, who would object to open space? Until you realize that the setbacks and open space requirements you’ve written don’t reflect the community that already exists—and, in fact, would require smaller, more widely-spaced buildings, probably reducing the number of people who live in your neighborhood, and therefore the number of local stores that could be supported, and how often the local bus could come, and raising the price of housing, and so on.

Downtown Kalamazoo. Credit: Google Maps
Downtown Kalamazoo. Credit: Google Maps

 

The other big issue is that these rules are generally written at a very local level, and so don’t reflect the interests of people who are affected by these decisions, but live elsewhere. It’s completely understandable that a resident of a moderately dense street would be somewhat concerned that more housing might cause some additional traffic, or make parking a bit harder, or make the neighborhood just a bit louder, and so on. Those concerns ought to get a hearing. But they also ought to be weighed against the desires of other people to be able to live in the area—especially when the area is a community that offers good access to jobs, public education, and other amenities that allow people to build comfortable lives. When housing decisions are only made locally, the former set of voices get input, but the latter don’t. No wonder, then, that places where state governments exert more influence on development policy tend to be less segregated.

The key point is there’s a systematic bias here: those concerned with the negative effects of new development are well-represented in the planning and development approval processes.  Those who might benefit from the positive effects aren’t. Over time this tilt results in the steady accretion of zoning and parking requirements, setbacks and height limits that while individually plausible are cumulatively stifling.

That means we end up with a profound disconnect between the kinds of neighborhoods we legislate for and the kinds of neighborhoods we actually want. Planning that actually takes into account the full picture of what these sorts of requirements mean for new development—and the full range of people who are affected by these decisions—could lead to more high-quality, diverse, and opportunity-rich communities.

The Week Observed: June 24, 2016

What City Observatory did this week

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

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

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

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


The week’s must reads

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

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

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


New knowledge

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

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

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


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

The Week Observed: June 17, 2016

What City Observatory did this week

1. In previous installments of our “Sprawl Tax” series, we’ve calculated the billions of dollars that longer distances between homes and workplaces cost American commuters, and shown that US workers pay more for transportation, and spend more time getting to and from their jobs, than peers in other rich countries. This week, we dove into how sprawl affects our quality of life, showing that self-reported satisfaction with local transportation systems is negatively correlated with longer commutes—but actually weakly positively correlated with “traffic congestion” as measured by the Texas Transportation Institute.

2. What happens when cities change? At a gathering of the Congress for New Urbanism in Detroit, the Kresge Foundation’s Carol Coletta argued that cities need to embrace the ever-changing urban environment—even as they work to make sure that transforming job and housing markets offer opportunity to everyone. While rising housing prices are a key issue in many places, deepening poverty is a much more common issue—and one that needs to change.

3. Somerville, Massachusetts is a town of nearly 80,000 people. Recently, its planning department issued a report revealing that its zoning code would outlaw all but 22 of its residential buildings from being built again as they exist today. While discussions about land use law and housing economics can get wonky and laden with seemingly obscure details, these big-picture facts need to be kept in mind: When regulations say that over 99 percent of a pleasant, diverse, and thriving city is “nonconforming,” the issue is with the rules, and not the buildings.

4. A few weeks ago, we wrote about the ways that Houston manages to write sprawling, car-dependent development into its laws without a formal zoning code. This week, we look at the other side: What Houston’s more lax rules allow that other cities’ don’t. The story is more recent than you might think, but still worth telling: Since 1999, Houston has become one of the only cities in the country to allow wholesale redevelopment of single-family home neighborhoods to “missing middle” type density, largely in the form of townhomes.


The week’s must reads

1. For many housing reform advocates, the politics of local government seem too stacked against efforts to reduce the growth of housing prices—a suspicion confirmed by a paper by Lens and Monkkonen that found greater state-level involvement in planning is associated with lower levels of residential segregation. Now, the state of Massachusetts (which already has one of the nation’s marquee state interventions, the “anti-snob zoning law”) is taking a further step, with the state senate approving a bill that would aim to increase housing production in a state with high housing prices by requiring local governments to designate an area where developers can build multifamily housing as of right, and allow “accessory dwelling units,” or backyard cottages. The bill faces steep local resistance, however.

2. For 33 years, St. Louis city and county have had a program to transfer public school students between them, with the goal of fostering integration between the disproportionately black city and disproportionately white county. Now, the governing board that manages those transfers is considering ending the program. These sorts of programs are rare in major metropolitan areas, despite extensive evidence about the benefits of racial integration—and economic integration, which is much more difficult without the former in a region where, like most of the country, racial identity and economic outcomes are correlated. The St. Louis Post-Dispatch lays out the case for continuing the program.

3. Access Magazine, from the University of California Transportation Center, gives a great primer on what’s wrong with parking requirements. From the more-than-inexact science of determining how many spaces every bar, hardware store, and barbershop needs, to the high cost paid to build and maintain each space, and the effects on people, especially low-income people. It’s a rigorous introduction to one of the more important reform efforts in modern urban planning.


New knowledge

1. Since 1979, power plants have been a bigger contributor to carbon dioxide production in America than transportation. But as reported in Vox, the University of Chicago’s Sam Ori, the amount of CO2 produced by power plants has fallen so sharply over the last decade or so—while production by transportation has continued to rise after dropping during the Great Recession. Today, for the first time in over a generation, transportation is the leading cause of climate emissions in America. In light of that, the potential for urban form to reduce transportation emissions becomes even more important.

2. Smart Growth America has released “Foot Traffic Ahead 2016,” their latest analysis of “walkable urban places,” or WalkUPs. They find continuing price premiums for these places over less-walkable places: 90 percent for office, 71 percent for retail, and 66 percent for multi-family rental residences. They also find that based on spending for housing and transportation for a somewhat below-average-earning household, these areas offer better social equity than car-dependent neighborhoods.

3. In the Washington Post, Columbia professor Lance Freeman takes on “five myths about gentrification.” He tries to complicate widespread ideas about a simple and direct relationship between gentrification and reductions in crime, displacement, and race, among other things. In the context of media coverage that frequently asserts the very connections that Freeman says evidence doesn’t support, this is an important corrective.

Why Houston has been special since at least 1999

A little while ago, in a post called “Sprawl beyond zoning,” we argued that even though Houston doesn’t technically have a zoning code, it still regulates the built environment in lots of ways that make it difficult or impossible to safely or conveniently get around without a car.

But we also promised to get into the ways that Houston’s lack of an official zoning code actually does allow for more flexibility, and densification, than the vast majority of American cities.

Or at least, it does now. In fact, much of the story of Houston’s densification begins with reforms adopted in 1999. Prior to that date, residential lots could be no smaller than 5,000 square feet: not such an extreme requirement in a country where plenty of suburbs demand, say, a quarter acre or more (nearly 11,000 square feet), but still big enough that, combined with wide roads and sprawling, parking-heavy commercial developments, real walkable density wasn’t quite possible. (Chicago’s Bungalow Belt neighborhoods, which maybe skirt the lower threshold of “walkability” with single family homes, are built on lots that are generally 3,250 square feet.)

But just before the turn of the millennium, Houston decided that within its inner belt highway, residential lots could be as small as 1,400 square feet. (Of course, leave it to Houston to define even a radical pro-urban reform with reference to an expressway.) That decision set of an explosion of “townhouse” type developments in inner neighborhoods, adding significant amounts of housing while retaining, generally, the basic form of a single-family home.

A handy diagram from this slideshow from Barbara Tennant shows what this looked like from the perspective of a city block:

Screen Shot 2016-06-15 at 3.11.27 PM

And here’s a bit of what this looks like on the ground, via Google Streetview, with these two midcentury suburban homes in 2007…

 

Screen Shot 2016-06-15 at 3.12.56 PM

…becoming four townhomes in the same amount of space by 2014.

 

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It’s important to note that this change isn’t just special because, in most American neighborhoods, the original density of those two midcentury homes would be legally preserved in perpetuity—allowing, perhaps, larger single-family homes to be built on the same lots, but not more of them. It’s also special because of how it represents a more gradual, almost contextual ratcheting-up of density.

In most other cities, as we’ve covered, politics and the regulatory costs of building housing conspire to make almost all new development either of the density-neutral (or -negative) single-family home variety, or very large multifamily buildings. That’s because if you’re going to go through the process of getting a zoning variance, battling neighborhood opposition, and so on, there needs to be a big payoff on the other end—and building a three-unit building probably isn’t going to cut it. That means when cities do add density, they generally do it with buildings that are often quite a bit larger than their surroundings. Whether or not that’s objectively a problem is up for debate—but clearly, for many people, it is. But by making “missing middle” density legal to build as of right (at least in certain neighborhoods), Houston has seemingly attracted a lot more of it.

Of course, Tennant’s slideshow makes the point that Houston’s flexibility allows for some rather odd-looking buildings…

Screen Shot 2016-06-15 at 3.29.55 PM

…but a lot of these new townhomes range from inoffensive to downright attractive, even by the snobbish standards of urbanists who prefer older, pre-World War Two cities.

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These are human-scaled, street-focused developments built at a density that makes walking possible, even pleasant, minus the bayou weather. If you wanted to see what a genuine, 21st-century American urban neighborhood looked like, you probably couldn’t do much better.

Perhaps the greatest endorsement of the change was that it has not only been preserved, but expanded: In 2013, Houston eliminated the inside-the-beltway/outside-the-beltway distinction, and now the entire city has the denser, “townhouse” type regulations in residential areas.

But in the long run, the test of Houston’s exceptional policies will be to determine whether inner-city housing prices remain relatively low compared to other large American cities. For most of its history, most of Houston’s famously elastic housing supply has come from the same place as other Sunbelt metropolises that do have zoning: sprawl on the suburban periphery. In fact, studies comparing the development regimes of Houston with its zoned cousin, Dallas, found little to no difference.

But as far as I can tell, no studies have looked at the effects of Houston’s central city development since the adoption of townhouse regulations in 1999. An important research project in the coming years will be to see if Houston’s willingness to allow more housing—and especially missing middle housing—in the center of a growing metropolitan area can reduce the growth of housing prices and keep neighborhoods more diverse and affordable than they would otherwise be.

The illegal city of Somerville

Zoning is complicated. It’s complicated on its own, with even small towns having dozens of pages of regulations and acronyms and often-inscrutable diagrams; and it’s complicated as a policy issue, with economists and lawyers and researchers bandying about regression lines and all sorts of claims about the micro and macro effects of growth rates and whatever.

This post will not get into any of that.

Rather, this post will ask a very simple, first-order question that absolutely anyone, regardless of expertise or math skills, can answer just by pondering their own hearts and minds for a minute. This is, in other words, a gut-check moment, if you’ll excuse the mixing of anatomical metaphors.

The question is: Should zoning rule out virtually all of the kinds of buildings that already exist in your city or neighborhood? In other words, imagine taking a walk around the block where your home is. All those buildings you see: Are they so terrible that you’d like to pass a law making it illegal to build them again?

This may seem like a silly question. After all, local officials and neighborhood groups often rely on regulation to “preserve community character.” Isn’t the point to encourage the kinds of buildings that already exist?

But—especially in places that were largely built up before World War Two—that is often not what building regulations do. Take, for example, Somerville, Massachusetts, an inner-ish ring suburb of Boston. Somerville is the kind of in-between density that you’ll often hear people praise: compact enough to walk to stores and friends’ houses, but with virtually no buildings over four floors, lots of trees and yards, and a mix of small apartment buildings and single-family homes.

Credit: Google Maps
Credit: Google Maps

 

Credit: Google Maps
Credit: Google Maps
Credit: Google Maps
Credit: Google Maps

 

But recently, the Somerville planning office released a report in which they confided that, in a city of nearly 80,000 people, there are exactly 22 residential buildings that meet the city’s zoning code. Every single other home is too dense to be legal: Either it takes up too much of the lot, or it has too many homes, or it’s too tall, or it’s not set far back enough from the street, and so on. (Note that this calculation actually doesn’t include parking requirements, which might very well do away with those last 22 conforming buildings.)

Screen Shot 2016-06-14 at 5.11.38 PM

 

Is Somerville really such a dark, dystopian place that the entire city ought to declare itself illegal?

No. Although my question above really is an open one—I don’t know where you live, and maybe your neighborhood really is that awful—my guess is that for the vast majority of people, the discovery that your city had declared your home and all your neighbors’ homes too deviant to be legally allowed would come as something of an unpleasant surprise. It might also make you think that, at some sort of fundamental, does-two-plus-two-equal-four level, something had gone wrong with the way your city regulates buildings.

And I think that, for most of you, that impulse would be correct. And while Somerville may be an extreme case, chances are pretty good that if you live in an area where most buildings are at least 60 or 70 years old, your situation is not entirely different. Only a few weeks ago, the New York Times discovered that fully 40 percent of all the buildings in Manhattan would be illegal to build today. Last year, we published a Portlander musing on how all the things he loved about his long-established urban neighborhood—its density, diverse mix of uses and housing types, and buildings built up to the sidewalk—were the things even that city had subsequently declared illegal. And near where I live, in Chicago, it’s quite common to find entire blocks that have been apartments since at least the 1920s, where the city has declared that the only “compatible” kind of building is single-family homes. “Compatible” with what?

Credit: New York Times
Credit: New York Times

 

Don’t worry: City Observatory will get back into the econometric weeds soon, probably in our next post. But it is valuable, from time to time, to step back and gawk at the big picture of contemporary land use law, which has taken its mandate to protect people from dangerous or noxious buildings and ended up declaring that the neighborhoods where tens of millions of people live—neighborhoods that, if surveys and housing prices are to be believed, many people consider pleasant and desirable—are themselves dangerous and noxious. There is something wrong here that you don’t need an economics or planning degree to understand.

This post appeared originally on City Observatory in June, 2016.

When cities change

This is the text of a speech delivered in Detroit last week at the Congress for New Urbanism conference by Carol Coletta, a senior fellow at the Kresge Foundation’s American Cities Practice.


Could there be a more apt place to observe “The Transforming City” than Detroit?

On behalf of Rip Rapson and my colleagues at the Kresge Foundation, welcome to Detroit. If you travel to Detroit regularly, as I have over the past 15 years, you see that Detroit changes quickly.

The speed of change here sometimes takes your breath away.

How many of you have walked the Detroit Riverfront or ridden the Dequindre Cut?

Visited the expanding Eastern Market?

Seen the Q Line construction on Woodward?

Eaten a meal at Selden Standard or Wright & Company, one of those meals so special that it deserves its own social media channel?

Walked the streets of downtown or Midtown and discovered Great Lakes Coffee, City Bird, or the El-Moore Lodge?

Or met Claire Nelson at the Urban Consulate, or any one of Detroit’s arts and civic innovators responsible for some of the most exciting urban work in the country?

This is the Detroit you can see right outside this theatre.

But there is another Detroit, one that is harder to see. It’s the Detroit that feels threatened by the pace of change in the city, suspicious of newcomers eager to be part of the change, and wondering when their loyalty to Detroit will be rewarded.

Such feelings are not unique to Detroit. Every morning my Google Alerts brings a new batch of headlines from around the country detailing the gentrification battles.

Because “new urbanism” is the butt of some of this criticism, I want to spend the next few minutes unpacking the myths and the realities of gentrification and what those of us who care about great places can do about it.

First, let me share some numbers.

In 1970, about eleven hundred urban Census tracts were classified as high poverty.

By 2010—40 years later—the number of high poverty Census tracts in urban America had increased from 1100 to more than 3,000. (3165)

The number of people living in those high poverty Census tracts had increased from 5 million to almost 11 million. And the number of poor people in high poverty Census tracts had increased from 2 million to more than 4 million.

So over a 40-year period, the number of high poverty Census tracts in America’s core cities had tripled, their population had doubled, and the number of poor people in those neighborhoods had doubled.

Given that record, I’ll bet a lot of people are hoping for a little gentrification– if gentrification means new investment, new housing, new shops without displacement.

The idea that places might benefit from gentrification runs against the popular narrative. But here’s the really startling fact: only 105 of the eleven hundred Census tracts that were high poverty in 1970 had rebounded to below poverty status by 2010. That’s only ten percent! Over 40 years!

A similar study of Philadelphia by Pew found almost exactly the same result in that city’s neighborhoods. There, ten times as many poor neighborhoods (164) experienced real declines in income as experienced gentrification since 2000.

It is the lack of gentrification that we rarely count and never see. The deterioration happens too slowly for us to notice. But it doesn’t mean the deterioration isn’t devastating. In fact, the high poverty neighborhoods of 1970 lost 40 percent of their population in 40 years.

You could make the case that poor people are displaced from poor neighborhoods because of their poor schools, their lack of jobs, their more chaotic public spaces, their lack of opportunity.

Understand, this is not the fault of the people who live there. This is a public policy failure.

But… when a combination of government intervention, philanthropic support, community development, and market forces combine to change a place as quickly as Detroit—even when that change means new residents, new jobs, and new places to live—it also rightfully generates concern.

See, we are conflicted about change. Many of us wish we could fix place in time.

But neighborhoods do change. You know that. You change them. And when change results in mixed income neighborhoods—in other words, when we achieve investment without displacement — it’s good for everybody.

The research on this is quite clear: The ability of people to improve their economic status from one generation to the next is strongly correlated with mixed-income neighborhoods.

Many of the public policy interventions to achieve economically integrated neighborhoods have supported poor people moving to wealthier neighborhoods. But that is an expensive, slow political slog that is hard to scale.

But what if we flipped that script? What if… we could lure people with financial options about where they live to disinvested neighborhoods—resulting in the kinds of places that enable opportunity?

And what if we also made a special effort to insure that the people remaining in low-income neighborhoods—people without options about where they live—what if an extra effort were made to insure they benefited from new people and new investment in their neighborhoods?

The research tells us that mixed-income neighborhoods benefit poor people naturally. But can we double down to accelerate those benefits?

Think of it this way: Can we get gentrification with broadly-shared benefits.

I think so. But it’s not easy. Remember: Only 10 percent of high poverty neighborhoods “gentrified” over the past 40 years. And today we have triple the number of high poverty neighborhoods than we had 40 years ago.

Clearly, mixed income neighborhoods won’t happen if we don’t work at it.

So how can we do that?

First, let’s acknowledge that, for the first time in 50 years, the market is moving in our favor. People (and jobs) are moving to cities. We need to see that as the opportunity it is to get mixed-income neighborhoods and not fear good, thoughtful development.

That means we can’t let NIMBYs win the day. The same people who complain about high prices also complain when developers show up to build more supply. We have to make the connection between supply and demand for the protesters and the press.

But attention must be paid to creating more mixed income housing. Our success on this has been mixed, and I’m struck by the comparison on methods used in NYC and in Portland, Oregon’s Pearl District to create more affordable housing in mixed income settings.

As City Observatory reported today, The City of New York, one of the nation’s hottest housing markets, has had inclusionary zoning for the past 10 years. And over that time, the city has produced an average of 280 units per year for a total of 2800 units.

 

In contrast, Portland took a very different approach. Portland used additional property tax revenue from construction in one neighborhood to subsidize affordable housing. Using just a third of such revenues from The Pearl District (along with Low Income Housing Tax Credits), Portland has built more than 2300 units of affordable housing—almost as many units as the much larger New York.

Portland’s Pearl District is an example of a desirable neighborhood. The cost of desirable neighborhoods goes up. And it is the fear of rising costs, new investment, (and sometimes a changing demographics) that spawned the “just green enough” movement.

Think about that: Disinvested neighborhoods lack access to parks and quality public space. But wait! Let’s not make it too nice for fear it will attract new investment. That’s craziness born out of legitimate frustration when prices start going up.

The fact that buyers and renters are willing to pay more for quality neighborhoods means we need to build more of them, not fewer of them.

How do we do that at scale?

When Paul Krugman or—the American electorate willing—the next president calls for new investments in infrastructure to stimulate the economy, will we be ready with a plan that defines infrastructure as something more than roads and bridges?

Why can’t “infrastructure” include new and redesigned parks and libraries, neighborhood community and cultural centers, trails and gardens—a reimagined civic commons? That’s the defining line I want to hear from our next president. I want so many desirable neighborhoods that people will have good choices at all price points.

The way we live today is changing so fast. We are decoupling and recoupling. We have mothers raising kids alone, and people delaying childbearing—some forever—who want to help. We are sharing jobs, cars and homes. We are retiring later and living longer. And our lives, increasingly, are lived in public.

We need to ready our cities for these changes. We need to figure out how to revalue what exists and give new life to the material, the buildings, the neighborhoods, the cities and the people we too often discard and write off.

Equity does not sit in opposition to a thriving, appealing city. It is central to it.

This is the work of CNU. This is your work. And that’s why I’m happy to be with you here in Detroit to celebrate and learn alongside you this week. Thank you for inviting me.

The illegal city of Somerville

Zoning is complicated. It’s complicated on its own, with even small towns having dozens of pages of regulations and acronyms and often-inscrutable diagrams; and it’s complicated as a policy issue, with economists and lawyers and researchers bandying about regression lines and all sorts of claims about the micro and macro effects of growth rates and whatever.

This post will not get into any of that.

Rather, this post will ask a very simple, first-order question that absolutely anyone, regardless of expertise or math skills, can answer just by pondering their own hearts and minds for a minute. This is, in other words, a gut-check moment, if you’ll excuse the mixing of anatomical metaphors.

The question is: Should zoning rule out virtually all of the kinds of buildings that already exist in your city or neighborhood? In other words, imagine taking a walk around the block where your home is. All those buildings you see: Are they so terrible that you’d like to pass a law making it illegal to build them again?

This may seem like a silly question. After all, local officials and neighborhood groups often rely on regulation to “preserve community character.” Isn’t the point to encourage the kinds of buildings that already exist?

But—especially in places that were largely built up before World War Two—that is often not what building regulations do. Take, for example, Somerville, Massachusetts, an inner-ish ring suburb of Boston. Somerville is the kind of in-between density that you’ll often hear people praise: compact enough to walk to stores and friends’ houses, but with virtually no buildings over four floors, lots of trees and yards, and a mix of small apartment buildings and single-family homes.

Credit: Google Maps
Credit: Google Maps

 

Credit: Google Maps
Credit: Google Maps
Credit: Google Maps
Credit: Google Maps

 

But recently, the Somerville planning office released a report in which they confided that, in a city of nearly 80,000 people, there are exactly 22 residential buildings that meet the city’s zoning code. Every single other home is too dense to be legal: Either it takes up too much of the lot, or it has too many homes, or it’s too tall, or it’s not set far back enough from the street, and so on. (Note that this calculation actually doesn’t include parking requirements, which might very well do away with those last 22 conforming buildings.)

Screen Shot 2016-06-14 at 5.11.38 PM

 

Is Somerville really such a dark, dystopian place that the entire city ought to declare itself illegal?

No. Although my question above really is an open one—I don’t know where you live, and maybe your neighborhood really is that awful—my guess is that for the vast majority of people, the discovery that your city had declared your home and all your neighbors’ homes too deviant to be legally allowed would come as something of an unpleasant surprise. It might also make you think that, at some sort of fundamental, does-two-plus-two-equal-four level, something had gone wrong with the way your city regulates buildings.

And I think that, for most of you, that impulse would be correct. And while Somerville may be an extreme case, chances are pretty good that if you live in an area where most buildings are at least 60 or 70 years old, your situation is not entirely different. Only a few weeks ago, the New York Times discovered that fully 40 percent of all the buildings in Manhattan would be illegal to build today. Last year, we published a Portlander musing on how all the things he loved about his long-established urban neighborhood—its density, diverse mix of uses and housing types, and buildings built up to the sidewalk—were the things even that city had subsequently declared illegal. And near where I live, in Chicago, it’s quite common to find entire blocks that have been apartments since at least the 1920s, where the city has declared that the only “compatible” kind of building is single-family homes. “Compatible” with what?

Credit: New York Times
Credit: New York Times

 

Don’t worry: City Observatory will get back into the econometric weeds soon, probably in our next post. But it is valuable, from time to time, to step back and gawk at the big picture of contemporary land use law, which has taken its mandate to protect people from dangerous or noxious buildings and ended up declaring that the neighborhoods where tens of millions of people live—neighborhoods that, if surveys and housing prices are to be believed, many people consider pleasant and desirable—are themselves dangerous and noxious. There is something wrong here that you don’t need an economics or planning degree to understand.

The Week Observed: June 10, 2016

What City Observatory did this week

1. Last week, we introduced the “Sprawl Tax”: the time and money American commuters spend just because their cities are more spread out than they might be. This week, we compare American sprawl to that of our international peers, and it’s not pretty. On average, in 17 European countries plus Canada, households spend 12.8 percent of their income on transportation; in the US, it’s 18 percent. Commuters in those countries spend, on average, about 39 minutes commuting roundtrip per day; the average American spends 51 minutes. We can do better.

2. Inclusionary zoning seems like a win-win, but…: Communities with new development get some affordable housing, and taxpayers don’t have to spend a dime. But as with most cases of free lunch, there’s less here than meets the eye: A meta-analysis of the literature on inclusionary zoning doesn’t find much evidence that one of the main fears about IZ, that it will significantly drive up market prices. But that seems to be because the scale of IZ programs is so small, delivering a relatively pittance of units: 280 per year in New York City, for example, a city of more than 8 million people. Solutions that actually deliver housing on the scale of the need are almost certain to require actual public resources.

3. How many carless workers are there, really? Often, we hear statistics about workers with “access to a car.” But that really just means that someone in their household has a car. If there are three adults and one vehicle, all of them nominally have “access,” but it’s likely that only one can really drive to work. So while, for example, 97.4 percent of all workers in the San Diego metro area have “access” to a car, more than one in ten lives in a household where there are more workers than cars. That’s a distinction worth making.

The week’s must reads

1. At City Observatory, we write a lot about economic segregation and the ways that disadvantaged neighborhoods reduce opportunity for the people who live in them. ButVox might have done us one better: instead of just writing about that, they drew about it, in a piece entitled “How living in a poor neighborhood changes everything about your life.” In an epic piece that combines cartoons and text, Alvin Chang breaks down the latest research about what we know about how segregation acts as a barrier to the American dream, how our cities came to be so segregated to begin with, and what we might do about it.

2. Nikole Hannah-Jones has become perhaps the nation’s foremost journalist on issues of segregation and education. In The New York Times Magazine, she writes an intensely personal and informative essay about her own struggles with choosing whether to send her child to a segregated New York City school—and what happened when the city decided to try to integrate that school with a nearby, much whiter school. For those of you who listened toher two-part report on school segregation in suburban St. Louis for This American Life (and if you haven’t, you should), the fallout is alarmingly similar to a similar situation there.

3. When it comes to transit, the difference between a line on the map and service you can depend on is vast. TransitCenter, using data compiled by the Center for Neighborhood Technology, measured how many people in various cities live close to any kind of transit service, and then how many live close (within half a mile) of high-frequency transit service: a bus or train that comes at least every 15 minutes. Those things turn out to be very different, in many cases: take a look at Detroit and Dallas on the chart below.


New knowledge

1. Sand Hill Road, the famous Silicon Valley venture capital district, is prototypical postwar suburbia. But new research from Richard Florida and Karen King finds that those important investments are happening more and more in urban areas. Today, more than half of all venture capital deals happen in urban neighborhoods, as defined by ZIP codes with more than 2,200 households per square mile. In top venture capital ZIP codes, the average bike-walk-transit commute share is nearly 26 percent, three times higher than the national average. Because venture investments are a leading indicator of future business growth, this is another data point signaling the growing economic importance of cities.

2. Pick two of three: Affordable housing, quality of life, and economic strength. That’s the message of Josh Lehner at the Oregon Office of Economic Analysis, who uses a set of metrics to place the nation’s 100 largest metropolitan areas on a Venn diagram of those three desirable policy outcomes. Just eight metro areas—mostly in the Great Plains—rank in the top half of all three categories. None are in the top 20 in all three. One takeaway: while metros that score well in economic strength and quality of life and build lots of housing do better on affordability than those that don’t build much housing, they still face affordability issues. There’s room to improve on construction, but making sure our below-market housing policies are actually working is also important. (See our post on inclusionary zoning above for more.)

3. We know that America is more urban—or perhaps metropolitan is the better word—than it has ever been. But Hamilton Lombard at the University of Virginia’s StatChat shows that it’s especially larger metropolitan areas that are coming to dominate the residential locations of Americans. In fact, all of the growth in the proportion of people living in metropolitan areas over the last 65 years has come from the growth of people living in metropolitan areas with over a million people. Now, that’s not just because people are all moving to New York or Houston or another huge city—many smaller metropolitan areas have grown to surpass the one million mark themselves. Still, by 2015, nearly six in ten Americans lived in such an area, versus less than three in ten in 1950.


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

How many carless workers are there really?

One of the first posts I ever wrote for City Observatory was called “Undercounting the transit constituency,” and it made a simple point: We dramatically undercount the number of people who depend on public transit to get around.

While we usually talk about transit use in terms of the number of people who ride a bus or train to get to work, most trips aren’t commutes—in fact, all trips aren’t commutes if you’re retired or a full-time student. And so if you count the number of people who use transit for any kind of trip, you get a much bigger number than if you just look at commutes.

 

But even when it comes to workers, we often overstate the ubiquity of cars. One common way to measure car access, for example, is the percentage of workers with “access to a car.” In practice, “access” just means that someone in your household owns a vehicle.

But that kind of “access” doesn’t always mean much. For example, for several years I lived in a household with three working adults, one of whom owned a car. By the standard measure, all three of us had “access.” But in reality, only one of us could actually use it to commute. Moreover, even the one of us who drove to work really depended, in a meaningful sense, on public transit: if the other two of us hadn’t been able to get to work, get paid, and contribute our share of the rent, the one driver would still be in deep trouble. In other words, a household with at least one worker who doesn’t drive is a household that probably depends on some kind of non-car transportation.

How many workers live in such a household? Fortunately, the American Community Survey makes it easy to tell, by breaking down the number of cars in a household by the number of workers in that household. Here, then, is a chart with the proportion of workers without “access,” as well as the proportion of workers in households that have fewer cars than workers:

 

In most cases, these numbers are quite different. In the DC metro area, less than six percent of workers live in zero-car households—that is, “lack access to a car.” But three times as many—nearly one in five—live in a household with fewer cars than workers. In San Diego, “access” is nearly universal: just 2.6 percent of workers live in zero-car households. But more than one in ten live in fewer-cars-than-workers households.

And again, these numbers underestimate the number of people who live in households that rely on some kind of non-driving transportation. They don’t count households where each worker has a car, but a retiree, stay-at-home parent, or full-time student, for example.

But even leaving that aside, these numbers help make a better case on how your city’s workforce depends on non-car transportation.

The Week Observed: June 3, 2016

What City Observatory did this week

1. In real life, somehow, Google patented sticky cars so that when their autonomous vehicles hit pedestrians, they won’t get thrown into the air, but will rather be pinned to the vehicle’s hood. In the spirit of helpfulness, we have diagrammed some other solutions Google might want to investigate, including pedestrian airbags that would inflate upon impact. Or, more seriously, we might want to consider how to build cities and prioritize human safety such that all vehicles, including autonomous ones, don’t hit pedestrians at dangerous speeds (or at all) to begin with.

2. A new report from the Urban Institute shows that Washington, DC public schools’ test scores are rising. Even more, the rising scores are much greater than what the changing demographics of the city might predict by themselves. Given the literature on the positive effects of racial and economic integration on education, one possibility is that we are seeing some dividends from the growing middle class presence in the District. More research at the school level is needed to parse whether this is in fact happening.

3. You’ve heard of “congestion costs”—the economic drag of snarled traffic and longer driving times. But what about the costs of land use patterns and transportation policies that require people to live farther from work and use cars to begin with? To help answer that question, we’re introducing the “Sprawl Tax.” In the first post in the series, we calculate that the average commuter in America’s 50 largest metro areas pays nearly $1,400 a year in time and money as a result of urban sprawl—ranging from just $166 in New Orleans to nearly $3,300 in Atlanta.


The week’s must reads

1. Governing looks at what will happen to suburbia in a world where housing demand and jobs are increasingly drawn to cities. Columnist Will Fulton reports on a panel of suburban developers talking about the market case for relatively dense, urban-like master planned communities with apartments and townhomes. But there’s a difference between an urban appearance and urban functionality: Even to the extent these types of developments are allowed outside of cities, will they just be isolated pockets of “drive-to-walk” urbanism?

2. Why are “complete streets” and “traffic calming” a big deal? ProPublica helps make the case with an interactive tool that shows your chance of surviving an impact with a car as a pedestrian at various vehicle speeds. At 20 mph, an average of seven percent of collisions will be fatal; at 40 mph, that number climbs to 45%.

3. There continues to be a lot of excitement about the ways that new technologies might help us solve longstanding urban issues—and not without some justification. But in an interview at Civic Hall, longtime Chicago “civic tech” leader Daniel X. O’Neil lays out why he thinks the movement has failed to deliver on its promises. Rather than developer-led hack nights or hackathons, O’Neil makes the case for bringing people with technological expertise to civic meetings and organizations that already exist, beginning with what they’re working on, and figuring out how to help. One example: the Smart Chicago “Documenters” program, which sends people to record and document public meetings for those who can’t be there.


New knowledge

1. At Planetizen, Todd Litman digs into a claim by New Geography writer Fanis Grammenos that data show that more compact neighborhoods are more expensive in terms of housing and transportation costs than more low-density areas. But Litman points out that the study conflates rental costs with the cost of mortgages—some of which may be based on loans taken out years or decades ago, reflecting outdated prices very different from those a contemporary buyer would be facing. Moreover, judging on a regional level misses that most of the difference between compact and non-compact living depends on neighborhood-level characteristics.

2. We have a new indication that transit is an important component of economic development. A study by Dagney Faulk and Michael Hicks of Ball State University finds a correlation between the existence and extent of fixed-route bus systems in counties in Illinois, Indiana, Michigan, Ohio, Pennsylvania, and Wisconsin and employee turnover rates: the more extensive the bus system, the less turnover. And that, they point out, has economic consequences for both workers and businesses, who save money on finding and training new employees.

3. This paper isn’t new, but it’s new to us, and fun and revealing: Leah Brooks of McGill University and Byron Lutz of the Federal Reserve find that dense development in LA is clustered around long-gone streetcar lines. But that’s not mostly because the city built so much housing when the streetcar lines still existed: It’s because neighborhoods near streetcars became zoned for high-density development, and remained zoned that way after the streetcars disappeared, while other areas remained zoned for low-density development.


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

Introducing the Sprawl Tax

If you read the news, you’ve probably seen reports about “congestion costs”: how much American commuters pay, in money and time, when they’re stuck in traffic. It’s fair to say that we’ve got some issues with many of these reports—but they’re popular nonetheless, perhaps because they help quantify a frustration that so many people can relate to.

That got us thinking: What if we could quantify some of these same issues from a city-friendly angle—measuring not the cost of congestion, which suggests that the solution is to build highways until every car is free on its own field of asphalt (a solution, by the way, that we know doesn’t work), but the cost of sprawl: of patterns of building that make people travel longer because their home, work, and other destinations are so physically far from each other?

So this week, we present the “Sprawl Tax”: what it is, how much it costs us, and what we can do about it. We found that the in time and money, American commuters have to pay a sprawl tax of over $107 billion dollars a year in the 50 largest metropolitan areas—nearly $1,400 for the average commuter. That includes the costs of the 3.9 billion additional hours American commuters spend traveling to and from work per year, or about 50 hours per worker.

Credit: Jay Jansheski, Flickr
Credit: Jay Jansheski, Flickr

 

The method

But first, how did we get those numbers?

To figure out a metropolitan area’s sprawl tax, we began with statistics on the average commute length, in miles, as calculated by the Brookings Institution for their 2015 report, “The growing distance between people and jobs in metropolitan America.”

Our next task was to estimate how much shorter daily commutes might be if metropolitan areas were less sprawling. We know that commute distances vary by metropolitan size (more populous areas tend to have longer average commutes), so we stratified our metropolitan areas into groups for the purposes of estimating how much shorter commutes might be if the regions were more compact. We assigned each metropolitan area a “benchmark” commuting distance based on its population: six miles for areas with 2.5 million or fewer people, and 7.5 miles for areas with more than 2.5 million people. These levels were chosen to ensure that each metropolitan area’s benchmark was within 0.5 miles of the real average commuting distance of another metropolitan area with similar or larger population—that is, a region with a similar population but less sprawl. Both benchmark levels are below those of the metropolitan areas in their category with the shortest average commute to reflect the reality that even the most “compact” American urban regions contain a large amount of sprawl.

The difference between the real average commute length in each metropolitan area and its benchmark became its “excess commuting distance.” We then multiplied this distance by 58.1 cents, the AAA’s estimated cost per mile for a mid-range sedan. Doubling the result gives the total sprawl tax per worker, per day, including both journey to and return from work. Multiplying by the number of workers according to the 2014 one-year American Community Survey figures gives the total sprawl tax per day for the metropolitan area. Finally, multiplying that number by 261 workdays per year gives the total annual sprawl tax for the metropolitan area.

How it adds up

Adding together the sprawl tax for each of the largest 50 metropolitan areas gives $48.5 billion dollars per year—or nearly $630 for every commuter annually. The financial aspect of the sprawl tax varies from $34.7 million in New Orleans to $4.7 billion in Dallas. In per commuter terms, the region with the biggest sprawl tax is Atlanta, where sprawl costs the average commuter more than $1,600 a year. The city with the smallest per capita sprawl tax is New Orleans, at just $60.66 per commuter per year.

But these figures reflect just the out-of-pocket costs of owning and using cars. What if you take time into account? After all, the longer trips forced on commuter by sprawling cities cost money, but they also cost time. Using a similar methodology, we calculated an “excess travel time” index, applying average travel speed for each metropolitan area to its benchmark commute distance, as opposed to its actual commute distance.

The result? In the 50 largest metro areas, sprawl costs commuters 3.9 billion hours per year, or more than 50 hours per year per commuter. That means sprawl makes the average commuter spend over two entire days per year traveling to and from work unnecessarily. The worst offender? Atlanta, where the average commuter loses 112 hours per year, or over four and a half days. In the metro area that performs best, New Orleans, commuters lose just over seven hours per year.

Sprawl tax versus congestion costs

Of course, this is almost by definition an underestimate, since it only counts journeys to work. But most travel is not to or from work, and so adding trips to other destinations—schools, grocery stores, doctor’s offices, and so on—would add significantly to the total. Nor does the sprawl tax measure the other real costs of longer commuters: more pollution, worse physical and mental health outcomes, and the medical and human costs of car crashes.

 

But even so, the sprawl tax rivals common estimates of congestion costs. To make the sprawl tax more comparable to estimates of congestion costs, which measure time lost in money, we converted our own time costs to dollars. At $15 an hour, that adds up to $58.7 billion. Add that to direct monetary costs ($48.5 billion), and you get $107.2 billion in total sprawl tax in the 50 largest metropolitan areas.

In contrast, INRIX estimated the congestion costs in all metropolitan areas at $124 billion in 2013. Given that only about half of all Americans live in the 50 largest metro areas, it seems likely that if the sprawl tax were calculated for the entire country, it would reach or exceed INRIX’s congestion cost estimate—even though it counts only a small fraction of the total costs of sprawl.

In other words, urban sprawl, and the longer commutes it makes necessary, is a major source of financial and time costs for American workers—and everyone else who has to travel in our sprawling metropolitan areas.

But it’s also a major drag on quality of life. Next, we’ll tackle that side of the sprawl tax.

California’s latest affordable housing proposal gives insight into housing politics

At first blush, it’s a bit confusing: Why, in a region that desperately needs more affordable housing, would there be so much opposition to a proposed law that would make it easier to build affordable housing?

The proposal in question was offered up last week by California Governor Jerry Brown as part of the state’s budget. It would streamline the approval process for new residential buildings with at least 20 percent affordable units (or 10 percent near transit) that already meet existing zoning by exempting them from an additional layer of environmental review, called CEQA, or the California Environmental Quality Act.

Credit: Daniel Hohern, Flickr
Credit: Daniel Hohern, Flickr

 

In essence, this is a kind of inclusionary zoning measure—something that many Bay Area affordable housing groups have historically supported—that promises regulatory advantages in exchange for below-market units. But unlike many inclusionary zoning laws, which allow developers to build taller or denser, Gov. Brown’s proposal would cede not one extra inch of height or additional apartment over what local cities have already designated.

Okay, so what’s the problem again? Well, virtually everywhere else in the country, if a developer wants to build something that matches their lot’s existing zoning, they can do so “as of right”: that is, as long as some local administrative body certifies that the plans actually meet zoning requirements, they get a construction permit.

But in California, developers can be required to go through the extra step of preparing a CEQA impact study. Essentially, that gives local bodies the ability to slow or block developments—even if they meet all existing zoning requirements.

A study late last year found that this layer of environmental review can add years to projects that would be routine in other parts of the country, and may well exacerbate urban sprawl, and its attendant environmental effects, because four out of five CEQA-related lawsuits focus on infill development. That gets to another central problem with CEQA as an environmental law: because it only considers impacts at the location of the proposed development, it can’t weigh the full tradeoffs of blocking housing construction in one location and thereby pushing it to another location where it may do even more environmental harm.

In other words, CEQA appears to be as much a special tool for obstructing development that meets local zoning requirements—or extracting more concessions from the developer—as a means of protecting the environment. It institutionalizes local discretion over development to an even greater extent than zoning.

Gov. Brown’s proposal, then, would reduce local discretion, acknowledging the statewide need for more housing, and especially relatively low-cost housing. While that may be good for California’s housing problems, it removes some of the negotiating power local authorities and organizations currently wield—hence, perhaps, their opposition.

This tension between local and regional or statewide power over development should be familiar. As we’ve written, when decisions are made at a local level, very place-specific costs like blocked views, competition for on-street parking, or “undesirable” neighbors are given high priority, while broader benefits to housing affordability, transportation access, and economic opportunity are often given short shrift. Not surprisingly, research has found that places where states exercise more power over development decisions have better housing outcomes, in the form of less segregation, than places where power is held more locally.

The battle in California reflects this dynamic. Local groups are put in the position of opposing a measure to speed the construction of affordable housing because it institutionalizes a broader kind of cost-benefit analysis, removing local discretion over every single project. (Of course, local governments still have the power to downzone, if they believe that the zoning they have already decided on is unacceptable, and the state law would not override that decision.) It’s also another data point suggesting that solutions to our “shortage of cities,” and resulting housing crunch, might be most likely to come from states, rather than city governments.

The Week Observed: May 27, 2016

What City Observatory did this week

1. Last month, we released the Storefront Index, a report that catalogued the nation’s retail clusters and provided a window into the spatial organization of an important part of Jane Jacobs’ famous “sidewalk ballet.” This week, we lifted the curtain a bit to explain how we built the index, hoping to give others who might wish to repeat or modify our methodology for their own research purposes a head start.

2. The growing economic strength of city centers is one of the most important facts of life in American urban policy today. This week, we updated our previous report, “Surging City Center Job Growth,” with three years of additional data that was unavailable when it was written. Our findings: although outlying areas have improved their standing since the depths of the recession, the pace of job sprawl has declined considerably in this economic expansion compared to the previous one.

3. We’re not the only ones finding strength in urban cores. Two other recent studies, in addition to our own, point to the same conclusion. The Washington think tank the Economic Innovation Group found that just 20 counties—all large urban counties—accounted for fully half of the country’s new business formationbetween 2010 and 2014. They also accounted for a disproportionate share of all new jobs. That’s a reversal from previous decades, when relatively smaller counties grew faster than larger ones. In addition, the Brookings Institution finds that urban core cities have continued to close the gap in their population growth rates with outlying parts of metropolitan areas.

4. A new affordable housing proposal in California is shedding light on some of the dynamics of housing politics in that state. Governor Jerry Brown has floated allowing developments that contain at least 20 percent below-market units and meet existing local zoning requirements to bypass an additional, only-in-California level of local discretion, called CEQA. But local governments and even some affordable housing advocates have come out against this fast-tracking of affordable units, because it reduces the bargaining power of local interests. That lines up with previous research that we’ve highlighted showing that regions where states exert more control of the development process are less segregated than places with more local control.


The week’s must reads

1. The share of new people in the rapidly growing Houston metropolitan area in the city proper has increased from just 12 percent from 2000 to 2010 to 28 percent from 2010 to 2015, according to Rice University’s Urban Edge blog. Of course, the city of Houston includes everything from burgeoning 21st century urban townhouse and apartment flat neighborhoods to classic late 20th century suburbia, so it won’t be clear exactly where these new residents are going until we have better tract-level data. But as Houston Tomorrow points out, there are payoffs even just to more centrally-located sprawl: the average person in the Houston metro area drives nearly 23,000 miles per year, as opposed to just over 19,000 in the city proper. In denser inner neighborhoods, that drops to 14,000 miles.

2. More from Texas: At D Magazine, Patrick Kennedy uses our Storefront Index to correlate downtown destination density with parking prices. Not surprisingly, the more downtown storefronts, the higher parking prices are. Kennedy finds similar patterns for job and residential density. Does that mean places with lots of people, jobs, and stores need more parking? Kennedy says no—it means that their land is valuable, and reserving lots of it for car storage doesn’t make sense.

3. A while ago, we highlighted an Orlando suburb that became the first municipality in the country to subsidize ride-hailing apps, like Uber, as a kind of transit service. Now, a much larger city, Philadelphia, has announced a limited-time partnership with Uber to solve the “first and last mile problem,” with discounts of 40 percent for trips to and from several regional rail stations. If the pilot is successful, it could be extended and expanded. This may be another sign that predictions from Yale Law professor David Schleicher about the inherent incentives of local governments to promote ride-hailing services as a public good were prescient.


New knowledge

1. The Seattle-based Frontier Group released a report this week, “A New Way Forward,” on the possibilities of a zero-carbon transportation system. It would rely on electric vehicles powered by renewable energy; more urban patterns of growth that allow for more trips to be taken without powered vehicles; more reliance on public transit; better pricing of transportation options to reflect their real social costs; and a suite of other measures.

2. School test scores in Washington, DC are up. Kristin Blagg and Matthew Chingos at the Urban Institute ask whether that’s just a consequence of changing demographics, or if there seems to have been genuine improvement. The answer: demographics can’t explain all of the test score improvements. Because their analysis only looks at district-wide changes, it’s less clear if the improvements might be tied to the benefits of integrated schools, or whether even schools that have remained racially and economically segregated have seen gains as well.

3. A new paper from Karen Chapple and Miriam Zuk at UC–Berkeley looks at the relationship between housing production—both market-rate and below-market—and low-income displacement in the Bay Area. They find that both types of housing are associated with reduced displacement, with below-market housing having roughly twice the per-unit effect as market housing. They also find that both kinds of housing appear only to work as anti-displacement measures at relatively larger geographies, which they suggest is a result of the incredibly intense housing pressures at smaller, block-group-sized neighborhood levels. While the authors position the paper as a counterpoint to an earlier report from the CA Legislative Analyst’s Office that emphasized the importance of market construction, Zuk and Chapple do reaffirm the importance of more market housing as part of the solution to the Bay Area’s housing problems. One issue: their models only manage to explain less than 20 percent of all the variation in displacement, suggesting other major unobserved factors that need to be sought out in future research.


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

City center job growth continues strength; suburbs rebounding from recession

As recently as the years 2002 to 2007, outlying urban neighborhoods and suburbs experienced much faster job growth than urban cores. But as a February 2015 City Observatory report, “Surging City Center Job Growth,” documented, that pattern reversed from 2007 to 2011, with urban cores overtaking more peripheral areas and maintaining positive job growth through those recession years. Since that report, however, the Census’ Longitudinal Employer-Household Dynamics database has released three more years’ worth of jobs figures, allowing up to update these trends for 2012, 2013, and 2014.

Using the same methodology as the 2015 report on the 51 largest metropolitan areas, we find that the relatively increased strength of city centers (which we define as areas within three miles of the central business district, or CBD) has held well into the post-recession recovery. While cores are now growing more slowly than the peripheries, the gap has narrowed substantially compared with the last economic cycle—a notable shift after decades of consistent job sprawl.

 

From 2002 to 2007, average annual job growth in urban cores was 0.26 percent, and 1.09 percent in peripheral, non-core areas. (These numbers differ slightly from those in the original report because of revisions from LEHD itself, as well as a data quality screen we implemented, which is explained at the bottom of this post. After applying the data screen, we based our findings on 19 of the 51 largest metropolitan areas. Numbers from all 51 MSAs are included at the end of this post.) From 2007 to 2011, this pattern reversed, with average annual  job growth of 0.49 percent in urban cores and just 0.10 percent in peripheries. And from 2011 to 2014, while annual employment growth in non-core areas rebounded from the depths of the recession to 2.04 percent, it also improved in city centers, growing to 1.97 percent.

In other words, while city centers lagged metropolitan peripheries in average annual job growth by 0.83 percentage points from 2002 to 2007, from 2007 to 2014, urban cores have actually grown 0.19 percentage points faster than peripheries. And although peripheries have grown slightly faster since 2011, urban cores remain in a much stronger position than they found themselves in during the previous economic expansion. The persistence of this pattern suggests that the dramatic decline in job sprawl we found from 2007 to 2011 was not simply a temporary result of the recession, but is enduring through the current economic recovery.

One of the biggest challenges in the perennial discussions of city versus suburb job growth is how to define the core and the periphery, and where to get accurate date.  In this post we describe why we think the three mile radius measure is a better indicator of the health of metropolitan cores, particularly for comparisons.  We also discuss the strengths and limitations of data available to measure core employment.  Despite the improvements in the geographical detail of data sets, there are still important limits.

These findings have major implications for American cities. We believe the evidence suggests the decline of job sprawl is a positive development, for at least three reasons.

First, many of the nation’s leading economists now agree that dense, walkable employment centers lead to improved productivity and economic growth. When firms cluster geographically such that the cost of travel between them is reduced, they are able to share resources such as physical infrastructure, labor pools, information, and technological or organizational innovation. According to research by Harvard professor Ed Glaeser, per capita productivity increases by four percent as population density increases by 50 percent—a difference roughly equivalent to the gap between Dallas (at about 3,600 people per square mile) and San Jose (at about 5,600).

Second, when people and jobs relocate to urban centers, they reduce carbon emissions in at least two ways. The first is by replacing some car trips with more emissions-efficient modes, like public transit or carpooling, or with zero-emissions modes, like walking or biking. As we have noted at City Observatory, jobs in central cities, which tend to be public transit hubs, make it more likely that even workers who live in outlying suburbs will use transit. In addition, even when commuters continue to drive, they are likely to drive fewer miles when jobs are located in central areas, reducing their emissions.

Finally, by allowing commuters to use less costly forms of transportation—public transit, walking, or biking—the movement of jobs to central cities can be a significant boon to social equity. Low-income workers are particularly sensitive to the high costs of car ownership and use, and researchers such as those at the Center for Neighborhood Technology have shown substantial differences in average transportation costs between denser, closer-in neighborhoods and more outlying communities. In many cases, the option of not using a car is worth several thousand dollars a year, a crucial increase in disposable income for many households.

This neighborhood in Atlanta has affordable housing—but its transportation costs make it unaffordable. Credit: Center for Neighborhood Technology
This neighborhood in Atlanta has affordable housing—but its transportation costs make it unaffordable. Credit: Center for Neighborhood Technology

 

But policymakers cannot trust that this trend will simply continue on its own, or that it will not pose challenges that will need to be addressed. In many places, the growth of demand for living and working in city centers has outstripped the growth of actual room for people to live and work in urban environments. This may be a result of some combination of a slowness of market actors to respond to demand; physical constraints on the growth of living and working space; or regulatory constraints on that growth.

This dynamic has produced a shortage of cities—demand for real estate in these central cities exceeds supply, driving up prices, excluding those who cannot afford them, and slowing the growth of these in-demand urban cores. Addressing this shortage, and making sure that residents outside the core have high-quality access to employment there with sustainable, low-cost transportation like public transit, biking, and walking, is key to leveraging this trend for maximum benefit in American cities.


How to measure the “core”?

While this report uses a three-mile radius around a city’s central business district as a proxy for “city center,” there are other ways to aggregate employment data at the sub-metropolitan level. One such method is to use counties, for which data is updated more regularly than the LEHD database our method relies on.

A recent example of this type of county analysis was published by former Trulia chief economist Jed Kolko in January 2016. Kolko’s data shows that while counties at the center of large metropolitan areas have seen job growth since 2007, they are outpaced by suburban counties in the same regions—although central counties have improved the most compared to patterns observed in 2000-2007, and appear to be continuing that acceleration. He further argues that to the extent that employment growth in these urban counties does appear to be gaining steam, it’s too early to tell whether that trend is cyclical or more long-term.

This analysis provides another useful perspective, but as we’ve pointed out, it also has limitations. In many instances, county-level data are too geographically coarse to detect shifts in growth patterns within metropolitan areas. Central counties seldom correspond to the central city of a metropolitan area, and even more rarely to what locals would understand as the “urban core.”  In many cases, central counties include substantial suburban job centers: Microsoft’s suburban campus in Redmond, Washington, is in Seattle’s King County, for example, and the suburban office parks around O’Hare Airport are part of Chicago’s Cook County. Moreover, county sizes vary substantially from region to region.

Even so, Kolko’s county-level data shows that—consistent with the data reported here—central areas’ job growth performance has improved in 2007-15, compared to the economic expansion of 2001-07. It also shows that job growth is accelerating faster in urban counties than in suburban counties in large metropolitan areas.

A key question raised by Kolko is whether the relative improvement in job growth in urban cores is a temporary cyclical change—one which will disappear as the economy normalizes—or a long-term structural shift in the relative fortunes of central and peripheral locations. While we may not have a definitive answer for several years, both the data presented here and Kolko’s county-level data suggest the answer is the latter. Far from being a temporary artifact of the recession, the improvement of urban cores is continuing into the current economic expansion.


Methodology and data notes

The data for this report are drawn from the Census Bureau’s Local Employment and Housing Dynamics program which combines administrative data to estimate employment levels by street address for workers and employers. Compiling these data is a complicated process and hinges on the consistency with which administrative records are compiled.  In the course of looking at employment data for 2012-2014 from LEHD, we discovered a number of instances of year-to-year job changes in both core and non-core areas that were so large as to raise questions about the reliability of the data. In some cases, there were periods of one to two years in which data for a particular geography exhibited a major departure from its historical pattern and then subsequently reverted to values close to the previous baseline.

For example, Detroit’s core is reported to have 140,507 jobs in 2002, but only 115,318 in 2003, and then 130,076 in 2004. Salt Lake City’s core displayed an even more curious pattern. In 2008, it reported 123,859 jobs; that fell to 110,649 in 2009. While a ten percent drop seems extreme, it did coincide with the Great Recession—but subsequent years are harder to explain. In 2010, reported employment increased again to 120,521; then fell to 104,823 in 2011; then grew again to 114,323 in 2012. These examples are not atypical for the metropolitan areas that failed our data quality screen.

These metropolitan areas are also typical of those with data anomalies in another way. Because LEHD breaks down employment by sector, we can determine that nearly all of the net job changes in the cores of Detroit and Salt Lake City occurred in “Educational Services.” (In Detroit, for example, LEHD reports the number of such jobs as 27,784 in 2002; 7,212 in 2003; and 27,797 in 2004.) Both of these cities have large universities within their cores.

These problems may be inherent in utilizing disparate sets of administrative records to establish workplace and residence locations. LEHD data are based on personal and business tax records which were not primarily designed for the purposes to which they are currently being adapted. In particular, it seems possible that year-to-year changes in these records at large organizations with multiple office sites switch between associating subsets of employees between the central office and some sort of satellite office. In most cases, large changes in one category—educational workers in the core, for example—are offset by changes in the other direction in another category—educational workers in the periphery. This hypothesis is also supported by the tendency for these changes to fall in the educational sector, or other categories—such as “Health Care and Social Assistance” and “Administration and Support”—likely to be part of large organizations. Our hypothesis, then, is that these administrative record changes, which do not necessarily reflect any actual physical rearrangement in the real world, are behind the odd data patterns we see.

Administrative data like that used to construct the LEHD database are not primarily intended to serve as a resource for time-series analysis. The Census Bureau constructs its estimates of data each year separately, so changes in reporting locations or disaggregations from year to year can alter results. As the Census Bureau warns: “The LEHD program produces each year of LODES independently, so there may be time series inconsistencies due to updates and methodological changes that can complicate longitudinal inferences.”

Validating all of the LEHD data is far beyond our resources. Instead, we chose to create a data quality screen focusing only on employment totals at levels of geography that might meaningfully affect our final analysis. The screen flagged metropolitan areas with large one-year changes in total employment: greater than eight percent in either direction in core areas, and greater than five percent in either direction in non-core areas. (The cutoffs differ because of the larger variance in growth figures for cores.) Metropolitan areas with such changes were excluded, unless the changes a) were consistent with multi-year trends, or b) were large declines during the Great Recession. As in our earlier report, we excluded the category of public administration from all totals. Federal employment was added to the LEHD program only after 2010, making later year data in this category non-comparable with earlier year data.

The Census’ LEHD program represents an invaluable source of data for social science research on any number of subjects: economic development, commute patterns, social networks, and many others. It has already been widely used for urban policy research, including by Elizabeth Kneebone and Natalie Holmes at the Brookings Institution (Kneebone & Holmes, 2015); researchers at the Federal Reserve Bank of Cleveland (Hartley et al., 2015), and others (Meltzer & Ghorbani, 2015). We are enormously grateful to the program for doing the work of compiling this information. However, we do want to flag these issues as a potential area of improvement, and suggest that other researchers using LEHD data should keep them in mind while performing their analysis.

Included Excluded—failed data quality screen Excluded—incomplete data
Atlanta, GA Austin, TX Boston, MA
Baltimore, MD Buffalo, NY Phoenix, AZ
Birmingham, AL Charlotte, NC Washington, DC
Cincinnati, OH Chicago, IL
Cleveland, OH Columbus, OH
Denver, CO Dallas, TX
Hartford, CT Detroit, MI
Houston, TX Indianapolis, IN
Kansas City, MO Jacksonville, FL
Las Vegas, NV Los Angeles, CA
Louisville, KY Memphis, TN
Nashville, TN Miami, FL
New York City, NY Milwaukee, WI
Pittsburgh, PA Minneapolis, MN
Portland, OR New Orleans, LA
Rochester, NY Norfolk, VA
San Antonio, TX Oklahoma City, OK
San Diego, CA Orlando, FL
San Francisco, CA Philadelphia, PA
Providence, RI
Raleigh, NC
Richmond, VA
Sacramento, CA
Salt Lake City, UT
San Jose, CA
Seattle, WA
St. Louis, MO
Tampa, FL

To test whether our data screen biased the overall results, we also tabulated aggregate data with no exclusions. Although the totals differ somewhat, the trends are broadly similar: average annual employment growth in urban cores is 0.00 percent from 2002 to 2007, 0.42 percent from 2007 to 2011, 1.60 percent from 2011 to 2014, and 0.92 percent from 2007 to 2014. Average annual employment growth in non-core areas is 1.23 percent from 2002 to 2007, -0.10 percent from 2007 to 2011, 2.01 percent from 2011 to 2014, and 0.81 percent from 2007 to 2014.

The Week Observed: May 20, 2016

What City Observatory did this week

1. What’s the relationship between urban sprawl, income segregation, and economic opportunity? A recent study by Reid Ewing and colleagues at the University of Utah used an innovative new measure of sprawl to correlate with economic outcomes of low-income children, and found a strong positiveassociation between compactness—that is, un-sprawl—and more economic mobility. A doubling of the “compactness index”—roughly the difference between Nashville and St. Louis—was linked to a 41 percent increase in the likelihood of a child born to the bottom fifth of the income distribution reaching the top fifth as an adult.

2. How did San Francisco’s housing market get so crazy? For many, the answer begins with the tech boom of the last decade. But new research by Eric Fischer shows that rental prices there have been steadily increasing at about 2.5 percent faster than inflation for about 60 years. What happened 60 years ago? San Francisco ran out of easily buildable open land. Unwilling to allow for major redevelopment, that means that they’ve been “building up” their housing shortage since the 1950s. Fischer also finds that you can predict housing prices with startling accuracy using just three variables: wages, employment, and housing stock. In his model, what would it take to get prices back down to a reasonable level? Either drop half the city’s jobs, cut wages by nearly half, or build 200,000 new homes—in a city that permitted just over 3,600 last year.

3. Nationally, it appears that rental supply may be catching up to demand. So says market analyst REIS, which finds that apartment vacancy rates have ticked up recently for the first time in years. Does that mean the end of price growth? Perhaps—but of course, apartments aren’t rented in a national market, and there’s no evidence of rising vacancy or a supply-demand match in places like San Francisco, New York, or most other cities making headlines for their housing prices. That said, even on that front there is some good news: the Boston Globehas reported that rents there are growing at the slowest rate in five years as a burst of new apartments came online last year, and another 5,000 are slated for this year.

4. While things might be starting to look better in Boston, over the last several years, there has been a clear pattern of faster rent growth in larger, urban citieswith strong economies. And while these cities’ rents are pulling away from the rest of the country—the top nine metro areas saw rent growth of over 12 percent between 2008 and 2015, compared to just over two percent in the bottom half of the hundred largest metros—high-end units within these metros are also pulling away from the rest of the market. These nuances are important for policymakers and advocates in trying to grapple with housing affordability.


The week’s must reads

1. A common refrain from housing advocates on the land use law side is that the best bet for better housing policy is to look at state governments, since local governments generally focus on the local costs of housing development, like congestion or negative effects on housing prices, rather than the broader regional benefits. Now, California Governor Jerry Brown is taking up the challenge,proposing new rules to force local governments to speed housing development proposals that meet existing zoning and contain at least 20 percent below-market units on site. A handful of other states, like Massachusetts, already have state-level override policies for local housing permits.

2. Another common housing advocate wish: Allowing “accessory dwelling units” or “granny flats,” backyard cottages that add housing without dramatically changing the face of a neighborhood. That’s exactly what Durango, Colorado has done, as described in CityLab. In fact, the city had already had ADUs, built before zoning—but they had been illegal for decades. Now the city is legalizing them again, perhaps bringing hundreds of new housing units online (and above board) without a single new building. It’s a tactic that many cities should be able to copy—especially older ones that, like Durango, already contain many ADU-type buildings constructed before modern zoning codes.

3. You’re in a driverless car, approaching a tunnel. A child steps into the road, and there’s no time to stop. Is your car programmed to continue ahead, killing the child, or swerve into the wall, saving the child but killing you? That’s one question. Another question is: Why is the car going fast enough to kill either of you? At n+1, Daniel Albert examines “the ethics of cars,” both in the future world of self-driving automobiles, as well as in our own era of human-driven ones.


New knowledge

1. A new GAO study has alarming numbers on racial and economic segregation of schools. Between 2001 and 2014, the proportion of all American schools with student bodies that were both at least 75 percent Black and Hispanic and 75 percent low-income grew from nine to 16 percent. In 2001, 14.2 percent of American students attended high-poverty schools; in 2014, more than 25 percent did. These figures reflect, in part, broader trends about growing economic segregation and the concentration of poverty in housing and neighborhoods as well as schools.

2. Many people are familiar with the unfortunate history—and, in many ways, present—of affordable housing being used to keep low-income people, and people of color, concentrated in certain neighborhoods, and out of others. But the University of Minnesota Law School’s Institute on Metropolitan Opportunity released a report this week that identified a different kind of below-market-housing-driven segregation: high-end affordable housing, often pitched as artists’ housing, that serves nearly exclusively white tenants in higher-end neighborhoods. These units often cost far more to build, and so receive more subsidies per unit, than other kinds of affordable housing.

3. The Urban Institute looks at a kind of “missing middle” housing whose production has fallen off since the housing bust of the last decade: two-to-four-unit residential buildings. They identify one of the problems as changing financing standards that have reduced risk tolerance for these types of buildings, perhaps below the levels tolerated for single-family homes. Given that these small multifamily buildings make up a significant proportion of moderate-cost housing in many metropolitan areas, addressing this sudden decline in production may be important.


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

The long road to San Francisco

Every once in a while, someone writes something that makes a murky, complicated, frustrating issue seem crystal clear.

This post by Eric Fischer is one of those. Doing yeoman’s work, Fischer transcribed decades’ worth of San Francisco housing prices and other data. Among his findings:

  • Though we talk about the Bay Area’s housing crisis as if it were a recent phenomenon, Fischer finds that housing prices have been appreciating at a steady 6.6 percent pace for the last 60 years. In real terms—that is, adjusting for inflation—they’ve been appreciating at about 2.5 percent annually. That doesn’t sound like much, but when it happens for 60 years in a row, it means that housing prices have quadrupled, after inflation, since 1956.
  • We know that housing prices are the result of exceedingly complex market and regulatory systems. But Fischer shows that variations in price over the last four decades can be predicted pretty well using just three variables: employment growth, wage growth, and housing construction.

Both of these have obvious follow-up questions—which Fischer asks and (mostly) answers.

First, if San Francisco’s housing crisis actually started 60 years ago, what triggered it? Well, the housing construction cycle that ended in 1954 was the last in which the city had large tracts of greenfield land. After that, housing could really only be added at scale with infill—but by then, zoning had already been enacted to make that much more difficult. In other words, because it has been unwilling to allow large-scale redevelopment, San Francisco has been steadily under-building basically since it ran out of open land.

Screen Shot 2016-05-16 at 6.02.13 PM

 

Second, if you can mostly predict housing prices with just three variables, how much influence does each have? Of course, correlation is not causation, and as Fischer admits, small tweaks to the model could produce notably different results—so these should be treated as broad trends, not precise measurements. But in Fischer’s model, a one percent increase in employment is associated with a 0.95 percent increase in rents; a one percent increase in wages is associated with a 1.74 percent increase in rents; and a one percent increase in the housing stock is associated with a 1.70 percent decrease in rents.

If we treat those as roughly accurate, that suggests that to return to 1981-era prices, when inflation-adjusted rents were about two-thirds lower, employment would have to fall by 51 percent, or wages would have to fall by 44 percent, or the housing stock would have to grow by 53 percent.

Michael Anderson of Bike Portland took a look at these numbers and despaired. And he’s not wrong: clearly losing half of all the jobs in San Francisco, or cutting everyone’s income in half, would be disastrous; and building 200,000 new units of housing in a city that permitted just over 3,600 last year seems more than a little out of reach. (And of course, every year that employment or wages rise, that needed housing number goes up, too.)

But Anderson also points out that even if there were no regulatory constraints on building housing, development would surely grind to a halt way before prices could fall down to semi-reasonable levels, as developers realized they could no longer count on the rental revenue they had based their loans on.

Credit: Anh Dinh, Flickr
Credit: Anh Dinh, Flickr

 

In fact, this brings up a point that is often elided when we talk about places, like San Francisco, where prices have gotten totally out of control: A rapid “correction” to those prices would, in many ways, be an economic crisis. Nearly every homeowner would find themselves tens or hundreds of thousands of dollars underwater on their home, probably causing a massive region-wide foreclosure crisis; renters would also be affected, as their landlords would also be underwater or even bankrupt, many stuck with mortgages based on valuations that anticipated rents three or four times higher than their new, more reasonable levels.

In America, no democratically elected government could ever propose, let alone enact, a policy with these consequences. Rather, San Francisco’s best hope is to build enough to prevent more price increases above inflation, and maybe even keep price appreciation below inflation, so that over the coming decades prices can float down to a more reasonable level without ruining every property owner in the city—and, in the meanwhile, produce as much non-market housing as possible. (Universal housing vouchers or housing tax credits would help.)

Fischer’s work, then, might best serve as a warning to other cities: housing crises, driven in part by supply shortfalls, build up over decades—and once they’ve been going on that long, the path back down the mountain is perilous and slow.

USDOT to shut down nation’s roads, citing safety concerns

WASHINGTON, DC – Citing safety concerns, today Secretary of Transportation Anthony Foxx announced he was contemplating the closure of roads to all private vehicles in nearly every city in the country until he could assure the nation’s drivers that they would be safe behind the wheel.

The announcement comes on the heels of comments by Secretary Foxx that the Department of Transportation may shut down the Washington Metro heavy rail system because of ongoing safety issues.

Since 2009, 14 Metro riders and employees have died in collisions, derailings, and other incidents. On an annual basis, that translates to about 0.48 fatalities per 100,000 weekday riders.*

However, Secretary Foxx noted that this is exceeded by the fatality rate of car crashes in every single American metropolitan area for which data was compiled in a recent report from the National Highway Traffic Safety Administration.

In San Francisco, 3.75 people died in automobile crashes per 100,000 residents in 2014, a rate 7.8 times higher than the fatality rate on Metro. In Raleigh, NC, the automobile crash fatality rate was 7.50 per 100,000, or about 15.6 times higher than the fatality rate on Metro. And in Dallas, the automobile crash fatality rate was 12.02 per 100,000, or about 25.0 times higher than the fatality rate on Metro.

A partial list of other cities in which Secretary Foxx is threatening to shut down automobile traffic includes:

Screen Shot 2016-05-11 at 2.05.36 AM

Each year, more than 30,000 Americans die in automobile crashes, at a rate higher than nearly every other industrialized nation, even accounting for higher vehicle miles traveled rates.

“This carnage is unacceptable,” the Secretary said. “Until we can assure America’s drivers and pedestrians that they are no more likely to die on the road than they are on the most dysfunctional heavy rail system in the country—a feat that, in many cities, will require a 90 to 95 percent reduction in road fatalities—I cannot in good conscience allow a single motor vehicle to menace our cities.”


*Methodology and sourcing: Road fatality rates are taken from the National Highway Traffic Safety Administration. WMATA Metro fatality rates are from news reports on fatalities since 2009; the denominator is half of the average weekday ridership from the most recent APTA ridership report, from Q4 of 2015. (We divided total ridership in half to estimate the total number of individual riders taking two trips per day.) This is designed to create a relatively high fatality rate for WMATA—making a relatively small denominator, of only the number of people who use WMATA on a daily basis—compared to the road crash fatality rate, which uses a relatively large denominator, the total number of people living in a metropolitan area.

Sprawl, segregation, and mobility

This is the fourth in an ongoing series of posts about income segregation, urban planning, and economic opportunity. In the first, we examined three different ways of looking at income segregation: the proportion of people living in low-income neighborhoods, high-income neighborhoods, or both “extremes.” In the second, we looked at another kind of income segregation, measured along the entire income spectrum, and distinguished between segregation and inequality. In the third, we examined how income segregation has changed, both since 1970 and since the Great Recession.


Over the last two weeks, we’ve written about how income segregation is really many different kinds of sorting; how to measure several of the most important kinds; how and why to distinguish between segregation per se and inequality; and how income segregation has changed over the last 40 years.

But we’re not just interested in analyzing and diagnosing income segregation for its own sake. We’re interested in how it intersects with outcomes we care about—notably economic opportunity for people with low incomes, and the strength of common civic culture—as well as policy levers that cities and other governments can use to improve those outcomes.

That makes a recent study led by Reid Ewing of the University of Utah particularly valuable. Ewing et al’s paper is one of the first to rigorously analyze the relationship between economic mobility, income segregation, urban sprawl, inequality, and other potential correlates of economic mobility.

The study builds off of an innovative “compactness index” developed by Ewing and Shima Hamidi to compare levels of sprawl between metropolitan areas. Previously, researchers like Raj Chetty and his team at the Equality of Opportunity Project had used commute times as a proxy for sprawl, but that’s obviously related to a number of other factors beyond the spread-out-ness of the urban environment.

The big takeaway from Reid’s study is that in metropolitan areas that are more compact—that is, less sprawl-y—children born into the lowest fifth of the income distribution are much, much more likely to reach the top fifth as adults. On average, if City A is twice as compact as City B, low-income children in City A will be 41 percent more likely to reach the top fifth of the income distribution than low-income children from City B. (In the real world, “twice as compact” is roughly the difference between sprawl-y metropolitan Nashville and less sprawl-y metropolitan St. Louis.)

St. Louis. Credit: Ron Reiring, Flickr
St. Louis. Credit: Ron Reiring, Flickr

 

Reid et al also find that lower levels of income segregation—specifically, segregation of the poor—is associated with greater mobility, confirming the findings of other researchers.

But when it comes to the interaction of sprawl with income segregation, things are a little more ambiguous. The study actually finds a negative relationship between compactness and segregation—that is, more compact metropolitan areas tend to be somewhat more segregated by income.

That raises a few questions. First, if compactness is associated with more income segregation, and more income segregation is associated with lower mobility, then how can compactness itself be associated with higher mobility? The answer to that, according to Reid et al, is that other effects—perhaps most notably access to jobs—overwhelm the income segregation effect and cause the net effect to be positive.

Second, why would more compact metro areas tend to be more segregated? There are a number of possibilities here. One is that there is some inherent connection between relatively dense built environment and segregation—but it’s not totally clear what the mechanism there would be. On the other hand, there are a number of possible third factors that might lead to the appearance of such a relationship. One is that in the US, more compact urban areas tend to be older urban areas—and older urban areas are ones where larger proportions of neighborhoods were around to be affected by the more blatant policies that promoted racial segregation, including redlining, restrictive covenants, and widespread racist violence. These historically racially segregated neighborhoods are, today, very disproportionately likely to be areas of concentrated poverty. In that way, the mechanism wouldn’t be that compact development leads to segregation, but that older cities are both more compact and more segregated.

Another possibility is the “modifiable aerial unit problem.” Reid et al measure segregation by Census tracts, which are drawn to have very roughly equal numbers of residents. That means that they’re much smaller in denser cities—and, perhaps, more sensitive to block-by-block sorting than in more sprawling regions, where tracts can include many different blocks that aren’t really in the same neighborhood.

Census Tracts at the same scale in Brooklyn and suburban New Jersey. Credit: Social Explorer

Screen Shot 2016-05-13 at 5.56.30 PM
Census Tracts at the same scale in Brooklyn and suburban New Jersey. Credit: Social Explorer

 

Or perhaps there’s something distinct that Reid’s compactness index is picking up that other definitions of sprawl don’t include. After all, previous research has in fact found a connection between looser zoning regulations—that is, ones that allow more compact multi-family development—and less income and racial segregation, presumably because a wider variety of housing types is more likely to include a wider variety of housing prices.

But in any case, clearly more research is needed. In the meanwhile, Reid’s study provides more evidence both that more compact urban areas provide more economic opportunity to the low-income, and that income segregation is a key lever of opportunity as well.

The Week Observed: May 13, 2016

What City Observatory did this week

1. A new study from Stanford Business School claims that society reaps the greatest benefits from low-income housing when that housing is built in the lowest-income neighborhoods—as opposed to integrating it within higher-income neighborhoods. But there are a number of caveats and concerns we have with the study. For one, it looks at a very specific form of low-income housing, LIHTC, with income targets 50 percent or more greater than the median income in the neighborhoods where the Stanford study finds benefits. Second, the “costs” to higher-income neighborhoods appear to mostly be the result of discrimination—which we wouldn’t give much weight in policymaking. And finally, the benefits to integration go far beyond what was measured by the study.

2. One of those benefits of integration: It can create its own positive feedback loops that reduce the tendency to re-segregation. Research from the University of Minnesota’s Institute on Metropolitan Opportunity shows that in metropolitan areas with regional school desegregation initiatives, mixed-race neighborhoods are much less likely to re-segregate than in areas without school desegregation initiatives. In other words, if white households aren’t as able to find segregated schools, they’re less likely to want segregated neighborhoods, and less likely to take part in destructive cycles of flight and reconcentration. Intentional housing desegregation—by, in part, putting low-income housing in higher-income neighborhoods that lack it—might be able to pull the same trick.

3. On Tuesday, Secretary of Transportation Anthony Foxx announced that he was considering shutting down the Washington, DC Metro because of safety concerns. On Wednesday, Foxx announced that, having reviewed the numbers, it turns out that road fatality rates in virtually every metropolitan area in the country exceed fatality rates on Metro—in many cases, by factors of 25 or more—and the USDOT would look into shutting down all roads to private motor vehicles until he could guarantee drivers and pedestrians that they would be as safe on a typical American street as they are on the most dysfunctional heavy rail system in country. Unfortunately, that appears to be unrealistic—most cities would need to reduce road fatalities by 90 to 95 percent—so motor traffic may be kept out of American cities indefinitely.

4. Last week, we explored four different ways of measuring income segregation, and the implications of each one for broad-based economic opportunity. This week, we take a look at how each kind of income segregation has changed, both over the long term and just the last few years. In both cases, the answer is: it’s up. But there are some important nuances: since 2007, nearly the entire rise in income segregation appears to come from increased sorting among people in the “middle,” between the 10th and 90th percentile of income, according to researchers Kendra Bischoff and Sean Reardon. We also created an interactive tool for you to look up how income segregation has changed in your region since 1970.


The week’s must reads

1. The nation’s most successful public transit system, the New York City Subway, has old, often less-than-attractive stations, crowded trains, plain plastic seats, spotty cell service, and none of the frills that civic leaders often claim are necessary to get people—especially middle-class people—out of their cars. So why do people use it? Because it’s fast, convenient, and reliable. At The Transport Politic, Yonah Freemark uses the example of the NYC Subway to commend Boston’s plan to save a rail extension by cutting costs on everything that won’t affect the qualities that riders actually care about: the frequency, speed, or reliability of service. It’s a great case study for anyone thinking about how to prioritize transit change in their city.

2. Many people believe that the purpose of zoning is to preserve neighborhood character. But Seattle’s The Urbanist blog points out that there are actually hundreds, if not thousands, of multi-family buildings in that city’s “single-family” zones—that is, places where multi-family buildings have been outlawed as “incompatible.” How can that be? These apartments and condo buildings were mostly constructed before the advent of zoning turned many already-existing communities into “illegal neighborhoods.” Many of these neighborhoods—especially closer to downtown—are among the city’s most popular, reaffirming yet again that the lack of housing diversity that zoning codes often prescribe is neither necessary nor desirable.

3. In a similar vein, modern American cities often take for granted that businesses and residences need to be kept apart. But CityLab highlights a blog that captures ghosts of Washington, DC’s mixed-use past: old storefronts that have been converted to residential buildings because they ran afoul of zoning laws that found them “incompatible.”


New knowledge

1. The Century Foundation has released a new report laying out principles for national transportation policy. The paper identifies four key challenges, from a lack of a national vision to structural problems with the political system, and proposes four major changes to transportation policy. They include: federal funds should take care of capital maintenance needs before supporting new construction; policy should focus on moving people and goods rather than cars and trucks; a renewed focus on performance management; and use an increased gas tax, vehicle miles traveled tax, congestion pricing, or other transportation-related sources to fund transportation programs.

2. While American urbanists often think of European cities as the kind of walking, biking, and transit paradises we might strive to emulate, in fact, many European cities have made significant progress in the last several decades to become more accessible to non-car travel themselves. A new study investigates these changes in Munich, Berlin, Hamburg, Vienna, and Zurich, showing how coordinated strategies of land use and transportation policy have significantly decreased car travel. The tactics will sound familiar: Parking management, dense mixed-use development, and high-quality transit and biking infrastructure.

3. The consulting firm Urban Spatial and Allan Mallach of the Center for Community Progress have published a massive trove of visualizations of neighborhood change in cities across the country. Among the indicators captured: residents with college degrees, median income, and housing prices. They also look at indicators that correlate with neighborhood change, and say they’re looking to build a predictive model of change.

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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

The positive feedback loop of integration

Yesterday, we critiqued a study that claimed to show that the benefits of putting low-income housing in very low-income neighborhoods greatly exceeded the benefits of putting it in higher-income neighborhoods—especially higher-income and predominantly white neighborhoods—where it might have more of a pro-integration effect.

Among the several points of our critique was that the study severely under-measured the benefits of integration.* While its cost-benefit analysis only counted the income gains based on estimates from Raj Chetty et al’s work, we pointed out that there are many other benefits you might expect from integration: better mental health, school performance, safety from crime, and so on.

But there’s an even bigger issue here that goes beyond any of these discrete benefits. Which is: there is evidence that integration creates positive feedback loops that change the fundamental dynamics of neighborhood change.

Somerville, MA. Credit: Tim Sackton, Flickr
Somerville, MA. Credit: Tim Sackton, Flickr

 

After all, the study’s authors calculated that a major cost of putting low-income housing in higher-income neighborhoods was that the property values in those neighborhoods declined as a result—not, apparently, because of any problems the new housing caused, as crime did not increase, but simply because their neighbors preferred not to live around the kinds of people who live in low-income housing.

But in many ways, that effect—and those preferences—depend on a steady supply of neighborhoods without any low-income housing. In part, this is the sort of “prisoner’s dilemma” that we’ve talked about before: in a policy context in which segregation creates resource-rich winners and resource-poor losers, any hint that your neighborhood or municipality might be going towards the resource-poor loser end of the spectrum is cause for alarm. The issue isn’t one or two low-income buildings per se—it’s the possibility that once one or two come in, the segregating dynamics of the housing market will bring in so many more that the area will become very disproportionately low-income. And even where the issue is one or two buildings—because a given homeowner happens to just have discriminatory preferences—that homeowner can only act on their preferences and leave the neighborhood if there are other neighborhoods without any low-income housing for them to flee to.

But what if every neighborhood had some minimum level of low-income housing? What if there were a metropolitan area with a regional integration plan that eliminated the option of living in a totally segregated higher-income neighborhood, protected by exclusionary zoning and other anti-poor policies?

Well, we don’t know for sure, because no such metropolitan area really exists. But there are urban regions that have instituted integration policies for public schools. And the evidence from those is pretty encouraging.

Take this 2012 report from the University of Minnesota’s Institute on Metropolitan Opportunity. In it, Myron Orfield and Thomas Luce  look at the trajectories of suburban neighborhoods between 1980 and 2009—asking, for example, how likely it is that a mixed-race community will end up resegregating. The overall numbers are not great: if a Census tract was 23 percent or more people of color in 1980, it was more likely to resegregate than remain diverse by 2009. (The report defined “resegregate” as become less than 40 percent white. Obviously there’s no objective threshold, but the general pattern holds regardless of where you draw the line.) Interestingly—and similar to the results in our “Lost in Place” report—a vanishingly small number of integrated suburban neighborhoods resegregated as white.

Credit: Institute on Metropolitan Opportunity
Credit: Institute on Metropolitan Opportunity

 

But the report reran these same numbers for 15 metropolitan areas with regional school desegregation initiatives. In other words, these are places where the connection between the demographics of your neighborhood and the demographic of your public school was, to some extent, broken. If a new low-income housing project was built on your wealthy block, then, that wouldn’t necessarily change the demographics of your children’s school, because the desegregation initiative would have already introduced low-income students from other neighborhoods. And by the same token, you wouldn’t necessarily be able to “escape” lower-income students by moving to another neighborhood.

So what’s the result? Well, diverse neighborhoods in these metropolitan areas were much, much less likely to resegregate than similar neighborhoods in regions without school desegregation initiatives. Neighborhoods up to about 37 percent people of color were more likely to remain diverse than to resegregate—and even neighborhoods that were 50 percent people of color in 1980 were only slightly more likely to resegregate, as opposed to having a roughly 75 percent chance of resegregating in regions without school desegregation initiatives.

Credit: Institute on Metropolitan Opportunity
Credit: Institute on Metropolitan Opportunity

 

And this difference is associated just with ending the “prisoner’s dilemma” in schools, not neighborhoods. That is, even if white people are able to access segregated housing, they appear much less likely to want it if that housing won’t guarantee segregated schools. Imagine, then, what might be possible if segregated housing itself were much harder to come by.


* To be fair, the study’s authors acknowledged at one point that they were doing this. Nevertheless, they didn’t change their cost-benefit analysis or conclusions as a result, so our criticism stands.

The rising tide of economic segregation

Last week, we argued that the problem called “income segregation” is actually several problems, and broke it down with the help of different measurements designed to capture different aspects of the issue.

In particular, we pointed out the need to distinguish between 1) the segregation of poverty, 2) the segregation of affluence, and 3) the segregation of the middle—and 4) the difference between income inequality and income segregation per se.

And—although we’ll go into more detail on why economic segregation matters in a subsequent post—recall that we care enough to dive into this because both a large body of empirical research and on-the-ground experience suggests that economic integration has a major positive influence on economic opportunity, especially for people with low incomes.

Today, we’ll briefly cover how each of these problems has evolved in American cities—both over the long term, and more recently. As before, we’re largely working off of outstanding research by Kendra Bischoff and Sean Reardon, whose report is worth diving into if you want more details.

At the highest level, economic segregation trends are extremely easy to summarize: they’re up. American cities are far more segregated by income today than they were in 1970 by every measure we’re aware of, indicating more “secession of the wealthy,” more concentrated poverty, and even more sorting among the lower-middle and upper-middle income tiers.

Credit: Kendra Bischoff and Sean Reardon
Credit: Kendra Bischoff and Sean Reardon

 

In 1970, just 8.6 percent of families lived in “poor” neighborhoods (where median income is below 67 percent of the regional median), and 6.6 lived in “affluent” neighborhoods (where median income is more than 150 percent of the regional median). By 2012, those figures had both more than doubled, to 18.6 and 15.7 percent, respectively—meaning that over a third of all families lived in either poor or wealthy neighborhoods, as opposed to just over one in seven in 1970.

But it’s not just segregation of poverty and affluence that have increased substantially over the last few generations. Bischoff and Reardon’s “H” score—which, if you remember, measures segregation along the entire spectrum of income—has also increased, from 0.115 to 0.146. In today’s terms, a shift that size is the equivalent of moving from a metro area of average segregation almost all the way to one in the top ten percent of most segregated metro areas. In other words, it’s a lot.

And what about the question of inequality versus segregation? Is this increase in segregation simply a result of greater gaps in earnings between rich or poor, or are people actually being sorted to live with more people at their relative level? Well, recall that last time we said that the H index was valuable in part because it measures segregation by people’s income rank, rather than absolute level of income—meaning it filters out a lot of the effects of rising inequality. Since it has increased substantially, we can conclude that rising income segregation is not just a result of rising inequality. Rather, there are other factors at work promoting segregation—including some we’ve talked about at City Observatory, like zoning laws that prohibit a mix of housing types in the same neighborhood.

So while rising inequality is correlated with rising segregation, it’s not the whole story. In a previous report, in fact, Bischoff and Reardon found that inequality is mostly associated with the segregation of affluence, and less strongly correlated with the segregation of people with lower incomes.

So that’s how things have changed over the last 40 years. What about the last five?

In their most recent paper, Bischoff and Reardon focus on changes between 2007 and 2012. (For sticklers, these are actually averages of 5-year American Community Survey results from 2005-09 and 2010-2014). Over that period, income segregation has continued its rise, but the trends look somewhat different than they have over the longer term.

A neighborhood in Atlanta. Credit: Chris Yunker, Flickr
A neighborhood in Atlanta. Credit: Chris Yunker, Flickr

 

Over the last five years, the proportion of families in low- and high-income neighborhoods has continued to increase—but a more sophisticated look at the numbers suggest that’s more about changing income than actual segregation. Rather, Bischoff and Reardon show that most of the rise in income segregation between 2007 and 2012 came from the increasing segregation of lower-middle-income families (those between the 10th and 50th percentile of income) and upper-middle-income families (those between the 50th and 90th percentiles).

How much does that matter? It’s hard to say. Most of the research on the effects of neighborhood income on individuals’ economic, academic, or health outcomes have focused on very poor neighborhoods, or areas of concentrated poverty. But if this trend continues, it may also be worth further investigating the effects of segregation on lower-middle-income, or working class, neighborhoods as well.

Our next installment in this series will examine the relationship between income segregation, urban built form, and sprawl—and how better urban planning might mitigate some of the trends towards increasing segregation that we’ve just discussed.

Until then, you can look up how your region has fared on the interactive tool we’ve created below, based on data from Bischoff and Reardon.

 

Where should low-income housing go?

Is it better to build affordable housing in low income neighborhoods, or higher income neighborhoods?

A recent study has run the numbers, and argues that social welfare is optimized by putting affordable housing in very poor neighborhoods, rather than wealthier (and especially whiter) ones.

Authored by Rebecca Diamond and Timothy McQuade of the Stanford School of Business, the study really has two major conclusions. First, building affordable housing in very low-income neighborhoods creates major benefits for the surrounding area. Second, there are major social costs to placing affordable housing developments in higher-income neighborhoods, though they calculate that these costs are outweighed by the income benefits to the affordable housing residents.

While there are some valuable findings here, as you might imagine, we have a few issues.

For one, the kind of affordable housing the study looks at is targeted to people with incomes that are 50 percent or more higher than is typical in low-income neighborhoods. The paper looks at developments funded by the Low Income Housing Tax Credit, or LIHTC. LIHTC buildings generally target households making 60 percent of Area Median Income; the study’s authors estimate that in their sample, that averages about $40,000. By contrast, median income in the low-income neighborhoods they find benefit the most from new LIHTC buildings top out at about $26,000. And since $26,000 is the high end, most of these neighborhoods are actually poorer than that.

In other words, they’re talking about neighborhoods so poor that building low-income housing increases the community’s average income. That makes their finding that LIHTC projects increase housing prices by about 6 percent within 0.1 miles (yes, you read that right—more on the geographic range of the effects later) much less surprising. It also means that the finding is less about “affordable housing” per se and more specific to LIHTC, or other subsidies with similar income targets. It’s questionable whether the same results would hold for other kinds of subsidized housing targeted to lower-income households.

Second, it’s worth taking a second to underline exactly what the “costs” of LIHTC buildings are to higher-income neighborhoods. Diamond and McQuade find that LIHTC buildings don’t increase crime. And yet they also find that the average homeowner in such a neighborhood would pay nearly $4,000 to avoid having to live within 0.1 miles of a LIHTC building. But note that we said “homeowner”: renters appear to have no such preference. Even more curiously, this aversion to low-income housing only appears in higher-income neighborhoods with low Black and Latino populations.

What would create such a pattern? The authors have an idea. “If local residents have preferences over the demographics of their neighbors,” they write, “new in-migrants could make the neighborhood more or less desirable.” This may be the world’s politest way of saying “mostly white homeowners appear to be discriminating against Blacks, Latinos, and/or poor people.”

Now, that’s not necessarily a surprise: it confirms many years of research about how racism and the perception of the presence of lower-income people affect housing markets. But it raises a question that anyone in housing policy or urban planning needs to be able to answer: are preferences of advantaged groups for segregation—segregation that we know is harmful for lower-income people and people of color—just another legitimate interest that we need to weigh against the interests others might have in desegregation? As it happens, the authors estimated the gains of integration, and found that they outweighed the costs. But there’s no reason the numbers had to work out that way. If the model’s results had shown that the benefits of segregation to mostly white, mostly higher-income homeowners were greater than the costs to disproportionately Black and Latino lower-income households, would that mean they would have come out in favor of segregation?

Finally, the way the authors do try to quantify the benefits of integration is extremely limited. Their estimates are based on Raj Chetty et al’s findings about the increase in average lifetime earnings for low-income households in higher-income neighborhoods. Of course, we’re big fans of Chetty’s work, and we’ve cited it ourselves extensively. But it’s a huge mistake not to include other potential benefits in a cost-benefit analysis. Other studies, for example, have shown major improvements in mental health; you might also expect better educational outcomes, which arguably have value beyond simply their contribution to future income. There’s also the reduced likelihood of crime victimization; potentially shorter commutes; and so on. None of these are weighed in when the authors conclude that the benefits of building LIHTC in high-income areas are exceeded by the benefits of building in the very low-income neighborhoods we talked about earlier.

So what should we take away from all of this?

  1. Building LIHTC units in very poor neighborhoods may, in fact, be a kind of place-based development strategy with some payoffs, as reflected by rising home prices. But it’s not clear how far it goes as a broad strategy for revitalizing these neighborhoods. For one thing, the strongest gains are in a very small area—just 0.1 miles from the project—with quickly declining improvements beyond that. Moreover, just as their estimates of the benefits of integration are limited, so are their estimates of the costs of segregation. While they do find that LIHTC projects help lower crime, it’s not clear whether there are improvements on other indicators that residents are likely to care about beyond home prices: schools, local retail options, and so on.
  2. Are all preferences made equal? We can use home prices to quantify the preferences of homeowners—but that doesn’t mean we should weigh every kind of preference in the same way. It turns out that for many people, the presence of people of color or lower-income people is enough to cause them to value their homes less. Evaluating policy options always involves value judgments, and econometric models—while often helpful—are not a substitute.
  3. When we do use econometric models, we need to be aware of what’s being left out. This, in fact, is part of our value judgments, whether we’re aware of it or not. Do we value better mental health for low-income people? Do we value education beyond its income effects? Do we value giving people the option to live somewhere they otherwise couldn’t? If none of those are in the model, then we are effectively answering “no.”
  4. Leaving integration up to local governments is unlikely to be successful. This is a point we’ve made before, citing research by Michael Lens and Paavo Monkkonen that showed that metropolitan areas with more local power in development decisions are more segregated than ones where states play a bigger role. This study underlines that while many people in all sorts of neighborhoods value diversity and integration, some do not, and they are willing to pay thousands of dollars to avoid having low-income neighbors. (This may also be about the kind of “prisoner’s dilemma” of who might get “stuck with more than their fair share” of low-income housing. In fact, research suggests that when integration is widespread, the dynamics of neighborhood change are altered in ways that reduce the incentive for self-segregation fo the advantaged.) When those preferences are combined with hyper-local power over what kinds of housing gets built where, it’s inevitable that many jurisdictions and neighborhoods will create regulatory barriers to low-income people living in their communities: in other words, exclusionary zoning.

Where should low-income housing go?

A new study has run the numbers, and has concluded that social welfare is optimized by putting affordable housing in very poor neighborhoods, rather than wealthier (and especially whiter) ones.

Authored by Rebecca Diamond and Timothy McQuade of the Stanford School of Business, the study really has two major conclusions. First, building affordable housing in very low-income neighborhoods creates major benefits for the surrounding area. Second, there are major social costs to placing affordable housing developments in higher-income neighborhoods, though they calculate that these costs are outweighed by the income benefits to the affordable housing residents.

While there are some valuable findings here, as you might imagine, we have a few issues.

For one, the kind of affordable housing the study looks at is targeted to people with incomes that are 50 percent or more higher than is typical in low-income neighborhoods. The paper looks at developments funded by the Low Income Housing Tax Credit, or LIHTC. LIHTC buildings generally target households making 60 percent of Area Median Income; the study’s authors estimate that in their sample, that averages about $40,000. By contrast, median income in the low-income neighborhoods they find benefit the most from new LIHTC buildings top out at about $26,000. And since $26,000 is the high end, most of these neighborhoods are actually poorer than that.

In other words, they’re talking about neighborhoods so poor that building low-income housing increases the community’s average income. That makes their finding that LIHTC projects increase housing prices by about 6 percent within 0.1 miles (yes, you read that right—more on the geographic range of the effects later) much less surprising. It also means that the finding is less about “affordable housing” per se and more specific to LIHTC, or other subsidies with similar income targets. It’s questionable whether the same results would hold for other kinds of subsidized housing targeted to lower-income households.

Second, it’s worth taking a second to underline exactly what the “costs” of LIHTC buildings are to higher-income neighborhoods. Diamond and McQuade find that LIHTC buildings don’t increase crime. And yet they also find that the average homeowner in such a neighborhood would pay nearly $4,000 to avoid having to live within 0.1 miles of a LIHTC building. But note that we said “homeowner”: renters appear to have no such preference. Even more curiously, this aversion to low-income housing only appears in higher-income neighborhoods with low Black and Latino populations.

What would create such a pattern? The authors have an idea. “If local residents have preferences over the demographics of their neighbors,” they write, “new in-migrants could make the neighborhood more or less desirable.” This may be the world’s politest way of saying “mostly white homeowners appear to be discriminating against Blacks, Latinos, and/or poor people.”

Now, that’s not necessarily a surprise: it confirms many years of research about how racism and the perception of the presence of lower-income people affect housing markets. But it raises a question that anyone in housing policy or urban planning needs to be able to answer: are preferences of advantaged groups for segregation—segregation that we know is harmful for lower-income people and people of color—just another legitimate interest that we need to weigh against the interests others might have in desegregation? As it happens, the authors estimated the gains of integration, and found that they outweighed the costs. But there’s no reason the numbers had to work out that way. If the model’s results had shown that the benefits of segregation to mostly white, mostly higher-income homeowners were greater than the costs to disproportionately Black and Latino lower-income households, would that mean they would have come out in favor of segregation?

Finally, the way the authors do try to quantify the benefits of integration is extremely limited. Their estimates are based on Raj Chetty et al’s findings about the increase in average lifetime earnings for low-income households in higher-income neighborhoods. Of course, we’re big fans of Chetty’s work, and we’ve cited it ourselves extensively. But it’s a huge mistake not to include other potential benefits in a cost-benefit analysis. Other studies, for example, have shown major improvements in mental health; you might also expect better educational outcomes, which arguably have value beyond simply their contribution to future income. There’s also the reduced likelihood of crime victimization; potentially shorter commutes; and so on. None of these are weighed in when the authors conclude that the benefits of building LIHTC in high-income areas are exceeded by the benefits of building in the very low-income neighborhoods we talked about earlier.

So what should we take away from all of this?

  1. Building LIHTC units in very poor neighborhoods may, in fact, be a kind of place-based development strategy with some payoffs, as reflected by rising home prices. But it’s not clear how far it goes as a broad strategy for revitalizing these neighborhoods. For one thing, the strongest gains are in a very small area—just 0.1 miles from the project—with quickly declining improvements beyond that. Moreover, just as their estimates of the benefits of integration are limited, so are their estimates of the costs of segregation. While they do find that LIHTC projects help lower crime, it’s not clear whether there are improvements on other indicators that residents are likely to care about beyond home prices: schools, local retail options, and so on.
  2. Are all preferences made equal? We can use home prices to quantify the preferences of homeowners—but that doesn’t mean we should weigh every kind of preference in the same way. It turns out that for many people, the presence of people of color or lower-income people is enough to cause them to value their homes less. Evaluating policy options always involves value judgments, and econometric models—while often helpful—are not a substitute.
  3. When we do use econometric models, we need to be aware of what’s being left out. This, in fact, is part of our value judgments, whether we’re aware of it or not. Do we value better mental health for low-income people? Do we value education beyond its income effects? Do we value giving people the option to live somewhere they otherwise couldn’t? If none of those are in the model, then we are effectively answering “no.”
  4. Leaving integration up to local governments is unlikely to be successful. This is a point we’ve made before, most recently, perhaps, in citing research by Michael Lens and Paavo Monkkonen that showed that metropolitan areas with more local power in development decisions are more segregated than ones where states play a bigger role. This study underlines that while many people in all sorts of neighborhoods value diversity and integration, some do not, and they are willing to pay thousands of dollars to avoid having low-income neighbors. (This may also be about the kind of “prisoner’s dilemma” of who might get “stuck with more than their fair share” of low-income housing. In fact, research suggests that when integration is widespread, the dynamics of neighborhood change are altered in ways that reduce the incentive for self-segregation fo the advantaged.) When those preferences are combined with hyper-local power over what kinds of housing gets built where, it’s inevitable that many jurisdictions and neighborhoods will create regulatory barriers to low-income people living in their communities: in other words, exclusionary zoning.

The Week Observed: May 6, 2016

What City Observatory did this week

1. At City Observatory, we’re interested in hard numbers—but we’re also interested in the human community and public spaces that cities can create. As we did in April with “Lost in Place,” on Monday we introduced an easy-to-share infographic of our report “Less in Common.” It summarizes many of the facts found in that report, including that the proportion of Americans interacting with their neighbors has declined by a third since 1970, and recreational activities like swimming have been radically privatized. Take a look—and because all City Observatory work is licensed under Creative Commons, you’re free to reuse the graphic in your own presentations or reports with attribution.

2. We often talk about “economic segregation” as if it were one issue—but in reality, that’s a catch-all term for all sorts of separate but related problems. Going off of work by Sean Reardon and Kendra Bischoff, we begin breaking down the concept by explaining some measures of segregation at the extremes: the percentage of families living in high-income or low-income neighborhoods. These measures are particularly relevant if you’re concerned about the effects of resource-hoarding wealthy neighborhoods, on the one hand, and opportunity-starved low-income neighborhoods on the other. But by breaking out these as separate ideas, we can see that some cities have issues with wealthy and low-income neighborhoods in roughly equal proportion, while in others, low-income neighborhoods are a much bigger problem.

3. Having introduced ways to understand and measure the segregation of the high- and low-income, we turn to the H index, a way of measuring income segregation along the entire spectrum, and distinguishing between segregation itself and inequality—different but related issues that may call for different policy approaches. While the High + Low scores suggest that New Orleans is much more segregated than Cincinnati, for example, the H index suggests the issue is actually that New Orleans is much more unequal.

4. One of the best parts of our work at City Observatory is seeing how people across the country apply our findings to their own cities and needs. We did a brief overview of the ways that people reacted and responded to our Storefront Index—from questions about whether businesses in skyways can have the same street-livening effects as traditional storefronts, to examining the inequality of retail and amenity density, to musing about how the Storefront Index could be a tool for planners to identify retail districts that need “room to grow” in the form of more commercial zoning. Let us know if you have your own uses, comments, or questions!

The week’s must reads

1. How do we know how to design the streets near your home, job, or school? Traffic studies, of course! But co.exist breaks down how those studies are themselves designed to almost always end up concluding that every street needs to be wider, faster, and less pedestrian-friendly. That, in turn, encourages more people to drive—so that the next traffic study finds roads need to be even more optimized for traffic, at the cost of safe, pleasant places to walk, bike, take transit, or just hang out.

2. NPR’s Planet Money podcast takes a look at Housing Choice Vouchers, one of the main forms of housing assistance to low-income households in the US. They end up asking some questions we’ve raised ourselves: Why do we make housing assistance a lottery, with many more qualifying households than available assistance, when other important kinds of help—like SNAP, or food stamps—are available to anyone with income below a certain level?

3. At Bloomberg, economist Noah Smith says that major American avenues to “extensive” economic growth, like globalization and the internet, have largely played out their potential for increasing productivity. The next round of US economic growth, he argues, will have to be “intensive”: “getting more output for a given unit of input.” And one way to do that is by urbanizing more. Research suggests that more densely settled metropolitan areas, all else equal, are more economically productive.


New knowledge

1. At City Observatory, we’ve been critical of the mortgage interest tax deduction, which effectively creates billions of dollars in subsidies that largely to go upper-income households. A new paper by Hal Martin of the Cleveland Federal Reserve and Andrew Hanson of Marquette University attempts to measure the effect on housing markets of different kinds of reforms to the MID. They find getting rid of the deduction would cause prices to fall as much as 13.5 percent in Washington, DC and as little as 3.5 percent in Miami. In contrast, swapping out the deduction for a 15 percent refundable credit—which could both reduce subsidies to upper-income households and make more assistance available to lower- and middle-income ones—would tend to increase housing prices—up to 12.1 percent in the Miami metropolitan area.

2. At CityLab, Richard Florida reviews two new studies on the growing economic strength of central cities. The first, by Daniel Hartley of the Chicago Federal Reserve, finds that neighborhoods closer to downtown—but not in downtown—saw faster job growth from 2009-11 than from 2002-2009, outpacing neighborhoods farther out on the periphery. (These results echo our findings in “Surging City Center Job Growth.”) Another, from the Initiative for a Competitive Inner City, finds that cities with stronger industry clusters saw more rapid job growth in those clusters from 2003-2011, underscoring the advantages of agglomeration.

3. Housing assistance can be a lifeline to low-income families, but does it offer benefits beyond immediate housing relief? A paper from the St. Louis Federal Reserve finds that, at least in some cases, the answer is yes: For every year that girls and women between the ages of 13 and 18 live in public housing, adult earnings increase by 9 percent; for each year that their families received housing vouchers, their adult earnings increase by 6 percent. Boys and men, on the other hand, see no such effects.


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

Income segregation along the whole spectrum

Yesterday, we introduced three kinds of economic segregation, and how you might measure each: the proportion of people in high-income neighborhoods; the proportion of people in low-income neighborhoods; and the proportion of people in either high- or low-income neighborhoods.

Each says something important about how people are sorted by income in a metropolitan area. But these measures also miss some things. For one, they don’t reflect how segregated people in the middle of the income spectrum are—whether working-class and upper-middle-class people live in the same neighborhoods, for example.

More subtly, but importantly, these measurements are also very sensitive to changes in inequality, even if segregation per se doesn’t change. Imagine that in your metropolitan area, you doubled the income of the richest 20 percent of families, and cut in half the income of the poorest 20 percent. All of a sudden, many more neighborhoods would meet the definitions of “rich” or “poor” according to these measurements, and so they would tell you that segregation had increased. But in fact, nobody actually moved—and the likelihood that, say, someone in the 10th percentile of income was living in the same neighborhood as someone in the 90th percentile didn’t change at all. What changed wasn’t segregation, but inequality.

Which brings us to…

The H index

So Riordan and Bischoff created an index, called H, that takes into account everyone. Unfortunately, unlike the previous three indicators, it doesn’t have an easy lay-person interpretation: it’s just a number, varying between 0 and 1, with larger numbers indicating more segregation. Basically, it works by ranking each family household by income across an entire metropolitan area, and then comparing the distributions of rankings in each neighborhood.

An important thing about H is that it is insensitive to changes in inequality. That is, because it depends on ranks and not actual incomes, if the top 10 percent of families doubled their income, or the bottom 10 percent of families cut their income in half, H would not change, even though there would be important implications for economic segregation. (Presumably we care more about high-end segregation, say, if wealthy people are really wealthy. The less different rich people are from everyone else, the less their separation matters.) In part, this is helpful: it means that an increase in H really tells us something about how people are being sorted into different neighborhoods, and not just a change in income inequality in general. But it also leaves out an important part of the story—just how different high-ranked families are from low-ranked families.

How does H differ from High + Low?

In reality, these two measures are highly correlated, as we might expect. But there are some notable differences. In both San Francisco and Milwaukee, for example, about 35 percent of families live in neighborhoods that are either low-income or high-income. But SF’s H index is 0.14, and Milwaukee’s is 0.19—a very significant jump from the least-segregated third of cities to the most-segregated third. That suggests much more sorting of relatively middle-income families in Milwaukee than San Francisco. It may also suggest that part of San Francisco’s bad showing on the High + Low score is about inequality, rather than segregation—which makes sense if we think that, say, there are many more very high-earning families in the Bay Area than in Milwaukee.

Similarly, Cincinnati and New Orleans score almost identically on the H index, at 0.15. But New Orleans has dramatically more people living in high- or low-income neighborhoods, 39 percent, versus 27 percent in Cincinnati. This is likely because New Orleans has more income inequality than Cincinnati.

In a way, you can think of the H index as a sort of pure description of segregation, while the “High + Low” score captures both segregation and inequality. While we presented that combination as a drawback at the top of this post, it might actually better reflect what many people have in mind when they think about the negative consequences of economic segregation. If harm is caused by extreme neighborhoods—both resource-hoarding rich neighborhoods and opportunity-scarce poor neighborhoods—then it matters how rich the rich are and how poor are the poor.

An increase in the H index might not directly translate to those sorts of ills—rather, it likely suggests that people are increasingly living among people with similar incomes to their own, whether or not they’re creating more rich or poor neighborhoods in the process. That distinction will turn out to be important in our next post about economic segregation: how it’s changing in America today.

How people are using the Storefront Index

For us at City Observatory, one of the most interesting (and fun) parts of our work comes after we’ve finished a Commentary or Report, and we get to watch others react and respond to its findings and arguments. “The Storefront Index,” the report on urban customer-facing business clusters that we released last month, is a great example.

At the Washington Post, Emily Badger focused on what the report had to say about cities as “centers of consumption,” and how a wide diversity of amenities and choices—from different types of clothes to niche bookstores and restaurants that cater both to immigrants from a particular country, province, or even city, as well as interested eaters from everywhere else—are key to the appeal of large urban areas. Badger also noted that the report could help show inequities in urban amenities, pointing out how spare businesses appeared in the Anacostia section of Washington, DC, compared to the rest of the metropolitan core.

Screen Shot 2016-05-04 at 3.43.01 PM

 

PlanPhilly, in turn, underscored the importance of zoning laws in shaping urban retail districts, arguing that the Storefront maps help “uncover where commercial corridors ‘want’ to expand, and where land use could be more supportive of this.”

Streets.mn wondered what sort of effect Minneapolis’ famous (or infamous) skyways have on the relationship between “storefront” businesses and urban vitality. If a shop or restaurant is in a skyway, and inaccessible from the street, does that take away from a city’s public life—from Jacobs’ “sidewalk ballet”?

Skyways in downtown Minneapolis. Credit: photogreuphies, Flickr
Skyways in downtown Minneapolis. Credit: photogreuphies, Flickr

 

And Clevescene.com saw the Storefront Index as evidence of Cleveland’s “downtown business boom.”

For many local outlets, the report was a chance to reflect on their city’s relative standing in terms of urban core retail outlets, whether that was good news (as in Portland, DC, and LA), or not so good news (as in Detroit and Orlando). And Houston’s Swamplot blog eschewed inter-city comparisons to look at which parts of their region were light on storefronts.

All in all, we’re pleased that so many people found the Storefront Index a useful and revealing tool for understanding their cities—and that many are already taking steps towards using it not just for diagnostics, but for its policy implications, from expanding commercial zoning in high-demand districts to questioning the importance of businesses on the street, and not separated in private spaces like skyways.

Have another reaction? Questions? Conclusions? Let us know.

There’s more than one kind of income segregation

Much of the conversation about urban inequality today—from Raj Chetty’s work on intergenerational economic mobility, to issues of concentrated poverty and gentrification—is framed in terms of economic segregation. But it turns out that “economic segregation” isn’t just one thing, and what we mean by the phrase, and how we choose to measure it, has serious implications both for our understanding of urban inequality and the kinds of policies we might design to fix it.

The basic issue is that unlike racial segregation, which has a few (ostensibly) discrete categories into which people fall, income segregation has to divide people based on a continuous spectrum with no obvious objective cutoffs, or even number of categories. Social scientists have come up with a number of different approaches to this problem; in this post, we’ll go through several of the most common and explain why they matter, with the goal of leaving you more able to engage in detailed, thoughtful conversations about inequality, segregation, and opportunity in your own city and beyond. (The examples will be based on work by Sean Riordan and Kendra Bischoff, whose papers on measuring economic segregation over the last several years have been excellent.)

 

High-income segregation

One approach is to measure how separate upper-income people are from everyone else. You might focus on this if you believe that, especially when the rich have a greater share of total income than they have in generations, what Robert Reich has called the “secession of the successful” threatens to keep an enormous share of society’s resources out of reach of everyone else. You can think of this as a sort of Mossack Fonseca problem: like offshoring wealth to avoid federal taxes, forming clusters of exclusive communities is a way of ensuring that money that might otherwise be used to pay for society-wide benefits will instead be spent disproportionately on the wealthy people themselves.

Riordan and Bischoff measure this by counting the proportion of people in a metropolitan area who live in neighborhoods where the median family income is more than 1.5 times higher than the median family income of the region as a whole. So, for example, the median family income in the Boston metro area is about $96,000 in the 2014 1-year American Community Survey; for that year, this measure would count the number of people living in neighborhoods where the median family income was at least $144,000. Because they use the median, and not the average, this will only capture neighborhoods where at least half of all families meet that threshold of disproportionate income; and because they measure families, it corrects for some of the differences between neighborhoods that result from age differences.

Low-income segregation

Another approach is to measure how separate low-income people are. You might focus on this version if you believe that the main threat from economic segregation is concentrated poverty; indeed, much of the research on economic segregation has focused on the problems associated with neighborhoods where a very large proportion of residents are low-income, including worse economic mobility, educational, and health outcomes.

Riordan and Bischoff’s measure for this mirrors their high-income segregation indicator: the proportion of people in a metropolitan area who live in a neighborhood where the median family income is at least 33 percent below the median income of the region as a whole. So, going back to Boston, this measure would count the number of people living in neighborhoods where the median family income is less than about $64,000.

High + Low

Perhaps you are interested in both of these aspects of economic segregation. An easy way to add them together is to…add them together. Another Riordan-Bischoff index is simply the proportion of people who live in high-income neighborhoods or low-income neighborhoods. This makes sense if you want to see how typical it is for someone to live in a community that is on some extreme, as opposed to being middle- or mixed-income. It makes for a good, quick, intuitive number that captures both high-end and low-end segregation.

On the other hand, it doesn’t necessarily tell you which of these is a problem, or in which proportions. Perhaps one city has a huge problem with concentrated poverty, while another’s issue is concentrated wealth. The policy response would not necessarily be the same to both.

How much of a difference does it make?

So how much do we gain by breaking down these different kinds of income segregation? Quite a bit, actually.

 

Comparing the prevalence of high-income and low-income neighborhoods by metro area, we can see quite a range of differences. In most cities, these numbers are roughly proportional. In Richmond, VA, 14 percent of families live in high-income neighborhoods, and 16 percent live in low-income neighborhoods. In San Diego, it’s 18 percent in high-income areas, and 21 percent in low-income areas. But in other cities, one side clearly dominates.

In some cities, many more people live in low-income neighborhoods than upper-income ones. In New Haven, for example, 16 percent of families live in high-income neighborhoods—but 25 percent live in low-income ones. In Milwaukee, it’s 13 percent and 22 percent; in Providence, it’s 10 percent and 20 percent. In these areas, concentrated poverty appears to be an even larger problem than in a typical metro area.

Interestingly, there really aren’t many cities where people in wealthy neighborhoods outnumber people in low-income neighborhoods. Partly, that reflects an argument we’ve been making for a while about the relative importance of the issues of gentrification by upper-income people and concentrated poverty. But it’s also, of course, a reflection of the income cutoffs chosen by Bischoff and Reardon. It might be useful if we had a fourth measurement—one that took into account the entire spectrum of income, and didn’t depend on arbitrary categorizations?

Tomorrow, we’ll introduce you to Bischoff and Reardon’s “H Index,” which does just that.

What it means to be in common

When we talk about the costs and consequences of car-dependent urban development, we often talk about hard economics and climate science. Spread-out neighborhoods divided by big, pedestrian-hostile roads force people to spend more on transportation than they would in a place where many trips could be taken by foot or transit. In high-demand cities, relatively lower-density development can lead to a “shortage of cities” that pushes housing prices up, encourages economic segregation, and leads to lower intergenerational economic mobility. And these urban forms are also highly correlated with more greenhouse gas emissions, worsening the threat of climate change.

But people also experience their neighborhoods as communities—as places where people gather, interact, and enrich each others’ lives. In our 2015 report “Less in Common,” we explored the ways in which increasing auto-centric development has degraded this aspect of our urban life. Now, as we did with our report “Lost in Place,” City Observatory and Brink Communication have put together an infographic to make these important ideas easy to share—and as always, this and all of our work is licensed under Creative Commons-Attribution, so feel free to incorporate it in your own presentations or reports.

The infographic illustrates many of the key findings of “Less in Common,” which illustrate ways in which increasing sprawl has weakened our communities, and show how a broader trend of Americans living more widely separated private lives has created a space for smart urban planning to strengthen the public realm.

Click to see the full infographic.
Click to see the full infographic.

 

Perhaps one of the clearest connections is in recreation: While Americans who went swimming in 1950 would probably go to a community pool, since then, the number of private, in-ground pools has increased from 2,500 to 5.2 million in 2009, as large-lot zoning and the construction of highways far into the suburban periphery has essentially subsidized the consumption of private land, at the expense of public facilities. These trends are mirrored in how we get around, relying more and more on cars cars as a mode of transportation, replacing walking and public transit—modes in which, outside a sealed, private machine, you might actually interact with neighbors or others. In fact, while about 30 percent of Americans reported spending time with their neighbors in 1970, that number was down to about 20 percent today.

This privatizing of public life has also encouraged further segregation of neighborhoods by economic status, a trend that has been well documented, and which we have explored at length at City Observatory.  Rich and poor Americans have become more spatially divided as we sort into high income and low income neighborhoods. While only 15 percent of Americans lived in rich or poor neighborhoods in 1970, by 2012, that figure was up to 34 percent.

The erosion of the civic commons also has a profound impact on economic opportunity: In regions with more economic segregation, children from low-income households are much less likely to be able to improve their income status as adults.

As the rapper Ice Cube told National Public Radio earlier this year, reflecting on the school integration policies of his childhood:

I liked it because I was being bused with a lot of my homies. So we was, like, all going out there, and then it was a lot of different neighborhoods. So it was, like, buses from all these different neighborhoods all converging on this white school. And it was kind of cool because we had a chance to see different things, different people, have different conversations, hear different music and just get a chance to see that the world was bigger than Compton, South Central or, you know, whatever. You know, so we had a chance to really kind of open our horizons…

In other words, the strength of our public spaces and institutions is crucial both for educational and economic opportunity, as well as expanding our sense of collective potential and identities. That’s something we should all be able to get behind.

Click here to see the full infographic.

The Week Observed: April 29, 2016

What City Observatory did this week

1. This week, we were proud to release City Observatory’s latest report: The Storefront Index. The Storefront Index maps and tallies every “storefront” business in the 51 largest US metropolitan areas, showing where clusters of customer-facing retailers create vibrant, flourishing neighborhood and regional commercial districts. The analysis highlights the importance of this kind of amenity in building healthy neighborhoods and cities, and is a valuable tool for community advocates, planners, businesspeople, and map geeks alike. Click here to find an interactive map for your city.

2. To illustrate the connection between storefronts and the street-level vitality of public spaces, we went off of a February Washingtonian article by Greater Greater Washington contributor Dan Reed about two adjacent public parks in central DC. One, Farragut Square, is usually full of people, while the other, Franklin Square, often lies mostly empty, just a few blocks away. Reed suggests in his article that one reason is the larger number of retail outlets on Farragut Square, which draw people through and around the park, some of whom also stop and enjoy the scenery on a park bench or patch of grass. The Storefront Index allows you to easily see this difference, confirming a quick on-the-ground impression, and offering a tool for identifying other likely “hot” and “cold” public spaces.

3. Although the current Storefront Index is based off a point-in-time database of businesses, we hope to expand this to allow stakeholders and researchers to see how neighborhood commercial districts have changed over time. To demonstrate the power of this possibility, we performed a historical analysis on one corridor, Alberta St. in Portland, OR. The Index shows dramatic growth of storefronts in the area between 1997 and 2014; further data from the Census shows that total jobs in the area has increased from under 800 to nearly 2,500 between 2002 and 2014.

4. Are Millennials back into buying cars? Some recent report have claimed so—but, as with homebuying, a closer look shows that young adults today remain much less likely to take out auto loans or have driver’s licenses than previous generations at at the same age. In fact, every age group up to 50 has driver’s licenses at a lower rate than a few decades ago; for those aged 25-29, the license rate has declined from over 95 percent to 85 percent since 1983. Again, while counter-intuitive takes on Millennials’ urban living habits might make good clickbait—and ring sonorously in the ears of real estate agents and car companies—the fact is that today’s young adults really are significantly less likely to own homes or have a driver’s license than previous generations.


The week’s must reads

1. We tend to focus on local policymakers, but it’s worth listening to this interview with Obama HUD Secretary, and former San Antonio mayor, Julián Castro at theNew Yorker—what does the White House think are the major challenges for urban policy? How does it propose to deal with them? “I couldn’t think of any American city that has dealt well with that issue of gentrification and displacement. People in the neighborhoods want some of those amenities and some investment…and then you reach a tipping point where people can’t afford to live in that neighborhood…. The inconclusive part of this is there hasn’t been enough research on what happens to the residents who are displaced. Do we know definitively that on net the impact is negative?”

2. While progressive slogans have focused on “the one percent,” Thomas Edsall at the New York Times says that more attention should be paid to the top twenty percent of earners. Going off of new research on economic segregation from Kendra Bischoff and Sean Reardon, he argues that the geographic separation of the “truly advantaged” has profound effects on opportunity and politics. Edsall says this kind of segregation is especially dangerous when it puts the economic self-interest of egalitarian-minded wealthy people at odds with their professed values.

3. What is the intersection of urban planning and gender? A conference in Detroit looked to investigate that question, as reported in the Huffington Post. Speakers argued that in many cases, women interact with cities differently—for example, placing a higher priority on safety in public places, or having different trip patterns, as a result of having disproportionate responsibility for things like child care. With women underrepresented in urban leadership positions (less than 20 percent of US mayors are women), there has been an increase in organizing to broaden understanding of these issues.


New knowledge

1. Bloomberg entered every ZIP code in America into Amazon’s new same-day delivery service to map where the company is and isn’t offering the product—andthe resulting maps show some disturbing racial patterns. Even if, as seems plausible, these results came from a race-neutral algorithm, they demonstrate the dangerous power of racial and economic segregation: by sorting demographics with greater purchasing power into certain neighborhoods, they make it more likely that ostensibly race-blind policies will actually perpetuate discrimination. Some patterns seem particularly egregious, as with Boston’s predominantly black Roxbury neighborhoods, which is excluded from same day service despite being completely surrounded by neighborhoods that are included.

2. Previously, we’ve covered ways in which neighborhoods and segregation can affect the educational outcomes of children. But a study led by Laura Tach at Cornell University finds that neighborhoods have effects on the educational progress of adults, too. Recipients of affordable housing support in Philadelphia were randomly assigned to homes in various neighborhoods and, as a part of the program, were required to enroll in secondary education. People assigned to homes in block groups with higher levels of poverty and violence made less progress in getting college credits than those assigned to wealthier and safer areas.

3. As covered in CityLab, a new study looks at how, when, and why transit services affect property values. The meta-study of 60 earlier papers finds that the connection between new public transit lines or stations and increased property values isn’t as automatic as sometimes claimed. A number of factors help determine the impact, including the extent to which the new service actually improves access to the region’s jobs and amenities; the ease of other transport options, including traffic congestion and parking prices; and the land use around stations, with denser, mixed-use development and public spaces increasing values. This adds to the growing body of evidence that concentrated poverty amplifies the negative effects of poverty across generations.


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

The Week Observed: April 22, 2016

What City Observatory did this week

1. When we measure segregation, we almost always use Census numbers that reflect where people live—ie, where their homes are. But people don’t spend all day in their homes, so a team of researchers used Twitter data from Louisville, KY to figure out where they spend their days. The results are a fascinating look at the asymmetry of segregation and neighborhood isolation: while residents of the lower-income, predominantly black West End ranged all over the city, residents of the wealthier, whiter side of town nearly entirely avoided the West End.

2. This week, the USDOT is releasing its new road performance metrics. While they may seem like the kind of wonkish details that only an engineer could love, anyone who cares about the livability and accessibility of their communities ought to be paying close attention, since the performance measures that state and local governments have to hit will help determine whether our roads are amenable to walking, biking, and transit service, or force nearly everyone into cars. Unfortunately, the new standards fail on several counts, including relying on a measure of congestion that rewards building empty roads and discounts the benefits of shorter commutes. The rules also represent a major missed opportunity to address climate change. Another option would have been to build measures that focus on reducing total driving and commute times, and take into account transit travel time.

3. Marijuana policy is sometimes dismissed as a novelty issue. Butdecriminalization and legalization actually have serious implications for urban policy for several reasons, from tax revenue, to economic development and industry clustering, to cultural signaling and Tiebout sorting, to spatially biased policing with implications for equity and economic mobility. Drug policy is one arena where state and local governments could use their positions as policy laboratories to find a better balance.

4. This week, City Observatory released a new, easy-to-share infographic that summarizes research by ourselves and others on neighborhood change. The big takeaways: over the last 40 years, neighborhoods with poverty rates over twice the national average have been much more likely to remain poor and lose significant population than they have been to gentrify. Along with our report, “Lost in Place,”which has interactive maps and tools to show how your city has changed since 1970, we hope this infographic will be useful for communicating the data on neighborhood change.


The week’s must reads

1. “NIMBY,” or “Not In My Backyard,” is a well-known epithet against people who agree that some kind of development—apartments, or schools, or shops—should gosomewhere, but not in their neighborhood. But now the New York Times covers the rise of self-described YIMBYs: people organizing and advocating for more housing development, in their backyards and elsewhere. The piece profiles Sonja Trauss of the San Francisco Bay Area Renters Federation, who has become one of the national leaders of the movement. If there’s going to be the political will to address America’s “shortage of cities,” people like Trauss may play a major role in building it.

2. We’ve been advocates of more big-picture reimaginings of federal housing policy—and this week, we’re joined by Demos’ Matt Breunig, commenting on an essay inDemocracy Journal by Peter Dreier that suggests creating an entitlement housing allowance through the Earned Income Tax Credit. Breunig, on the other hand, points out that a yearly lump sum may not be the best way of distributing benefits for a cost that renters face monthly. See our pieces about this sort of low-income housing entitlement with vouchers or tax credits.

3. This week, San Francisco became the first US city to require that all new housing in buildings that are 10 or fewer stories include solar panels. Unfortunately, as Vox explains, this is a much less effective anti-greenhouse emissions policy than just allowing more housing to begin with. Because people in dense, transit- and walking-friendly cities like San Francisco are much more efficient in their energy usage, increasing the number of people who live in them has major environmental dividends. Vox estimates that the carbon benefits of the solar panel mandate is about a third of the carbon benefits of allowing 10,000 units of new housing in the city.


New knowledge

1. Children do worse on academic tests if there has been a homicide in their neighborhood within the last week. Building on that finding, NYU sociologist Patrick Sharkey has found a strong link between counties with high levels of violent crime and lower levels of economic mobility, even holding other factors constant. The effects are sensitive enough that children growing up in a place during periods of relatively low crime did better as adults than children who grew up in the same places during periods of higher crime. This study adds an important piece to our understanding of how place affects the long-term outcomes of its residents.

2. The Chicago-based Center for Neighborhood Technology has released perhapsthe most comprehensive, easy-to-use transit database yet. Called “AllTransit,” it combines original analysis of transit access and quality with well-organized aggregation of existing data on ridership, service, and demographics. The tool is designed for use by policymakers and advocates to see where transit is and isn’t working—and how it may be creating opportunity, or failing to do so, for different people in different parts of a region. Anyone trying to understand the landscape of sustainable transportation in the US should check it out.

3. Are American cities no longer eating up as many acres of farmland as they used to? That’s the question posed by Issi Romem at buildzoom. Romem finds that the number of square miles consumed by new urban (or perhaps “suburban” is the better term) developments has stayed remarkably steady over the last several decades. But that evenness hides major variations at the metropolitan level: while some regions, like Atlanta, are growing in physical area even more rapidly, others, like the Bay Area, have seen growth come nearly to a halt. There’s a lot to unpack here, from the physical growth that far outstrips population growth in places like Cleveland or Atlanta, to the unfortunate reality that most US cities that add enough housing to keep prices low do so by adding low-density subdivisions on the urban fringe. (It’s also worth noting that this analysis ignores the higher transportation costs associated with that kind of sprawling development.) It’s important to recognize that almost no US city have land use plans that facilitate density where it’s most demanded. If we allow for more density and “missing middle” housing, we wouldn’t need to choose between “expansive” and “expensive” cities.


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

Marijuana: its geographical and policy implications

In the last several years, marijuana legalization has gone from a fringe issue treated as a joke or third rail to a mainstream, enacted policy in parts of the country. Broadly, the change seems to be driven by growing recognition of the general failure and costs of the drug war; growing understanding and acceptance of the medical uses of marijuana; and generational culture change.

In 2012, Colorado and Washington became the first states to fully legalize marijuana for all purposes for adults over age 21; in 2014, Alaska and Oregon followed. A number of cities, including Washington, DC, and New York City, have decriminalized cannabis, giving out tickets rather than arresting offenders.

Metropolitan area-level survey data from the US Substance Abuse and Mental Health Services Administration, collected between 2005 and 2010, before any of the full legalization measures passed, suggests that it’s no accident that these are the regions that are leading on the issue. Seattle, Portland, and Denver were all among the metropolitan areas with the greatest reported use of marijuana in the last year, ranging from 13.9 percent in Seattle to 16.5 percent in Denver. (No Alaska metropolitan area was included in the survey.) By contrast, the national average was 10.7 percent.

 

California, home to the city with the highest reported use—San Francisco, at 17 percent—hasn’t fully legalized marijuana, but it has legalized it for medical purposes, with rather lax standards for receiving a prescription. Meanwhile, the metro areas with the lowest reported use tend to be in the Plains or Southeast (with the notable exceptions of Atlanta and Nashville), with Houston registering the lowest rate of marijuana use, at 7.9 percent.

At City Observatory, we generally focus on issues of urban planning, housing, and transportation, but there are a number of reasons for policymakers and stakeholders to treat marijuana legalization as more than a novelty.

Perhaps the most appealing for the straightedge lawmaker is simply cash. In the last fiscal year, Colorado collected nearly $70 million in tax revenue from marijuana sales—versus just $42 million from alcohol sales. Next door, the Grand Canyon Institute has estimated that a similar measure could collect $62 million a year in tax revenue for Arizona. Nor is the benefit limited to the public sector; far from it—the medical marijuana industry in California is now selling $2.7 billion a year. In fact, there’s already evidence that early-adopter states are creating path dependencies that may anchor a potentially massive industry in their jurisdictions. Companies that developed industry-specific knowledge and skills in Colorado, for example, are now in prime position to capitalize on states that legalized marijuana later.

There is also a kind of Tiebout sorting issue to think about. State and local policies like marijuana legalization can serve as signals about a place’s values and cultural profile for potential migrants and businesses, even those who aren’t most directly affected by the policy itself. The most recent example is the law passed in North Carolina that, among other things, required transgender residents to use bathrooms according to the gender on their birth certificate. The law set off such an intense backlash, including threats of economic boycotts, that the state’s governor began trying to soften some of its provisions less than a month after its passage. Indiana’s “Religious Freedom Restoration Act,” which permitted discrimination by private businesses on the grounds of sexual orientation, cost the state at least $60 million in convention business alone. With businesses increasingly chasing high-value employees, state and local officials may want to watch to see if marijuana legalization has any effect on the location choices of this cohort of the “young and restless,” or others. (Of course, part of Tiebout sorting is that people have different preferences—so perhaps this is an argument against legalization for places looking to attract or retain more socially conservative, or older, residents.)

Finally, the connection between the war on drugs and economic opportunity has been well explored by researchers and advocates. People who are arrested, even for nonviolent drug possession offenses, find themselves at a severe disadvantage in future employment searches. Moreover, studies have shown that arrests for drug possession are concentrated in low-income neighborhoods, and neighborhoods whose residents are primarily people of color, even when drug use is no higher in these communities than elsewhere. In other words, drug arrests act as a drag on opportunity with a strong economic, social, and spatial bias—with direct implications for those who are concerned about the intersection of urban geography and inequality.

Obviously, we’re still a long way from figuring out the ideal drug policy—but there’s an increasing consensus that the status quo isn’t it. Marijuana is one front on which cities’ and states’ often-heralded, sometimes-overblown status as policy laboratories could bear real fruit.

The Week Observed: April 15, 2016

What City Observatory did this week

1. More than half of commuters to jobs in classically suburban DuPage County, outside Chicago, say they’d like to walk, bike, or take transit—but nearly 90 percent of them drive anyway. What’s going on? A closer look finds that decades of avowedly auto-centric planning has led to a situation in which nearly all housing and employment growth has been directed to highways, and prohibited near one of the county’s 26 rail stations. As a result, not driving is usually time-consuming, uncomfortable, and dangerous, so even people who would rather not get in their car every day are forced to do so.

2. We’ve sounded this alarm before, but if you’ve read an article about how rents in your city have changed dramatically in just a month or two, it may have been bogus. Another round of pieces about apartment listing service Abodo’s “rent reports” ignore obvious absurdities, including the fact that Abodo claims rents in Portland, OR, grew 14 percent in February in a single month, and then declined seven percent the very next month. These “reports” are in fact just averages of the listing companies’ databases, which are heavily skewed to higher-end apartments and make no effort to correct for random noise in availabilities from month to month. Readers should ignore them, and reporters should know better than to quote them.

3. Place matters for your economic opportunities—and also for your life expectancy. A new study from Raj Chetty et al, whose previous groundbreaking research linked local conditions to intergenerational economic mobility, finds correlations between life expectancy, especially for the low income, and a range of local variables. It ties longer life to greater population density, higher home values, more immigrants, more local government spending, and more college graduates—all indicators of high-quality urban spaces. These findings are exploratory, and don’t yet control for other factors, but point towards further research into how where we live affects our life chances.

4. The growth of upwardly mobile college graduates in many urban centers around the country has led, in some cases, to an overcorrection of the old conventional wisdom: after decades in which cities were synonyms for neighborhoods with disproportionate numbers of lower-income people, people of color, and immigrants, cities are increasingly associated with people who are wealthier and whiter. But it’s important not to confuse the direction of change with actual levels: as a new Pew study underscores, whites and people with higher incomes remainunder-represented in cities and urban behaviors like public transit ridership. It’s important to keep that in mind when evaluating the equity impacts of urban policy.


The week’s must reads

1. America’s GDP is more than 13 percent below where it could be if not for the exclusionary effects of high housing prices in our most productive cities. The Economist considers what might be done to remedy that, and rounds up policy ideas like TILTs (essentially impact fees paid directly to neighbors of new development), moving development decisions from hyper-local neighborhoods (where everyone wants new development “somewhere else”) to the broader city, where neighborhoods can negotiate over their fair share; or even state or federal override of exclusionary, anti-density local laws.

2. Despite its reputation as a world-class melting pot, New York is by some measures one of the most segregated cities in the US. The New York Times considers what that means for Mayor Bill de Blasio’s big housing reforms, including a policy—already the subject of a lawsuit—that gives preference for low-income inclusionary zoning units to local residents, which critics say perpetuates segregation in neighborhoods with a large majority of white residents.

3. Eighty percent of the energy in every gallon of gas is wasted. More than 50,000 Americans die prematurely every year because of vehicle pollution, and more than 3,000 die every month from traffic accidents. The average car owner pays $12,544 a year in loan payments, gas, insurance, and maintenance—for a machine that sits idle 92 percent of the time. Cars and trucks are responsible for more than 80 percent of transportation-related greenhouse gas emissions, playing a key role in global climate change. At The Atlantic, Edward Humes argues these and other issues make our reliance on cars insane.


New knowledge

1. Housing policy has been implicated in everything from climate change to intergenerational mobility to longevity, and now an Urban Institute paper links it to school attendance. Surveying the research literature, as well as doing their own analysis, they find that housing conditions like high levels of lead, as well as housing instability and frequent moving, were highly correlated with chronic absenteeism among students, which in turn is correlated with poor academic outcomes. Concentrated poverty, and its associated problems, are also implicated.

2. They paved over paradise, but they didn’t stop there. New satellite imagery shows how much hard pavement has been added to the DC metro area at Greater Greater Washington. GGW‘s David Alpert points out that more hardscape isn’t always a bad thing—sometimes, it means more density in places that desperately need it, especially in a rapidly growing city. But much of the new pavement represents parking lots and roads far away from the homes and jobs of the central city.

3. A bill has been introduced in Illinois to tax drivers per mile driven—but even if you live elsewhere, this primer from Chicago’s Metropolitan Planning Council is worth reading for a rundown of why and how such a tax might work. A big issue for the state is that the growing vehicle fuel efficiency means declining revenue, without any corresponding decline in infrastructure needs. The plan would offer a few options to drivers, including flat fees and GPS trackers that would precisely measure travel distances. Potentially, these trackers could be used to price congestion, charging more for driving at peak times and locations, and helping to keep roads relatively open. Social equity issues, as well as administration costs, are also challenges. (Oregon already has a pilot VMT tax program—read more here.)


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

Daytime and nighttime segregation

In cities, you’ll sometimes hear people talk about a “daytime population”: not how many people live in a place, but how many gather there regularly during their waking hours. So while 1.6 million people may actually live in Manhattan, there are nearly twice that many people on the island during a given workday.

Most studies on segregation deal with what you might call the “nighttime population,” or actual locations of residence. And of course, that kind of segregation has been shown to have significant negative effects. But it’s also in large part a matter of convenience: the Census means that we have detailed data on where people live. It’s harder to get data on where they happen to spend their time when they’re not at home.

But a fascinating study asks whether, and how, waking mobility affects patterns of segregation. The authors—Taylor Shelton, Ate Poorthuis, and Matthew Zook—used geotagged Twitter and Foursquare data in Louisville, KY to determine whether users likely lived in that city’s West End (predominantly black) or East End (predominantly white). Then they mapped the ratio of the number of tweets by East End residents to the number of tweets by West End residents all across the city.

Screen Shot 2016-04-18 at 10.11.39 AM

 

The results are striking: While the West End is visible as a block of nearly solid purple, indicating virtually no tweets from East End residents, Louisville’s East End appears as various splotches of orange, grey, and purple—indicating a much greater mix of East and West End residents.

The implication is that West End residents, who are mostly black, are much more likely to cross boundaries of segregation than East End residents, who are mostly white. In part, that may be a matter of necessity, as the wealthier East End has more jobs, stores and services.

But it also fits in a pattern of racial stigma and avoidance described by other studies as well. What’s ironic here is that while racial segregation is often described as a limitation on the movement of the disadvantaged population—and in many important ways, from health outcomes to employment, it is—in terms of physical mobility, it turns out that the driver of the West End’s isolation isn’t that West Enders never leave, but that East Enders never visit.

A view of 9th Street, which divides the East and West Ends of Louisville, KY. Credit: Google Maps
A view of 9th Street, which divides the East and West Ends of Louisville, KY. Credit: Google Maps

 

That dovetails with research by Ed Glaeser, who suggests that since around 1970, the persistence of “nighttime” residential segregation has been driven primarily by whites’ decisions to avoid neighborhoods that have a significant black population, and to leave their own neighborhoods when blacks move in. It also resonates with research from Robert Sampson, who found a significant stigma attached to predominantly black neighborhoods, and Maria Krysan, who found that while blacks’ knowledge about predominantly white neighborhoods in Chicago depended on their distance and economic class, whites were much more likely to describe themselves as knowing nothing about black neighborhoods, regardless of other factors.

Shelton, Poorthuis, and Zook did find that a few specific activities could draw East End residents west: a cluster appeared near the Churchill Downs racetrack during horse racing season, but then disappeared when the season ended. In other words, while this is a hopeful sign that some kinds of activities clearly generate geographic crossover, these kinds of visits appeared to be to few or limited to have any wider spillover effects in increasing even daytime integration elsewhere in the West End.

That suggests the remedy for this kind of separation will have to go deeper than just an occasional event that draws people from around the city for a few hours. But this paper helps underscore that when we think about segregation, we need to think about more than just where people sleep at night.

Urbanism isn’t yet a luxury good

For most of the 20th century, cities and their accoutrements were associated with immigrants, people of color, and relative economic deprivation. The very phrase “inner city” became a synonym of “poor,” and in certain contexts “urban” itself became a word that referred to people of color, especially black people.

The “great inversion” has challenged that narrative in recent years, as increasing numbers of disproportionately white, upwardly mobile college graduates have moved to downtowns and inner cities around the country. In fact, in analyzing recent Census data, Jed Kolko found evidence that white college graduates were among the only demographics becoming more urban in their living arrangements.

Credit: Paul Sableman, Flickr
Credit: Paul Sableman, Flickr

 

This is all very valuable research—and captures a real phenomenon that has both promise and peril for American cities and suburbs. But there’s a danger in overcorrecting here. (For example, Matt Yglesias’ headline at Vox“America’s urban renaissance is only for the rich”—sort of skirts that line.) Specifically, while the direction of change is that cities are becoming relatively wealthier and whiter, the actual levels of these populations mean that in most cities, residents are still disproportionately lower-income, foreign-born, and black or brown.

The danger in overcorrecting the conventional wisdom is that we discount the ways in which cities offer important lifelines to people with fewer resources or who are historically disadvantaged. A good example is public transit, and the vastly lower transportation costs that people who live in places with viable transit systems (and the ability to walk or bike for many trips) can enjoy, freeing up household budgets for other necessities. If we imagine that the typical transit rider is a white creative class worker in Brooklyn or the North Side of Chicago, we might discount that redistributive, progressive effect of transit service, and decline to pursue it as a policy goal.

But a recent Pew survey hits home just how far we have to go before the prototypically urban experience of riding the bus or subway becomes a disproportionately white, upper-income phenomenon. Pew asked respondents how often they used public transportation, and published the results with various demographic breakdowns.

Screen Shot 2016-04-13 at 3.17.56 PM

 

The results clearly show that public transit use in America remains disproportionately not the province of whites or upper-income people. Just seven percent of whites—compared to 23 percent of black people and 15 percent of Hispanics—reported using transit at least once a week. A quarter of immigrants took public transit weekly, as opposed to just nine percent of native-born Americans. And those with incomes under $30,000 a year were by far the most likely to be regular riders (15 percent), compared with those making between $30,000 and $75,000 (eight percent) or more (10 percent).

While change makes headlines, actual levels matter too. Cities are, in fact, becoming wealthier and whiter; suburbs are becoming more economically and ethnically diverse. But at least so far, the effect has been to diversify both, rather than lead to a total demographic flip. Cities and “urban lifestyles,” including the use of public transit, are very far from actually being disproportionately wealthy and white, despite the impression you might get in parts of New York or San Francisco.

A mystery in the suburbs

More than half of workers in DuPage County, outside Chicago, say they’d like to get to work without a car. But nearly 90 percent of them drive anyway. What’s going on?

First, a little context.

Your city probably has a DuPage County—if not by name, by profile. Beginning about 15 miles due west of Chicago’s Loop, DuPage boomed in the last several decades of the 20th century, filling the spaces in between 19th century railroad suburbs with low-density subdivisions and office parks, and growing from just 150,000 people in 1950 to nearly a million in 2010. Today, it’s home to a disproportionately affluent slice of the region (median household income is $80,000, as compared to just over $60,000 for the metro area), as well as some of the Chicago region’s largest employment centers outside of downtown, including Fortune 500 companies like Ace Hardware and (for the moment, anyway) McDonald’s.

DuPage County's I-88 corridor, looking towards downtown Chicago. Credit: bujcich, Flickr
DuPage County’s I-88 corridor, looking towards downtown Chicago. Credit: bujcich, Flickr

 

In other words, DuPage County is more or less a poster child for affluent, “successful” postwar sprawl. That said, its relative economic position to Chicago’s core has been declining recently, as a result both of the growing job base and high-income population of the center city and the growing ethnic and economic diversity of DuPage itself. Thus the poll of DuPage workers, commissioned by the county’s economic development arm, to see what the county might do to attract and keep jobs from fleeing to downtown Chicago or elsewhere.

So why don’t people who say they’d like to take transit actually do it?

It’s not that DuPage doesn’t have transit services. It’s actually pretty transit-rich for suburban America: three Metra commuter rail lines, with 26 stations, pass through the county; a handful of bus lines also criss-cross the area.

A Metra train in Wheaton, IL. Credit: Wikimedia Commons
A Metra train in Wheaton, IL. Credit: Wikimedia Commons

 

But for those transit services to be useful for commuting, they have to actually go where people are going—their homes and jobs. And a closer look shows that they don’t.

Back in 1950, development in DuPage County was focused around the commuter rail lines. If you lived in DuPage, you probably lived within a relatively short distance of rail transit—which gave you access not just to the city, but to every other community on your line.

Screen Shot 2016-04-08 at 12.57.16 PM
Note that the lines marked “highway” were planned, not existing, highways in 1950.

 

Since then, however, planners and developers assumed that virtually everyone would use a car to get around, and so the overwhelming majority of the hundreds of thousands of jobs and homes that DuPage County has added in the last several decades have been built too far from rail stations to be accessible. Instead, they’ve been focused along highways and wide arterials built with little to no consideration of transit, walking, or biking.

We can see the effects easily in maps. A population density map of DuPage County shows that there’s no strong correlation between where people live and where Metra stations (the white circles) are.

DuPagePopDens

 

But as we’ve discussed before, destination density is perhaps an even more important factor in determining how someone gets to work. Unfortunately, a heatmap of DuPage County jobs looks even worse in terms of rail access:

DuPageJobDens

 

Nor does the bus network help that much. For one thing, the spread-out nature of development means that no one bus line can have easy access to many homes or businesses either—and even someone who steps out of a bus relatively close to their destination has to navigate roads and parking lots that aren’t designed for walking. Partly as a result, the buses simply don’t come that often: at best, every 15 minutes at rush hour, which may be on the edge of acceptability for show-up-and-go service in the afternoon or late in the evening, but is a burden for someone who really needs to be on time for a job. Other buses come much less frequently, even at rush hour.

This is where you wait for the bus in the jobs-rich I-88 corridor in DuPage.

So someone who wanted to commute to their job in DuPage County by transit would discover 26 rail stations which are probably within walking distance of neither their home nor their job, and a network of buses that aren’t much better, most of which come too infrequently to be reliable for very time-sensitive trips like a commute, and which require getting to and from stops that are located on roads that are hostile or dangerous for walking.

In other words, the decisions of planners and developers over the last several decades have created a land use pattern that essentially locks in transportation choices for all future residents, who are now stuck commuting in ways they say they’d rather not. And DuPage, like other car-dependent suburbs around the country, may be losing some of its economic base as a result.

One response to this, of course, is that for most of the 20th century, car-dependent development is what people wanted. If people wanted to live or work near transit stations, then developers would have built homes and offices there. Which: maybe! But if that’s the case, then it’s odd that basically every municipality in DuPage County has taken the step of legally restricting developers from doing so. Nearly every suburb prohibits apartments, offices, and most other space-efficient commercial uses outside a radius of just two or three blocks from their train station. And even within that radius, density is restricted and discouraged with parking requirements and other rules.

This kind of multifamily building, common in the city, is just a few blocks from suburban Elmhurst, IL's downtown Metra station. It was built probably only a few years before the adoption of zoning codes that made this sort of construction illegal, and enforced a low-density development pattern on the area. Credit: Google Streetview
This kind of multifamily building, common in the city, is just a few blocks from suburban Elmhurst, IL’s downtown Metra station. It was built probably only a few years before the adoption of zoning codes that made this sort of construction illegal, and enforced a low-density development pattern on the area. Credit: Google Streetview

 

And, of course, over the decades, the federal, state, and local governments have invested billions of dollars in highways and road widening, without which most of the development of the last half-century would have been impossible. The size and nature of the public investment prompted a complementary set of private investments that was utterly, and in some ways irrevocably, dependent on auto travel. In fact, nearly the only people who do commute to work by public transit in DuPage are the ones living near Metra stations.

DuPageTransitCommutes

 

The point is not that, absent these policies, there would have been no new subdivisions far from transit. Nor is it that the right outcome would be for every Metra station to be a little mini-Loop.

Rather, these policies exist on a spectrum—a sliding scale of how many people and jobs will be within walking distance of high-quality transit, on streets amenable to traveling on outside of a car—and we happen to have chosen one extreme, with the result that 90 percent of people drive to work. Including, at a minimum, four out of five people who say they’d prefer not to.

The problem with that isn’t just that some of those urban Millennials aren’t enjoying their preferred lifestyle. It’s that hundreds of thousands of people—including people of modest means—are forced to pay thousands of dollars more in transportation costs every year. And that people who really can’t drive, because they can’t pay for the costs of owning a car, or because they’re too young or old or have some physical disability, are shut out of full participation in society, or forced to waste hours of their days on inefficient transit.

These outcomes, as a result of changing land use patterns, take decades to unfold, and neither DuPage nor the rest of the Chicago region—which looks pretty similar, outside downtown—is going to slide the scale back towards a more balanced transportation system immediately. But lots of little decisions add up.

The Week Observed: April 8, 2016

What City Observatory did this week

1. Even in a relatively dense city like Chicago, large amounts of off-street parking goes unused daily. A new report from the Center for Neighborhood Technology documents the over-supply of residential parking, and lays the blame on municipal parking requirements that force developers to build parking lots or garages even when they don’t believe their tenants need them. With a single stall of parking costing up to $37,000, this is especially burdensome for affordable housing developers, whose buyers are especially unlikely to even own a car, but it can also add to market-rate prices, and encourage car ownership by forcing everyone to pay for parking whether they drive or not.

2. The argument that misguided zoning laws are behind many of our urban problems—from housing shortages and rising rents to low-density, car-dependent sprawl—is no longer such a fringe argument. But it’s worth digging into the other kinds of urban policies that lead to environmentally and socially unsustainable neighborhoods. A useful place to do that is Houston, which has created some picture-perfect sprawl without a formal zoning code. In some cases, that’s because they’ve replicated some zoning staples, like parking requirements, outside a zoning code per se. But there are also issues like street widths and block lengths that create an inherently pedestrian-hostile environment, and encourage car-dependent neighborhoods.

3. Millennials are buying more homes as they get older—but at every age, they’re buying fewer homes than previous generations. We get into the difference between lifecycle and generational change, and why the fact that people are more likely to buy a home at 35 than 25 doesn’t mean that today’s 35-year-olds are as likely to buy a home as 35-year-olds ten or fifteen years ago. In fact, homebuying is down among virtually every age cohort except those over 70, with profound consequences for the housing market.

4. A recent challenge to hackers to use public data to reimagine Staten Island, NY’s bus network demonstrates both the promise and the limitations of data-driven urban planning. At City Observatory, we obviously believe in the power of data—and grassroots-led action—to improve our communities and cities. But we also need to be aware of what data doesn’t tell us: in this case, how much of the trip patterns being analyzed are a result of the existing structure of the bus system; what might happen in a more radical reimagining of Staten Island’s transportation landscape; and how hidden priorities and assumptions draw borders around our plans.


The week’s must reads

1. Last summer, the Supreme Court’s opinion upholding “disparate impact” claims under the Fair Housing Act made front page headlines; last month, one of the first such cases since the opinion was handed down against Yuma, Arizona. At CityLab,Kriston Capps writes about how a court deemed that city’s zoning laws discriminatory—in particular, the rejection of a developer’s request to reduce minimum lot sizes for his development from 8,000 square feet to 6,000 amidst racially charged rhetoric from nearby homeowners. Yuma is far from the only city to engage in large-lot zoning; this is a decision that potentially implicates many other municipalities.

2. At first glance, this isn’t a story with much relevance to the US: Toronto isplanning to loosen commercial use requirements in its postwar suburban apartment towers. Of course, the vast majority of US metro areas don’t have many suburban towers—but the basic idea applies anyway. Just like the Canadian highrises, US suburbs are held back economically by large single-use districts, where residents are unable to walk to neighborhood retail or everyday services, or start home businesses to bring in some income with low overhead.

3. Massachusetts has taken a major step towards more inclusionary housing policy, with a state legislator introducing a bill that would require every municipality to zone some of its land for multifamily residential buildings. As Vox‘s Matthew Yglesias writes, such a law would put Massachusetts in a small collection of North American governments, including Washington state, Oregon, and the province of Ontario, that force cities to allow some amount of denser, urban housing. Such a policy not only creates room for more housing infill without pushing sprawl further into the countryside, but can help integrate exclusionary neighborhoods.


New knowledge

1. The face of American debt is increasingly a young graduate with student loans—or perhaps a family who bought their first home during the real estate bubble of the last decade and is still underwater. But a new report from the New York Federal Reserve suggests that the age cohort with the fastest-growing debt loads is over 50, increasing roughly 60 percent between 2003 and 2015. (Some, but not most, of that increase is a result of population growth.) In the wake of the Great Recession, credit standards have tightened, and (with the exception of student loans) younger people are borrowing less. Conversely, older adults are carrying greater debt into their retirement years—perhaps reflecting the lingering effects of the housing bust.

2. Income segregation is one of the most important indicators for cities because of its established link to intergenerational economic mobility. Using the latest American Community Survey, Sean Riordan of Stanford and Kendra Bischoff of Cornell find that neighborhood-level income segregation—which their previous research showed had been growing substantially from the 1980s through 2007—continued to grow from 2007 to 2012. The changes varied by metropolitan area, and, not surprisingly, were strongly correlated with changes in income inequality. The growth of income segregation also appears to be picking up steam: after growing by 4.5 percentage points on a per-decade basis from 1970 to 2007, it grew at a 6.4 percentage point per decade pace from 2007 to 2012. Unlike previous studies that have emphasized the “secession of the rich,” Riordan and Bischoff find that the growth of income segregation from 2007 to 2012 was driven largely by increased sorting among working- and middle-class households, rather than the very wealthy or very poor.

3. Another study, this one in The Lancet, finds that urban neighborhoods are good for your health. Comparing behavior across several cities, from Baltimore to Bogotá, researchers found the residents of more urban neighborhoods walked an average of 90 minutes more per week than residents of more car-dependent communities. Indicators of more physical activity included residential density, a greater number of intersections, public transit, and mixed land use patterns.


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

Sprawl beyond zoning

Another column from Paul Krugman today on the ways that US-style zoning laws are detrimental to economic opportunity is a pleasant reminder that the role of building regulations in broader questions of inequality is no longer such a fringe issue. Particularly in places with the greatest “shortage of cities”—where the gap between available housing and the demand for it is greatest, and prices are, as a result, most out of whack—the basic idea that zoning is one of the main drivers of that shortage is increasingly well understood, even if not everyone agrees with it.

But while these regressive, environmentally and socially unsustainable regulations often get reduced to “zoning,” there’s a lot more going on in American cities than that. Take, for example, Houston, which is famous (in its way) for being the only major US city without comprehensive zoning. It’s a frequent comeback for those who claim that zoning and regulation is behind American urban sprawl: If that’s so, then how do you explain Houston, which combines a lack of zoning with picture-perfect urban sprawl?

Houston City Hall, where they don't write zoning codes. Credit: Wikimedia Commons
Houston City Hall, where they don’t write zoning codes. Credit: Wikimedia Commons

 

The answer is illuminating in two directions. First, Houston is a case study in how non-zoning regulations can produce sprawl. But it also shows how Houston’s lack of traditional zoning really does open up some windows that don’t exist in other places—and what the consequences are in practice. This post will focus on the first direction; we’ll dive into the second in a later post.

You might divide Houston’s non-zoning regulations into two buckets. The first are regulations that essentially reproduce zoning without the name. These have been covered well by a number of people, including Michael Lewyn in 2005, Chris Berry in 2001, and more recently, Zillow’s Sklyar Olsen. (There’s also a good amount of discussion in William Fischel’s Zoning Rules!) A big one is that neighborhoods can establish private covenants that regulate building density, form, and use—and the city of Houston will sue to enforce them, rather than requiring private individuals who are party to the covenant to sue. Essentially, Houston enforces private zoning codes with public money and resources.

Houston also directly regulates the built environment in ways that most cities do within a zoning code. Up until 1998, the city mandated that homes be built on lots no smaller than 5,000 square feet—well over the minimums that predominate in older, denser cities. (Since then, the city has relaxed the minimum lot area requirements in some places, with consequences that are worth exploring in another post.) Similarly, minimum parking regulations are a staple of American zoning; Houston’s are no different even if they appear outside a comprehensive zoning code. One-bedroom apartments must have 1.33 parking spaces available; single family homes must have two. In a special case of backwardness, bars must have ten parking spaces for every thousand square feet of floor area. As elsewhere, the result of all of this is to a) create a built environment in which surface parking lots are common, pushing buildings farther apart and making walking both more burdensome and less pleasant; and b) force tenants and customers to effectively pre-pay for the major costs of car use, making the price difference between driving and not much smaller, and inducing more people to drive.

More interesting for our purposes here, however, are regulations beyond the scope of normal “zoning”—that is, the use and form of buildings. These regulations aren’t necessarily unusual, but they go beyond the question of directly regulating buildings, to regulating the spaces in between. For example, street widths: Houston’s planning department suggests that major arterials ought to be at least 100 feet wide, a size that makes crossing anywhere but at a signalized intersection virtually impossible, and generally precludes a pedestrian-oriented street that is safe and pleasant to walk along. On these streets, intersections are also supposed to be no less than 600 feet apart, roughly twice the length recommended for a high-quality pedestrian environment—and especially harmful when it’s dangerous to cross the street without a traffic light.

Especially when combined with parking requirements, the effect of these non-zoning regulations is to create streets that look like this:

 

For reasons of both comfort and practicality, this is not a street that very many people will choose to interact with outside of a car. The sidewalks are wedged between fast-moving cars and parking lots; to get to any of the businesses that line the street, a pedestrian will have to navigate spaces designed for cars, which is unpleasant, time-consuming, and dangerous. Because the city code requires plentiful off-street parking, because the street width has been optimized for car travel, and because private covenants generally enforce the separation of commercial and residential areas, the distance between these shops and most people’s homes is likely to be too far to walk anyway. And because transit use generally involves some walking from a stop to your final destination, it will be greatly discouraged as well.

Given a transportation environment that has discouraged all non-car modes, developers will end up building housing far from jobs and amenities, assuming that their buyers will drive. In this way, auto-oriented arterials function in a similar way to highways: they reduce the costs (financial, time, and otherwise) of driving, increase the costs of other modes, and encourage sprawl.

That creates both environmental and social unsustainability, pushing people to rely on emissions-heavy, and personally expensive, transportation. As work from the Center for Neighborhood Technology has shown, people who live in more car-dependent neighborhoods can pay significantly more for transportation, often to the point that it crowds out other necessities. Even where housing is affordable, then, the total location costs of that housing, including transportation, might not be. And people who cannot drive at all—either because they cannot afford to own a car, or because they are not physically able—are left to rely on public transit that is almost necessarily impractical, because of the physical layout of streets.

While zoning is the most common land use tool, and while it is fairly characterized as being a big contributor to sprawling development patterns throughout the country, it’s only one example of the kind of regulation that leads to sprawl. Houston’s combination of parking requirements, prescribed street widths, and the public enforcement of private covenants accomplishes the same sprawling results. So while these sorts of street regulations don’t directly enforce the kind of low-density housing that we criticize zoning for, they do strongly encourage it. They deserve a place in our conversations about housing accessibility, and access to opportunity, in Houston and beyond.

The Week Observed: April 1, 2016

What City Observatory did this week

1. Have we reached “peak Millennial”? One researchers argues that because new births peaked in 1990, today’s 26-year-olds represent the high water mark of a youth-led urban renaissance. But a closer look shows that’s not the case: the US Census predicts that we have a number of years until we’ve reached the top of the youth wave, demographically—and foresees a plateau, rather than a peak. Moreover, it appears that the preference among young adults for city living is increasing, which could boost their urban numbers even without a demographic swell.

2. Growing up in a mixed-income neighborhood can have serious benefits for children when they reach their adult years—and a new study reveals how previous research has actually understated those effects. A new paper shows that previous studies on the “Moving to Opportunity” experiment that gave public housing residents vouchers to move to lower-poverty neighborhoods had a hidden bias that suggested the benefits of moving were smaller than they really were. The real takeaway, though, is not about “mobility” programs per se, but about the importance of economic integration in general—as other research that measured the opposite dynamic, the growth of middle- or upper-income households near existing public housing, has shown.

3. Fact: College students in Detroit are more likely to stick around town after graduation than their peers in Austin, Texas. Does that mean the Motor City is winning the fight against “brain drain,” and Austin’s boom isn’t all it’s cracked up to be? Not really. It turns out that these differences have more to do with the kinds of higher education institutions in each city than the cities themselves. In some places, universities effectively function as export industries, producing far more graduates than their region can absorb, and shipping them all over the state, country, or even world. By looking at the numbers a different way—new local grads produced per capita—we can get a better handle on the “brain drain” story.

4. What would a well-functioning housing voucher program look like? In some places, tensions over the higher rents some housing authorities are willing to pay to try to improve vouchers’ pro-integration power have provoked a backlash. But differentiating rents by local markets may be key to using vouchers to create more mixed-income communities. They also highlight the importance of committing serious funding behind housing affordability efforts.


The week’s must reads

1. Who’s moving to cities, and who isn’t? The release of new 2015 county population figures has set off another round of demographic analysis about the changing profile of urban America. For two perspectives, check out Jed Kolko, who argues that the urban renaissance has been demographically limited; and Tony Dutzik, who says that the urban/suburban divide matters less than what demographic and lifestyle trends mean for resource and energy consumption—and sustainability. Look for our thoughts next week.

2. You often hear it in arguments against bike or bus lanes: If they’re so important, why do they look empty? David Levinson helpfully answers that question with some simple math and geometry. It turns out that even equally utilized car and bike lanes will leave the car lanes looking much busier—simply because each car takes up much more space than a bike (or, per person, than a bus!). On a typical block, a bike lane with one cyclist is getting about as much throughput given the space it takes up as a car lane with eight vehicles.

3. A new report from the Urban Institute uses a unique combination of data from credit reporting agencies and the American Community Survey to assess the credit situation of the nation’s renters and homeowners. The report, by UI’s Wei Li and Laurie Goodman, and entitled “Comparing Credit Profiles of American Renters and Owners,” clearly shows the impact of the housing bust on the credit standing of rental households. They report that 19 million current renters used to be homeowners, and that about a quarter of these lost their homes to foreclosure; the bulk of foreclosed former homeowners are between 36 and 55. The outlook going forward isn’t at all favorable: by their count, some 64 million renters have credit scores below 650, which is generally the threshold for qualifying for mortgage financing.


New knowledge

1. When do we have too much parking? A new report from Chicago’s Center for Neighborhood Technology says the answer is “now.” Sending teams out to parking garages in residential buildings built to the city’s legal requirements, CNT found utilization rates of just one parked car for every three apartments—and even less for buildings near rapid transit stations. Why does that matter? Building parking costs money and takes up space, which could be used to add more housing without taking up any more space. Ironically, for below-market housing, parking requirements can be especially onerous, even though their low-income tenants are less likely to even own a car.

2. What determines if someone moves to a big city? A new paper suggests that a big part of the answer is self-confidence. In part because highly skilled people are most able to take advantage of the wage premiums of cities, people who rate their own abilities highly are disproportionately likely to move to large urban areas. Unfortunately, that also means that high-ability people without that self-confidence are less likely to move. That gives those with the confidence to move early a boost in their careers, even over relatively more skilled people who didn’t move, or moved later in their lives. For more, see CityLab.

3. As economic segregation becomes a larger problem, a new report from Brookings (also covered in CityLab) shows that concentrated poverty is at higher levels than before the recession. The number of people living in high-poverty neighborhoods has increased by over five million, to about 14 million in 2010-2014 American Community Survey figures. Sun Belt and Great Lakes metropolitan areas were hardest hit, the Brookings figures show. And while concentrated poverty grew faster in percentage terms in the suburbs, overall levels of concentrated poverty remain much higher in city centers, with 25.5 percent of low-income people living in high-poverty neighborhoods there versus 7.1 percent in suburbs. These figures underline the importance of actively pursuing economic integration policies.


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

The high and hidden costs of parking requirements

There’s not enough parking in Chicago: it’s an article of faith among many drivers, and has been a key assumption in many of the city’s planning efforts. But a new report from the Chicago-based Center for Neighborhood Technology finds that one of those efforts, mandatory off-street parking requirements for residential buildings, is causing an over-supply of parking, with serious consequences for affordability and transportation.

A view of Chicago's Edgewater neighborhood, with parking land use highlighted in teal. Credit: Center for Neighborhood Technology
A view of Chicago’s Edgewater neighborhood, with parking land use highlighted in teal. Credit: Center for Neighborhood Technology

 

Repeating a methodology used by CNT in Seattle’s King County, Washington, San Francisco, and Washington, DC, researchers went into parking garages attached to residential buildings in the middle of the night, when most people should be home and parking use should be highest. (Full disclosure: I interned for CNT last year, and contributed to the literature review for the report.) They found that, on average, only half the required parking spots in the typical building were actually occupied. Overall, zoning required two parking places per three units, but the survey revealed there was just one parking spot in use for every three units; the city’s zoning law requires one spot per unit for most new buildings.

This oversupply varied by the kind of units and location of the building. Expectedly, units near rapid transit stations used fewer parking spaces—though, crucially, the same was true of units near high-quality bus service, as defined by average frequencies of no more than 15 minutes. Perhaps less expectedly, buildings with larger, family-sized units actually had a greater oversupply of parking than buildings with studios and one-bedroom units. The family-sized buildings used an average of 0.54 parking spaces per unit—but supplied 0.85 spaces.

Credit: Center for Neighborhood Technology
Credit: Center for Neighborhood Technology

 

While 0.31 empty parking spaces per unit may not sound like a big deal, it is. One reason is simply cost: each stall in a parking garage can cost up to $37,000 to build. Even surface parking spaces can cost up to $4,200—and require extra land, or impose significant opportunity costs by reducing the number of housing units than can fit on a parcel. That’s a problem for market-rate developments, where parking has been found to add 10 percent to prices in San Francisco.

But it can be an even bigger burden for affordable housing developers, who need to delicately balance different funding sources to make up the gap between the cost of building and the below-market prices they charge. The tens of thousands of additional financing dollars per unit that parking requirements can impose can kill or drastically scale back a project. That’s all the more ironic, since low-income residents are even less likely to own a car. In fact, even in market-rate developments, forcing every tenant to effectively pay for the construction and maintenance of off-street parking requires people who don’t own cars—who are disproportionately low-income, the elderly, and people with disabilities—to subsidize those who do.

But the presence of off-street parking also affects behavior. As we’ve written before, getting the price right matters when it comes to transportation; by making everyone pay up front for off-street parking whether they use it or not, parking requirements makes the effective difference in cost between parking and not parking a car at your home zero. As a result, more people own cars than would if paying was actually connected to use. In fact, residents of neighborhoods with parking minimums are 28 percent more likely to drive to work, imposing costs in terms of congestion, public safety, and carbon emissions on the rest of society.

The report closes with a “policy toolkit” for municipalities to reform their parking requirements. They include simple fixes, like just lowering the requirements, or even establishing parking maximums—but also other approaches, like shared parking districts that allow different uses with different peak times to share the same parking supply, or credits for carshare spaces, transit accessibility, or other factors that are likely to reduce the need for parking. Anyone looking for a blueprint to reform their city’s parking policies to improve affordability and accessible transit ought to take a look.

What works, and what doesn’t, with housing vouchers

Earlier this month, a report in Chicago pointed to some of the tensions implicit in a desegregation-oriented federal affordable housing program.

The Sun-Times, with that city’s Better Government Association, published a “watchdogs” feature on housing choice vouchers. The big news: while some voucher holders pay relatively large proportions of their rents, others pay much less, or nothing, for apartments that cost much, much more—sometimes well over what an employed, working-class family could afford.

These findings aren’t necessarily scandalous: different voucher holders living in very different neighborhoods and paying different amounts of money is how the system is designed to work. But it’s a good excuse to take a closer look at a program that serves over five million people in 2.2 million households, but whose details remain muddy to many people.

Housing choice vouchers, previously known as Section 8, were created by Congress in 1974 as a response to perceived failures in the traditional public housing program, whose modernist towers had been tarnished with poor construction and maintenance, extreme economic and racial segregation, and high crime rates. (Notably, however, some academics have challenged this narrative of failure—for one example, look to Nicholas Bloom’s Public Housing that Worked.)

The Pruitt-Igoe public housing complex in St. Louis, before its 1972 demolition. Credit: US Geological Survey
The Pruitt-Igoe public housing complex in St. Louis, before its 1972 demolition. Credit: US Geological Survey

 

The idea was that rather than living in government-owned buildings, low-income people would receive rental subsidies to live in privately-owned buildings of their selection. That way, they could—in theory—choose where to live, and break the patterns of segregation that public housing projects had often reinforced. For the architects of the program, then, the news that some voucher holders were living in wealthy downtown neighborhoods while others lived in more modest communities would have been exactly what they hoped for.

And what about paying different amounts? Well, what vouchers are worth depends on two things: how much rent is, and how much income the voucher holder has. In general, voucher holders pay 30 percent of their income towards rent, and the voucher picks up the difference between that and the total cost of their apartment up to a HUD prescribed maximum limit, calculated to reflect the price of a modest apartment in the local market. So if you make $1,000 a month, and your rent is $1,000, you pay $300 and the voucher will cover the other $700. If you make $500 a month and your rent is $1,200, you pay $150 and the voucher covers $1,050. Because the point is to help low-income people expand their housing choices while requiring them to pay according to their financial ability, different people receiving very different amounts of money for their voucher is pretty much built into the DNA of the program.

But there is a wrinkle. Vouchers are only supposed to allow their recipients to live in “reasonable” apartments, and so each year HUD calculates a “fair market rent” (or FMR) figure for each metropolitan area, which is supposed to roughly approximate the cost of a slightly below-average apartment in the region. Vouchers will only cover rents up to this FMR.

But FMR essentially averages rents across what can be vast geographic, social, and economic distances, including far-flung suburbs, tony downtown districts, and very poor neighborhoods. As a result, the final number might be too low to afford many neighborhoods with good access to jobs, high-performing schools, and other amenities—the very places that vouchers are supposed to allow low-income people to live.

One strategy for getting around this problem has been “exception rents.” Several public housing authorities, under a little-appreciated demonstration program called Moving to Work, have received permission to give vouchers for apartments with rents above FMR. In some cases, the limit is 120 percent of FMR; in others, 150 percent. Chicago appears to be an outlier in having granted permission for payments going up to 300 percent of FMR, leading to situations in which a handful of voucher recipients could afford to live in extremely high-end new buildings—though the Chicago Housing Authority has announced that it is phasing out those rents and lowering the limit to 150 percent of FMR over the next few years.

While reporting on these “exception rents” has led to hand-wringing about how well voucher recipients “deserve” to live, the policy is responding to a serious problem: namely, the failure of vouchers to actually challenge the patterns of segregation they were meant to dismantle. (We would also point out that, if the question is about “fairness” of housing subsidies, the entire voucher program is smaller than tax giveaways to relatively affluent homeowners.) Voucher recipients do live in neighborhoods that are somewhat less racially segregated, and have lower levels of poverty, and better access to some resources than residents of traditional public housing projects, but the differences are far more modest than proponents might have hoped.

Part of the problem, surely, is discrimination against voucher holders—which is perfectly legal in most places, and rampant even where it’s illegal. Another issue is transportation costs, which can make some suburban, car-dependent locations unaffordable even if the housing costs themselves are not. Another issue may simply be that voucher recipients have social support networks in their current neighborhoods that they can’t afford to give up by moving away. But as important as these other issues may be, to the extent that HUD’s “fair market rents” are simply too low to reach many neighborhoods, that’s clearly a barrier.

Besides “exception rents,” HUD is also testing a new strategy for getting around this problem: “small-area FMRs.” Essentially, instead of calculating fair market rents for entire metropolitan areas, they’ll be determined by ZIP code. So in Chicago’s south suburb of Thornton, vouchers would only cover 78 percent of FMR, or $830 for a two-bedroom apartment. In the wealthier West Loop neighborhood, vouchers would cover about 148 percent of FMR, or $1,560 for a two-bedroom apartment.

But even here, “small area” FMRs would be capped at 150 percent of the regional average, even if local rents are far higher. So in north suburban Lincolnwood, vouchers will cover no more than $1,590 for a two-bedroom apartment—even though HUD’s own figures suggest that local rents are nearly $500 higher.

Of course, some would argue that vouchers don’t need to make every neighborhood available. Much of the outrage generated by the Sun-Times/BGA piece revolved around the idea that some living conditions are too good for people receiving vouchers.

Ironically, though, what counts for some people as “abuse” of the federal voucher program is exactly what one of the most popular local affordable housing policies is all about. Inclusionary zoning is premised on the idea that new, often luxury buildings should be setting aside some units for low-income people. The difference isn’t the kind of units that low-income people get to live in—it’s whether there’s any direct cost to taxpayers.

But as we’ve written before, there’s no getting around it: below-market housing is necessary, and it costs money. When it comes to other major social priorities, like food stamps, public schools, or Medicaid, most people realize that the only way to fund the necessary programs is with broad-based taxes: “impact fees” on grocery stores or doctors just don’t cut it.

But when it comes to housing, we too often expect that if developers are just squeezed a little more, we’ll have all the low-cost housing we need. It’s not true. As it is, funding is so sparse that only a quarter of households that qualify for low-income housing assistance receive it; meanwhile, voters are happy to approve much larger subsidies for middle- and upper-class homeowners. Figuring out how to make vouchers as the poverty- and segregation-fighting tools they were intended to be, in as financially efficient a way as possible, is an important goal. But whatever the answer is, it will require us to decide we care enough about affordable housing to pay for it.

The Week Observed: March 25, 2016

What City Observatory did this week

1. When supply catches up to demand, rents go down. While stories about crazy housing markets tend to focus on big, coastal metropolitan areas, it turns out there’s a lot to learn from looking at Williston, ND. That sleepy town began to boom thanks to oil, and its housing market responded the way markets respond to rapidly growing demand: prices spiked. But in Williston, housing supply could also respond, and the number of building permits increased by nearly 1,200 percent between 2009 and 2012. Thanks to a combination of growing supply and falling demand as a result of the fall of oil prices, rents have also dropped dramatically. The lesson is that supply and demand matter—but also that there is a structural lag in supply. Demand can change much more quickly, and until supply can catch up, it will push prices upwards.

2. It’s time for a “big short” in parking. In the popular movie “The Big Short,” investors who predicted the bursting of the housing bubble made a killing by betting against rising housing prices. We think there’s a case to be made that we should be “shorting” investments in parking garages: between changing preferences for urban, car-lite living and the implications of widespread self-driving cars, demand for parking may crash in the near future. That would leave many cities with outstanding bonds backed by parking revenue in a pickle.

3. It’s time for a “big short” in parking. In the popular movie “The Big Short,” investors who predicted the bursting of the housing bubble made a killing by betting against rising housing prices. We think there’s a case to be made that we should be “shorting” investments in parking garages: between changing preferences for urban, car-lite living and the implications of widespread self-driving cars, demand for parking may crash in the near future. That would leave many cities with outstanding bonds backed by parking revenue in a pickle.

4. A field guide to median rent statistics. We’ve written before that journalists and readers should be extremely wary of apartment listing companies claiming to know what median rents are in different cities or neighborhoods. Very often, companies just publish statistics based on their own listings, as a way of generating PR, and not recognizing the strong, if inadvertent, biases in such an approach. As a result, much of what’s published on the web varies wildly, both in terms of rent levels, and how much (or even in what direction) rents are moving.

5. Here’s your definitive field guide to median rent statistics. We break down several of the most common sources for median rent statistics, explaining how they’re created, what they’re good for, and what they aren’t. We end with three questions you can ask as a journalist or a reader when you come across someone claiming to have median rent information: Where is your data from? Is this just an average of your listings? And why is your data different from others’?

6. The beat goes on: More misleading congestion rankings from TomTom. This week, TomTom released another update of its rankings of cities’ traffic congestion, based on readings from the navigation devices it sells to drivers. But, as we’ve pointed out, this data can be deeply misleading. To begin with, there’s the fact that it ignores differences in commute trip lengths between cities, so that Portland can have a higher congestion index than Houston, even though Portland’s more compact development means that people there have shorter (in terms of both time and geography) commutes. But at least, this time, TomTom admits in its report that policymakers shouldn’t expect they can build themselves out of congestion, however it’s measured.


The week’s must reads

1. Let us now praise “low-quality” housing: At Market Urbanism, Emily Washington argues that many of the types of market-rate housing that used to house low-income people without the need for subsidies, like single-room occupancy hotels, have been legislated out of existence. While we disagree that those kinds of housing would ever eliminate the need for subsidies, it’s true that they could dramatically expand the supply of low-cost homes. For another iteration of this argument, see Alan Durning at Slate.

2. “The Baltimore riot of April 27, 2015, started with a shutdown of public transportation,” Alec Macgillis begins his deep dive into how disinvestment in public transit in the Baltimore area has helped define that region’s inequality. It’s a story whose outlines may be well known, but which Macgillis tells in richer detail than you’ll see almost anywhere else. A plan for a three-line subway system for the city was announced at nearly the same time as the plan for the DC Metro—but while Washington has built out an extensive system, Baltimore has only completed a single line.

3. Should urban rail stations have park-and-ride lots? In Seattle, Sound Transit is considering a plan to build 18,000 parking spaces near transit stations—at a cost of nearly a billion dollars. (This might be a good time to remind everyone thatparking garages are incredibly expensive—whether or not you ever see their cost in parking fees.) Seattle’s The Urbanist blog makes a strong case that even if some parking is necessary, public transit dollars should not be spent on large amounts of parking in dense neighborhoods. Housing and other destinations should be built near transit, allowing people to use it without driving; parking lots, where necessary, can be some distance away, with shuttles where demand makes that reasonable.


New knowledge

1. Public input is crucial for good, equitable, democratic planning. But traditional community meetings are not necessarily the best way to get public input.Planetizen’s new series, the Fiasco Files, takes “failed” public meetings and tries to wrest some lessons from them. Up first, Dave Biggs recounts one organized disruption of a meeting he helped lead, and some of the takeaways: multiple paths for comments (including online); clear established rules for communication; and some anonymous input that allows people to vote without being intimidated by louder members of the audience.

2. This week, the Census released its 2015 county-level population estimates. AtCityLab, Jed Kolko breaks down his analysis of the winners and losers, arguing that the new numbers suggest that long-term trends, including growing population in low-density Sun Belt metro areas, are reasserting themselves as the recovery to the Great Recession continues. We wrote our own post about using county-level population figures to infer trends in urban cores, of course—which we think is trying to fit a square peg in a round hole.

3. News you can use: If you want intelligent birds, go to the city. Researchers from Montreal’s McGill University have concluded that urban birds are smarter than their country bumpkin cousins. The city birds were better at problem-solving tasks, including opening drawers to get food—and were healthier, with stronger immunity systems to boot. Urban humans who have had to deal with overly clever or insistent pigeons might not see this as a benefit, however.


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

Here’s your definitive field guide to median rent statistics

Even the most casual consumer of urban news can’t avoid reading articles about whether rents in their city are up, or down, and how they compare to other cities around their country. Unfortunately, the vast majority of these rent estimates are completely made up.

As we’ve written, the proliferation of these rent stories seems to be driven by a growing number of online real estate startups, who have figured out that they can get free publicity by using their listings to create “median rent reports.” The problem is that, for a number of reasons, even the most comprehensive listing agency will be missing a lot: many apartments aren’t officially listed anywhere, renting by word of mouth or a simple sign hanging on a front gate. Moreover, most of these sites are targeting younger, higher-income renters, which might go some way to explaining why they have hundreds or thousands of listings in some neighborhoods, and only a small handful in others. And even beyond that, the fact that apartments listed above market price will tend to stay unrented longer, while relatively cheaper apartments will get quickly snatched up, will bias any simple average upwards.

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Simply comparing rental figures from different companies—like these infographics from Abodo and Zumper—shows wildly differing rents.

 

For both journalists and news consumers, then, we’ve put together a short field guide for rent statistics: who makes them, and the advantages or disadvantages of each.

HUD Fair Market Rents

How it’s made: HUD creates “fair market rent” estimates for metropolitan areas in order to determine how much money Housing Choice Vouchers can be worth in each region. The estimates are for rental units at the 40th percentile of price—that is, cheaper than 60 percent of all units—by number of bedrooms, for the entire metro area. The formula is complicated, but involves taking the most recent American Community Survey 5-year estimate, and then adjusting it based on the most recent ACS 1-year estimate for recent movers, a local inflation measure, and forecasted national rent trends.

Advantages: Theoretically, the ACS samples that Fair Market Rents are based on really do contain the entire universe of apartments (with one caveat—see below), removing the problem of units that are never listed. The estimates are also designed to estimate the median price of a newly rented unit, as opposed to all units—which include a number with longstanding tenants who are probably paying less than those who recently moved—like American Community Survey figures.

Disadvantages: ACS numbers come out with quite a bit of lag, so the 2016 Fair Market Rent calculations are based on ACS figures collected no later than 2013—and the 5-year estimate began collection in 2009. The adjustments are meant to make up for that gap, but obviously that introduces quite a bit of room for error. It also makes FMR unhelpful for trying to track up-to-the-minute trends. For a long time, FMRs were also only made at the metropolitan area level, so neighborhood-to-neighborhood comparisons were impossible. More recently, that has changed—see the next entry. Also, FMR is calculated in a way that is designed to filter out subsidized units, which pushes its figures up a bit. Finally, it can’t tell you about relatively low-cost or high-cost housing.

Can answer: What are the most expensive metropolitan areas to begin a new lease in?

Can’t answer: What are the most expensive neighborhoods in my city? Which metropolitan areas have seen the fastest rent growth in the last year?

HUD Small Area Fair Market Rents

How it’s made: HUD began calculating sub-metropolitan area rent estimates in order to make it easier for voucher holders to move into “opportunity areas,” where market prices were too far above the regional median for vouchers to be usable. The “small areas” are ZIP codes, whose Fair Market Rents are otherwise calculated in a similar way as the metro area estimates.

Advantages: Like regular FMRs, coverage of non-listed apartments and an attempt to measure the cost of beginning a lease now, as opposed to including longtime leaseholders. And, obviously, the ability to compare neighborhood-to-neighborhood prices.

Disadvantages: The same time-lag issues as regular Fair Market Rent calculations. Also, as you go to smaller levels of geography, ACS margins of error become much larger. HUD considers an estimate “reliable” if its margin of error is less than half of the value of the estimate itself—that is, if the ACS says a ZIP code’s median rent for one-bedroom apartments is $1,000, HUD considers that “reliable” if the margin of error is less than $500—and while margins of error are much lower than that in most urban neighborhoods, caution is advised. Detecting small differences between neighborhoods, or from one year to the next, isn’t really possible. Still can’t tell you about relatively low-cost or high-cost housing.

Can answer: Broadly speaking, what are the most expensive ZIP codes in my metropolitan area, and how do they compare with the most expensive ZIP codes in another metropolitan area?

Can’t answer: Is the median apartment in this ZIP code $20 more or less expensive than the median apartment in that ZIP code? What does the typical low-income person pay in this ZIP code?

American Community Survey

How it’s made: The Census’ American Community Survey replaced the long-form decennial questionnaire, and surveys US residents every year on a variety of issues, including rent. The responses are rolled up into three main products: 1-year estimates, 3-year estimates, and 5-year estimates. The 3- and 5-year estimates are necessary to increase sample sizes, and create more reasonable margins of error, for smaller geographic areas.

Advantages: Like Fair Market Rents, the ACS theoretically gets around the problem of unlisted apartments. Perhaps most valuably, it publishes more than just median figures, allowing you to compare estimates at, say, the 25th percentile, which gives more of an insight into what lower-income people might be paying. Using IPUMS, you can also cross-reference ACS data to find median rents by particular demographics. Also, because the Census has been using similar data for a number of years, you can do some historical analysis.

Disadvantages: The ACS has quite a time lag—at the moment, the most recent data released is from 2014—and if you’re interested in smaller levels of geography, like neighborhoods or even smaller suburbs, you probably need to use multiyear estimates that include survey responses from over five years ago. Also, because the estimates include all renters, they may be biased downwards compared to the rents facing someone looking to begin a lease.

Can answer: Roughly, how do rents for low-cost apartments compare from one city, or one neighborhood, to the next? How has the geography of high-rent apartments changed over the last 10 or 20 years?

Can’t answer: How much did rents increase in my neighborhood, or my city, last year? What is the median rental price facing people on the rental market today?

Zillow

How it’s made: Zillow’s rental estimates are based on their own listings, but crucially, they also add their own proprietary modeling that adjusts for the changing mix of listings available at any given time.

Advantages: Unlike FMR or the ACS, Zillow’s numbers are based off of nearly real-time data on rental listings, allowing for much more timely estimates. The modeling also introduces a necessary corrective to straight averages from available listings, which can vary wildly based on what happens to be available at any given time. Especially in larger markets, Zillow also makes available lots of breakdowns of the data, including by metro area, ZIP code, number of bedrooms, and “market tier,” allowing you to compare relatively low- or high-cost apartments in different areas. You can download the entire national dataset as a CSV file.

Disadvantages: Because Zillow’s figures are based on listings, they are missing any unlisted units, which will probably tend to bias Zillow’s estimates upwards. Rental estimates are also only available going back to about 2010 in most areas.

Can answer: Roughly speaking, how have rents changed over the last year in my city compared to another city? What are the most expensive parts of my city? How has that changed in the last few years?

Can’t answer: What is the long-term trend in rents in my city? What is the exact median rent for my neighborhood or city?

Most apartment listings services (Zumper, Abodo, etc.)

How it’s made: Many of these services appear to simply use the median rent from their own listings without any adjustments. We say “appear to” because the descriptions of the methodologies that they use to generate their rents are typically quite sketchy, and simply make very vague references to their database listings.

Advantages: Avoid the guesswork that comes with modeling.

Disadvantages: Suffers from all of the biases and problems of raw listings, including a tendency to dramatically over-sample higher-end neighborhoods and apartments because of selection and survivorship biases (see the top of this post for more), and a vulnerability to random changes in the composition of available apartments from one time period to the next.  

Can answer: What is the median price of apartments currently listed by this company?

Can’t answer: Anything else.

Market analysis firms (Yardi Matrix, Rainmaker Insights, CoStar, etc.)

Unlike apartment listings services, whose main product is the ability to search for particular apartments, market analysis firms specialize in giving big-picture snapshots of the real estate market to businesses. Perhaps because their livelihood is their data analysis, they are somewhat less forthcoming about their proprietary methodologies on their websites (and most of their actual data is behind a paywall), and so there isn’t as much we can say about them. We have reached out to several to ask about their methodologies, and if we receive responses, we will update this post with them.


Three questions to ask

Obviously this isn’t a comprehensive list of all the people who might try to tell you what median rents are. But if you’re a journalist (or an enterprising reader), and somebody is trying to tell you that they have rental figures, here are three questions to ask:

  1. Where did the data come from? The answer will generally be either surveys or listings. Surveys have margins of error, which can get quite large, especially for smaller geographic areas; they should be willing to tell you what they are, and how big the samples are. If it’s listings, they should be able to tell you how they dealt with all the biases we’ve talked about that are inherent to listings.
  2. If it’s listing data, is this just an average of all your listings? If the answer is yes, you can safely ignore any “median rent” claims. If not, they should be able to explain how they deal with under-representation of low-rent, unlisted apartments; survivorship bias that over-representation of high-rent apartments that take a long time to lease; and noise in the basket of apartments that happen to be available at any given time.
  3. Why are your numbers different from other sites’? This is the bottom line: Given that there are many different rental figures, they should have a good answer for why theirs are the most accurate. And “we have the most listings” is not a good answer, any more than the most accurate poll is the one with the most respondents. Quality—including ways to address all the pitfalls we’ve brought up in this post—matters more than quantity.

County data is great, but it can’t tell us much about urban living

You’re on your couch, streaming the latest episode of Broad City on your Mac laptop, just like a good millennial. But all of a sudden, your wifi connection goes bad, and the screen goes all pixelated. Instead of Abbi and Ilana at an art gallery, all you can see is big blocks of seemingly random color—you know it’s based on what the screen is supposed to look like, but at such a coarse level that it doesn’t actually contain any of the information you’re interested in.

Is this a flower? An octopus? Who knows. Credit: AJC, Flickr
Is this a flower? An octopus? Who knows. Credit: AJC, Flickr

 

County-level data—at least for some purposes—is a bit like your pixellated screen. Since the Census released its 2015 county-level population estimates last night, we’ve seen a number of analysts try to deduce from them information that they just don’t contain: whether the trend of urban living’s growing popularity is continuing, slowing, or reversing.

To understand why counties aren’t a useful measure for this question, take a look at the following charts, which were put together by Luke Juday at the University of Virginia. They show how demographics have changed in a number of metropolitan areas based on distance from the central business district. But rather than being based on arbitrary, coarse political boundaries—counties or even municipalities—they’re based on Census tracts, which allows for a much finer-grained analysis.

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As you can see, there’s a clear trend of growing demand for inner-city living, as represented in this case by growing population density. In many cases, there’s also a counter-trend of decline between that booming inner city and healthier outer suburbs. Using this methodology, those trends are clear as day.

But if you used counties, you would likely be able to detect neither the booming inner cities nor the declining second ring. Why? Because in many cases, both the booming core and the declining second ring are in the same counties.

Look at Charlotte, for example. There’s a clear boom in its central city (here depicted by growing income levels) followed by a trough at about five miles out from its CBD. But Mecklenburg County, where Charlotte is located, contains neighborhoods that are 10, 15, even close to 20 miles from its CBD—meaning both the peak and the trough are averaged out in its county numbers.

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Or take Memphis, TN. It also has a peak-trough pattern (this chart shows college graduates, but the income chart is very similar) that goes about five miles out from its CBD. But Shelby County, where Memphis is located, goes for up to 28 miles from downtown Memphis. Again, county-level numbers combine two diametrically opposed trends into one number that accurately reflects neither.

 

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Finally, look at this map of population growth in Chicago in the 2000s. No one could look at this map and conclude that central Chicago wasn’t booming—and that much of the rest of the city was really hurting. But you can erase both of these facts by adding them together. (Not to mention that all of Chicago would be added to the rest of suburban Cook County in the county-level statistics.)

Blue areas saw population growth; red areas saw decline. Credit: City of Chicago.
Blue areas saw population growth; red areas saw decline. Credit: City of Chicago.

 

And Charlotte, Chicago, and Memphis are hardly atypical. Phoenix is centered in Maricopa County, which encompasses wide swaths of suburbs, as does Seattle’s King County, and Austin’s Travis County. True, some counties correspond more closely to the urban core: New York County corresponds to the Manhattan, but that’s the exception, rather than the rule. On top of that, counties vary wildly in size, with substantially larger geographies in the West compared to the East.  

There are things that county-level data is good for, of course. It can tell us what population growth is for metropolitan areas as a whole, for example, which is a good indicator of regional health.

But claims about the growing economic and demographic strength of urban centers have always been about just that—urban centers. Those centers—and the weakening inner-ring suburbs around them—simply don’t correspond geographically to counties.

Fortunately, we have tract-level data from before 2015, and we can use it to test our actual hypotheses. Juday’s work is an excellent example of that. We will also eventually have tract-level data for 2015, and then we can do the same with those updated numbers.

But in the meanwhile, we shouldn’t let our hammer make us think every question is a nail. There are a lot of interesting things to learn in the new county population numbers—but the question of urban growth, or inner-ring decline, simply isn’t one of them.

A field guide to median rent statistics

How much does a one-bedroom apartment cost in Chicago, my hometown? A quick Google search comes up with an article claiming that median rent is $1,970, according to the real estate company Zumper.

But wait—according to real estate company Trulia, the median rent in Chicago was just $1,400 in January 2016, and that includes apartments with two or more bedrooms.

How much should you pay for this? Sources disagree. Credit: JohnPickenPhoto, Flickr
How much should you pay for this? Sources disagree. Credit: JohnPickenPhoto, Flickr

 

And the real estate company Zillow reported that the median rent was $1,647 just a few months ago.

And HUD says that “Fair Market Rent” in the Chicago metro area was just $922 for a one-bedroom apartment in 2015.

Not only can these different sources not agree on how much a “typical” apartment costs, they give very different pictures of how much (and in what direction) prices are changing. For example, Abodo claims that Boston is one of the cities where rents increased the most in February 2016—5 percent month over month. (By the way, that’s an increase of nearly 80 percent a year, which is by itself a red flag that something might be up with these numbers.) But in the same month, Zumper says that rents in Boston fell by 2.1 percent.

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Abodo

 

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Zumper

 

What’s going on?

Over the last few years, there’s been an ever-growing number of articles and lists of the most expensive rental cities in the county, the most expensive neighborhoods, and which cities are seeing their rents climb the fastest—and even where rents might be starting to fall. But what are presented as clear, objective findings are in fact coming from many different sources, most of which disagree with each other substantially. And while many sources are just fine for their original intended purpose—being a place to sift through real estate listings—they’re not so good as a statistical research database.

How, then, can journalists and readers know which sources to trust, for which questions, in what areas?

The first step is to acknowledge that none of these sources have the definitive, “correct” answer. All of them involve some guesswork and data that’s limited, biased, or somewhat out of date—and often all three. The advent of online listing agencies with massive databases has brought us the mixed blessing that is big data. While it’s a simple matter to query your big database and compute the median value of rental listings, there are a lot of reasons why every organization’s particular collection of listings is an incomplete and statistically biased sample.  Unlike home purchases, landlords don’t have to report their rent figures to to any public agency, so collecting broad, representative data on rents can be extremely challenging. As we wrote back in November:

For a number of reasons, just taking the average of all the listings you can find is likely to produce extremely skewed results, with numbers much higher than true average home prices. For one, many apartments, especially on the lower end of the market, aren’t necessarily listed in places that are easy to find—or at all. Instead, landlords find tenants with a sign on a fence or streetlight pole, local (and not necessarily English-language) newspapers, or just word of mouth. On top of that, if you have two homes of similar quality but even slightly different prices, you would expect the cheaper one to rent or sell more quickly. As a result, it would spend less time listed than the more expensive home; any given sample of listings, then, would tend to over-represent those more expensive, harder-to-rent homes. (If this doesn’t make sense, read the “visitors to the mall” example here, explaining a similar statistical problem with attempts to measure prison recidivism.)

But that doesn’t mean you have to throw up your hands in rental-data nihilism. There are important differences in the reliability of rental price statistics from different sources—and, just as crucially, different sources are best for different questions.

Tomorrow, we’ll publish a sort of field guide to rental statistics, meant to help both journalists getting a barrage of press releases, as well as readers trying to wade through the swamp of contradictory rental figures that are published on a regular basis.

The Week Observed: March 18, 2016

What City Observatory did this week

1. Finding nuance in the housing supply arguments. A new article from Rick Jacobus at Shelterforce helps resolve some of the tensions in the growing debate about whether and how housing supply is behind the affordability crisis—and the answer hinges on understanding how demand and supply can change at local and regional levels. But zooming out also allows us to explain our skepticism some of the claims about new luxury housing creating its own high-end demand where it wouldn’t otherwise exist.

2. Super long commutes: a non-big, non-growing, non-problem. A slew of articles have told readers that “mega commuters”—people who travel at least 90 minutes in each direction—are a growing, and troubling, indicator of problems with our transportation systems. But in fact, the number of these extreme commutes have not been growing, and make up less than three percent of all commuters. Moreover, many of these commuters may actually be doing something more akin to telecommuting than actually physically going into the office each day.

3. Like Uber, but for redistribution. Last year, two researchers suggested that cities might soon begin subsidizing Uber trips—and this month, an Orlando suburb became the first municipality to make good on that prediction. What’s in it for cities? The authors argue that Uber can produce “public goods” by intensifying the agglomeration benefits that cities exist for to begin with—and improve efficiency by using a smaller number of vehicles (and parking spaces) more intensively. But there are also questions, like whether subsidizing trips is the most cost-effective way to reach those goals, and the fact that Uber cars face the same problems of geometry as regular cars—in short, they take up way more space per person than buses or trains—and so can’t help, and may even hurt, road congestion.

4. Why the new Inrix Traffic Scorecard deserves a “D.” We’ve criticized Inrix and the Texas Transportation Institute’s traffic reports before; unfortunately, a new report—issued by Inrix without TTI—takes several steps back even from that low bar. The new “traffic scorecard” is stripped of context from previous years, and it’s not clear if this report’s numbers are comparable to past statistics, making trends impossible to discern. Inrix has some amazing data, with great potential for analysis—but it needs to be open, consistent and transparent if it’s going to help us better understand and address our transportation problems.

The week’s must reads

1. In some good news, Baltimore County and the US Department of Housing and Urban Development have come to an agreement to help reduce segregation in that region. It took half a decade to negotiate, but the deal, which was spurred by a legal complaint from the NAACP and local groups, will result in more low-income family housing being constructed in primarily white, high-income areas in the county. The complaint indicated that these places were using their federal low-income housing money disproportionately for age-restricted buildings that tended to house elderly white residents.

2. The Bay Area transit agency BART’s Twitter account got real this week, tweeting in the wake of an electrical malfunction that “much of our system has reached the end of its useful life.” Vox suggests that this problem is bigger than just BART, pointing to the DC Metro’s decision to shut down entirely for 29 hours to take care of potentially fatal equipment problems and a 2010 FTA study that found that 26 percent of the country’s rail mass transit was in “poor or marginal” condition.

3. We’re a little late on this, but if you missed it, you owe it to yourself (and maybe your grandkids) to read it: The New Yorker goes deep on how global warming is flooding Miami—not in 2100, or 2050, but today. Though the Army Corps of Engineers predicts sea levels could rise five feet in the next century, waters are already inundating Miami Beach with such frequency and severity that the city has spent $100 million in mitigation. As one of the world’s most vulnerable urban areas to climate change-related flooding, the region is on the front lines of figuring out what can be done for coastal cities in the coming years.


New knowledge

1. What’s the effect of technology on mode choice decisions? A report from University of Minnesota professor Yingling Fan uses data from the American Time Use Survey to identify behaviors that might be done during commutes as self-driving car technology improves and becomes more common. One big takeaway is that if the “cost” of travel time is reduced because more activities can be undertaken during a trip, people may take many more, and longer, trips.

2. Though it has so far produced few headlines, in some areas, financial firms are creating securities backed by the rental income of large bundles of single-family homes. The Federal Reserve Bank of San Francisco scrutinizes the geography of these homes, and find that they largely, though not perfectly, map those neighborhoods that were hardest hit by the foreclosure crisis. They also raise the question of the relationship to these securitized rental homes and access for Section 8 voucher holders, and the effect of securitization on the broader market, including non-securitized homes. They conclude that available data is insufficient for understanding the impact of this trend on US cities, and much further research and transparency is needed.

3. Demolition of vacant properties has become a common tactic for cities that have seen significant depopulation of some of their neighborhoods. A study from researchers at Harvard and the Federal Reserve Board of Governors looks at these teardowns in three cities—Cleveland, Chicago, and Denver—and measures outcomes like crime and rehab investments. They find that demolitions were associated with a small but statistically significant reduction in local property crimes (burglaries and thefts), but found no impact for rehabilitation projects. Their data suggest the reductions were highly localized (within 250 feet of the demolished property), and may be temporary.


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

Like Uber, but for redistribution

In a January 2015 paper, the Yale Law professor David Schleicher and Yale Law student Daniel Rauch published a paper on how local governments might regulate “sharing economy” companies, such as Uber, in the future.

Among their more startling predictions, perhaps, was that the very cities that have been battling to regulate startups like Uber—which have been accused of ignoring laws requiring their competitors to, for example, license their drivers or ensure a certain proportion of their fleet is accessible to people with physical disabilities—would soon spend public money subsidizing Uber trips.

Why would they do such a thing?

Well, we might ask the Orlando suburb of Altamonte Springs, which this month became the first US city to fulfill Schleicher and Rauch’s predictions by announcing that it would begin subsidizing Uber trips within its borders. The city will cover 25 percent of the cost of trips that begin or end at the city’s SunRail commuter station, and 20 percent of other trips. The idea is to make help solve the “first/last mile problem” with the rail station, since there are few homes, jobs, or stores close enough to the station to make walking reasonable, and even the city admits that bus service is too spare to be relied on.

The view from the Altamonte Springs SunRail station. Credit: Google Maps
The view from the Altamonte Springs SunRail station. Credit: Google Maps

 

The Yale paper makes the case that there are good economic reasons for this kind of subsidy. In particular, they argue that low-cost Uber trips might create a “public goods” surplus by, among other things, allowing residents to make trips—and potentially buy more goods and services, or reach more jobs, or even just visit more people—that they otherwise wouldn’t be able to, ultimately improving on the “agglomeration effects” that are the economic basis of city living to begin with. Subsidizing ride-hailing services might also have a decongesting effect, by allowing a smaller number of vehicles to be used more intensively, and reducing the need for each household to keep one or more cars sitting idle for 23 hours a day. That would also reduce the need for homes, stores, and offices to hold large amounts of land for peak-use parking capacity, which also sits idle outside of work hours, or on low-shopping days.

Finally, they point out that there is a strong redistributive angle to this: Uber as a sort of public transportation. While the Altamonte Springs policy is not explicitly aimed at redistribution, it might conceivably be disproportionately used by lower-income people with limited car access. Other cities might attempt to target their subsidies more carefully, either by directly subsidizing trips for people below a certain income threshold—think of the reduced-fare transit cards that many agencies provide for low-income riders—or by simply requiring that ride-hailing companies provide a certain amount of reduced-fare rides in exchange for permission to operate. Think of it as inclusionary Uber.

But if this is going to become a broader trend, there are still a lot of questions to resolve.

One is simply cost. One of the biggest expenses in public transit is the cost of paying the driver or operator of the train—and if the ratio of drivers to passengers is essentially one to one, that cost skyrockets. The Fortune article about Altamonte Springs’ policy quotes an economist who predicts that the policy will “blow [the city’s] budget out of the water.” And a federal program that does something similar—a Medicaid policy that reimburses “non-emergency transportation” for patients who lack other options to reach a doctor—costs $3 billion a year to cover 3.6 million Americans, or roughly $833 per person, most of whom are presumably not taking subsidy-eligible trips as often as, say, commuters to the SunRail station. According to the GAO, nationally, the average cost of providing a paratransit trip is $29. Meanwhile, the total cost per bus ride in the Orlando area is about $4.07. (Of course, in its first year, SunRail itself apparently cost about $38 per trip, which raises its own set of questions about the cost-effectiveness of commuter rail lines in very low-density metropolitan areas.)

Another is access. Particularly if subsidized ride-hailing services are considered a redistributive measure, it matters if they are only usable by people with smartphones and credit cards—things a substantial portion of low-income people still don’t have.

Third, there’s the question of ownership. Some “sharing” services, most notably bike share systems, are owned by cities or transit agencies themselves. If a local government decides to use ridesharing as a part of its public transportation system, does it make sense to contract that out to a private company—or create “inclusionary” exactions requirements for those companies—or run its own system? For that matter, to what extent does subsidizing rideshare companies like Uber simply replace paratransit, and is that a trade worth making?

Finally, there’s the issue of geometry, as Jarrett Walker might say. Orlando—and certainly its suburbs—have been built and regulated in such a way that traditional transit services, like fixed-route buses or trains, are extremely hard to operate, precisely because population, job, and commercial densities are so low that there aren’t enough places to walk to around any given transit stop. In that scenario, subsidizing low- or single-occupancy vehicle trips might make sense. But it will still be the case that a person in a car will take up vastly more room than a person on a bus or train. Ridesharing may help decongest urban areas in the sense of reducing the total number of vehicles, or reducing the amount of land dedicated to parking. But it won’t allow more people to use the same amount of roadspace more efficiently—and in fact, if lower prices encourage people to switch from public transit to ridesharing, it might make congestion worse.

Credit: International Sustainability Institute and Seattle Bike Blog
Credit: International Sustainability Institute and Seattle Bike Blog

 

Ironically, by making it easier to live in far-flung locations, these subsidies might end up tilting the scale on people’s housing decisions, pushing people further out into the suburbs and ultimately making urban transportation more difficult and costly. As Reid Ewing and his colleagues have shown, some public housing that has low rents has high levels of embedded transportation costs due to the remoteness of workplaces and daily destinations, meaning that on the whole, it’s actually less affordable for the families living there than more central locations with somewhat higher rents.

While there has been a lot of discussion about how ride-hailing services like Uber and Lyft—and, combined with them, driverless vehicles—might affect American cities. But the truth is that the answer depends, just as it does with regular old owner-driven cars, on how cities decide to regulate the built environment, the vehicles themselves, and the prices of using public rights of way. As we begin what might be a wave of new kinds of regulation aimed at subsidizing the use of ridesharing services, it’s important that we ask what we hope to accomplish, and what the best way to do it might be.

Finding nuance in the housing supply arguments

On the one hand, over the last few years, the growing debate about the root causes of affordable housing crises in high-income, coastal American cities has been robust, passionate, and often nuanced. On the other, there have been precious few “breakthrough” moments, and the rhetoric today often looks pretty similar to what it was a few years ago: one side (including City Observatory) arguing that the basic issue is too little housing; another arguing that new housing is itself the cause of higher prices.

Which is why a new essay by Rick Jacobus at Shelterforce was so refreshing. Writing at an outlet that has published writers who are critical of new market-rate construction, Jacobus’ headline reads: “Why we must build,” but its subheading suggests an unusually nuanced position: “We can’t build our way out of the housing crisis…but we won’t get out without building.”

That sort of “necessary but insufficient” position isn’t new—it’s the one we’ve taken on multiple occasions, for example—but it’s still surprisingly rare, and Jacobus does a particularly good job of articulating it.

More market-rate housing: Necessary but insufficient

The basic idea is this: at a macro scale, the interplay of supply and demand is the biggest influence on average housing prices. Addressing the fact that the median home in the San Francisco metro area costs nearly $800,000 is all about building more housing; the reason Phoenix or Houston can see huge population booms while keeping prices under control (median price in Phoenix: just over $200,000) isn’t that landlords and developers there are so humanitarian, it’s that building more housing is easy, and so the overwhelming competition for housing that drives up prices in the Bay Area just doesn’t exist.

But while more housing can reduce the price of the median home, the median home isn’t all that matters. People at the low end of the US income scale simply don’t make enough money nearly anywhere, and never have, to afford decent market-rate housing—the cost of maintenance, and certainly of construction, keeps a price floor well above what someone living at the poverty line can pay. Direct housing assistance, then, will be necessary—and substantially more of it than we currently provide. Importantly, though, the effectiveness of that assistance depends on having a reasonable “baseline” market price, or else public budgets end up drowning in the massive gaps between what low-income (or even moderate-income) people can pay, and what housing actually costs. Just ask San Francisco, where a historic $300 million affordable housing bond issue is purchasing precious little actual affordable housing.

Geographic scale matters

Jacobus also addresses another important nuance: the question of scale. Again, at a regional level, more housing unambiguously reduces housing prices: we know that not just because we believe in Econ 101, but because all the real-world evidence suggests that’s the case.

But at a neighborhood scale, things are a bit more muddled. New luxury housing might signal to high-income residents that a neighborhood they previously wouldn’t have considered living in is safe, or hip, and increase demand by more than it increases supply. It might bring in high-end retailers that wouldn’t have previously considered the neighborhood, similarly attracting more wealthy residents. Even Stephen Smith, a staunch defender of the idea that more housing is key to solving the affordable housing crisis and writer for the website Market Urbanism, has written about these contradictory dynamics.

That said, we are skeptical about the extent to which this theoretical problem is actually a real-world issue in cities with major housing problems. Why? Well, look at how high-income neighborhoods have spread across the North Side of Chicago over the last several decades, bringing high rents with them:

incseggif

For the last 40 years, gentrification has followed a very predictable pattern: demand rises in one neighborhood until prices begin to cause people who might have moved to there to move to the next neighborhood over, getting as close to the amenities and jobs in the high-rent neighborhood as they can. As more and more people decide they want to live in central city communities with high-quality amenities, that process repeats over and over, expanding the high-rent zone not in fits and jumps, but continuously out from its center.

As a result, the idea that some neighborhoods might be “saved” from the interest of high-income people if only developers wouldn’t signal the value of the neighborhood by building luxury housing seems far-fetched. By zooming out a bit, we can see that the geography of demand is determined by proximity to the amenities of the high-income zone; not building new housing right next to the edge of the zone isn’t going to convince anyone that they don’t want to live there, and even the most pristine new luxury apartment far away from the zone isn’t going to bring a bunch of people clamoring to pay top dollar.

The temporal mismatch is worse at the neighborhood level

But even if new housing isn’t going to provoke more demand that wouldn’t have shown up anyway, there’s another neighborhood-level problem that Jacobus identifies. Namely, housing demand can change much, much faster, and more dramatically, than housing supply. This is actually true at the regional level as well: an economic boom like the one the Bay Area has experienced can bring in many more jobseekers, much more quickly, than developers can respond with housing, simply because the development process in large, built-up cities is slow, and can take several years to respond to shifts.

But it’s much worse at the neighborhood level. Changes in neighborhood reputation, driven by the sort of spillover process I described above, can take place extremely rapidly—and once they do, an area that previously had nearly no demand from higher-income residents can see interest from a huge proportion of the region’s population that wants to be in the high-amenity urban core.

At the same time, adding housing in a particular neighborhood can be more challenging than adding it at the regional level. For one thing, if we’re talking about the urban core, there’s no suburban greenfield fringe to build on. And in most high-rent cities, even low-rent neighborhoods have few empty lots to build on. Neighborhood politics, obviously, also make building more housing very challenging.

The massive swings in very local demand mean that adding supply might have little effect in that immediate neighborhood, even as it lowers prices in the region more broadly, or allows filtering to take place closer to the urban core than it would otherwise. Here, then, is another “necessary but not sufficient” point: cities need to build more housing to keep regional prices reasonable, and to come as close as possible to meeting the demand for living in high-amenity urban cores. But in the neighborhoods with the greatest demand in the American cities with the greatest demand—New York, San Francisco, Chicago, and a handful of others—it’s likely that demand is simply too high for any realistic amount of new construction to bring market prices down to, say, Phoenix-like levels.

So what?

One takeaway is that there’s an intersection of policy and politics here: the problem of geographic scale matters not just as a matter of technocratic interest to planners, but because it means that local activists who care not about median regional prices, but whether they and their neighbors will be able to afford their particular neighborhood in a few years, may have less reason to support more housing supply there—even though that would be by far the best outcome for affordability in the region as a whole. That means it’s even more important for planners and housing advocates to have something to offer them.

The challenge is that any realistic solution will require dramatically increasing the resources we devote to housing assistance. While we’ve pointed out that we could probably pay for housing vouchers (or a refundable tax credit) to every qualifying household just by getting rid of the mortgage interest tax deduction for people making over $100,000, that would require federal action that simply isn’t forthcoming from the current Congress. And at the local level, the focus on inclusionary zoning and impact fees has both fed on and promoted the fantasy that all we need to do to solve the affordable housing crisis is squeeze developers hard enough. In reality, only a broadly-funded commitment to funding housing assistance has any shot at reaching the required scale. And even that won’t have the needed effect unless we build enough market-rate housing to get prices down and reduce the per-unit cost of subsidies.

How is driving mode share changing in your city?

Last week, we published an interactive tool for exploring how commuting has changed by different age groups over the last decade or so. One of the big takeaways was that even among younger people, there’s been only miniscule shifts away from driving, or towards transit and biking, despite the huge surge of youth to more urban locations.

As we wrote, a big issue is that transportation choices depend on transportation options—and in most neighborhoods in America, those options lean heavily towards cars. Distances are too far, and roads are too dangerous, for biking or walking; and transit services are often unreliable or are themselves located beyond walking distances from the jobs or homes people are trying to get to.

But by separating this data out by metropolitan area, we can see some more movement, especially in places that do have a stock of pre-zoning “illegal neighborhoods” and solid public transit, where the growing number of downtown jobs and growing population, especially of young people, has increased the number of people who want—and, importantly, can—use non-car means of transportation to commute.

So while nationally, the proportion of young people driving has dropped by only one or two percentage points, in the San Francisco metro area, the share of 16-to-24-year-olds who drove to work fell from 71.0 percent in 2006 to 64.8 percent in 2014.

Screen Shot 2016-03-10 at 11.02.54 AM

 

And while driving declines were fairly consistent across age groups in San Francisco, in many places, the urban generation gap is very apparent. In the Chicago region, the share of young people driving to work decreased from 78.1 percent to 74.3 percent, even as it held steady among people 45 to 54.

Screen Shot 2016-03-10 at 11.02.11 AM

 

The Minneapolis-St. Paul region also saw very different trendlines by age, with younger people reducing driving, even as older workers saw little to no change:

Screen Shot 2016-03-10 at 11.01.11 AM

 

On the other hand, some metro areas aren’t looking so good in any age group. For example, here’s Houston:

Screen Shot 2016-03-10 at 10.58.34 AM

 

You can play around with the numbers below, looking at mode shifts by age in the 25 largest metropolitan areas. As before, we have allowed the scales to change depending on the inputs you select to make it as easy as possible to see trends—note, though, that the scales can change dramatically from one metropolitan area to another.

 

The Week Observed: March 11, 2016

What City Observatory did this week

1. Muddling income inequality and economic segregation. What does it mean to be a prosperous city? What does it mean to be a city with high economic inequality? These questions can be difficult because they apply statistics we’re used to using at a national level to municipalities or neighborhoods—and that context makes all the difference. At a local level, indicators of great prosperity, like very high income levels, often means that a city or suburb has simply managed to push out the poor. And indicators of inequality that are unambiguously bad at a national level may actually be good at a local level, because they suggest a measure of integration. As journalists increasingly bring the important questions of economic opportunity and inequality to local contexts, it’s crucial to understand those differences.

2. How we shut the door on housing. Among policy analysts and urban observers, there’s growing recognition that major shortages of housing in high-job-growth cities are behind skyrocketing housing prices. But there’s less understanding of how we got to this point. In a new paper, the Dartmouth professor William Fischel, long a leading scholar on the subject, brings out data suggesting that concern about housing prices suddenly spiked in the early 1970s—around the very same time as zoning laws became much more restrictive about new housing construction. He speculates that a period of high inflation, combined with broader homeownership and tax laws that gave preferences to homes as financial vehicles over other investments, increased demands from homeowners for assurance that their greatest assets wouldn’t lose their value.

3. How should cities approach economic development? A new report from the Brookings Institution is a must-read primer for local officials and stakeholders interested in state or local economic development. We add a few caveats and notes of our own, including the centrality of talented, highly educated young people; the importance of providing the kind of high-quality urban spaces that attract those young people; how strategy is about choosing what not to do, and why the federal government has a crucial role to play, even in state and local success.

4. How is driving mode share changing in your city? Last week, we published a tool for exploring how commuting patterns have changed in the US since 2006 by age cohort. We pointed out that despite the real movement of young people to urban centers, the national changes in commutes by cars, transit, and other modes of transportation have been surprisingly small, because of how dependent those choices are on a slow-changing built environment. This week, we published another tool that breaks down changes in driving by age for the 25 largest metropolitan areas—which shows the importance of having those options. Especially in regions with walkable urban cores and higher-quality transit systems, the shift away from driving is more pronounced, and generally even more so among younger cohorts.


The week’s must reads

1. Much has been written about whether, and how, ride-hailing services like Uber and Lyft will affect public transportation. This month, an Orlando suburbs will become the first city in the country to actually attempt to use Uber as a substitute for some public transit trips, subsidizing 20 to 25 percent of the cost of the on-demand service. While officials say they hope that the subsidies will solve some residents’ “first and last mile problems” getting to SunRail commuter train stations, they will also subsidize trips that do not intersect with transit. The Fortune article also quotes an economist concerned that the subsidies may encourage more trips, and end up costing more than the municipality of 43,000 can afford.

2. At Shelterforce, Rick Jacobus has written one of the more nuanced interpretations of the “to build or not to build”debates on housing affordability. He argues that blocking the construction of luxury housing, which has become a prime tactic of anti-gentrification activists across the country, can’t solve the problem—but that allowing more housing isn’t the whole answer, either. Jacobus also makes an important distinction between the ability of more housing supply to produce “filtered” affordable housing at the regional level, as opposed to in a particular hot neighborhood. He also makes some points we would take issue with, including on rent control. Look for a longer City Observatory response to Jacobus’ post soon.

3. Journalists Deborah and James Fallows of The Atlantic talk about their travels around the US, and how many of the “forgotten” cities they visited are thriving, far from the coastal hubs that get the lion’s share of media attention. They highlight the importance of having a distinctive downtown, even in smaller towns: “To a surprising degree,” James Fallows says in his interview with PBS, “just the identity of a place…depends on having a downtown with restaurants and with not just a shopping mall. It was amazing to go see how many parts of the country are attracting really ambitious, really well-educated, really first-rate people who think that the best arena for their ambitions and their whole life prospect is someplace where they can do work of the very first tier, but also have some effect on the local community.”


New knowledge

1. New York University’s Furman Center has released a new study, the “National Affordable Rental Housing Report.” Looking at the 11 largest metropolitan areas in the US, the report finds a growing renter population in both central cities and the suburbs, with a majority of central city residents renting in each of the regions except for Houston and Philadelphia. Increasingly, renters are living in single-family homes, in addition to multifamily buildings. And a “considerable” gap between supply and demand has pushed down vacancy rates and contributed to the affordability crisis.

2. “The Case for Age-Friendly Communities” is a new report from Grantmakers in Aging and researchers at Portland State University and Boston College, explaining what urban design and policy can do to create neighborhoods where you can both “grow up and grow old.” That’s an increasingly important challenge given the interest both in retaining and attracting families with children to urban neighborhoods, as well as accommodating America’s growing elderly population. The paper underscores the importance of accessible transportation, including public transit; a variety of affordable housing types; and access to public and inclusive social events.

3. The real estate company RedFin gave the public a peek at a new “Opportunity Index” tool this week. The Index computes the number of jobs paying at least $40,000 a year that are accessible to any given neighborhood within a 30 minute bike, walk, or transit commute, and displays the results on a heatmap reminiscent of David Levinson’s maps at the University of Minnesota. (Levinson’s, however, just track transit commutes, and don’t have an income screen.) While the full interactive tool has yet to be released, the screenshots are worth checking out.


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

How we shut the door on housing

Note: Tomorrow, NYU’s Furman Center will hold a seminar with Dartmouth professor William Fischel on his new paper,”The Rise of the Homevoters: How OPEC and Earth Day Created Growth-Control Zoning that Derailed the Growth Machine.” This post contains some of our reactions to the paper.


 

There’s increasing recognition that laws preventing the construction of new housing in high-demand neighborhoods—”the new exclusionary zoning” (a phrase coined in this excellent paper by John Mangin)—is a problem, driving up housing prices across entire metropolitan areas and increasing segregation. Less talked about is where these regulations came from.

Last November, we wrote about one influential theory on that count, from Dartmouth professor William Fischel. His 2015 book, Zoning Rules!, suggested that the big shift to broadly exclusionary zoning happened in the 1970s, and that there were five big culprits:

  1. Highways that greatly increased housing demand in suburban communities
  2. The Civil Rights Movement, which threatened to integrate previously segregated areas
  3. The granting of more powerful legal standing to opponents of development
  4. The creation of more complicated development processes with multiple veto points
  5. The rapid growth of housing prices in 1970s, combined with a period of high inflation

In a new paper, Fischel again addresses how, and why, American cities became so much more restrictive on housing growth in the 1970s. The broad outlines are the same: Rapid inflation in the beginning of the decade, combined with tax policies that favored housing investments over other financial vehicles like the stock market (think the mortgage interest tax deduction and capital gains exemption) made homeowners start thinking of their homes as “growth stocks” rather than stable investments. Those expectations drove homeowners to more aggressively pursue policies that would protect their investments, including preventing new developments that might drive down prices either by creating disamenities like traffic or noise, or simply creating more competing sellers.

A Google Ngram of mentions of “housing prices” in American books shows how quickly housing values became an issue at this time:

Screen Shot 2016-03-07 at 11.44.16 AM

…and how talk of “growth controls,” “downzoning,” and “farmland preservation”—all ways to reduce housing construction and inflate prices—took off at exactly the same time:

Screen Shot 2016-03-07 at 11.44.42 AM

He also expands on some of the regional aspects of “the new exclusionary zoning,” as this shift has been called. Notably, large metropolitan areas on the East and West coasts have seen the most dramatic move to building restrictions. These changes have resulted in drastically different regional housing prices; while the difference in real estate values between, say, metropolitan Atlanta and metropolitan San Francisco was relatively small prior to the 1970s, it has since widened substantially. Perhaps more strikingly, even non-coastal areas that have seen huge increases in jobs and population over that period—say, Phoenix or Houston—have kept housing prices relatively low. And while natural barriers to construction have often been cited as a reason for low housing production and high prices in coastal cities, Fischel points out that there are many interior cities with similar barriers: Washington, DC, for example, is not meaningfully more hemmed in by the Potomac than Chicago is by Lake Michigan, or than St. Louis is by the Mississippi.

Rather, Fischel points to institutional factors. Metropolitan areas in the Northeast are generally made up of many geographically small municipalities, which allows homeowners to heavily influence the local bodies that make zoning decisions. Sunbelt local governments, by contrast, are generally much larger, making hyper-local anti-development politics harder to organize. (Previously, we’ve covered the evidence that more fragmented governments tend to be more restrictive on development. Finally, although the West Coast generally lacks the Northeast’s extreme jurisdictional fragmentation, Fischel argues that ballot referenda still allow homeowners to directly exert their influence. Another factor is the prisoner’s dilemma:  if some local jurisdictions effectively put in place growth controls, other jurisdictions have strong incentives to implement their own growth controls to avoid becoming a “dumping ground” for unwanted residents or land uses.  

And yet, evidence also suggests that housing price growth itself leads homeowners to demand more restrictive housing laws. And while the Northeast and West Coast are not the only regions to see rapid population and employment growth, they have seen the fastest growth in high-paying jobs that require high levels of education, attracting the sort of workers with the ability to bid up prices. “This suggests,” Fischel concludes, “that if economic shifts occur that make Chicago and St. Louis the favorite destinations of high-skilled, college-educated workers, the cities of the Midwest will become the centers of growth controls and rising housing prices.”

As before, the big takeaway is that restrictive zoning is not an accident, nor a policy imposed by top-down planners, but something that is demanded by voters—particularly homeowners—who are, at least in part, responding to their own financial incentives. Any plan to reform zoning needs to address those voters and their interests. That’s why the path to more plentiful and cheaper housing may begin with measures that aim to reduce the weight homeowners put in their homes as financial investments, including rolling back the mortgage interest tax deduction and treating capital gains on housing like other capital gains for tax purposes.

The Week Observed: March 4, 2016

What City Observatory did this week

1. Cities can’t solve all our problems. Like other people who think and work about cities and urban issues, we’re often focused on how ground-level changes can make cities better—things neighborhood groups or local government can do. But though local actors are important, we can’t lose sight of the fact that cities don’t exist in a vacuum—they very much depend on state and federal policy for everything from the condition of the macro economy to climate change. We’re fast reaching the point where if they are to succeed, cities need to federal government to step up.

2. Explore national transportation change trends by age group. As we’ve written before, even with the move of young  highly-educated people and jobs to cities, moving the needle on transportation use is incredibly hard, because it depends in large part on the slowly-changing built environment. In this post, we built an interactive tool to look at exactly how much transportation behavior has changed (at least in commutes) by age over the last decade or so. In a future post, we’ll break it down by metropolitan area—where the news is a bit rosier.

3. The problem with how we measure housing affordability. By far the most common benchmark for whether housing is “affordable” is whether a household spends more than 30 percent of its income in rent or mortgage payments. But there are some problems: 30 percent is a very different burden for someone on a very low income compared to higher incomes; it doesn’t include other location-based costs, like transportation; and it doesn’t take into account what people get for that housing: a substandard apartment in a neighborhood with few amenities, or a better unit with access to good jobs and amenities?

4. CBO on highway finance: The price is wrong. A new report from the Congressional Budget Office confirms something we’ve known for a while: drivers don’t pay the full price of their use of roads, and as a result, drive much more than if they weren’t being shielded from the true costs of driving. Other financial arrangements that took into account the costs of congestion and maintenance—not to mention environmental and human costs—might lead to more efficient use of our car transportation system. The report also warns that the stimulative impact of new highways appears to be waning.


The week’s must reads

1. We’ve expressed reservations about inclusionary zoning as an affordable housing strategy for a variety of reasons, including its effect on the market and its limited scale. At streets.mn, University of Minnesota Professor Evan Roberts offers a cogent synthesis the skepticism, breaking his arguments into four parts: 1) IZ puts all the funding burden for affordable housing on a very small number of people—developers and purchasers of new housing; 2) IZ makes the financing of affordable housing opaque; 3) IZ is a passive response to the problem of affordability that makes no affirmative commitment to provide a certain amount of housing; 4) and IZ discourages new market-rate housing.

2. Donald Shoup’s The High Cost of Free Parking is one of the most influential urban policy books of the last ten years, forcefully arguing that city residents suffer for the sake of plentiful, ostensibly free parking supply. In the Washington Post, he updates his arguments about how parking requirements hurt the poor by driving up housing construction costs. He points out that a single parking space can cost $24,000—several times the median net household worth among Hispanics ($7,700) and black Americans ($6,300). Forcing all residents, whether or not they own a car, to help subsidize required parking spaces at their homes, businesses, and shops is an unnecessary burden. It’s counterintuitive, but free is a bad price if you’re concerned about the poor.

3. The New Yorker covers the growing number of “micro-unit” apartment developments in its hometown, interviewing Brookings’ Alan Berube and the Furman Center’s Ingrid Gould Ellen. While these newly-built homes aren’t affordable to lower-income renters—something that shouldn’t be a surprise, as we’ve written—they do help meet the growing demand for housing for single-person households, including young people and the elderly, making for more flexible neighborhoods that allow people to “age in place” and allow larger units to filter to younger families.


New knowledge

1. The debate over streetcars often focuses on their perceived shortcomings, including whether their added expense is worth the limited time and capacity savings over bus routes, or their usefulness as instigators of infill development. A newly published study from two Florida State researchers looks at the issue from another perspective: whether, and how, the kinds of people who ride streetcars are different from people who ride light rail, another popular form of rail that tends to run in its own right-of-way, as opposed to on the same roadbed as cars, like streetcars. They find that ridership sources are different for each type: light rail tends to attract more “utilitarian” riders going to, for example, jobs, while streetcars appear to attract riders motivated by “tourism and special activity” centers.

2. Though transportation conversations often pit different modes against one another—”bicyclists” and “drivers” and “bus riders” and so on—most people depend on multiple modes over the course of a typical week, if not a typical day. A new survey of BART riders in the San Francisco Bay Area has a lot of interesting information, but perhaps the most interesting is the breakdown of how people arrive to BART stations: over a third walk, about 6 percent bike, a little under a tenth take the bus, and just under 40 percent either drive themselves or get dropped off. It’s a good reminder that most transportation environments depend on the interplay of multiple modes.

3. Governments make sure to measure how many people use major pieces of road infrastructure, like highways, and transit agencies are able to release detailed ridership information, but we hear far less often about “walkership” (feel free to insert your own made-up word there). But new sensors installed in Chicago’s Loop have an estimate for us: over the course of the last week of February, more than 1.61 million trips were taken on foot on a 4,000-ft. stretch of State Street. While we don’t think of walking as “mass transportation,” that represents 230,000 trips per day—more than all but one of Chicago’s eight heavy rail lines.


This week, The Direct Transfer, Jeff Wood’s daily roundup of all the urbanism news that’s fit to print—from Brookings Institution reports to updates about local zoning and transportation debates—went to a “premium” model, worth $15 a month or $150 a year for the full daily email. We’ve always seen The Week Observed as a complement, rather than a competitor, to The Direct Transfer—a digest from a particular perspective, rather than a comprehensive link rundown—this newsletter offers great value for money if you need to stay on top of the country’s urbanist news.


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

The problem with how we measure housing affordability

This is the first in a three-part series on the flawed way that we measure housing affordability. This post looks at exactly what’s wrong with one of the most common ways we determine what “affordable” means. The second part looks at an alternative measure, and the third examines the particular challenges of understanding “affordability” for owner-occupied homes.


Given how much time media outlets, policy shops, and community groups have spent talking about America’s affordable housing crisis over the last few years, you might think that we’ve at least settled on a pretty good way to define what housing affordability actually is. After all, how can we talk about solving a problem if we don’t have a reliable way of determining who’s suffering, and where, and why?

Unfortunately, you’d be wrong.

As an illustration, picture yourself as an employee of a local supermarket, making $1,500 a month. You live with a friend in an outlying neighborhood, and your share of rent is $400, plus $300 a month for car expenses. After all that, you have $800 a month left over – which dwindles pretty quickly between child care, groceries, and prescriptions. When you get sick or your car breaks down, you can’t avoid racking up some credit card debt.

The front page of Craigslist for apartments in San Francisco.
The front page of Craigslist for apartments in San Francisco.

 

Across town, a man who works as a VP in marketing makes $8,000 a month. He pays $3,000 in rent for a brand new loft apartment near downtown. Because he can walk to work and takes public transit most other places, he buys a monthly pass for $100 and doesn’t own a car. After those costs, he’s got $4,900 to spend every month, which buys lots of nice meals out and international vacations while leaving room for healthy retirement savings.

You’re having trouble making rent, and the marketing VP can make their payments easily. But according to our most common standard of housing affordability, it’s the VP who’s rent-burdened, and you’re doing fine.

That’s because those standards rely on a simple ratio: if you pay more than 30% of your income in housing costs, your housing is unaffordable. If you don’t, it’s not. And the supermarket worker pays just 27% ($400 of $1,500), while the marketing VP pays 38% ($3,000 of $8,000).

The supermarket/VP story is an extreme example, but it demonstrates several of the fundamental problems with the 30% threshold as a measure of housing affordability.

1. Equity. Most obviously, it doesn’t take into account that, depending on how much money you start with, leaving 70% of your income for all non-housing expenses may be plenty – or not nearly enough. Affluent people have the luxury of deciding whether to spend relatively large proportions of their incomes to buy housing in a better location, or with particular amenities, without sacrificing other necessities like food or clothing. Low-income people generally don’t. In that way, comparisons between people with different earnings can turn out misleading or unfair, as in the example above.

Craigslist apartments in Boston.
Craigslist apartments in Boston.

 

But it can also fail in analyzing the burden of housing costs on people with similar incomes. Not everyone, after all, has the same non-housing obligations: for a healthy, childless twentysomething, a salary of $40,000 might easily cover housing, food, insurance, and other necessities. But someone who has to do much more non-housing spending – because of a chronic medical condition, say, or children with special needs – might struggle on the same income.

2. Other location-based costs. On top of that, there’s increasing recognition that housing choices are closely tied to other costs, which need to be considered part of the package. In other words, the cost of housing is less relevant than the total cost of a location. By far the most important of these other costs is transportation. While housing closer to the center of a metropolitan area is often more expensive, it also requires less driving – and often no driving at all, thanks to public transit – which saves a lot of money. According to Harvard’s Joint Center for Housing Studies, low-income people who manage to spend less than 30% of their income on housing actually end up paying $100 a month more on getting around, which eats into their savings, and sometimes erases them entirely.

Some organizations, like Chicago’s Center for Neighborhood Technology, have tried to take this into account. CNT’s H+T Index shows the total housing and transportation costs for various locations, set against a combined affordability standard of 45% of income. That’s a major step forward – but using a ratio like 45% still has all the other problems of the 30% ratio we’ve already covered.

3. Quality of housing. The 30% threshold can’t tell us anything about what a given household is getting for their money. Few of us would say that affordable housing needs are met by homes that are low in cost but lacking in basic modern amenities like heating or indoor plumbing. While those problems are now relatively rare in major metropolitan areas, many cities have a stock of affordable housing that is predominantly located in neighborhoods with high crime rates, failing schools, few options for fresh food, or other major quality of life issues. Do that housing satisfy our need for affordability?

Craigslist apartments in Memphis.
Craigslist apartments in Memphis.

 

This is an especially important question if we care about housing for its effects on opportunity and mobility. As recent research from Raj Chetty has reinforced, the kind of neighborhood you live in can dramatically change your prospects for living a comfortable middle-class life. It seems odd, in light of those findings, to measure housing access without taking into account whether that access includes communities that offer a shot at economic stability in addition to cheap rent.

In conclusion, the way that we currently measure housing affordability – a simple 30% ratio of cost to income – is simply inadequate to the task. It fails to give us an equitable picture of who is in need and who isn’t; fails to consider the total cost of a location, missing housing-dependent payments, like transportation, that can add a significant burden to low-income households; and fails to consider questions of housing and neighborhood quality that exert significant influences on the life chances of the people who live there.

(Why, then, do we use it? This Bloomberg piece from last year, also pointing out the 30% ratio’s flaws, is probably correct that its durability has to do with simplicity.)

Tomorrow, we’ll look at an alternative way to measure housing affordability that addresses some of these problems.

Explore national transportation change trends by age group

In some ways, the urban renaissance of the last decade or two has been quite dramatic. Downtown or downtown-adjacent neighborhoods in cities around the country have seen rapid investments, demographic change, and growth in amenities and jobs. Even mayors in places with a reputation for car dependence, like Nashville and Indianapolis, are pushing for big investments in urban public transit.

Because many of those who work in urban planning live in or near these walkable, transit-served neighborhoods, it may be easy to imagine that their changes are representative of the overall pace of transition to a more urban-centric nation. But as we and others have discussed before, in at least one way—transportation—change has actually been excruciatingly slow at the national level.

According to the American Community Survey, from 2006 to 2014, the proportion of people using a car to get to work declined—from 86.72 percent to 85.70 percent. Even among young people, the shift seems underwhelming: from 85.00 percent to 83.94 percent. (Though, as we stressed last week, these Census data only cover journey-to-work trips and tend to overstate the extent to which households rely exclusively on cars for their transportation needs.)

The changes for transit, biking, and walking are, obviously, similarly small. Transit mode share increased from 4.83 percent to 5.21 percent; among those 20 to 24, the increase was 5.53 to 6.35 percent. The overall share of walking commutes actually fell.

In fact, we’ve built a little tool to let people explore these data in an interactive way, selecting mode type and age ranges to see how things have changed, and haven’t, over the last almost-decade. The tool displays the same data in two ways: first, as a graph, and then as a simple table, for those who find that easier to read. (On the graph, yes, we have allowed the y-axis to begin at numbers larger than zero—in large part because the changes are so small that a chart that began at zero would be unintelligible. We will trust our readers to be sophisticated enough at reading graphs to understand.)

 

So what’s going on here? Well, as we wrote about just last week, the single greatest determinant of people’s transportation choices isn’t what mode they think is the coolest—or even whether there’s a train or bus station nearby, though that obviously helps. The most important factor is their city’s land use pattern: are there things close by to walk to? Is the city compact enough—and pedestrian-friendly enough—that there’s an fast, safe, and pleasant way to get from a transit stop to their place of employment? When you step out of a train station, do you see this:

The terminus of the Green Line light rail in downtown St. Paul. Credit: Google Maps
The terminus of the Green Line light rail in downtown St. Paul. Credit: Google Maps

 

…or this:

 

The Arapaho light rail stop in Dallas. Credit: Google Maps
The Arapaho light rail stop in Dallas. Credit: Google Maps

 

This kind of built environment doesn’t change nearly as fast as attitudes—or as quickly as jobs can relocate from suburban office parks to downtown lofts. But it does change, and it’s why we insisted last week that thinking about “the future of urban transportation” in terms of apps and hacks, rather than fundamental urban design, is a huge mistake.

There is more encouraging news, however: if you drill down to mode shifts by metropolitan area, the changes are much more pronounced, especially among younger people. In a follow-up post, we’ll let you see exactly how much has changed in your city.

Undercounting the transit constituency

By far the most common way to measure transit use is “commute mode share,” or the percentage of workers who use transit to get to their job. For the most part, this is a measure of convenience: it’s the most direct way the Census asks about transportation, which means it’s the easiest way to get consistent data from any city or metropolitan area in the country.

But it also has a lot of problems. For one, the vast majority of trips—about 84 percent—aren’t simple home-to-work commutes. And it’s not just that people who work also go to the grocery store, restaurants, or friends’ homes. Lots of people don’t work at all, and those people—largely students, the elderly, or people with disabilities – are disproportionately likely to use transit for all or almost all of their trips. Finally, plenty of people who do work might drive three or four days a week and take transit the other one or two. But since the Census only asks about what they do most of the time, they’ll show up as “drivers.” All of these things will tend to undercount a place’s reliance on public transit.

People take transit for lots of reasons! Credit: Juliana Swanson, Flickr
People take transit for lots of reasons! Credit: Juliana Swenson, Flickr

 

A handful of people have proposed their own measures to try to correct for some of these problems. One of the best came from Reuben Fischer-Baum at FiveThirtyEight, who ranked American cities based on annual transit trips per capita. That has the advantage of counting all trips, whether they’re work-related or not. It can’t, however, tell you much about the distribution of use across people: maybe a place scores highly because ten percent of people use transit a lot, or 40 percent of people use transit occasionally.

In the spirit of this work, City Observatory would like to offer our own measures of transit use, based on data from the Census’ American Housing Survey. (The 2013 AHS includes just 25 metropolitan areas, which is why many larger cities are left out of our list below.) And these measures suggest that, indeed, commuting mode share dramatically understates Americans’ reliance on transit.

The first, more restrictive measure is the percentage of households that report using transit to get to school or work “sometimes, most of the time, or always” (leaving out people who reported “once in a while” or “never”). The second, broader measure is the percentage of households that report using transit for any purpose.

These measures have two big advantages over commute share. First, like Nate Silver’s index, they include a broader sample of trip destinations than just work. Second—just as importantly—they recognize that transportation decisions are usually made at the household level, not individual. Consider a couple who both work outside the home. That is, if a man takes the bus to work, then his wife or husband also depends on that transit service, even if they usually drive. After all, if the bus stops running, they’re going to have to figure out a way to carpool, or even buy another car—a major logistical or financial burden for many families. The same is true for parents of children who take transit to school, or adult children who live with elderly parents who rely on transit to get to social services or other activities.

That means that these figures better demonstrate the number of people with a direct stake in transit service, whether or not they themselves ride it on a regular basis. (Of course, lots of people who “have a stake” in transit are still left out, including people who would like to use transit but can’t because the service isn’t good enough, or people who drive but benefit from reduced congestion because of transit, or employers whose employees wouldn’t be able to show up for work without transit.)

And that matters because the people who make decisions about transit investments—politicians—look at how many of their constituents benefit from a given service as a major component of whether they benefit politically from supporting it.

And if they’re just looking at commute share, they’re looking at too few people. Even transit-rich metropolitan Boston doesn’t look so great by that metric: only 12 percent of workers there usually take transit to their jobs. But 29 percent of households include someone who regularly takes transit to school or work, and fully 56 percent of households use transit for at least some of their trips. In sprawling Houston, just 2 percent of workers commute with transit – but more than twice that proportion of households use transit for work or school, and more than one in ten households use transit for some of their trips. That’s still not great, but it’s much more significant than the minuscule commute numbers. It also suggests that even in one of the most transit-hostile regions of the country, a remarkable number of people find public transit useful for certain trips, forming a toehold for better service to produce even more ridership.

Where transit is convenient enough, people take it - even in Houston. Credit: wordjunky, Flickr
Where transit is convenient enough, people take it – even in Houston. Credit: wordjunky, Flickr

 

Of course, critics of these measures will point out that using households rather than individuals will make the proportion of car use increase, too, since a large number of households use both transit and private automobiles. But that’s really the point: people’s transportation behavior is much more diverse and flexible than the simple commute numbers suggest, and we ought to be giving as many people as possible as many choices as possible so they can determine what makes the most sense for a given trip.

In the end, the fact that transit use is broader than we think is evidence of its usefulness, and evidence that where service is adequate, many people will recognize that usefulness. But the case for better transit service goes beyond that. It’s about connecting people with opportunities in an affordable, efficient way, whether that’s a job or a cultural event. It’s about giving people the freedom to access what their own city has to offer. Everyone ought to have that choice.

The Week Observed: February 26, 2016

What City Observatory did this week

1. Another round on the Washington Post‘s housing roundtable. On Friday, we took part in a roundtable at the Washington Post‘s Wonkblog on what it would take to solve the housing affordability crises in places like San Francisco. On Monday, we followed up on some of the ideas of our fellow roundtablers, highlighting the surprising number of agreements before narrowing in on the biggest dispute: what is the role of market-rate housing construction, especially high-end construction? We argue that the role of housing filtering—of high-end construction taking pressure off of low-price housing—is a key and underappreciated part of the affordability picture.

2. Undercounting the transit constituency. The most common way we talk about how many people use public transit—or biking or walking—is “commute mode share,” or the percentage of commuters who take a particular form of transportation to work. But more than four out of five trips aren’t commutes—not just for workers who also have to pick up their kids from school and go grocery shopping, but for students, retirees, and other non-workers whose lives don’t include any commutes at all. Those are people who are disproportionately likely to use transit, and so commute mode share will tend to overstate a place’s car reliance. In the Philadelphia metro area, for example, only about 10 percent of people commute to work on transit—but 21 percent of households use it to get to school or work, and 42 percent of households use transit for some purpose.

3. What I learned playing SimCity. The education of a City Observatory writer included lots and lots of SimCity. But a return to city-building video games also revealed a whole host of built-in assumptions about how cities and urban planning work: from mandatory US-style zoning to the invisibility of parking and the total absence of neighborhoods and politics. It turns out there’s a lot you can learn about modern urban planning’s blind spots and biases from a game.

4. Designed to fail. A recent New York Times article covered the work of a design team hired by Ford to reimagine the future of urban transportation. But they missed an insight that, ironically, they had already acted on: although the designers tested Chicago’s transportation system by going to a restaurant four miles away, their downtown offices were located within a quick walk of dozens of restaurants. The design of neighborhoods matters just as much as the details of its public transit or a ride-hailing app when it comes to connecting people to the amenities and resources that they need.


The week’s must reads

1. The National Committee on Uniform Traffic Control Devices has one of the most snooze-inducing names imaginable—but that doesn’t mean it’s not important, as it helps set guidelines for what streets look like from coast to coast. And asStreetsblog USA reports, NCUCTCD is responding to changes on the ground, like green paint for bike lanes and innovative, multimodal-friendly traffic signals, by adopting national standards that will help spread those progressive changes to other cities, and encourage local leaders to embrace consistency from place to place.

2. Marisa Novara at Chicago’s Metropolitan Planning Council writes about the challenges of housing policy in a city where some neighborhoods are heating up, but overall population isn’t increasing—a situation that many cities in the Midwest and Northeast find themselves in. She makes the important point that on-the-ground changes people see in their neighborhoods, like rising home prices, need to be thought of as the outcomes of many different interacting factors, including changing demand, transportation networks, and housing supply—rather than as acause by themselves. Novara also points out that while below-market subsidized housing is important, no realistic amount of funding will produce enough for that to be a solution on its own: market prices also need to be kept under control.

3. As the presidential primaries heat up, Gabrielle Gurley at The American Prospect takes a look at the infrastructure plans of the Democratic candidates, Hillary Clinton and Bernie Sanders. The topline numbers: Clinton proposes $275 billion over five years (compared to Obama’s $500 billion proposal in 2015), while Sanders goes for $1 trillion. But neither of those figures seems likely to get by Congress. Both candidates also includes a national infrastructure bank (which we’ve been skeptical of). Gurley ultimately concludes that there’s little to be excited about.


New knowledge

1. How affordable is affordable housing? Affordability is a function not just of rents, but of the embedded costs of transportation attributable to a house’s location. As reported by the Dallas Morning News, a new study by Shima Hamidi of the University of Texas – Arlington and Reid Ewing of the University of Utah shows that by failing to take into account transportation costs, the total location costs of HUD-funded affordable housing are beyond what low-income households can afford. In particular, homes in sprawling areas are likely to require transportation spending that is more than 15 percent of total household income, the threshold above which transportation costs are considered “unaffordable.”

2. CityLab‘s Eric Jaffe has an excellent writeup of a paper looking at why, exactly, American cities have seen an influx of young, highly educated people since 2000. The study, by Victor Couture of UC – Berkeley and Jessie Handbury of the University of Pennsylvania, tests various hypotheses about the location-choice decisions of college graduates between 25 and 44. They find that a desire to be close to sought-after amenities, like restaurants, bars, gyms, and retail stores, provides the strongest explanation. Interestingly, proximity to jobs was a relatively minor factor, as people with jobs in the suburbs were not much less likely to choose a downtown home than those with center city jobs.

3. A new report from SSTI tracks venture capital funding by metropolitan area for 2015. The topline findings shouldn’t be surprising: the San Francisco area got the most funding, with $21 billion, or about $4,500 per person; the San Jose region was next, with $3,200 in VC funding per resident. Columbus, Ohio and Tampa, Florida posted the most rapid growth, with total VC funding increasing by over 80 percent.


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

What I learned playing SimCity

Like most city lovers of a certain age, I spent many hours as a kid playing SimCity. For readers who are tragically uninitiated, SimCity is one of the iconic computer games of the 1990s, though new versions have been released as recently as 2013. Playing as mayor (or, really, dictator, but more on that later), you shepherded the growth of a city from its very first streets to towering skyscrapers—assuming you weren’t wiped out by tornados, fires, or aliens. By making thousands and thousands of people plan commercial, industrial, and residential districts for their virtual towns, the creators of SimCity have probably done more than anyone in the history of the world to introduce basic principles of zoning to the public.

SimCity 2000. Credit: 01229, Flickr
SimCity 2000. Credit: 01229, Flickr

 

Recently, I started playing a successor to SimCity, Cities: Skylines (or CS, as I’ll call it). CS is very much like SimCity, with some added details (at least compared to the last version I played) and much better graphics. But unlike when I was ten, I can also appreciate that CS, like SimCity, has a whole host of assumptions about how cities work, and how urban governance works, built into the gameplay—assumptions that are both frustrating as a player and fascinating as someone who spends a lot of time thinking about real urban planning and governance. While all games that simulate real life are of course drastically simplified, the way that they’re simplified often speaks to the actual worldview of the people who design and play them. With that in mind, here are some notes on what a video game can teach us about the biases and blind spots of real-life urban planning in the US:

  • You must zone—and use single-use zoning. With the exception of some Sunbelt cities, nearly every urban core in America took shape in an era before zoning. As we’ve written, brownstone Brooklyn, Wicker Park in Chicago, Cooper-Young in Memphis, and any number of pre-WWII neighborhoods across the country—not to mention iconic cities in other parts of the world—could only have been built without modern American zoning, with its density limits, parking requirements, and separation of shops and homes. But in CS, no one can build anything on a plot of land until you’ve given it a zone: Residential, Commercial, Industrial, or Office, and specified high- or low-density. It’s striking that zoning is so baked into our assumptions about how urban development works that leaving something unzoned is just not possible—let alone creating mixed-use zoning, form-based zoning, or other kinds of development regulations like those used in Europe.
Zoning in Cities: Skylines: low-density commercial (light blue), high-density commercial (dark blue), and low-density residential (green).
Zoning in Cities: Skylines: low-density commercial (light blue), high-density commercial (dark blue), and low-density residential (green).

 

  • You must give cars primacy on the street. One of the most important tools real-life planners have is designing public space, including streets. The tradeoff between pedestrian spaces, bike lanes, and lanes for motorized traffic—and within motorized traffic, between private vehicles and public transportation—has a profound effect on neighborhood character, development patterns, and how people choose to get around. But in CS, that decision has been made for you—and as with zoning, the assumption is that all streets will follow the mid-to-late-20th-century US norm, which is dedicating as much space as possible for the use of private vehicles. Pedestrian-only and pedestrian-dominated streets, transitways, or simple bus lanes are all impossible, even though, again, many real-life neighborhoods around the world would be very, very different without them.
  • Parking doesn’t exist. This is an interesting one: whereas the last two issues bake in assumptions based on 20th century US practices, when it comes to one of the defining features of modern urban land use in America—parking—CS simply pretends it doesn’t exist. Why would it do that, when the game takes so much care to have a sophisticated transportation model, with individual workers who have to get to jobs, creating traffic jams, or using specific bus or train stops? Here’s one theory: no one actually wants a city full of parking lots and multi-story garages. Put simply, accommodating the actual demand for parking that your little citizens generate would be a bummer, because half of the buzzing streetscapes or idyllic suburbs you created would be erased for parking lots. This is, in fact, what we have done in real life, and it is a bummer. But CS might have forced players to look at parking as a part of the transportation system—and to recognize that the attractive, non-parking-lot-based neighborhoods in which many people wish to live their lives are incompatible with massive car use. Instead, it just pretends that all the costs associated with car storage don’t exist—a form of denial that is still strong more than ten years after the publication of The High Cost of Free Parking.
  • It’s all about the built environment. CS presents cities as a kind of dynamic puzzle, a system with inputs and outputs that can be optimized towards whatever goal you might have for them. But in real life, cities are mostly about people, and the relationships between them. Interestingly, though in many ways the game locks in an incredibly specific time and place—America in the second half of the 20th century, more or less—many of the defining features of that era are entirely absent. There are no poor neighborhoods in CS; race doesn’t exist, so there are no segregated black or white or Asian or Latino neighborhoods, either. In fact, community does not exist in any form. Every person cares only about their individual inputs and outputs: finding a job, having a means of transportation to the job, and so on. But for many real people, community is what cities are all about. Moreover, a central tension in urban governance is reconciling the design of the built environment with the goals of the people and communities who live in it. It’s disappointing that at least one version of the planners’ fantasy resolves that tension by simply imagining people and community out of the equation.
  • There are no politics. It would take a special kind of weirdo (like me) to play a game where you have to negotiate funding for major infrastructure projects with representatives from your state’s DOT, and get a community organization’s approval for every new apartment building. But those politics are, in fact, central to how cities get built today. In CS, you don’t really answer to anybody, which, obviously, is part of the fun—but it also represents a particular fantasy that has dogged urban planning since its beginning: namely, the myth of planning as engineering, a quasi-scientific exercise in tweaking traffic flows and directing people and jobs to the optimal locations to achieve a unified vision. In real life, every decision that gets made has a coalition of interested parties behind it. Understanding those interests, and the government institutions through which they’re channeled, is as important to understanding urban planning as a traffic model or supply and demand curve.

 

Please don't let anyone build this in real life
Please don’t let anyone build this in real life

Even though it’s just a computer game, Cities: Skylines has a lot to teach us about the unstated premises of our urban planning conversations, and demonstrates how those premises profoundly shape what our cities can look like. When we assume the necessity of a given way of regulating cities, assume away the messiness of people and their relationships, assume away politics, and ignore major costs, we miss an awful lot of what urban planning debates should be.

Another round on the Washington Post’s housing roundtable

Last Friday, we took part in a roundtable at the Washington Post’s Wonkblog on affordable housing. The conversation focused on a long-running debate about how best to address the affordability crisis in cities like San Francisco, and was sparked in particular by the new California Legislative Analyst’s Office report that found neighborhoods in the Bay Area with more market-rate housing construction were less likely to experience displacement of low-income residents.

Because there were several participants, space was limited. And although we’re generally familiar with the arguments, we didn’t get to see other contributors’ pieces before they were published. So we’d like to take the opportunity to respond to a few ideas here.

Screen Shot 2016-02-22 at 10.33.44 AM

 

One big takeaway is that there’s much more overlap in the arguments than you might think. For example, Alex Karner of Georgia Tech’s planning school and Chris Benner of UC – Santa Cruz, who take a skeptical position with regards to the LAO study, agree that we need more housing supply: “The LAO report is correct that there is a housing shortage across California,” they say. And when they write:

We need innovative policies that move beyond the limited existing [affordable housing] programs. The most promising…would provide direct subsidies to create permanently affordable housing…. The question is whether we have the political will to overcome local opposition to new development and to change policies, like the mortgage interest tax deduction, that currently do more to subsidize middle- and high-income homeowners than struggling low-income renters.

…they sound very similar to what we’ve written at City Observatory, where we’ve criticized the limited scope of existing affordable housing programs, advocated for innovative new programs to give direct housing subsidies to the low-income, talked about the political difficulties of local development politics, and argued for cutting the wasteful and regressive mortgage interest tax deduction.

So where’s the rub? That comes with our differing views on whether new market-rate housing construction can help even if that housing is targeted at high-income households. For Karner and Benner—and Dan Immergluck, also of Georgia Tech’s planning school—the answer is no. “To be sure, more supply is needed,” Karner and Benner write, “but unless it is targeted to those who need it most, it will only help wealthier residents.” Moreover, they add, high-income housing is already well supplied.

Our view is that this makes a fundamental mistake by implying that some housing is inherently “high-end” and other housing is inherently “low-end.” In fact, nearly all “low-end” housing is just high-end housing that became cheaper as it aged—in wonk terms, it “filtered down.” In the same way, gentrifying neighborhoods don’t become expensive because all of their “low-end” buildings are torn down and replaced with new “high-end” buildings: in San Francisco, like Brooklyn, Chicago, and other US cities, the vast majority of people in gentrified neighborhoods live in homes that have been around for decades, a century, or more.

Rather, these older homes become expensive because wealthier people become willing to pay more for them. Sometimes, that’s because landlords do major renovations; but other times, it’s simply because the area has become more desirable as a result of job growth or just the growing demand for urban living, and those are the only places in the neighborhood to live. When a landlord finds that she has many people bidding for her apartments, she will tend to rent to whoever can pay the most—increasing the rent until lower-income people drop out of the running. Adding more housing to the neighborhood, even if it’s expensive, will divert some of those high-income people from bidding on older apartments—which means less competition between high- and low-income people for the same homes, and fewer old buildings that “filter up” to become more expensive.

Park Slope, Brooklyn is not expensive because of new luxury condo developments. Credit: Anthony Viviano, Flickr
Park Slope, Brooklyn is not expensive because of new luxury condo developments. Credit: Anthony Viviano, Flickr

 

Immergluck directly addresses this “filtering” problem. He admits that it is a major source of “naturally occurring” (or market rate) affordable housing, but goes on to say that the process simply doesn’t work in neighborhoods experiencing rapid gentrification, “because land values and rents rise as the neighborhoods become more desirable and developers bid up land values.”

Of course, we think it’s crucial make the why and how of rents being bid up: generally, it’s because the number of people wishing to live in a neighborhood grows faster than the number of places to live, and the latter is largely a result of legal restrictions on the kinds and number of homes that can be built.

Even so, there’s some agreement here, too. Some markets may be so far out of whack that it may be impossible to restore affordability—but they’re exceptional. It is certainly true that in the hottest urban neighborhoods, where the number of people who would like to move in is truly massive—think central San Francisco, or lower Manhattan—it would be very difficult to build enough market-rate housing to avoid so much competition for housing that low-end apartments “filter up” to become more expensive.

But for one, most cities and most neighborhoods are not like central San Francisco or lower Manhattan, and don’t have such overwhelming demand. And second, as Immergluck concedes, filtering can still work more broadly, “in the metropolitan context.” That’s crucial, as an increasing number of metropolitan areas don’t just have some unaffordable neighborhoods—the entire region is unaffordable, pushing lower-income people to other, lower-cost parts of the country. Arresting that trend, which has been called “the new exclusionary zoning,” is hugely important to creating equitable cities, and it can’t be done without building more housing. Thanks to filtering, that’s true even if, as will probably be the case, most of that new housing is built at the higher end of the market.

The Week Observed: February 19, 2016

Next week, we’ll be releasing our latest City Report, which maps the location of consumer-facing businesses around the nation to provide a new, quantitative measure of a city’s street-level vitality—one facet of Jane Jacobs’ famed “sidewalk ballet.” Look for the full report, as well as detailed maps and breakdowns for each of the 51 largest US metropolitan areas, on our website.


What City Observatory did this week

1. More driving means more dying. Traffic-related deaths increased more than 11 percent over the first nine months of 2015. The cause isn’t hard to detect: cheap gas prices and a recovering economy have more people driving, and just as traffic deaths fell when driving fell in the late 2000s, they’re rising as Americans drive more. While some organizations try to blame the increase on driver behavior—on cell phones, for example, which is hard to square with the declines in traffic deaths from 2006 to 2014—the reality is that our transportation system is designed in a way that nearly guarantees huge human costs.

2. With highways, be careful what you wish for. A new plan to widen I-55 in Chicago is based on a commonly-held idea: more highways means less traffic. But a Google-assisted trip to cities with double or even triple the highway capacity per capita of Chicago reveals that even places like Atlanta or Houston that have gone to extreme lengths to avoid traffic congestion, spending billions of dollars to push highways through neighborhoods, still have lots of traffic congestion. The problem is that cars take up a lot of space—too much space for them to always be an efficient way to get around big cities.

3. Urban myth busting: New rental housing and median-income households. It’s a common argument: new high-end housing is a cause of our housing crisis. But it doesn’t fit the evidence. In fact, new housing has historically been too expensive for low- or moderate-income households—just as new cars (average price today: $34,000) are. Most housing becomes affordable the same way that cars do: it ages, and the relatively affluent owners move on to newer, trendier offerings. But in places where there is little new housing but strong demand, that process has been interrupted, leading the affluent to hold onto their old housing, keeping its prices high.

4. Costly misses on convention centers. University of Texas – San Antonio professor Heywood Sanders writes a guest post on the problem of systemically over-optimistic projections about the utilization and positive economic benefits of new publicly funded convention centers. Focusing on a new proposal in Austin, Sanders shows that the new projection mimics one made two decades ago, even though the first fell woefully short of reality: while it projected nearly 100 trade shows a year, the center hosted just 40 in 2013.


The week’s must reads

1. We often use economic arguments and studies to inveigh against the problems created by cities’ minimum parking requirements. But sometimes it’s best to just look at a single example on the ground. That’s what the blog Urban Cincy does, highlighting how the redevelopment of a historic building in that city’s Over the Rhine neighborhood is threatened by parking requirements that did not exist when it was built. While developers have found a 175-space lot a few blocks from the building, it’s not clear whether the city will give a variance to allow those spaces to be used for the building’s requirement. As you can see below in the image from Urban Cincy, the building and its streetscape would clearly be improved by a giant parking lot.

2. At CityLab, Amanda Kolson Hurley has written a threepart series on the amazing demographic changes in the Minneapolis-St. Paul suburbs—changes that reflect, and perhaps predict, broader shifts around the country. Hurley shows how once-90 percent white suburbs have significantly diversified, with immigrants from Asia, Africa, and Latin America, as well as people of color moving out from the central Twin Cities. But as they have diversified, they are also facing increasing problems of poverty and resegregation in the suburbs. Hurley dives deep into the debate over exactly how much establishing diverse, stable, opportunity-rich suburbs depends on battling racial segregation.

3. At Planetizen, Joshua Drucker raises concerns about economic impact statements in a piece that makes good joint reading with our own guest post about convention center projections. Drucker points out that economic impact statements often depend on the assumption that previous trends can continue indefinitely, ignoring issues like capacity constraints that may make that untrue. He argues that while economic impact studies are important, both practitioners and community members need to be educated about their shortcomings and take steps to minimize them, including ending false claims of precision, using multiple methods, and building different scenarios.


New knowledge

1. At CityLab, Richard Florida covers a new study from Trulia on the continued rise of renting. The proportion of American households that rent their housing has continued to rise during the recovery from the recession, reaching 41.1 percent in 2014, compared to 36.1 percent in 2006. The rise has been especially pronounced among younger people, with 71.6 percent of 18-to-34-year-olds renting in 2014, up from 62.5 percent in 2006. While some of the increase may be due to economic issues, even high-income households are seeing a rapid increase in renting.

2. How many people actually use those huge parking lots in front of so many suburban—and many urban—retail stores? Jennifer Evans-Cowley of The Ohio State University led a team that used aerial imagery to measure parking use around the Columbus, Ohio metropolitan area. It probably won’t shock you to hear that Evans-Cowley’s team found massive underuse everywhere they looked: on average, parking lots were just 28 percent occupied (or nearly 300 percent oversupply), with the highest utilization rate being 69 percent (or about 45 percent oversupply). Meanwhile, the massive, largely empty parking lots—which may be required by local zoning codes—force buildings to be more spread out, making it more difficult for people to walk or use transit to run errands.

3. CityLab covers a new study from Elliot Anenberg of the Federal Reserve and Edward Kung of UCLA on how food trucks decide where to set up shop. The researchers underline the importance of mobile technology in connecting consumers with food trucks, and the ways that these mobile shops can benefit from consumers’ preference for variety in their food. Interestingly, New York City is a major outlier in having relatively few online searches for food truck locations—perhaps, as CityLab‘s Richard Florida speculates, because the city’s dense land use patterns mean there are so many options within a short walking distance that searching is unnecessary. (Surprisingly, Portland Oregon—which has one of the nation’s largest concentrations of free-standing food vendors—ranks very low on the “food trucks” Google Search list, possibly because in Portland they are called “food carts.”)


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

Costly misses on convention centers

Today’s guest post comes from our colleague Heywood Sanders, Professor at the University of Texas San Antonio, and author of Convention Center Follies.


Lots of people make guesses about the future. So do cities. And cities often employ “expert” consultants, who presumably have a wealth of knowledge and expertise to inform their guesses, and provide more accurate and precise forecasts of the future.

But those forecasts don’t always prove accurate and effective. And consultants may be prone to telling city leaders what they’d prefer to hear, sometimes leading to dire consequences for the cities and their residents.

One cautionary tale took place in Austin, Texas. In the mid-1990s, Austin was considering expanding its convention center, so it hired a consultant, Charles H. Johnson, to make two separate reports forecasting the effects of such a project. Both studies depicted a glowing future if the convention center expansion was built: double the convention events, double the attendance, double the hotel room nights. The city, presumably at least partly thanks to these figures, went ahead with it.

Credit: Earl McGehee, Flickr
Credit: Earl McGehee, Flickr

 

Almost two decades later, the city wants to do it again—but their own analysis shows that Austin has yet to see all the predicted benefits from the first round of expansions.

This year, Austin has once again contracted with Johnson to make a recommendation about building an even bigger convention center. Not surprisingly, the 2015 report is rosy about the expansion. But it also provides actual attendance figures for the first round of expansions, allowing us to compare Johnson’s projections from the 1990s with what has actually happened.

The comparison is not flattering. Where the 1990s reports forecast 98 annual conventions and trade shows, the center just managed to land 40 in 2013. Johnson had also forecast that expansion would more than double attendance figures, from 150,000 to 329,00. But the expanded Austin center housed 186,675 convention and trade show attendees in 2013, the most recent year in the new report. Hotel room nights likewise fell far short of projections.

On top of that, it turns out that not only does history repeat, but so do dubious projections of the future. The 2015 report suggests that in “Year 8” of the newly proposed convention center expansion, there will be 311,000 hotel room nights—roughly what the 1990s analysis projected for the first round of expansion.

Nor is Austin the only city to find itself in this position. Johnson himself also worked on a report for a proposed Boston convention center, suggesting that it would produce 794,000 hotel room nights by 2012. While the center that eventually was built was somewhat smaller than the one Johnson analyzed (at 516,000 rather than 600,000 square feet), it generated only a fraction of the business: just under 265,000 hotel room nights in 2014. And Dallas Magazine detailed some of the projections and accounting shenanigans surrounding that city’s convention expansions earlier this year.

You might think that someone in Austin—perhaps the Austin Convention Center director, the city manager and staff, or the city’s mayor and council—would bother to check on the track record of convention center projections, and those of Johnson in particular, before commissioning a study. You might ask how Johnson came up with his projection for the currently proposed expansion. And you might wonder how an “expert” consultant gets to be considered “expert.”

There is clearly a danger of “selection bias” going on here.  The municipalities that commission economic impact studies and forecasts are looking for a justification to build these facilities. Typically they are sponsored by convention and visitor bureaus, or other special purpose entities with a strong vested interest. They choose the consultants to conduct the studies. Confronted with a choice of consultants who invariably produce high numbers and go forward recommendations and other consultants who are more pessimistic and cautious, it’s likely that those commissioning the studies will choose the more optimistic firms. Over time, this will weed out the pessimists, and only optimists will be left. This theory has some support in academic research.

When cities commission feasibility studies, and especially when the results of those studies will guide the use of millions of dollars of public money, there ought to be some reason to believe that those reports will be accurate. Part of that is looking at the track record of similar studies by the same authors and using the same methodology. Cities and voters should be able to evaluate the people being hired both for their reliability—how close their projections are to observed outcomes—and their bias, or whether their projections consistently over- or under-shoot actual results.

Without some assurance of reasonable accuracy on these fronts, it’s hard to know why cities should continue to base major economic development investment decisions on these often faulty studies.

The Week Observed: February 12, 2016

What City Observatory did this week

1. More evidence on the “Dow of cities.” We’ve argued before that evidence of shifting demand for urban real estate can be read as a sort of “stock” in cities—and that cities’ stock has been rising. A new report from Zillow underscores this trend. It finds that for the first time, the average urban home is worth more than the average suburban home—a major reversal of decades’ worth of demand for more suburban living. On a square foot basis, urban homes have been ahead for some time, and now enjoy a 25 percent price premium compared to suburban homes, and the gap is widening.

2. Why the first-time homebuyer is an endangered species. The percentage of all homebuyers who are purchasing their first home is at a historic low—30 percent. We look at a number of economic and demographic factors that are behind this trend, including lower incomes, more debt, and higher home prices. While homeownership isn’t going away, it is experiencing “gerontrification,” as a larger and larger percentage of homeowners are in late middle age or older.

3. Report: Market-rate housing construction is a weapon against displacement. For years, a large body of research has shown that regions that build more housing have lower home prices. But now, a report from the California Legislative Analyst’s Office has directly linked market-rate housing construction with lower rates of displacement. The study, which looks at neighborhoods in the San Francisco Bay Area, finds that those with “high” levels of housing construction had a 26 percent chance of experiencing displacement, while those with “low” levels of construction had a 46 percent chance. Importantly, inclusionary zoning policies played little if any role in reducing displacement—the effect was nearly the same in areas without such policies.

4. Inclusionary zoning has a scale problem. While much of the debate over local policies to promote affordable housing has focused on inclusionary zoning—the practice of requiring market-rate developers to sell or rent some proportion of their units at below-market prices—a look at the record of such policies in addressing major affordable housing shortages suggests that they are working at simply too small a scale to be really effective. This isn’t a matter of tweaking existing laws, but a basic shortcoming in the approach. The most successful IZ policy in the country, in Montgomery County, MD, has produced 14,000 units in nearly 40 years, a quantity only possible because it has nearly doubled in population over the same period—and even then, by its own count, at least 78,000 households remain burdened by housing costs. More ambitious approaches to solving our affordability problems are needed.


The week’s must reads

1. In Texas, state legislators have effectively given themselves the power to single-handedly veto affordable housing projects in their districts. A feature by the Texas Observer examines how this system ends up segregating low-income housing into already low-income neighborhoods, exacerbating economic and racial segregation, and limiting low income Texans’ access to jobs and high-quality public resources. Although the focus is on state policy, the practice of giving vetos to individual state legislators, and its exclusionary consequences, reflects what we know about giving power over development only to local decision-makers.

2. President Obama has released his ambitious, $98 billion 2017 Department of Transportation budget proposal. At CityLab, Eric Jaffe covers many of its ambitious provisions: a doubling of public transit funding, to nearly $20 billion; more than doubling funding for the popular TIGER grant program; and $7 billion for high-speed rail. Beyond dollar figures, the budget would empower metropolitan planning organizations by passing funds directly to them, rather than through more highway-favorable state DOTs. It would also add a $10 a barrel tax on oil, raising revenue and pricing in some of the social costs of that polluting energy source. Oh yeah: and it’s all dead on arrival at the Republican-controlled Congress. But for an argument that it matters anyway, check out Robert Puentes and Joseph Kane at Brookings.

3. For decades, official policy in most US cities has been to dedicate large parts of the public way for private car storage, an effective subsidy to drivers and blow to other uses, both transportation-related as well as social, commercial, or artistic. Justin Fox of Bloomberg View takes a look at a rising backlash to that practice, with urban leaders taking a page from Donald Shoup’s groundbreaking The High Price of Free Parking and charging car owners for their use of valuable public land. He also notes the decline of another kind of automobile land use subsidy: the practice of requiring new buildings to include off-street parking spaces.


New knowledge

1. According to a new report from the Center for Budget and Policy Priorities,many state job creation programs are misguided. While many such policies are targeted at luring firms from other states, or lowering corporate taxes across the board, CBPP argues that more than 80 percent of job growth is actually driven by companies already within a state, and by startups and other small companies with little taxable income. In fact, while startups created nearly 3 million jobs per year from 1990 to 2009, businesses older than a year shed as many jobs as they created.

2. Research suggests that diversity and immigration can increase innovation and entrepreneurship. But a new study from Abigail Cooke of the University of Buffalo and Thomas Kemeny of the University of Southampton suggests that those benefits depend on “inclusive” institutions (like voluntary business and civic organizations, “third places,” and pro-immigrant ordinances) that help connect immigrants to the economy. In some cases, cities with fewer inclusive institutions see no statistically significant benefits from immigrant diversity, even as other cities with such institutions see strong economic benefits.

3. Housing Choice Vouchers (aka Section 8) provide low-income renters with a wider set of housing and neighborhood choice than conventional public housing—a feature that earns praise from affordable housing advocates (and from us at City Observatory). At The American Prospect, Jake Blumgart examines some of the barriers voucher holders still face in the Philadelphia region, and finds that they are numerous: from outright discrimination to a lack of guidance for voucher holders unfamiliar with many parts of the region. As a result, less than four percent of all vouchers were used in neighborhoods of “maximum opportunity,” and the program has done much less to mitigate patterns of segregation than many had hoped.


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

With highway expansion, be careful what you wish for

I live in Chicago. In Chicago, like pretty much everywhere, people complain about traffic. Almost every day, our roads and highways get congested at rush hour, leaving people crawling along supposedly high-speed corridors, wasting time, money, and gas. This is what it looks like on a typical Monday at 5:35 pm:

Credit: Google Maps
Credit: Google Maps

 

Obviously, no one is happy about this. So some people argue that we ought to build more highways. If the problem is that there are too many cars for the number of highway lanes, then surely building more highway lanes will improve the situation! In fact, just recently our governor announced that he was planning on adding at least one lane in each direction on I-55, which runs southwest out of the Loop.

It turns out that it’s true that Chicago has relatively few highways: by one measure, fewer than any other major metropolitan area, with just 0.33 highway lane-miles per 1,000 people. So let’s go on a Google-assisted fact-finding mission to some other cities with more highways to see if they’ve solved their traffic problems. Here’s Boston, which, at 0.62 highway lane-miles per 1,000 people, has almost double the highway capacity of Chicago:

Credit: Google Maps
Credit: Google Maps

 

Hm. That still looks pretty bad. Maybe the issue, though, is Boston’s famously narrow streets in its dense central city. (After all, people also blame Chicago’s congestion on too many people packed into too little space.) So here’s Atlanta, which has a similar number of highway lane-miles per 1,000 people (0.56), but is way less dense and has way bigger surface streets:

Credit: Google Maps
Credit: Google Maps

 

No dice. Okay, let’s go for even more highways. Remember, at this point we’ve nearly doubled Chicago’s highway capacity, spending many tens of billions of dollars, declaring eminent domain on hundreds of thousands of homes and businesses, and tearing apart dozens of neighborhoods. But what if we nearly tripled Chicago’s highway capacity? Houston has 0.82 highway miles per 1,000 residents, massive surface streets, and very few high-density areas like Boston or Chicago. Here’s what their rush hour looks like:

Credit: Google Maps
Credit: Google Maps

 

Obviously, this is not exactly a scientific study. Fortunately, however, other people have done those, and they find something similar: more road capacity does not necessarily mean less congestion. If a wider highway makes traffic flow faster, then some number of people who had been using other methods of transportation, or just making fewer trips, will start driving on the highway—adding more cars until traffic gets so bad that they stop. Over the longer term, additional highway capacity encourages developers to build ever farther into the suburban periphery, advertising the transportation benefits of being right next to a big highway that can bring you into the metropolitan area. The people who buy homes out there are then locked into driving longer and longer distances to get to work, go shopping, and meet people, each of which ends up increasing traffic congestion. That’s a big reason why people in Houston drive, on average, 12.2 miles to work, as compared to 10 in Chicago—even though Houston’s metropolitan area has almost a third fewer people than Chicago’s.

The problem, fundamentally, is one of space: cars take up a huge amount of physical space per person, compared with other kinds of transportation. In smaller cities, you might be able to accommodate them without total gridlock, at the cost of downtowns that are mostly parking lots, and streets that are unsafe for children or the elderly to cross. But as metropolitan areas grow, it simply becomes impossible to create enough space for cars. Even cities that have grown up almost entirely in the automobile era, and have catered to it in about as extreme a way as you can imagine, suffer from daily traffic jams.

Credit: International Sustainability Institute and Seattle Bike Blog
Credit: International Sustainability Institute and Seattle Bike Blog

 

When you’re sitting in traffic congestion, it’s natural to wish it away, and to imagine that with just a little more space, you could whisk yourself along at higher speeds. But if that’s the vision, it’s worth checking on other cities that have done just that. And it turns out that almost all of them, even ones that have double or nearly triple the highway capacity of a place like Chicago, still have the same problems. Maybe it’s time to look for different solutions.

Report: Market-rate housing construction is a weapon against displacement

We’ve known for a long time that housing shortages are a major driver of high housing prices—and that, as a result, places that prevent new construction also tend to have big affordability problems.

But now, for the first time that we’re aware of, researchers have taken the next step to showing directly that places like that prevent new construction end up inducing more displacement of their low-income residents.

That finding comes from California’s Legislative Analyst’s Office, which just released a new report on the state’s ever-growing affordability crisis. Using a broad definition of displacement—any decline of a neighborhood’s low-income population relative to its total population—the LAO shows that, even controlling for other demographic factors, Bay Area communities with the greatest expansion of market-rate housing also see the least low-income displacement.

Screen Shot 2016-02-09 at 4.24.43 PM

The effect is strong: changing from a low-construction neighborhood to a high-construction neighborhood was associated with a decline in the probability of displacement from 46 percent to 26 percent.

And crucially, the LAO researchers found that this effect was independent of inclusionary housing programs. That is, new construction reduced displacement not because it included low-income set-aside units, but because it helped keep market prices lower. In fact, the presence or lack of an inclusionary housing policy had a much, much smaller effect on displacement than the amount of market-rate housing construction.

That’s the headline, but there’s much more to see in the report. It covers the challenges to expanding many of the state’s low-income housing assistance, and demonstrates the importance of filtering to creating “naturally occurring” affordable housing—and how zoning restrictions hamper that process. It bears close reading for anyone invested in creating affordable communities.

Inclusionary zoning has a scale problem

Over the last few months, we’ve outlined a number of policy ideas that address the problem of housing affordability by dramatically expanding the number of people receiving some sort of housing assistance. (Low-income people, that is. We think the number of affluent people receiving housing assistance is already pretty high.)

  • We suggested taxing the growth in residential property values. Not only might that provide a disincentive to speculation that drives up market prices, but just a one percent tax would have raised $1.6 billion in the Bay Area in 2013 alone—more than five times San Francisco’s historic, but one-time, bond issue for affordable housing under Proposition A.
  • We argued for making Housing Choice Vouchers an entitlement. At the moment, less than a quarter of households that qualify for low-income housing assistance actually receive any, because Congress simply doesn’t appropriate enough money. But we could pay for housing vouchers for every single qualifying person just by dropping one kind of housing subsidy—the mortgage interest tax deduction—for people making over $100,000 a year. Actually, that’s not quite true: we’d still have more than $10 billion left over to increase the value of the deduction for the middle class.
  • We suggested that, perhaps even better than expanding Housing Choice Vouchers, we could make low-income housing assistance just as easy and automatic as we make upper-income housing assistance. We could put it in the tax code, by creating a refundable housing voucher tax credit.

None of these policies is on the brink of passing in Congress, or any state capitol or city hall. But they’re worth talking about both as a vision for what an equitable housing policy of the future might look like—and also as a contrast to the failure of scale of today’s marquee housing policies.

Local housing subsidies are woefully out of scale with the problem of affordability

As we noted above, less than a quarter of those who qualify for direct federal low-income housing subsidies get them. But when it comes to housing assistance, that’s the good news. Local housing policies—which, for obvious reasons of political scale, are often the focus of neighborhood activists, researchers, and planners—are in even worse shape.

Take inclusionary zoning, or IZ. Details vary from place to place, but typically, IZ requires housing developers to sell or rent some proportion of their units below market rate. In exchange, the city often allows the developer to build more densely than otherwise allowed, as a way of defraying some of the cost of the below-market units. And sometimes the developers have the option of paying a fee into an affordable housing fund, rather than building the units themselves.

Politically, the appeal of IZ is clear. First and foremost, it’s a way of financing housing that doesn’t require raising property or sales taxes. Second, it creates another hurdle for development, which is almost always a popular move in homevoter regimes. And it has great symbolic value: because of the high cost of construction, new buildings are often the most expensive housing in a neighborhood. Including below-market units in new luxury buildings can be a statement about the value of economic integration.

Unfortunately, IZ is more powerful as a symbol than as a way of helping people. A chart published in a New York City Planning Department report last fall makes this point rather eloquently on its own.

Screen Shot 2016-02-09 at 9.58.35 AM

There’s a lot going on here, but the most important lines are “Total Unit Production” and “Total In-Lieu Fees Collected.” Washington, DC, for example, created 80 units of affordable housing and collected no money in fees between 2006 and mid-2014. In the DC metropolitan area, 46 percent of renters are burdened by their housing costs. Even allowing for some differences in the District itself (and our quibbles with the 30 percent ratio used to get that number), it’s clear that it would be generous to refer to 80 units of affordable housing—roughly 10 per year—as “token.”

And while DC is a particularly egregious example, the other cities are hardly exemplars themselves. San Francisco looks relatively impressive at 1,560 units—until you realize that’s under 140 units per year in a city of over 800,000 people where median home prices are well above what even upper-middle-class, let alone low-income, households can afford. (Indeed, San Francisco’s “affordable” units go to families of four making as much as $91,700.) Nor do the city’s in-lieu fees make up much of a difference: about $5 million a year, which, according to numbers from Kim-Mai Cutler, might buy about 20 units.

The most successful inclusionary zoning program relied on extremely rapid population growth

Arguably the most successful inclusionary zoning program is in Montgomery County, Maryland, outside DC. Montgomery County’s IZ program, the first in the country, has created over 14,000 affordable units since 1974, or more than 350 a year. But while that’s relatively impressive, it’s hardly met the need: according to the County itself, there are at least 78,000 households that are still cost-burdened. Moreover, Montgomery County’s relative success has been predicated on truly massive population growth, nearly doubling from 564,000 to over a million people from 1974 to 2013. Without that kind of growth, the County would be unable to produce as many IZ units—and, indeed, as population growth has slowed, so has the number of new units. While Montgomery County produced an average of 441 units per year from 1976 to 1999, from 2000 to 2013, it has averaged just 245. Cities that are unable or unwilling to accommodate very rapid market-rate housing construction won’t be able to replicate these results—which still haven’t come close to solving the problem.

 

Montgomery County, MD's has probably urbanized faster than any other suburban county in the nation. But that makes it a bad IZ role model for other jurisdictions unwilling or unable to match that kind of growth. Credit: Google Maps
Montgomery County, MD’s has probably urbanized faster than any other suburban county in the nation. But that makes it a bad IZ role model for other jurisdictions unwilling or unable to match that kind of growth. Credit: Google Maps

 

None of this is necessarily an argument against inclusionary zoning on its own: local activists may reasonably conclude that this is the best that can be done at the moment. They may similarly decide that the tradeoff of slightly higher market prices is worth creating units at prices below what could otherwise be reached. (Though advocates frequently bristle at the suggestion that inclusionary zoning drives up the price of non-subsidized housing, evidence seems to suggest that it does, at least in markets with high demand and relatively restricted supply—that is, the sorts of markets where IZ is likely to be implemented. And, in fact, when IZ policies are being promoted to local homeowners, advocates sometimes pivot to arguing that affordable housing will be good for property values—in other words, it will make housing more expensive.)

We need to think bigger than inclusionary zoning

But there is no way to argue that inclusionary zoning is coming close to meeting the demand for below-market housing—or, importantly, that it will ever be able to do so. A hundred and forty units per year in San Francisco is not off by ten percent, or fifty percent, or even just one order of magnitude. Moreover, any dramatic expansion of IZ would also involve increasing the amount of private housing development by a similar amount, since IZ depends on piggybacking off of market-rate development—something that would be politically unthinkable in almost any jurisdiction.

In short, IZ needs to be reframed as not a centerpiece, but a minor part of an affordable housing agenda that actually serves everyone who needs help. Advocates need to push government to act on the scale of the problem, and one of the first steps is acknowledging out loud how far we have to go. At a local level, perhaps that can be done with a housing capital gains tax dedicated to funding affordable housing. At a federal level—and it seems more than likely that only the federal government has access to the resources to fully close the gap between the low-income housing assistance we need and what we currently have—expanding Housing Choice Vouchers, LIHTC, or creating something like the housing voucher tax credit could make a big difference. And, of course, broadly affordable housing requires reasonable market prices, too—which requires easing some of the regulations that prevent new housing for new residents and artificially inflate housing costs. Note the findings released just yesterday by the California Legislative Analyst’s Office, which found a much stronger connection between market-rate construction and reduced displacement than inclusionary housing policies.

Again, the point is not that inclusionary zoning is the enemy of affordable housing. It’s that it’s not that great a friend. The fact that IZ may be on the edge of what is politically possible today should not blind us to the fact that the cities and neighborhoods we envision require vastly more ambition.

More support for a real estate capital gains tax

A few months ago, we offered a proposal to dramatically increase funding for affordable housing and put a damper on real estate speculation: tax housing capital gains. While San Francisco’s voter-approved Proposition A will produce a one-time infusion of $310 million for below-market housing, and that city’s inclusionary zoning ordinance has produced just about $30 million per year in in-lieu fees, a barely-there one percent tax on the total increase in value of residential property in the Bay Area would have given local governments $1.6 billion in 2013. (Update: We should clarify that there is already a federal residential capital gains tax, but its revenues aren’t targeted at affordable housing, and it exempts the first $250,000 of gains entirely. As we suggested in the first piece we wrote about this, we have in mind something more locally administered and directly targeted at affordability. We’re also fine with exempting some “normal” amount of returns, but a quarter million dollar profit goes beyond “normal” appreciation.)

Now, that idea has received some backup from across the Atlantic. As reported in The Guardian, Britain’s National Institute of Economic and Social Research, or NIESR, released a paper arguing that a capital gains tax on housing would be one of the best tools to tamp down on an overheated real estate market.

Tax it. Credit: DncnH, Flickr
Tax it. Credit: DncnH, Flickr

 

NIESR focuses less on the potential for such a tax to generate funds to subsidize affordable housing than on its potential to even the playing field between housing and other kinds of investments, since the UK, like the US, gives strong tax preferences to residential property owners. That, in turn, would make residential real estate speculation less attractive, slowing rapid increases in property values and, hopefully, making housing market crashes less disruptive as well. In the American context, reducing tax incentives to buy housing might also balance the scales a bit more between renters and homevoters, easing the political imperative for local governments to pursue development policies that maximize homeowners’ investment returns.

The NIESR paper also makes a strong case that a real estate capital gains tax would be a boon for intergenerational equity. Rising real home prices are pretty much a straightforward transfer of wealth to older generations (who own homes) from the younger generations (who must pay, either through mortgages or rent) to purchase them. As in the United States, homeownership in the UK has not only been declining markedly, it has been experiencing “gerontrification”: as older people hold onto homes whose value has increased dramatically, homeownership among young people has crashed, as the combination of higher home prices and a weak economy mean that fewer and fewer of them have the means to purchase real estate.

Moreover, also like in the US, housing is an ever-larger proportion of overall wealth in the UK, and therefore a major driver of wealth inequality. Residential and nonprofit real estate now represents nearly 60 percent of all wealth in Great Britain. And as MIT graduate student Matthew Rognlie has shown, virtually all of the increase in the ratio of capital gains to wage income over the last several decades—the prime macroeconomic driver of wealth inequality—has come from housing.

The point of all this, as ever, is not that homeownership is bad, or that homeowners should be punished. The NIESR paper echoed us in advocating that a real estate capital gains tax be charged only when a home is sold, so that people on low or fixed incomes whose homes appreciate in value rapidly aren’t caught without enough cash to pay. They also agreed that homeowners could have some amount of price appreciation exempted from the tax as a “normal” return. But when demand for housing in a particular neighborhood or city skyrockets, there’s no reason that current homeowners should reap all of the benefit at the expense of people who would like to buy but can’t because prices are too high. A real estate capital gains tax would not only dampen market price increases, but would represent a sea change in the amount of money available for below-market housing in high-demand areas. It should be on the agenda for anyone who’s worried about inequality and affordable housing.

The Week Observed: February 5, 2016

What City Observatory did this week

1. Don’t demonize driving—just stop subsidizing it. City Observatory likes to make data-driven arguments—but the rhetorical frameworks we use to explain the data matter, too. Here, we take a minute to try to reframe the urbanist argument about the role of cars in a “good” city. While advocates’ rhetoric sometimes makes it sound like cars are inherently bad, we think the issue is really that an over-reliance on cars is bad. Refocusing the problem in that way doesn’t just make for a much more politically palatable argument, given that most people will be keeping at least one car for the foreseeable future—it also makes the policy issue clearer, by focusing on how we subsidize car ownership in ways that encourage overuse and dangerous use.

2. Who’s afraid of affordable housing? The acrimonious debate over housing policy in San Francisco breaks down into two main groups: one that wants to ease regulations on new housing construction, and another that wants to encourage only below-market housing construction. So it’s odd that a proposed ordinance to ease regulations on 100 percent below-market housing ran into major opposition. But that opposition highlights, yet again, the ways that giving a development veto to local groups can serve to make housing less affordable—even when those same local groups are publicly committed to improving affordability.

3. Bursting Portland’s urban growth boundary won’t make housing more affordable. The Oregon Legislature is considering a package of bills that would trade a repeal of the state’s ban on inclusionary zoning for opening up the city’s urban growth boundary to new suburban development. But that’s a deal that affordable housing advocates should turn down: based on the experiences of other American cities, inclusionary zoning is likely to produce only token numbers of affordable units, compared to tax-backed programs Portland already runs—or other measures it could take (see the post below). Meanwhile, opening up the urban growth boundary would be unlikely to relieve much pressure on the market of housing in the central city, where the major affordability issues exist.

4. More support for a real estate capital gains tax. A British think tank makes the case for taxing windfall gains to residential property values—one that dovetails very nicely with the argument we made previously that Bay Area governments, and other local governments seeing rapid housing price growth, ought to tax the growth in residential property values and use the money for affordable housing. Just a one percent tax could have raised $1.6 billion in the Bay Area in 2013, orders of magnitude above the value captured by San Francisco’s inclusionary zoning ordinance.


The week’s must reads

1. In recent years, policy gridlock at the federal level has led to talk of new leadership from mayors and other local urban leaders. But in City Limits, Judi Kende of Enterprise Community Partners makes the case that cities simply can’t solve the challenges they face without federal help. Many of her points echo arguments we’ve made as well—including that a lack of funding means only 23 percent of low-income households eligible for housing subsidies actually receive help—though while we’ve focused on demand-side solutions like vouchers, Kende suggests expanding affordable housing supply through programs like the Low Income Housing Tax Credit. Either would involve massively more resources than are currently marshalled by marquee local initiatives like inclusionary zoning—resources that only the federal government has access to.

2. Last week, we linked to an LA Times article about that city’s struggles with public transit ridership. This week, a number of writers pushed back on the idea that LA transit is seeing any such sustained decline. Transit consultant Jarrett Walker points out that while ridership is down since 2006, it’s up since 2005—and way up since 2004. In other words, ridership data is noisy, and the overall trendline is unclear. Transit Center says that if there is a post-Recession ridership drop, declining bus service—not a lack of demand—is to blame.

3. Though we often talk about the consequences of transit infrastructure on urban equity and quality of life, the ongoing lead poisoning crisis in Flint, Michigan, is a reminder that other parts of the built environment are just as crucial. And in case you thought this story doesn’t affect people who live outside Michigan, Vox dug through numbers from Pennsylvania and found that 18 of 20 cities in that state have lead exposure rates greater than Flint’s. While Flint’s issues are about lead water pipes, Pennsylvania’s are largely about lead-based paint in older buildings. But in both cases, these are stories about significant health effects of the urban built environment—something that ought to concern urbanists.


New knowledge

1. It’s another story for the “Dow of cities” file: Consumer Affairs reports on a new Zillow study showing that the value of urban housing continues to grow faster than that of suburban housing. (They also cite some of our work as background.) In fact, in some metropolitan areas—including Boston, Washington, DC, and San Francisco—the average urban home is now worth more than the average suburban home, reversing a decades-long pattern. The change is even more dramatic when adjusted for home size. That’s just another piece of evidence of the long-term shift of demand towards urban centers.

2. We talk about income inequality and wealth inequality, but what about housing price inequality? A new paper from David Albouy of the University of Illinois and Mike Zabek of the University of Michigan tracks this kind of inequality from 1930 to 2010. They find that home price inequality declined through the middle of the 20th century, before beginning to climb again in the 1970s and 80s, reaching roughly 1930s levels by 2010. The changes are explained not by the quality of housing itself, but by the value of land—that is, the value of the location of housing. They write that their findings suggest that “regulatory and geographic constraints on housing supply,” like zoning, “may play a role” in housing inequality within cities.

3. A new report from New York’s Regional Plan Association takes aim at “the unintended consequences of housing finance.” The RPA argues that federal loan programs make financing mixed-use, multi-family urban infill projects more difficult than suburban-type single-use single-family homes, exacerbating the shortage of housing in the sorts of walkable urban neighborhoods that are increasingly in demand. They suggest easing regulations on, for example, the proportion of buildings’ square footage that is allowed to be used for commercial or other non-residential purposes, as the current cap rules out most multifamily buildings with ground floor retail under five stories.


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

Who’s afraid of affordable housing?

Update: As reported by the San Francisco Chronicle, the SF Board of Supervisors has passed the ordinance in question.


As bitter as the housing debate in the San Francisco Bay Area gets sometimes, no one disagrees that the region is facing a crisis of high costs. It’s just that some people believe the crisis can’t be resolved without easing some of the zoning regulations that make it more difficult to build new housing, exacerbating a severe shortage; and others believe that market-priced units will never help, placing all their hopes on building more below-market housing.

So surely a proposal to ease regulations on 100 percent below-market housing developments would sail through to victory, right?

Except it isn’t. As the Chronicle reported, the Planning Commission deadlocked on a proposed ordinance that would remove a lengthy regulatory hurdle, the “conditional use permit,” that’s required even for developments that meet existing zoning and face no community opposition. It can add months, or even a year, to all-below-market projects, slowing down production and adding significant costs to the developers. And all a “conditional use permit” requires is showing that the project is “necessary and desirable,” which one would think would apply to basically any below-market development in San Francisco.

Credit: Torbakhopper, Flickr
Credit: Torbakhopper, Flickr

 

So what’s the issue? Some of it appears to be local political grudges. But the proposal is also laying bare some of the inherent political tensions of local governance—even among self-described progressives. In short, neighbors are simply unwilling to give up any power to control what happens in their neighborhoods, even if it means fast-tracking 100 percent below-market housing that they admit their communities desperately need. The Chronicle quotes one Commissioner saying that the proposal was trying to “take away the public’s right to comment”—even though neighbors could call for a discretionary review if they happened to object to a project. But it seems that any reduction in the leverage Commissioners and neighbors hold over developers—even developers of all-below-market housing—is perceived as a threat. They’re not going to say no to the construction of more affordable housing, the argument apparently goes, but they’d like to maintain every possible option to do so if they change their minds.

And perhaps part of it is that some San Franciscans who have been opposing development on affordability grounds, when faced with the prospect of affordable development, have realized that they’re just against any development at all.

For those of us who don’t live in San Francisco, this anecdote serves mainly as another example of the problem of placing overwhelming power over urban policy, including development policy, at a very local level. Even where the need for below-market housing is overwhelming—and where residents self-identify as very progressive and pro-affordability—the immediate neighbors of development of almost any type tend to oppose it. And at the very least, they’re unwilling to give up their veto, even if that ultimately means that less affordable housing will be built. It’s not a coincidence that a study out of UCLA, released just over a month ago, found that municipalities with more onerous building permit processes—like, say, the conditional use permit—were associated with more segregation of the low-income.

The Commissioner who introduced the ordinance is now placing it on the ballot for a referendum. Hopefully, asking voters citywide to weigh in will allow them to place their values—and the region’s clear need for more housing, especially below-market—above maintaining maximum hyper-local power. We’ll see.

The Week Observed: January 29, 2016

What City Observatory did this week

1. The market cap of cities. What’s the value of a city? We’ve taken a stab at answering that question—at least, the value of a city’s housing. Using a measure called market capitalization, or “market cap” in financial parlance, we can compare the economic weight of cities with major companies. Turns out San Francisco’s housing is worth more than three times as much as Microsoft, and all the housing in Columbus, Ohio is worth about as much as Bank of America. These comparisons may seem weird, but they do reflect real demand and value, and are a reminder of just how massively valuable our housing really is.

2. What is an “unequal” city? Higher levels of national economic inequality are bad. Higher levels of metropolitan area inequality are bad. So what about at the city or neighborhood level? Well, then it gets complicated. Given any level of metropolitan inequality, for some smaller part of that region to be less “unequal,” it would have to exclude some group of people: a neighborhood without rich people, or a municipality without anyone in poverty. But there’s a name for sorting people geographically according to their income: segregation. And segregation actually leads to worse economic mobility for the low-income. Ironically, then, fighting inequality at the local level means creating integrated neighborhoods that register higher levels of “inequality.”

3. Land use and transportation infrastructure: Two sides of a coin. When new highways are quickly filled up with cars, erasing any gains in the fight against congestion, those who want to continue building more and bigger roads sometimes point out that population growth along the highway interpret this as showing that things would have been even worse if it hadn’t been built. But this treats land use and transportation as if they are totally independent of each other—and they very much aren’t. Adding highway capacity out to the suburbs will encourage people to build more houses there; spending those same resources on improving more space-efficient transportation, like buses or trains, in the central city will encourage more development in the central city. That symbiotic relationship can’t be ignored.

4. In some cities, the construction boom is starting to pay off. After a long period of consistently fast rent growth, prices are flat or falling in Seattle, Denver, and Washington, DC, thanks in large part to an apartment construction boom in those cities. In fact, it’s a national phenomenon—the rate of rent growth has fallen by half in response to a 20 percent surge in apartment construction in 2015. Though the historical evidence connecting housing supply and prices is very strong, we had yet to see a housing boom correct price growth during this cycle—but now that evidence is arriving.

The week’s must reads

1. Nearly half of all states—23, to be exact—restrict the use of gas tax revenue for sustainable transportation projects, including transit, bike lanes, and sidewalks. AtStreetsblog, Angie Schmitt reports that dispiriting fact—but also that Colorado recently voted to reverse their own such restriction. That move, Schmitt argues, is one of “five things states can do to bring transportation out of the stone age.” The others: base project funding on clearly articulated goals; adopt more flexible street design standards; use transportation demand management; and give more resources to local governments.

2. We’ve written before about the power of smart transit investments—ones that create fast, reliable service that goes where people need to go, regardless of whether it’s by train or bus. Los Angeles may be seeing the results of the flip side of those policies, however, according to a blockbuster piece by Laura Nelson and Dan Weikel in the LA Times. As they report, the region is seeing dramatic decreases in public transit ridership in the midst of multi-billion-dollar investments in new rail lines. One possible culprit: significant cuts to bus service, which carries most riders in the region. Though it’s not mentioned in the article, the continued growth of parking supply—in part because of legal requirements—is also likely a factor.

3. In the least-in-demand neighborhoods of Baltimore, high-quality rowhomes might sell for just $50,000—but the cost of rehabbing an abandoned home can reach $100,000. Faced with those economics, Baltimore has joined the list of cities that see the demolition of vacant homes as a blight-fighting tool. But is such a plan actually in the long-term interest of the city? At Greater Greater Washington, a panel of writers and planners go back and forth on the virtues of demolition—and what might bring housing demand back to the city.


New knowledge

1. Via CityLab, Reid Ewing and colleagues at the University of Utah have used data from Raj Chetty’s Equality of Opportunity project to measure the effects of urban sprawl on intergenerational economic mobility. They find that upward mobility is significantly stronger in metropolitan areas that are less sprawling. As a region’s “compactness index” doubles, the chances of a child in the bottom quintile’s moving into the top quintile increase from 8 percent to 11.2 percent. Given that “perfect mobility” would be 20 percent, that’s a very meaningful effect.

2. The relationship between a piece of land’s “accessibility”—how quickly someone can get from there to valuable jobs and amenities—and its price is well known: better accessibility means more expensive land. But what’s less well known is howchanges in accessibility on a given piece of land affect its price. Michael Iacono and David Levinson of the University of Minnesota look into the issue, and find that there’s less of an effect than you might think, both for automobile and transit access. They argue that’s likely because American cities tend to have mature transportation networks, and so most new projects will only slightly change the accessibility calculus. For us, the takeaway is that a city’s most accessible areas today are likely to be its most accessible areas for some time to come—so if you want to increase the number of people in accessible locations, it may be most efficient to increase density there.

3. The Brookings Institution released a new Metro Monitor report on the economic status of America’s major metropolitan areas, breaking down progress on “Growth,” “Prosperity,” and “Inclusion.” There are some interesting regional patterns, such as how Texas cities score very high on “Growth” and “Prosperity” (which include metrics like total jobs and average wages) but more poorly on “Inclusion” (which includes metrics like median wages and the employment-population ratio).


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

Land use and transportation infrastructure: Two sides of a coin

In the wake of our posts on the Katy Freeway in Houston, and US PIRG’s report on the country’s biggest highway construction boondoggles, we’ve heard one kind of pushback over and over. Sure, defenders of highway expansion admit, things are just as congested after reconstruction as before. But, hey, that’s a sign of success, because the suburban areas the highways serve saw a huge population boom! If it hadn’t been for the expansion, things would obviously be even worse.

We’ve heard this enough that we thought it merited one more short commentary on its own.

In short, these critics are forgetting that population growth doesn’t happen independently of transportation infrastructure—it’s profoundly shaped by it. In fact, research dating back at least to the 1950s has found over and over that highway construction in the urban periphery is associated with more housing construction there—and the depopulation or urban neighborhoods. It’s the land use side of induced demand: part of the way that highways fill themselves up with cars is by creating demand for housing near them.

So pretty, so much highway demand. Credit: r. nial bradshaw, Flickr
So pretty, so much highway demand. Credit: r. nial bradshaw, Flickr

 

In the absence of added highway capacity to the suburbs, more of that population growth likely would have been directed to more central locations—especially in a region, like Houston, with relatively lax restrictions on construction. That, in turn, would have reduced driving demand further out on the Katy.

It also would have helped reduce Houston’s dubious distinction the region with one of the longest average commutes in the country, at about 12 miles. Added density—not necessarily in the form of scary highrises, but human-scaled “missing middle” duplexes, townhomes, and small apartment buildings—would help free the region from the financially and environmentally unsustainable treadmill of expanding its automobile infrastructure, and support neighborhood retail districts, schools whose students can walk to class, and viable public transit service.

Of course, none of this is really specific to Houston. While many people talk about the relationship between transportation demand and transportation infrastructure as, so to speak, a one-way street (“more people are living way out in the exurbs, so we need to build more highways there”), the truth is that transportation infrastructure shapes its own demand as much as it is shaped by demand. More highways encourage low-density, auto-oriented development that then requires more automobile infrastructure; streets built for walking, biking, and transit encourage the kind of development that will take advantage of those ways of getting around (assuming, that is, that such development is legal), and create demand for more of them.

The difference is that high-capacity automobile infrastructure, on a per-person basis, is incredibly space-inefficient, expensive to both taxpayers and users, highly polluting, and dangerous. Not only do drivers not come close to paying the costs of building and maintaining highways, car-dependent development patterns impose huge social costs on the rest of us. Walking, biking, and transit infrastructure* generally do not.

* The one exception being that much rail infrastructure, in particular heavy rail subways, is very expensive in North America.

In some cities, the housing construction boom is starting to pay off

To some observers, planners’ promises that more housing supply will push down prices don’t seem to be working. In recent years, rents have jumped substantially, and it doesn’t seem like market forces are working to ameliorate this trend. Although the historical evidence linking faster housing construction growth and slower housing price growth is quite strong, it can often be difficult to convince people who don’t spend lots of time with regression printouts—that is, most people—of the relationship.

But there is good news on that front: rents in Seattle, Denver, and Washington, DC appear to be easing significantly. In what a local business paper describes as an “alarming deterioration”—though renters probably have different words for it—the average Seattle rent fell by $59 in the last quarter of 2015, following a long period of rapid increases. Not coincidentally, vacancies also increased by a full percentage point. The Puget Sound Business Journal reports that landlords have reason to worry that things aren’t going to get any “better” for them: another 21,600 units of housing under construction should hold down rent growth into the coming year, too.

It’s the same story in Denver. After a surge of new construction, vacancy rates shot up from 5 to 6.8 percent in the fourth quarter of 2015. As a result, median rents—which had grown by nearly $250 a month from the first to the third quarter of the year—fell by $7 in the last quarter.

Denver's getting a little more affordable. Credit: H. Michael Miley, Flickr
Denver’s getting a little more affordable. Credit: H. Michael Miley, Flickr

 

And in Washington, DC, real estate firm Yardi Matrix says that rent increases have been held in check for the past year by the large number of new apartments coming online—and expects the same pattern to hold for 2016.

In fact, this is a national story. Overall apartment construction, which has struggled to keep up with the growing demand for rental units, surged by over 20 percent in 2015—and rent growth slowed to 3.3 percent in December, and is projected by Zillow to fall to 1.1 percent by the end of 2016.

The growth of rents has fallen sharply.
The growth of rents has fallen sharply.

 

The examples of Seattle and Denver ought to be a model for other cities seeing a surge of central-city housing demand. There is an alternative to the never-ending upward prices of regions like the San Francisco Bay Area, and it involves allowing housing supply to meet demand.

A key issue here is what you might call the “temporal mismatch” between demand and supply.  Demand can change very quickly for a variety of reasons: growth in the local economy, popularity of a particular neighborhood, the unattractiveness or unaffordability of homeownership, demographic changes, and so on. But supply changes slowly, because it takes time for developers to recognize that demand has changed—and then it takes time to design, permit, and build new capacity. This is especially true in places with restrictive land use laws. But when supply eventually responds—as it has in several of these markets—rent increases moderate, and in some cases rents even decline.  

There are some other important lessons if you dig into the numbers a bit. As the Denver Post points out, the vast majority of new construction in that city, as elsewhere, has been at the high end of the market. As a result, vacancy rates are highest in more expensive neighborhoods. In part, this is just the nature of new construction: it generally costs much more money to build new than to maintain an older building, and so new construction will target relatively higher price points. In addition, the long buildup of higher-end demand in central cities gave developers a strong incentive to build to that market. As higher-end demand is better met and rents stabilize or fall, it may become more profitable for developers to target slightly less affluent parts of the market.

But this also shows the importance of allowing, and encouraging, low-construction-cost “missing middle” housing over broad swaths of a city. That’s the kind of development that’s most likely to be able to meet the housing needs of moderate-income households, without a subsidy—if not right away, then after it has downfiltered a bit.

But already, the power of increasing housing supply to halt rapidly rising rents is playing out in real time in cities across the country. That’s something to celebrate.

The Week Observed: January 22, 2016

What City Observatory did this week

1. Which federal agency has a big role to play in housing affordability? The answer might surprise you. The Federal Reserve has announced a plan to increase the interest rates it charges banks, putting the brakes on the economy in an attempt to hold back inflation. But it turns out that if you subtract housing, the Consumer Price Index is actually going down. People worried about inflation, then, should really be worried about the price of housing. Fortunately, the Fed could conceivably do something about that: by targeting its purchases of securities to construction loans and mortgages in multifamily housing, it could keep down interest rates in the housing sector and encourage more supply, helping to hold down the growth of rents.

2. For highway advocates, it’s about the journey, not the destination. Our earlier piece about the folly that was the expansion of the Katy Freeway in Houston got some pushback: If the government widened road, and congestion is even worse than before, doesn’t that mean that the road is really popular, and the project was a success? In short: no. When drivers don’t see the costs of their decision to drive—in the form of pollution, more deaths and injuries from crashes, more inefficient land use, and the extra congestion they impose on everyone else—more highways just mean more driving, and more costs. Moreover, if congestion is both a reason for expanding highways and a sign that such an expansion has been a success, then there will be no end to the highway-building—which is maybe the point.

3. Are jobs really returning to the city? We’ve long argued that the economic center of gravity of US metropolitan areas is shifting towards urban cores. Jed Kolko, formerly of Trulia, takes issue with that conclusion, however, and argues that the evidence for such a shift is much more ambiguous. We lay out exactly why we disagree: The shift appears to transcend economic cycles, is picking up steam in the most recent data, and the data that appears ambiguous to Kolko is based on county-level numbers that include both urban cores and far-away suburbs—a good reason for ambiguity if the goal is to understand how job growth is different in those two types of built environments.

4. Why not make housing assistance to the low-income as easy as assistance to the high-income? Recently, we argued that if we’re serious about addressing affordability, Housing Choice Vouchers could be made universal, available to everyone whose income qualifies them—as opposed to the current situation, in which limited funding means roughly three out of four people who qualify don’t get assistance. But there are problems with that plan, including the fact that in many places, finding landlords who accept vouchers can be difficult. So here’s another idea: A refundable housing tax credit. That both avoids the problem of landlord compliance, and helps model low-income subsidies on the things that make high-income subsidies—like the mortgage interest tax deduction—so popular: they’re easy, automatic, and universal.


The week’s must reads

1. Streetsblog NYC‘s Charles Komanoff savages a New York City report on the traffic impacts of new for-hire vehicles, like Uber or Lyft. As Streetsblog points out, the study isn’t actually based on the copious data available on such services, as well as regular taxis; instead, it’s based on interpolating “hypothetical 2010 and 2020 traffic estimates.” Those estimates conflict with other estimates made by outlets like the New York Times. And even the presentation of data seems designed to be opaque, as evidenced in the chart that Streetsblog highlighted below.

2. Next City published a feature on a topic that’s been dear to our hearts: “missing middle” housing, and its role in providing a diversity of human-scaled housing options to help create and maintain diverse neighborhoods. From townhomes to lowrise apartments, “missing middle” housing provides a way to gently add density that supports transit and walkable community shopping districts, as well as smaller units that are more affordable or accessible to lower-income people, singles, and the elderly.

3. On the heels of our stories about Houston’s Katy Freeway, US PIRG has released a study on the worst “highway boondoggles”: huge and expensive infrastructure projects that failed to succeed even on their own terms, reducing traffic congestion. In addition to the Katy, US PIRG’s list includes I-405 in LA, which was expanded at a cost of over $1 billion without reducing travel times, and US 101 in Silicon Valley. They cover well-established research about induced demand and the futility of fighting congestion with more and bigger roads, and point out the disjunction between the resources we spend on adding road capacity while skimping on maintenance for roads that already exist.


New knowledge

1. Researchers from Harvard and UC-Davis found a connection between air pollution and violent crime in Chicago by correlating incidents of crime on either side of major highways by which way the wind was blowing that day. They find that downwind areas—the ones receiving more highway-related pollution—saw 2.2 percent more violent crimes. While that may be a small (but statistically significant) effect, they’re also measuring small differences in pollution, suggesting that larger, more consistently elevated levels of pollution may have more substantial effects.

2. Via Streetsblog Chicago, the Center for Neighborhood Technology released areport and accompanying website on off-street parking in Washington, DC. CNT researchers looked at parking utilization at over 120 buildings to create a statistical model of where off-street parking—which, as in other cities, is generally required by DC’s zoning regulations—is most underused. On average, they found, parking is overbuilt by about 40 percent, representing a massive transfer of resources to subsidize car use. You can also see a similar site CNT made for Seattle.

3. A new study out of the University of Minnesota’s Institute on Metropolitan Opportunity finds that while there are some areas of the Twin Cities experiencing declining affordability and reductions in poverty, they’re in parts of town with already above-average incomes and housing prices. In contrast, lower-income areas that are often described in local media as gentrifying are mostly exhibiting “signs of decline,” including falling average incomes. Rather than gentrification, the study concludes that “a much greater danger is a growing gap between struggling and prosperous 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.

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

What is an “unequal” city?

Why does economic inequality—as opposed to just poverty—matter? There are a lot of reasons, but a big one is that higher levels of inequality make it harder to improve your economic position. As Federal Reserve Chair Janet Yellen has argued, the bigger the gap between rich and poor, the harder it is for the children of rich and poor to have equal opportunities to make their lives what they would like. So at the national level, more inequality means less economic mobility.

But at more local levels, the story is more complicated. The massive study on economic mobility carried out by Raj Chetty and his colleagues and released last year found that more unequal metropolitan areas were, in fact, worse for mobility.

The relationship between economic mobility and metro area (CZ) economic segregation. Credit: Chetty et al, "Where is the Land of Opportunity?"
The relationship between economic mobility and metro area (CZ) economic segregation. Credit: Chetty et al, “Where is the Land of Opportunity?”

 

But they also found that in more economically segregated metropolitan areas, low-income children were less likely to make it out of poverty. In part, that makes sense: in segregated regions, poor children are more likely to grow up in neighborhoods, or municipalities, with high concentrations of poverty—which in turn leaves fewer resources for the kinds of public and private amenities, from schools to stores, that help people improve their quality of life.  

What does that mean for inequality? Well, high levels of segregation are created by economically homogenous neighborhoods:  rich people live near other rich people, poor people live in neighborhoods of high poverty. In other words, more segregation equals more neighborhood-level equality. A wealthy suburb where everyone earns six figures is going to have very low levels of income inequality; ditto a neighborhood where almost everyone is economically struggling. In that sense, given high levels of regional inequality, sub-regional equality—in a neighborhood or municipality—isn’t really a good thing.

That’s an important caveat to coverage of urban inequality, like this one from Fast Company, covering a report from the Brookings Institution. At a national and regional level, high levels of inequality are very bad. But local policy is mostly made by municipalities at a sub-regional level. And the only way for municipalities to pursue more equality is, in effect, by pursuing economic segregation.

Boston, the city where Brookings reported inequality has grown the most. Credit: bill_comstock, Flickr
Boston, the city where Fast Company reported inequality has grown the most. Credit: bill_comstock, Flickr

 

As we’ve written before, this is admittedly counterintuitive. With most other national issues—poverty, say, or school segregation—we can take a problem we know to exist across the country and drill down to see which regions, cities, and neighborhoods are most badly affected. But doing the same with inequality ends up being quite misleading. It means something very different for a city or neighborhood to have a high 95/20 ratio than for the country as a whole. It would be a great thing for national inequality levels to fall; but does anyone think Chelsea in New York City would be a more “equal” place if its public housing residents were all removed, leaving only the wealthy and reducing its 95/20 ratio? Would it be unprogressive to create affordable housing in a place like Winnetka, Illinois, increasing local inequality thereby making it a place where both rich and poor could live?

This is not to dispute, as Brookings argues, that there are trade-offs: Low-income households in economically integrated neighborhoods—that is, neighborhoods with high levels of economic inequality—may face higher prices for some goods and services. But on net, there’s little evidence that they’d be better off if all the rich people decamped for some exclusionary community. (As they are, in fact, increasingly doing.) Ironically, then, if local officials want to fight national inequality, they ought to focus on creating integrated, affordable neighborhoods—even if that means those neighborhoods appear more “unequal.”

Why not make housing assistance to the low-income as easy as assistance to the high-income?

Earlier this month, we argued that Housing Choice Vouchers, also known as Section 8 vouchers, ought to be provided to every household with a qualifying income. The limited funding for vouchers today leaves millions of people—over three-quarters of those who qualify—without help when official public policy has declared that they need it. We also pointed out that we could pay for the entire voucher expansion—and dramatically increase housing assistance to middle-income homeowners—simply by ending one kind of housing subsidy, the mortgage interest tax deduction, to households making over $100,000 a year.

Screen Shot 2016-01-04 at 12.37.02 PM
We will never stop showing this chart.

 

But there are a number of tactical issues with this plan. For one, there’s the part where the federal government—the same one that has not been in a hurry to spend much money on social services for quite a while—decides to create a new entitlement worth tens of billions of dollars. More prosaically, there’s also the problem of finding landlords who actually accept vouchers. In most of the country, it’s perfectly legal not to, leading to situations where people wait years to get off the voucher waiting list, only to discover that they can’t actually find a place to use the voucher once they have it. And even where Section 8 discrimination has been outlawed, enforcement is, to put it lightly, lax.

But don’t worry, there’s another solution: refundable tax credits. In case you forgot, credits represent money that comes straight off your tax bill, while deductions (as in, the mortgage interest one) reduce the amount of your income that’s taxed. And a refundable tax credit means that if you owe less money in taxes than the credit is worth, the government actually writes you a check for the difference. Surprisingly enough, one of the most notable refundable tax credits—the Earned Income Tax Credit, or EITC, which basically supplements the income of low-income workers—enjoys ideologically broad support, from Milton Friedman to Bernie Sanders.

So what would our housing tax credit look like? Possibly, a lot like the EITC and Housing Choice Vouchers smushed together. Tenants would report their income and rent to the IRS as they did their taxes; those whose income fell below 50 percent of their area’s median income would qualify for refundable tax credits that made up the difference between 30 percent of their income and whatever their rent was, up to some predetermined fair market rent.

Of course, if we wanted to to take this opportunity to improve on the way vouchers currently work, we could do that, too. That might look like tweaking the “area” used to determine “Fair Market Rents,” moving perhaps from metropolitan regions to ZIP codes, or other smaller units that would allow vouchers to be more useful in higher-income, higher-opportunity neighborhoods; or acknowledging that the 30 percent ratio for housing costs doesn’t make sense for everyone; or whatever else.

One complication is that tenants would have to somehow verify their rents. But that wouldn’t have to be too hard—a copy of the lease, or some signed IRS-specific form, ought to be enough. It would, in any case, almost certainly be less of a hassle from the landlord’s perspective than participating in Section 8.

And the advantages are pretty big. For one, although money spent through tax preferences is every bit as real as money spent through programs like Section 8, tax credits are much easier to sell politically: They can, not untruthfully, be described as tax cuts, rather than new spending, even though functionally they are almost identical. Second, perhaps even more importantly, a refundable housing tax credit would require much less cooperation on the part of landlords. In fact, the rent verification system could be designed in such a way that landlords would never need to know up front whether their tenants intended to use the housing tax credit, any more than they currently know whether their tenants use the EITC. In that way, any apartment charging Fair Market Rent or less would be usable by housing tax credit recipients, vastly expanding housing options for low-income renters.

For example, these apartments. Credit: Michael Coghlan, Flickr
For example, these apartments. Credit: Michael Coghlan, Flickr

 

Lastly, a refundable housing tax credit should theoretically cost about as much as a straightforward voucher expansion, which the Congressional Budget Office pegged at $41 billion a year over ten years. And really, if you take away one thing from these posts, it’s that figure. While $41 billion isn’t overwhelming compared to the size of the federal budget—or even compared to what we already spend on housing subsidies to people who arguably don’t need them—its effects would dwarf the marquee affordable housing initiatives coming out of places like New York City and San Francisco. While local efforts to relieve the housing cost burdens of low-income residents are laudable, the scale of the problem in very high-demand regions is simply beyond the budgets of cities to deal with.

If we’re serious about closing the gap between market rents and what low-income people can afford, we have to be serious about the scale of the resources that need to be brought to bear. (We also need to be serious about making sure that gap isn’t larger than it needs to be by combating exclusionary zoning that’s designed to push market prices higher.) Making housing assistance an entitlement through either vouchers or a tax credit doesn’t have to be the only way we do it, but any other solution will have to be of a similar size.

The current voucher program is small-scale, stigmatized, and more complicated than it needs to be. It doesn’t reach all those in need, many landlords simply refuse to participate, and both tenants and landlords have to deal with a bureaucratic system to receive benefits. In contrast, the housing benefits we give to the middle-class and wealthy are large, normalized, and automatic: anyone who itemizes their income tax deductions receives the mortgage interest tax deduction. Maybe we should take advantage of the less burdensome way we dispense housing assistance to those who don’t really need it, and use the same method to provide housing assistance to all of those who really do.

Why can’t cheaply-built houses be an affordability solution in expensive cities?

You may be surprised to hear that condos, all else equal, are more expensive than houses. You should be, because it’s not true. But that didn’t deter Joel Kotkin, the one-man cottage industry of curious urban criticism, from claiming so from his perch at Chapman University. As SF Weekly dutifully reported, Kotkin and his colleagues have released a report that claims multifamily buildings—at least those over four stories or so—can’t be cheaper than single-family homes, because “higher density construction is far more expensive to build.”

As far as it goes, that’s a fair enough claim. Taller, bigger buildings need more elaborate foundations, bigger work crews, and expensive features like elevators, which all drive up the cost of construction per square foot.

And if we constructed buildings floating out in space, that might make condos more expensive. But down here on Earth, buildings are built on land. And land costs money.

Screenshot from alexblock.net, showing a chart from the Globe and Mail, his commentary and a quote from the article.
Screenshot from alexblock.net, showing a chart from the Globe and Mail, his commentary and a quote from the article.

 

And especially in high-demand housing markets, it’s land costs that make single-family homes so expensive. That’s because single-family homes have to absorb all of the price of the land they sit on in their own prices. If you build multiple homes on the same piece of land, then each of the homes only has to absorb a fraction of the land’s price.

That doesn’t just help to explain the difference in price between houses and condos. It helps explain the difference in price between single-family homes in different places.

Source: Redfin
Source: Redfin

 

Screen Shot 2016-01-13 at 9.18.28 AM
Source: Redfin

 

The first photo above is a house in San Francisco. It costs $899,000. The photo below it is of a house in Detroit. It costs $26,000. If you were to simply look at the structures—that is, if these buildings were floating out in space—then these prices would make no sense. But the San Francisco home is not that expensive because the building itself is so amazing, nor is the Detroit house so cheap because the building is so terrible. Rather, each reflects the demand for their locations: that is, the price of the land they sit on.

Land costs are also part of why yearning for the old days of moderate-cost bungalows is unproductive. A century ago, in most cities, it was possible to find relatively cheap land within commuting distance of downtown—partly because the invention of streetcars had just radically expanded the definition of “commuting distance”—so if you could build a house cheaply, you might end up with a relatively low-cost home. But as cities grow, and especially as their metropolitan economies grow, there’s more and more people competing for a fixed amount of land within easy commuting distance of job centers. As a result, the price of easily accessible locations—that is, land—increases substantially. At that point, it doesn’t really matter so much if you can build a home very cheaply, because the cost of the land it sits on will ensure that the total price of construction will be very high.

(Of course, in San Francisco, the supply of land for multi-family housing is further artificially constrained by zoning regulations. Because most of the city is zoned for very low-density use, the relatively few sites on which one is allowed to build new apartments or condominiums is very scarce and therefore very expensive.  Further constricting the number of places where multi-family housing could be built in San Francisco—as Kotkin suggests—would drive up the price of all housing, single family and multifamily, newly built or existing, even higher.

There are basically two ways to resolve this problem: Find cheaper land—that is, build out on the suburban periphery, pushing sprawl further away from the city center—or divide the cost of the land by more than one home.

The Week Observed: January 15, 2016

What City Observatory did this week

1. Bending the carbon curve in the wrong direction. After years in which Americans were driving less, cheap gas is helping to push those numbers back up—erasing a full sixth of the progress we had made against transportation-related greenhouse gas emissions. Unfortunately, we can’t expect that this backsliding will entirely disappear if and when gas prices go back up, either, as Americans are buying less fuel-efficient cars that will continue to be on the road for years to come.

2. Pulling it all together. We write a lot at City Observatory—nearly a post every weekday. We thought the new year was a good opportunity to pull back and ask what all this adds up to—in other words, what have we learned? We put together an outline of our work under four big headings: The growing economic importance of city centers; The shortage of cities; The need to rethink transportation policy; and The challenge of segregation, integration, and neighborhood change.

3. Why can’t cheaply-built houses be an affordability solution in expensive cities? Noted urban skeptic Joel Kotkin and his colleagues at Chapman University recently released a report arguing that, because per-unit construction costs rise rapidly in buildings above four or five stories, the real route to affordable housing must be through smaller single-family homes. We rejoin that this would only be true if homes weren’t built on land. But where land is involved, it is also a cost—and it explains why low-cost single-family homes in very expensive cities are basically an impossibility.

4. The many faces of exclusionary zoning. A new study, which we flagged in last week’s The Week Observed, looks at the relationship between particular kinds of land use regulation and economic segregation. They confirm that there is a connection, though they raise some questions about exactly what the mechanism is for the exclusion of the poor: traditional low-density zoning or arduous approval processes. (We argue both are almost certainly at play.) They also confirm something like the “prisoner’s dilemma of local planning” issue: the more land use is locally controlled, and the less state-level involvement, the worse the segregation.

The week’s must reads

1. The Knight Foundation has announced the 158 finalists for its Knight Cities Challenge, a competition to fund ideas that “help Knight cities to attract and retain talent, expand economic opportunity, and create and strengthen a culture of civic engagement. The finalists include turning neighborhood free libraries into wifi hotspots, creating “urban glens” in vacant lots, and “permit corps”: connecting city residents with student navigators of city regulations and codes.

2. For all the talk of growing suburban poverty, urban centers are still much poorer than the metropolitan periphery. But for those people who do find themselves in car-dependent suburbs with very low incomes, the consequences are serious. The Washington Post has a piece on what it’s like trying simply to live, apply for jobs, and work in a place where the cost of participating in society is the thousands of dollars needed to buy a car, insure it, maintain it, and keep it fueled. It’s a reminder that transit and walkable communities aren’t just environmentally friendly and (often) more pleasant: they’re crucial for low-income people, people with disabilities, or the elderly, who can’t or don’t drive.

3. We don’t generally include stories in The Week Observed as examples of whatnot to do, but this was so egregious we’re making an exception. Wake County, North Carolina’s Triangle Business Journal covers a proposed bus rapid transit project in that region—and then declares that “It’s a system that only works if [planning director] Maloney and team can get executives out of their BMWs and into the bus terminals.” To do that, they need “shiny, newer” buses that “look and feel different from what they perceive [transit] to be right now.” Allow us to say: pish posh, and wrong on both counts. A transit system can be highly successful without necessarily attracting the very wealthiest people; and plenty of transit systems have attracted executives, not with fancier buses but with service that rivals cars for travel time and reliability. No one ever added an hour to their commute each way because the bus got shinier.

New knowledge

1. CityLab flags a new neighborhood change study from Elizabeth Delmelle at the University of North Carolina at Charlotte. Delmelle looks at LA and Chicago in 1970, assigning every Census tract to one of five neighborhood typologies, and then checking back again in 2010 to see whether, and how, they’ve changed. The results dovetail in many ways with our own work, including Lost in Place, in that the study finds that “struggling” areas were much more likely to remain low-income than to transition up in a way that might be considered gentrification.

2. It can be hard explaining to non-urbanists why adding more parking is a bad thing. But Eric Jaffe at CityLab reports on a new study that provides a very good answer: because it causes people to drive more to use up the available parking. Researchers from the State Smart Transportation Initiative and the University of Connecticut provide the strongest evidence yet that lots of parking and lots of driving aren’t just related—the relationship is actually causal. Take, for example, the two charts below: the first one shows how increased parking supply predicts increased driving; the second tries to see how increased driving predicts increased parking supply. As you can see, the first correlation is much stronger than the second.

3. A new poll from Time Magazine looks at the true size of the “gig economy.”They find that 45 million people, or about 22 percent of the working age US population, have offered some kind of “gig” service—from driving, to handyman fixes, to food delivery, and so on. These Americans are also disproportionately male, non-white, young, and urban. About a third of those 45 million people rely on gigs for over 40 percent of their income. Time points out that the implications of these findings aren’t totally clear: while workers in this sector may enjoy more independence or schedule flexibility, they also lack many of the protections and benefits of full-time workers.


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

The many faces of exclusionary zoning

What exactly is the relationship between land use regulations and economic segregation? Previous research has shown that places with more restrictive land use regulations have higher housing costs and are more segregated by race, but now a new study from UCLA aims to give more detailed answers.

The paper, by Michael Lens and Paavo Monkkonen, differs from previous research on the subject in that it doesn’t use a proxy for land use regulations, like observed density or government fragmentation, or an index that sums all the many different components of these regulations. Instead, Lens and Monkkonen test many different kinds of regulation to get a better sense of the “specific pathways through which land use regulations affect income segregation.”

Credit: Robert Couse-Baker
Credit: Robert Couse-Baker

 

To briefly summarize their analysis, Lens and Monkkonen make four important findings.

  1. Density restrictions—think minimum lot sizes—are associated with more segregation of the rich, though not the poor;
  2. More difficult building approval processes are associated with segregation of the poor.
  3. More fragmented local governments are associated with high overall levels of segregation.
  4. Greater state-level involvement in land use planning is associated with lower overall levels of segregation..

For us, there are at least two big takeaways. Though the authors claim their findings cast doubt on the widely believed connection between low-density zoning and segregation of the poor—the classic “exclusionary zoning” problem—we think it suggests something else. After all, exclusionary zoning works by preventing the construction of housing that might be more affordable to middle- or low-income people, like smaller houses or apartment buildings. Whether that’s done up front by explicitly banning those types of buildings (ie, low-density zoning) or more surreptitiously through an arduous approval process, the result—and the mechanism of exclusion—is the same.

So the issue is less that low-density zoning doesn’t matter for the segregation of the poor, and more that there are many different regulatory tools local governments can employ to get to exclusionary land use. If the way communities block low-income-friendly development is by smothering it in red tape, rather than openly disallowing it, it’s important to understand the distinction to combat it—but equally important to understand that the end result is the same.

We’re also concerned that the author’s methodology doesn’t capture the either-or nature of exclusionary zoning—that is, a community can use either low-density zoning or an onerous approval process to keep out the kinds of housing it doesn’t want. Because cities with very onerous approval processes may feel they are sufficiently protected against the poor without low-density zoning, they may not use it. As a result, the researchers would see a weaker relationship between low-density zoning and segregation, even though a real relationship does exist.

Second, the findings about the effects of the scale at which decisions are made—more hyper-local decision-making associated with more segregation, and more state-level involvement associated with less—confirm once more the important role of politics and democratic structures in the extent to which land use laws become harmful.

Although they often seem to have only a local interest, housing and transportation policies affect entire metropolitan regions, and sometimes beyond. Though it may seem that only the people near a proposed rail station, for example, should have a large say about whether and how it gets built, that rail station also means access—or not—to the people, resources, and jobs in the neighborhood for residents in many other communities. Similarly, the decision of whether to build more housing—particularly lower-cost housing—concerns not just the people who live near the proposed construction site, but everyone who might want to move into such a home—again, especially when moving there would provide access to valuable resources like high-performing schools or jobs. The finding that state policies help minimize the segregating effects of some kinds of land use regulation suggests that broader geographic units can help overcome some of the prisoner’s dilemma problems that plague hyperlocal decision-making.

Finally, we should note that while the authors claim that these findings suggest the economic desegregation would most easily be accomplished by introducing low-income housing into high-income neighborhoods, rather than vice versa, that seems to be a separate issue not directly addressed by their valuable work here—something the authors acknowledged in an email exchange.

There’s a tendency, in land use policy as elsewhere, to view land use regulation through a simple lens: “regulation” is either good or bad. But the Lens/Monkkonen paper helps illustrate that “regulation” is not a single thing, but made up of many distinct parts that can be applied by many different institutions. Excessive restrictions on density clearly aggravate economic segregation, but the extent to which they do so is strongly influenced by the scale at which they’re determined.

The Week Observed: January 8, 2016

This week, Planetizen named City Observatory one of its 10 best urban websites of 2015, adding that “every single post is essential reading.” We’re extremely grateful for the recognition, and are excited about continuing our work into 2016! (Check out the other great websites Planetizen highlighted at the link, too!)


What City Observatory did this week

1. Make housing vouchers an entitlement—we can afford it. Unlike food stamps, which are available to everyone whose income qualifies them, there are 20 million Americans who qualify for direct federal housing assistance but don’t get it, largely because there simply isn’t enough funding. A new CBO report shows that we could give a housing voucher to every eligible family for about $41 billion a year—far less than the amount we spend subsidizing housing to households earning more than $100,000 through the mortgage interest tax deduction.

2. Houston has something to teach you about public transit. In 2015, Houston made two big transit moves: opening two new light rail lines and completely reorganizing its bus network to offer more reliable and useful lines. As of November, the most recent data available, the light rail lines had 185,000 rides—and the bus system had added 199,000. That’s all the more remarkable because the light rail extensions cost $1.4 billion and took the better part of a decade; the bus reorganization cost a tiny fraction of that to plan, is budget-neutral going forward, and took about a year to put in place. But this isn’t a bus v. rail story. So what is it?

3. The economic strength of American cities in four charts. American cities are increasingly central to the nation’s economy. How do we know? There’s a lot of evidence, but we pick out four big indicators: rising real estate values (“the Dow of cities”); the rent gradient; the walkability premium; and job growth. Below is a chart showing how the rent gradient—that is, the change in housing prices as you move from city centers to more outlying areas—has become dramatically steeper from 1980 to today, indicating increasing demand for inner-city housing.


The week’s must reads

1. Why don’t American cities build more public transit infrastructure? Part of the answer is that we get less bang for our buck than any other country in the world—and it’s not even close. John Ricco at Greater Greater Washington digs into the numbers a bit and runs through some of the theories about what makes American rail projects so expensive, from land acquisition costs to over-engineering. Below is a chart by Ricco, showing the per-kilometer cost of building subways in wealthy countries; the red bars are American projects.

2. Every year, Yonah Freemark at The Transport Politic previews the coming year’s transit projects. In 2016, American cities will see 245 miles of new fixed-guideway systems—more than triple the mileage of 2015. Also, be sure to check out Freemark’s “Transit Explorer” page, with interactive maps of all the new projects in his database.

3. CityLab makes a list of the urbanist terms it hopes are left in 2015. There are some obvious ones—”Uber for [x]”—and a few tweaks at the culture of trendy urban neighborhoods, and their love of everything “artisanal.” But there are some serious entries too: We found ourselves agreeing that the “tale of two cities” cliche often obscures more in conversations about inequality than it illuminates, hiding the many different kinds of people and neighborhoods represented by the terms “rich” and “poor” in every city. Another highlight: Time to end “wider roads = less traffic.”


New knowledge

1. A paper from Michael Lens and Paavo Monkkonen of UCLA adds to evidence thatland use regulations contribute to urban segregation. Lens and Monkkonen find a direct link between restrictive land use policies and higher levels of income segregation—in particular, the isolation of high-income households. In addition, more involvement in land use planning by states is associated with less segregation, and more fragmentation of land use planning by smaller municipalities is associated with more segregation—more evidence that shrinking the pool of people with a say in housing policy leads to more exclusionary policies.

2. Tony Dutzik of the Frontier Group analyzes newly released data on how much Americans are driving. In short: more. Vehicle miles traveled per capita increased by 0.5 percent in 2014 for the first time in a decade, and total VMT has nearly reached its all-time high from 2007. In slightly more encouraging news, the FTA’s numbers represent a downward revision from the first estimates, suggesting we might be able to expect a similar downward change to the initial 2015 numbers. But as we’ve written, as long as gas remains historically cheap, we should expect an increase in driving.

3. Evidence from Europe of the importance of neighborhood stigma: Researchers from Université-Paris Est and the Université de Bourgogne look at nearly 3,000 job applications for positions as cooks or waiters in the Paris area, and compare response rates to the residential location reported by the applicants. They find that holding other factors constant, “a good address can triple the chances of being invited to a job interview.”


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

Make housing vouchers an entitlement—we can afford it

We could extend housing vouchers to every very-low-income household—and expand housing support to the middle class, too — if we were willing to take away just one of the big housing subsidies to people making over $100,000 a year.

But let’s back up.

Previously, we’ve made the case that the SNAP program, or food stamps, is a pretty good template for thinking about how to reform the way we do housing assistance. SNAP is available to everyone below a certain income threshold; if you apply and you qualify, you get money to buy food.

Housing is very different. There are a million different housing assistance programs, but all of them are quite limited in scope: if you apply and you qualify, you are simply one of many such people fighting over a much smaller number of vouchers or set-aside affordable units. In some cases, this makes housing assistance more like a lottery game than a social service, as when nearly 2,600 people applied for just 18 homes in San Francisco, 58,000 people applied for 105 homes in New York, or nearly 300,000 people were placed on the waitlist for a Chicago Housing Authority unit. Nationwide, about 20 million people qualify for housing assistance but don’t receive it.

You'll be waiting a long time for a public housing unit at this mixed-income development in Chicago. Credit: Google Maps
You’ll be waiting a long time for a public housing unit at this mixed-income development in Chicago. Credit: Google Maps

 

But how much would food-stampifying housing policy cost? Surely an unreasonable, pie-in-the-sky amount, right?

Well, fortunately for us, the Congressional Budget Office has already done the legwork to figure it out. In a study published in September, the CBO gamed out a large number of possible directions to take housing policy: bigger, smaller, budget-neutral tweaks, transfers from one program to another, and so on.

One of the options it analyzed was expanding the Housing Choice Voucher (also known as Section 8) program to everyone who qualifies—which, at the moment, is anyone whose income is below 50 percent of “AMI,” or the median income in their area. (In most metro areas, that puts the upper limit for a family of four at between $25,000 and $35,000). The CBO estimated such a policy would cost about $41 billion a year over the next ten years. A more modest approach, targeted to only the extremely low-income—those making less than 30 percent of their area’s median income—would cost about $29 billion a year.

That’s nothing to sneeze at. We already spend about $18 billion a year on Housing Choice Vouchers, so all told, an everyone-who-qualifies voucher program would cost $59 billion a year over the next ten years.

But it turns out there’s another housing program that’s already much bigger than that: the home mortgage interest tax deduction, which cost taxpayers $68 billion in 2014.

What do we get for the mortgage interest tax deduction? Not much, according to the best research available. The goal, ostensibly, is to promote homeownership. Whether or not that’s a good idea in itself—we’ve had our doubts—the fact is that the mortgage interest deduction isn’t actually effective at promoting homeownership. Why not? A big reason is that the vast, vast majority of its expenditures go to high-income households: after all, you only get it if you itemize your deductions, and you get more money for having a more expensive house. That means most of the money is going to people who would have plenty of resources to buy a home without the deduction. Instead, the evidence seems to suggest that one of the main effects of the deduction is to encourage wealthy people to buy bigger houses.

In contrast, when you give low-income people housing subsidies, they spend their extra money on things like better food, healthcare, and education—which directly improve their quality of life and help bring them out of poverty.

Screen Shot 2016-01-04 at 12.37.02 PM

As of 2012, 77 percent of the money we spent on the mortgage interest deduction went to households making over $100,000 a year, an income that would make you richer than four out of five Americans. It also happens that 77 percent of $68 billion, the total value of the mortgage interest tax deduction, is about $52 billion: in other words, enough to give a housing voucher to every single household that needed it, with about $10 billion to spare.

Such a surplus would even allow the federal government to increase the value of the mortgage interest tax deduction for people making under $100,000 a year—people for whom extra cash is much more likely to be the difference between buying a home and not. In fact, redirecting all the money left over after giving all qualifying households vouchers would allow us to increase the value of the mortgage interest deduction for people making less than $100,000 by more than 60 percent. (We’re far from the only people thinking about reforming the mortgage interest deduction, by the way. Representative Keith Ellison of Minnesota has submitted a bill that would convert the deduction into a 15 percent tax credit, available to people who don’t itemize their deductions, and reduce the maximum amount of home value that can be deducted from $1 million to $500,000. His bill would not redirect any money to Housing Choice Vouchers, however.)

Making this work for the broad majority of middle-class homeowners is also important, because the mortgage interest tax deduction is a super popular policy; as much as 90 percent of the electorate supports continuing it. Whether or not it’s the best use of housing policy dollars, getting rid of the deduction entirely is a nonstarter.

But why should it be impossible to give up housing subsidies for the richest fifth of the country in exchange for more homeownership support for the middle class and a guarantee of housing support for all very-low-income people?

Now, importantly, this would not mean the end of our housing problems. In many places, housing vouchers are only moderately useful in combating racial and economic segregation, both because landlords are able (legally or illegally) to discriminate against voucher holders, and because they won’t cover rents in extremely high-cost neighborhoods. Segregation would continue to put low-income people and people of color at disadvantages in terms of access to public resources and economic mobility.

Chicago's WBEZ found widespread evidence of open discrimination against voucher holders—despite such discrimination being illegal in Chicago.
Chicago’s WBEZ found widespread evidence of open discrimination against voucher holders—despite such discrimination being illegal in Chicago.

 

And in places with extreme housing shortages, prices have surpassed what even moderate-income and middle-class households can afford. While voucher eligibility cuts off at 50 percent of “area median income,” San Francisco recently announced it was building housing for people at 150 percent of AMI, or over $150,000 a year; Bill de Blasio’s big affordable housing program in New York City contains a large number of set-aside units for people making 120 percent of AMI, or about $90,000 a year there.

In these places—and similarly exclusionary neighborhoods and suburbs across the country—the need to pay for housing subsidies to the poor, the working class, and the middle and upper-middle class overwhelms any realistic funding source. More construction is needed to get prices down to a point where subsidies to lower-income people are sufficient, and middle-income households are able to afford housing largely on their own.

But despite these shortcomings, it’s hard to overstate just what a revolution in housing policy entitlement vouchers would be. Affordable housing is a national challenge, but in recent years, it has largely been up to local governments to tinker around the edges of overwhelming need—and even the most ambitious local governments simply don’t have the resources to do much more than tinker around the edges. San Francisco’s massive Proposition A, which voters approved in November, will bond $310 million for affordable housing—its own proponents decided their initial goal, $500 million, would strain the ability of the city to service the debt—which will likely result in less than a thousand net new units of affordable housing. In Chicago, the signature affordable housing policy of the last few years is supposed to create just 1,000 units of affordable housing, even as 300,000 people are on the waitlist for a public unit. In Austin, a community land trust was able to make national news while creating three affordable homes, with 25 more in the pipeline.

Local efforts to to provide housing relief to those who need it are necessary and important. But only the federal government has the resources to address the full scale of the issue. In fact, there is already at least one federal housing program that could be scaled up to take a massive bite out of the housing problem, relieving one of the most terrifying and dangerous consequences of poverty. We could pay for it simply by deciding that households that make more than $100,000, people whose income is above 80 percent of the country’s, don’t need housing subsidies. What kind of government turns down that deal?

Houston has something to teach you about public transit

Houston doesn’t have much of a reputation for public transit, although about 300,000 rides are taken on trains and buses in the region every weekday. Recently, though, the local transit agency, Metro, has been making some big moves.

First, the agency worked with transit consultant Jarrett Walker and a local team led by TEI to completely reimagine its bus network. Rather than a predominantly radial system, where most routes headed towards downtown, the new network relies on a grid of bus lines that come frequently enough for people to use for transfers. As a result, the bus system now helps people reach more varied destinations all over the metro area, not just those downtown—which is crucial in a region as decentralized as Houston’s. It also recognizes that in many cases, a smaller number of more frequent, show-up-and-go lines is superior to a larger number of routes that show up only once an hour, or not at all at off-peak times. Notably, the reorganization, which took effect in August, was designed to be budget-neutral.

Frequent (red) bus lines before the reorganization...
Frequent (red) bus lines before the reorganization…

 

...and after
…and after

 

Second, in May, Metro opened two new light rail services: the Green and Purple lines. Together, they run for almost 10 miles south and west of downtown, built at a cost of about $1.4 billion over six years. The rail lines are supposed to improve reliability and comfort over the older bus service, and catalyze economic redevelopment in the neighborhoods through which they pass.

A light rail train in Houston. Credit: wordjunky, Flickr
A light rail train in Houston. Credit: wordjunky, Flickr

 

How have Houstonians reacted to these projects?

Though bus ridership dipped briefly after the reorganization as riders learned their way around, by November, ridership had not only regained its previous levels but exceeded them by four percent. Walker, the consultant largely responsible for the redesign, estimates that ridership might increase by as much as 20 percent over two years. It’s obviously unclear whether that will happen, but a four percent jump over just two months is a pretty good start.

The Green and Purple lines, in contrast, are off to a slow start. In November, the most recent data available, they were averaging fewer than 7,000 rides per weekday combined. By contrast, the city’s first light rail line, the Red Line, carried almost 55,000 rides.

In fact, it turns out that the total monthly ridership of the Green and Purple lines combined is less than the growth in bus rides since the implementation of the new service pattern: about 185,000 rides on the light rail lines in November, compared with an increase of 199,000 rides on the bus network.

That’s pretty incredible, considering that the former cost $1.4 billion to plan and build over the better part of a decade, and the latter was designed and implemented in just a year for a tiny fraction of the cost—and is budget-neutral going forward, as opposed to the added operations cost of running the light rail lines.

It would be easy to take too much from this. In many cases, new light rail lines have in fact attracted significant ridership: Houston’s own Red Line, for example, or the Green Line in Minneapolis-St. Paul, which opened in 2014 and is already beating forecasts with over 40,000 rides a day. Where already high-ridership bus lines need added capacity or cities are looking to dramatically add density to the urban fabric, requiring high-capacity transit service, rail can and does play an essential role.

A Green Line train in Minneapolis. Credit: Michael Hicks, Flickr
A Green Line train in Minneapolis. Credit: Michael Hicks, Flickr

 

But as Jarrett Walker has argued, the real issue with transit is less about mode—bus or rail or ferry or helicopter—and more about service. Does the vehicle, whatever it is, come frequently and reliably so that you can show up to a stop and be sure you’ll be able to board soon? And does it actually provide a way to get to your destination in a reasonable amount of time? If yes, people will ride, whether the wheels are rubber or steel. If no, they won’t.

Nor is Houston’s experience exceptional. Last year, we found a national trend of better bus ridership where local transit agencies were improving service—and declines where service was deteriorating.

Ironically, in its article about the opening of the Green and Purple lines, the Houston Chronicle quoted a man who was excited about the trains because, he said, “You can’t trust the bus.” But it turns out that’s not a permanent condition. If you make the bus more trustworthy, riders will come. Resource-starved cities looking for ways to improve their bread-and-butter transit services, connecting residents to the people, jobs, and amenities they need, would do well to look at what’s happened in Houston.

Our favorites from 2015, part 2

Here are Daniel Kay Hertz’s five favorite posts of 2015:

5. Undercounting the transit constituency

When we only look at the number of people who commute on transit, we’re missing others—especially students and the retired—who rely on transit for other reasons.

 

4. A modest proposal: treat affordable housing more like food stamps

Comparing two well-known government assistance programs sheds some light on what’s wrong with affordable housing policy.

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

We usually think of the typical transit rider as living in a dense neighborhood. But really, it’s more about where they’re going than where they live.

TC

2. Zoning in everything—even the education gap

Housing policy is at the bottom of many of the nation’s economic and social problems, even where it seems unlikely. In this piece, I sketch out how zoning laws exacerbate the racial education gap.

1. A $1.6 billion proposal

A story of “ethical landlording” isn’t as ethical as it seems. But it points the way to a better possibility: a housing capital gains tax to fund affordability.

The Year Observed: Your 12 favorite posts from 2015, part 1

12. Let’s talk about neighborhood stigma

In the last year or two, there has been a resurgence of awareness and debate about the big, structural issues facing America’s persistently poor neighborhoods. But one part of the equation has largely been left out: stigma. A large body of research has shown that stigma and reputation, above and beyond other factors, can have serious negative consequences for urban neighborhoods—and that it falls most harshly against majority black neighborhoods.

11. Urban residents aren’t abandoning buses; buses are abandoning them

A series of articles came out this summer about the decline in bus ridership, positioning rail as the urban transit mode of choice going forward. But a closer look at the numbers show that where bus service has held steady or grown, so has ridership—the problem is that bus service has been cut in cities all around the country. Nor do those cuts seem to be predicted by falling ridership beforehand.

 

10. What’s really going on in gentrifying neighborhoods?

The common narrative about gentrifying neighborhoods is that demographics change—towards wealthier, and usually whiter, residents—largely because older residents are pushed out by rising prices. But a study from the Philadelphia Federal Reserve confirms most previous research in finding that the real driver of change is who’s moving in—not who’s leaving. Despite the conventional wisdom, the researchers find little evidence of widespread displacement.

9. Reducing congestion: Katy didn’t.

The American Highway Users Alliance touted the widening of the Katy Freeway in Houston as a “success story” in the fight against congestion. There’s only one problem: congestion got worse after the project. Oops.

Screen Shot 2015-12-16 at 10.39.04 AM

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

Our second-most-read post this year was all about “illegal neighborhoods”—but in this post, we point out that in many other countries, walkable communities with a diversity of housing options are still perfectly legal. Going off of Sonia Hirt’s excellent new book, Zoned in the USA, we take a quick tour of how zoning works in other countries. Hint: “low density residential” doesn’t have to outlaw neighborhood corner stores or lowrise apartment buildings.

7. The high price of cheap gas.

Gas prices have fallen precipitously, which almost everyone takes to be good news. But there’s a dark side, too: As prices have fallen, driving has increased—and with it, greenhouse gas emissions, traffic congestion, and injuries and deaths caused by car crashes. The lesson: pricing has a big effect on driving and its negative consequences. We don’t have to wait for gas to get more expensive, however—raising the gas tax, or levying congestion or parking charges, could have the same effect and raise revenue for transportation service and maintenance.

A sign announcing congestion charges in London. Credit: mariordo59, Flickr
A sign announcing congestion charges in London. Credit: mariordo59, Flickr

The Year Observed: Your 12 favorite posts from 2015, part 2

6. Why aren’t we talking about Marietta, Georgia?

While stories about displacement in gentrifying neighborhoods abound, more direct, egregious examples of displacement in suburban areas are often left behind. We focused on one particularly galling example of an Atlanta suburb using eminent domain to demolish an apartment complex predominantly occupied by lower-income people of color, to be replaced with a commercial development.

5. Our old planning rules of thumb are “all thumbs.”

Wider roads are safer roads. We should be concerned about having “enough” parking. Land uses generate a fixed number of vehicle trips. These old rules of thumb are deeply flawed, and have led to unsustainable, expensive, and environmentally dangerous urban planning. It’s time for some new rules of thumb.

How we feel about bad rules of thumb. Get it? Credit: Jesper Ronn-Jensen, Flickr.
How we feel about bad rules of thumb. Get it? Credit: Jesper Ronn-Jensen, Flickr.

4. Homevoters v. the growth machine.

There are two big theories about who controls urban development. One says it’s a coalition of business interests and developers, who push past zoning regulations with ease; the other says it’s homeowners, who are able to quash most development they fear might negatively affect their property values. A new study from NYU takes a look at Bloomberg-era New York City—which ought to be as favorable a territory for developers as exists in the US—and finds evidence instead that homeowners dominate even there. White neighborhoods, areas near high-testing schools, and places with high population growth are all more likely to be downzoned (have allowed density reduced) than upzoned (have allowed density increased).

3. Truthiness in gentrification reporting.

This Fall, a series of studies came out suggesting that many of the most-feared impacts of gentrification were much less of a big deal than widely thought. One paper by the Philadelphia Fed found little evidence for displacement in gentrifying neighborhoods in that city; another in New York found that residents of public housing in gentrifying neighborhoods benefited, with higher incomes and better schools.

Screen Shot 2015-10-27 at 9.08.38 AM

2. My illegal neighborhood.

Our guest writer, Robert Liberty, takes a look around his Portland neighborhood and realizes that almost everything he likes about it has been made illegal. There’s the buildings without parking lots; the homes, shops, and jobs at light industrial sites all within walking distance of each other; the apartments and single family homes side by side; the street narrow enough to cross easily and discourage speeding cars. Why are these things illegal again?

1. The immaculate conception theory of your neighborhood’s origins.

Newsflash: everyone hated your home when it was new, too. While a debate over allowing apartments in single-family home neighborhoods prompted an appeal to the inherent goodness of early 20th century bungalows, it turns out that romanticizing past eras of homebuilding is dangerous business. But there are lessons to learn from our urbanist forefathers and -mothers, like the good that can come out of allowing a city to grow, and allowing many kinds of homes for different kinds of people.

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

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.


This post was originally published on September 3rd, 2015.

The Week Observed: December 24, 2015

What City Observatory did this week

1. The Katy isn’t ready for its closeup. When the Texas Department of Transportation tried to sell the public on its Katy Freeway expansion project, part of the story was that it would ease congestion. We covered how that worked out last week. (Not well, is the answer.) Another part involved renderings of the final product. Amazingly, given that they’re depicting a 23-lane superhighway, there are almost as many people and trees in their renderings as cars. Using distorted images of major, disruptive infrastructure projects is a time-honored tradition—but one that ought to end.

2. About that “consensus” on zoning. Earlier this month, in the Washington Post, the economist Ilya Somin argued that we’re reaching a cross-ideological consensus that strict zoning is doing more harm than good in American cities by driving up housing prices and promoting sprawl. But look beyond the community of national policy wonks—by, say, going to a neighborhood development meeting—and it looks like there’s something like a consensus in the other direction. The political path forward on zoning reform is going to be more complicated than that, but we’ve got a few ideas.

3. Who’s really rent-burdened? In light of all the recent discussions of rising rents, we reprise a post from earlier this year, showing that by far the most commonly used metric of housing affordability—the 30 percent ratio of housing costs to income—misses a lot of other important factors. A big one is how much income a household has left over after paying housing costs for other necessities; others include the cost of transportation inherent a home’s location—less if it’s transit-accessible, more if it’s not. Getting a better handle on what affordability really means, and who is most affected, is crucial for moving towards solutions.


The week’s must reads

1. In almost every city in the country, new buildings are required to provide off-street parking—and lots of it. Those parking requirements end up encouraging sprawl by creating large surface parking lots, making homes and businesses more expensive thanks to costly-to-build garages, and subsidizing car ownership and driving. On top of that, most parking requirements are based on one-size-fits-all estimates of how much traffic a given building will generate—and those estimates are usually far too high. (See Strong Towns’ “Black Friday parking” campaign.) Fortunately, a growing number of cities are recognizing those issues, and are reducing, or even eliminating entirely, their requirements. Next City reports on a Strong Towns effort to track all those efforts across the country.

2. Good Jobs First, whose reports on economic development subsidies we’ve covered in The Week Observed before, has a new tool that allows you to look up business subsidies by company, subsidy value, level of government, and more. Previously, they’ve shown that many states give the vast majority of their general-purpose economic development subsidies—as much as 96 percent—to large companies, which they argue shortchanges smaller businesses that provide the most benefit to local communities.

3. A new lawsuit from a coalition of civil rights groups in Maryland argues that that state’s governor, Larry Hogan, violated the Civil Rights Act when he canceled a planned rail line in favor of more spending on roads and highways. As Emily Badger writes at the Washington Post, the group alleges that the move was a transfer of resources that will disproportionately harm black residents, who are more likely to rely on public transit. Transportation policy has a long history of being a focus in civil rights, from highway displacement to the Montgomery bus boycott, but this lawsuit aims to reinvigorate that connection at a time when civil rights issues in housing and policing are gaining a higher national profile.


New knowledge

1. We’re a little late on this, but Zillow’s November report has a glimmer of good news for the rental housing market: price increases are significantly slower than in 2014, possibly as a result of the steady increase in new apartments being completed. Interestingly, single family rents are growing faster than multifamily rents. Also notably, for-sale housing price growth is picking up steam.

2. What’s the connection between slavery and present-day economic inequality and innovation? A study from the Washington Center for Equitable Growth tackles this perhaps unexpected question, and argues that the particular kind of inequality fostered in many Southern states during and after the period of slavery has left an institutional legacy lasting to the present day. They write that slave societies developed fewer advanced educational institutions, focusing instead on low-cost, low-skill labor for economic development. In part as a result, they have under-developed institutions and business cultures for promoting innovation and knowledge-based industries. A key bit of evidence: patent rates in the 19th century were much lower in the South—and remain much lower today.

3. Who lives near rail? A new Census report looks at the Washington, DC area, andhow demographics near rapid transit stations have changed over the last several years. It finds that young adults and people with high levels of education are particularly likely to live near rail stations—yet another piece of evidence confirming the growing demand for urban, transit-accessible neighborhoods, especially among the “Young and Restless.” As long as neighborhoods with great transit remain in short supply, we can expect them to command premium prices that put them beyond the reach of many households.


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

About that “consensus” on zoning

Is there a “cross-ideological consensus” on zoning reform?

Writing in the Washington Post earlier this month, economist Ilya Somin made such a claim. Libertarians, he wrote, have opposed the strict laws that prescribe expensive, exclusionary, low-density homes in most neighborhoods across the country for some time; but now, as noted lefty economist Paul Krugman’s recent column and a speech given by the chair of President Obama’s Council of Economic Advisers show, liberals are joining the zoning reform camp.

Krugman: blowing our minds. Credit: Corey Doctorow, Flickr
Krugman: blowing our minds. Credit: Corey Doctorow, Flickr

 

Suffice it to say that while we’re happy to see this issue get press in the Post, much of this argument seems misguided. For one, people have been making arguably left-of-center, egalitarian arguments against zoning since at least the 1920s; and the most sustained attack on exclusionary zoning in American history occurred in the 1960s and 70s as an outgrowth of the Civil Rights Movement, hardly a bastion of libertarianism.

More importantly, though, anyone who thinks there is a “consensus” about the damage caused by too-strict zoning ought to attend the next community development meeting in their neighborhood. While there may appear to be a policy consensus among national-level policy wonks, things look very different on the ground, including the ground on which zoning policy is actually made. Arguably, something very close to a consensus has existed on zoning for quite some time—at least since the 1970s—and it’s not that it’s too strict. It’s that it’s doing a great job, and if anything needs to be stricter.

Nor is this really an “ideological” issue. Rather, it’s a financial one: homeowners dominate local development politics in large part because their homes make up such a large proportion of their total wealth that any decline in property values could devastate them. (Or, conversely, cut into huge capital gains, if they are lucky enough to own property in, say, San Francisco’s Mission neighborhood.) As a result, they’re extremely wary of any change to their surroundings that might reduce their property values—and zoning gives them the legal ability to stop those changes.

So even to the extent that there’s a consensus about the damage of zoning among policy wonks, part of that consensus is also that zoning is incredibly difficult to change, because the interest local homeowners have in preserving it is so powerful.

The inherent power of that interest is apparent even where zoning isn’t. At Better! Cities and Towns, Ben Brown takes a look at zoning-free Houston, and sees just as much catering to private interests as Somin sees in zoning codes. Though that city has no comprehensive zoning, a patchwork network of deed restrictions, historic districts, and other regulations—lobbied for heavily by homeowners and other people with interests in protecting property values—pretty much have the same effect. In fact, in a 2001 paper, Chris Berry found that Houston’s non-zoning land use system was just as exclusionary as Dallas’ more classic exclusionary zoning.

Zoning: not actually an urbanist paradise. Credit: Katie Haugland, Flickr
Houston: not actually a libertarian urbanist paradise. Credit: Katie Haugland, Flickr

 

But the solution obviously can’t be an end run around democratic planning. Though it may now be causing problems of its own, the revolt against top-down urban policy in the 1960s and 70s was reacting to real and devastating projects, from highways to urban renewal clearance, that booted hundreds of thousands of people from their homes—and those people were usually people of color, immigrants, low-income, or otherwise vulnerable. It’s hard to imagine how removing democratic protections against such abuses would result in much more progressive outcomes today. (In fact, some municipalities are continuing good old fashioned urban renewal clearance projects anyway.)

Rather, the path to zoning reform probably has two branches. First, make property values a less pressing issue for homeowners. We’ve covered some of William Fischel’s proposals along those lines, including reforming preferential tax policies like the mortgage interest deduction and capital gains exemptions that make housing a particularly valuable investment.

Second, make the democratic process truly democratic by allowing input from everyone significantly affected by a policy—which means making some housing decisions at a citywide, regional, or even state level, rather than neighborhood by neighborhood. While it may seem like a purely local issue whether or not an apartment building goes up on your block, we know now very well that it’s not. The sum of many decisions to block such construction makes neighborhoods, cities, and even entire regions much more expensive than they need to be, both in terms of housing costs and transportation costs as a result of sprawl.

When housing decisions are made hyper-locally, the only interests taken into account are those of nearby residents, who may have worries about their property values, the visual “character” of the neighborhood, or even more directly exclusionary concerns about the type of people who will leave near them. It also creates a sort of “prisoner’s dilemma” in which no neighborhood wants to be stuck with “undesirable,” or costly, land uses. But when decisions are made at a broader geographic level, the people who stand to gain from new housing—renters and potential buyers who want more housing options, businesses that might gain more customers, and people thinking about how more density might support the regional transit system—also get to have a voice. Scholars of zoning and segregation have argued that more local fragmentation in decisionmaking is a crucial part of using land use laws to impede integration.

Finally, zoning reform is a necessary, but not sufficient, part of a comprehensive housing plan—and including the other parts may be an important piece of assembling the political coalition for more equitable cities, bringing in more traditional affordable housing advocates and neighborhood activists. As Jamaal Green writes at Rooflines, changing land use laws to allow more housing, and more varied kinds of housing, can do a lot: slow the growth of regional housing prices; encourage integration by creating more affordable mixes of housing in high-demand neighborhoods; reduce transportation costs by allowing people to walk to some destinations and more effectively use transit; and so on. But while it’s a crucial part of making more equitable and sustainable cities, it doesn’t address every problem. Direct housing support, either through vouchers, public housing, or both, will always be necessary for people who can’t afford private housing even in efficient markets; tenant protections are needed to prevent landlord abuse, whether through illegal evictions in high-priced communities or neglect in low-demand areas; and expanded public transit is needed to efficiently and affordably connect people in all communities to jobs and services. Making zoning changes a clear part of this broader agenda is important to building broad support.

At a hyper-local level, there is no consensus that zoning needs to be made more flexible to allow more, and more varied, housing. That’s not an accident: it’s because hyper-local democracy includes people who may be adversely affected by more housing, but not most of the people who would benefit. But we do believe that most people want their cities to be affordable, diverse, and sustainable. Making housing plans at a broader level might allow people to act on those principles, rather than on their local fears—and, just as importantly, give those who stand to benefit from less exclusionary policies a democratic voice in the process.

The Week Observed: December 18, 2015

What City Observatory did this week

1. Don’t bank on it. Hillary Clinton, as part of her campaign for President, has proposed a National Infrastructure Bank to help local governments pay for crucial infrastructure maintenance and upgrades. But it’s not so clear that such a bank is the answer to America’s infrastructure problems. Rather, the bank would likely face a number of issues, including simply displacing other sources of borrowing for projects that would have been funded anyway and leaving localities without any additional revenues with which to pay loans back. But the fundamental issue is that America’s infrastructure problem has little to do with the ability to borrow capital, and more to do with mixed up priorities and the lack of revenue with which to repay borrowing and maintain existing infrastructure.

2. Homevoters v. the growth machine. There are two big theories about who controls urban development. One suggests it’s a coalition of business interests who run roughshod over regulations like zoning; the other is that a democratic group of homeowners uses zoning effectively to block development that might hurt their property values. A new study out of NYU tries to answer the question of which is right—and comes down firmly on the homevoter side. That’s the most plausible explanation, they say, for why neighborhoods near good schools, or with growing populations, actually see many more downzonings—or reductions in allowed density—even though developers and business interests would surely like to add more housing there.

3. Reducing congestion: Katy didn’t. Several years ago, Houston spent $2.8 billion to expand capacity on its Katy Freeway, making it—at 23 lanes—one of the widest in the world. Afterwards, the American Highway Users Alliance cited the Katy widening as a victory against congestion. But it turns out that in the years since then, travel times have actually increased dramatically—as any urbanist familiar with “induced demand” could have told them from the beginning.

4. Where did all the small apartment buildings go? We’ve written about the“missing middle” before: the fact that American cities build lots of single family homes and some large apartment buildings, but few of the smaller, lowrise apartment buildings that make up important parts of many walkable urban and suburban neighborhoods. Using data from the Census, we show that hasn’t always been the case: as late as the early 1980s, apartment buildings with fewer than 10 units made up nearly half of all new multifamily units. That’s now down to about seven percent.

The week’s must reads

1. At Planetizen, Todd Litman writes about what the Paris climate talks mean for urban planning. He connects the heavy influence of land use patterns and transportation systems on a city’s carbon emissions with the broader goals of reduced global temperature increases. He also links to a study he carried out earlier this year with powerful evidence of the link between smart urban policy and environmental benefits.

2. For cities like Detroit, where abundant vacant homes create public safety hazards and unsightly conditions in many neighborhoods, demolition has become a major anti-blight strategy. Reuters takes a look at Detroit’s post-bankruptcy plan to demolish 80,000 homes—and the question of exactly how much such a plan should cost. Beyond that issue, though, demolitions appear to be showing progress on at least some fronts: the city credits them with a massive decrease in arsons, and an independent report suggested that home prices near demolitions increased by an average of 4.2 percent.

3. At City Observatory, we’ve been proponents of pricing road use to make drivers internalize the external costs of their travel, including added congestion, environmental damage, and deaths and injuries from accidents. Governing looks at a growing trend of cities getting revenue from public rights of way. Most exciting is San Francisco’s parking initiative, which uses demand-dynamic pricing to regulate the number of parked cars and the length of time they stay in the style of Donald Shoup.


New knowledge

1. At the Brookings Institution, William Julius Wilson describes how economic segregation, layered on top of racial segregation, has put low-income black Americans at an extreme risk of being victimized by violent crime. The gap between higher-income and lower-income African Americans has grown especially rapidly since the 1970s.

2. The mortgage interest tax deduction: it’s a highly skewed policy that gives the biggest benefits to very wealthy homeowners and provides nothing to all to those who rent, or who don’t earn enough to itemize their deductions. Dylan Matthews at Vox is the latest to assail the tax deduction, showing that simple, common-sense reforms—including capping the home value that’s eligible for the deduction at $500,000, and turning the entire program into a 15 percent credit so it can be accessed by people who don’t itemize deductions—would make a huge difference in making the policy more progressive. (See the Tax Policy Center’s report that informed much of Matthews’ article here.)

3. The American Institute of Architects has released new survey data about what builders believe people are asking for in 2015. Notably, reinvestment in developed, walkable areas continues to gain ground: 65 percent more of the surveyed firms said infill development is gaining popularity than losing; 55 percent more said proximity to public transit is gaining popularity; and 48 percent more said walkable neighborhoods are gaining popularity. (Hat tip to Streetsblog USA.)


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

Homevoters v. the growth machine

It’s election day, everyone.  If you haven’t voted, please do so. In honor of the election, today we’re please to reprise one of Daniel Kay Hertz’s essays on urban politics.  Daniel has just released his new book, The Battle of Lincoln Park: Urban Renewal and Gentrification in Chicago.

There are two big theories about who controls the pace of development in American cities and suburbs.

One is the “growth machine.” In this telling, developed by academics like Harvey Molotch in the 1970s, urban elected officials and zoning boards are highly influenced by coalitions of business and civic leaders interested mainly in economic growth and maximizing the price of the land they own.

The growth machine view. Credit: Matthew Rutledge, Flickr
The growth machine view. Credit: Matthew Rutledge, Flickr

 

The other, developed later by the economist William Fischel, is the “homevoter hypothesis.” Fischel argues that real power—at least in the small to moderately-sized municipalities in which the majority of Americans live—is held by homeowners, who are also interested primarily in maximizing the value of their property: their homes.

The homevoter view. Credit: Richard Masoner, Flickr

 

These two theories closely track two of the major camps in the debate about what’s wrong with American housing policy. If you believe in the growth machine, either because you’re a reader of Molotch or it just happens to coincide with your general worldview, you’ll probably believe that US cities suffer from too much development, pushed on an unwilling populace by a profit-driven elite for whom zoning and planning is an inconvenience at most.

If you’re in the homevoter camp, conversely, you’re likely to think that the problem is too little development, as NIMBY homeowners scare local elected officials into blocking any housing development that might compromise their property values—either simply by increasing the housing stock, and thus the number of “competing” sellers, or by introducing “undesirable” kinds of people or buildings.

As you can see, there’s quite a bit riding on which of these theories is right—or, more realistically, in what proportions, where, and in which ways, each is right and wrong. One suggests that development laws ought to be made more restrictive; the other that they ought to be less. One suggests that there may already be a broad democratic coalition in favor of a rational housing market, but that coalition is frustrated by a smaller number of more powerful interests; the other suggests that the broad democratic coalition of homeowners, at least at a hyper-local level, is getting exactly what it wants when home values spiral upwards.

A study published last year from Vicki Been, Josiah Madar, and Simon McDonnell of NYU took a crack at pitting these theories against each other to see which did a better job of explaining zoning changes in New York City from 2003 to 2009, under former mayor Michael Bloomberg.

Growth machine or homevoter? Credit: Center for American Progress, Flickr
Growth machine or homevoter? Credit: Center for American Progress, Flickr

 

As the authors themselves admit, their choice of place and time give the growth machine position a leg up: even Fischel, who coined the “homevoter” name, suggests that his theory probably applies best to smaller municipalities, without the huge business interests of major cities. It’s also most likely to matter in places where most people own their own homes—and New York City has one of the lowest homeownership rates in the country, with just 36 percent of homes being owner-occupied. Finally, the billionaire businessman Michael Bloomberg is, at least superficially, as good an avatar of the “growth machine” coalition as one can imagine.

To distinguish between the two theories, the study compared “upzones” (a zoning change that increases allowed density) and “downzones” (a zoning change that reduces allowed density) with several factors:

  • First, land close to infrastructure and services, like rail stations and high-performing schools. If the growth machine theory is correct, these places should see more upzones, as developers try to take advantage of these valuable locations. If the homevoter theory is correct, these places might see more downzones, as homeowners try to protect the value of their property against other, competing homes.
  • Second, market growth and rising home prices. The growth machine theory would suggest places with rising prices would also see more upzones.
  • Neighborhood demographics. Growth machine theory might suggest that demographics associated with high real estate values, like wealthier and whiter neighborhoods, would see more upzones. Homevoter theory would say those places would see more downzones, as more powerful homeowners are more able to enact their anti-development orientation.
  • Homeownership rates and voter turnout. Both high homeownership rates and turnout would result in more downzones, according to homevoter theory.

So what did the results looks like?

  • Interestingly, proximity to high-quality infrastructure and services made land more likely to be changed in both directions—that is, land far from high-quality infrastructure and services was more likely to remain in its original zoning category. But in almost every case, proximity was especially likely to lead to more downzones. For example, parcels in high-performing school districts were 43 percent more likely than the typical parcel to be upzoned—but 392 percent more likely to be downzoned.
  • Correlations with market growth were weaker—but they suggested that growing markets were associated with downzoning. Parcels in neighborhoods seeing rapid population growth were 41 percent more likely to be downzoned, for example. Parcels in neighborhoods seeing rapid home value increases were about 20 percent less likely to be upzoned, although they were also 27 percent less likely to be downzoned.
  • Downzoning was very strongly correlated with whiter neighborhoods: parcels in Census tracts that were over 80 percent white were more than seven times more likely to be downzoned than parcels in tracts that were less than 20 percent white.
  • Parcels in tracts with high homeownership rates were 43 percent more likely to be downzoned, and 25 percent less likely to be upzoned. Parcels in districts with high voter turnout were 230 percent more likely to be downzoned, and 53 percent less likely to be upzoned.

So what does this tell us? Well, in every case where the evidence clearly points to one theory or the other, the winner is the homevoter hypothesis. Homes near high-performing schools—sources of great value to which Fischel says homeowners pay particular attention—were overwhelmingly more likely to have their maximum density reduced, rather than increased, as developers and business interests would surely prefer. Neighborhoods with rising demand, similarly, tended to see more anti-development zoning, to the extent that a growing population tended to lead the government of New York City to allow fewer homes to be built. Very white neighborhoods were particularly likely to see density caps lowered. And homeownership and voter turnout rates had exactly the results expected by the homevoter theory. (Although the voter turnout results could, arguably, also be seen as compatible with the growth machine.)

These outcomes are all the more stunning because of where and when they took place: New York City under Michael Bloomberg, which, again, is one of the very last settings you would expect to find “homevoters” in charge of development.

Of course, none of this means that big landowners, businesses, and developers aren’t also trying to influence the development process in their favor, and sometimes succeeding. Perhaps the most fascinating results of the study actually suggest a somewhat more complex dynamic: if land near parks and high-performing schools are more likely to be both upzoned and downzoned, then you can imagine a story in which these amenities lead to increased competition between the growth machine and homevoters. According to this report, homevoters appear to win the vast majority of the time—but developers also score a few victories, getting more upzones than are granted (or, perhaps, requested) in less valuable territory.

As we wrote in our review of William Fischel’s new book, Zoning Rules!, and contra Ilya Somin’s argument about a growing pro-zoning-reform consensus, these findings also suggest that those who would like to moderate home price increases through smarter development policy may have a daunting political hill to climb. More about that in an upcoming post.

Homevoters v. the growth machine

There are two big theories about who controls the pace of development in American cities and suburbs.

One is the “growth machine.” In this telling, developed by academics like Harvey Molotch in the 1970s, urban elected officials and zoning boards are highly influenced by coalitions of business and civic leaders interested mainly in economic growth and maximizing the price of the land they own.

The growth machine view. Credit: Matthew Rutledge, Flickr
The growth machine view. Credit: Matthew Rutledge, Flickr

 

The other, developed later by the economist William Fischel, is the “homevoter hypothesis.” Fischel argues that real power—at least in the small to moderately-sized municipalities in which the majority of Americans live—is held by homeowners, who are also interested primarily in maximizing the value of their property: their homes.

The homevoter view. Credit: Richard Masoner, Flickr

 

These two theories closely track two of the major camps in the debate about what’s wrong with American housing policy. If you believe in the growth machine, either because you’re a reader of Molotch or it just happens to coincide with your general worldview, you’ll probably believe that US cities suffer from too much development, pushed on an unwilling populace by a profit-driven elite for whom zoning and planning is an inconvenience at most.

If you’re in the homevoter camp, conversely, you’re likely to think that the problem is too little development, as NIMBY homeowners scare local elected officials into blocking any housing development that might compromise their property values—either simply by increasing the housing stock, and thus the number of “competing” sellers, or by introducing “undesirable” kinds of people or buildings.

As you can see, there’s quite a bit riding on which of these theories is right—or, more realistically, in what proportions, where, and in which ways, each is right and wrong. One suggests that development laws ought to be made more restrictive; the other that they ought to be less. One suggests that there may already be a broad democratic coalition in favor of a rational housing market, but that coalition is frustrated by a smaller number of more powerful interests; the other suggests that the broad democratic coalition of homeowners, at least at a hyper-local level, is getting exactly what it wants when home values spiral upwards.

A study published last year from Vicki Been, Josiah Madar, and Simon McDonnell of NYU took a crack at pitting these theories against each other to see which did a better job of explaining zoning changes in New York City from 2003 to 2009, under former mayor Michael Bloomberg.

Growth machine or homevoter? Credit: Center for American Progress, Flickr
Growth machine or homevoter? Credit: Center for American Progress, Flickr

 

As the authors themselves admit, their choice of place and time give the growth machine position a leg up: even Fischel, who coined the “homevoter” name, suggests that his theory probably applies best to smaller municipalities, without the huge business interests of major cities. It’s also most likely to matter in places where most people own their own homes—and New York City has one of the lowest homeownership rates in the country, with just 36 percent of homes being owner-occupied. Finally, the billionaire businessman Michael Bloomberg is, at least superficially, as good an avatar of the “growth machine” coalition as one can imagine.

To distinguish between the two theories, the study compared “upzones” (a zoning change that increases allowed density) and “downzones” (a zoning change that reduces allowed density) with several factors:

  • First, land close to infrastructure and services, like rail stations and high-performing schools. If the growth machine theory is correct, these places should see more upzones, as developers try to take advantage of these valuable locations. If the homevoter theory is correct, these places might see more downzones, as homeowners try to protect the value of their property against other, competing homes.
  • Second, market growth and rising home prices. The growth machine theory would suggest places with rising prices would also see more upzones.
  • Neighborhood demographics. Growth machine theory might suggest that demographics associated with high real estate values, like wealthier and whiter neighborhoods, would see more upzones. Homevoter theory would say those places would see more downzones, as more powerful homeowners are more able to enact their anti-development orientation.
  • Homeownership rates and voter turnout. Both high homeownership rates and turnout would result in more downzones, according to homevoter theory.

So what did the results looks like?

  • Interestingly, proximity to high-quality infrastructure and services made land more likely to be changed in both directions—that is, land far from high-quality infrastructure and services was more likely to remain in its original zoning category. But in almost every case, proximity was especially likely to lead to more downzones. For example, parcels in high-performing school districts were 43 percent more likely than the typical parcel to be upzoned—but 392 percent more likely to be downzoned.
  • Correlations with market growth were weaker—but they suggested that growing markets were associated with downzoning. Parcels in neighborhoods seeing rapid population growth were 41 percent more likely to be downzoned, for example. Parcels in neighborhoods seeing rapid home value increases were about 20 percent less likely to be upzoned, although they were also 27 percent less likely to be downzoned.
  • Downzoning was very strongly correlated with whiter neighborhoods: parcels in Census tracts that were over 80 percent white were more than seven times more likely to be downzoned than parcels in tracts that were less than 20 percent white.
  • Parcels in tracts with high homeownership rates were 43 percent more likely to be downzoned, and 25 percent less likely to be upzoned. Parcels in districts with high voter turnout were 230 percent more likely to be downzoned, and 53 percent less likely to be upzoned.

So what does this tell us? Well, in every case where the evidence clearly points to one theory or the other, the winner is the homevoter hypothesis. Homes near high-performing schools—sources of great value to which Fischel says homeowners pay particular attention—were overwhelmingly more likely to have their maximum density reduced, rather than increased, as developers and business interests would surely prefer. Neighborhoods with rising demand, similarly, tended to see more anti-development zoning, to the extent that a growing population tended to lead the government of New York City to allow fewer homes to be built. Very white neighborhoods were particularly likely to see density caps lowered. And homeownership and voter turnout rates had exactly the results expected by the homevoter theory. (Although the voter turnout results could, arguably, also be seen as compatible with the growth machine.)

These outcomes are all the more stunning because of where and when they took place: New York City under Michael Bloomberg, which, again, is one of the very last settings you would expect to find “homevoters” in charge of development.

Of course, none of this means that big landowners, businesses, and developers aren’t also trying to influence the development process in their favor, and sometimes succeeding. Perhaps the most fascinating results of the study actually suggest a somewhat more complex dynamic: if land near parks and high-performing schools are more likely to be both upzoned and downzoned, then you can imagine a story in which these amenities lead to increased competition between the growth machine and homevoters. According to this report, homevoters appear to win the vast majority of the time—but developers also score a few victories, getting more upzones than are granted (or, perhaps, requested) in less valuable territory.

As we wrote in our review of William Fischel’s new book, Zoning Rules!, and contra Ilya Somin’s argument about a growing pro-zoning-reform consensus, these findings also suggest that those who would like to moderate home price increases through smarter development policy may have a daunting political hill to climb. More about that in an upcoming post.

Where did all the small apartment buildings go?

Back in August, we wrote about the phenomenon of the “missing middle”: the fact that today’s urban (and suburban) development tends to take the form of either single-family homes or very large apartment buildings, but not so much in the middle.

And that’s a problem! Small apartment buildings perform a vital function in classic “illegal neighborhoods,” creating a stock of market-rate housing that is generally cheaper than houses, as well as adding crucial density to support walkable neighborhood commercial districts and transit, all at a lowrise scale that many people think “fits” with single family homes. After all, from triple deckers in New England, to two-flats in Chicago, to small apartment buildings in cities of all sizes all across the country, most popular older neighborhoods already include a large stock of these structures.

 

In our first post on the subject, we dug up statistics about the “missing middle” in metro areas around the country, using statistics from the last decade to show that extremely few homes are built in buildings that hold between two and four units.

  But data from another Census report, the “2014 Characteristics of New Housing,” breaks down construction into more categories—and goes back all the way to 1972. Which allows us to see that the missing middle hasn’t always been missing.

In fact, back in 1972, nearly a third of all multifamily homes were constructed in buildings with two to nine units—a typical size for lowrise apartment buildings. Significantly fewer, about a fifth, were built in very large structures with over 50 units. Small apartments peaked in 1981, with 46 percent of all new multifamily units.

Since then, though, they’ve fallen off a cliff.

In 2014, just seven percent of new multifamily homes were in buildings with fewer than 10 units. But nearly half—48 percent—were in buildings with 50 units or more.

Don’t get us wrong. There’s nothing wrong with big residential buildings. They’re necessary, in fact, for creating very high density areas in and around central business districts, and in large or high-cost cities’ urban cores, where space is at a premium.

But most urban neighborhoods don’t need 50-unit buildings, and it’s hard to imagine overcoming the opposition to such development in currently lowrise communities. And while the reaction to Seattle’s HALA proposal suggests that even small apartments are going to be unwelcome in many single-family neighborhoods, there are plenty of neighborhoods that are already mixed, where adding housing two, five, eight units at a time could help keep up with demand and create a broader diversity of housing options. That’s important both for price diversity, and to make room for people to “age in place,” downsizing from large homes they can’t take care of any more without having to leave their neighborhood. If the only options are large apartment buildings or single family homes, that seems like a recipe for political polarization and continued economic segregation.

What’s behind this shift? A huge amount of it, most likely, is about zoning. As building regulations tightened in the 70s and afterwards, American cities are increasingly divided into two types of development areas: urban cores where very large projects are allowed, and everywhere else, which is generally reserved for single family homes. There may also be a financing component, as getting bank loans for smaller projects may increasingly be a challenge. It’s probably also an indication that the number of sites where multi-family developments are so scarce—and therefore expensive—that it’s simply uneconomical to develop them for anything smaller than a 50 unit building.

But either way, as we wrote back in August, American cities can’t meet their housing challenges, or create liveable, walkable neighborhoods, with just two settings—single family homes and huge apartment buildings. It’s time to find the missing middle.

 

The Week Observed: December 11, 2015

What City Observatory did this week

1. A $1.6 billion proposal. A film school teacher in San Francisco had some people talking about “ethical landlording” as a solution to the problem of too-high real estate prices. But substituting the private whims of land owners for prices as a way to determine who wins access to scarce housing isn’t necessarily an improvement. We have a different idea: tax capital gains on housing. In 2013 alone, SF area residential property increased in value by $159 billion. A tax that collected just one percent of that value could create a public funding stream for a significant amount of affordable housing.

2. Pulling a FAST one. Congress has finally agreed on a five-year transportation bill—but it’s hardly cause for celebration. With the so-called “FAST Act,” the federal government has officially severed the connection between the gas tax and funding for the Highway Trust Fund, acknowledging what has long been true: drivers don’t pay for the cost of using public roads. But rather than using that acknowledgement to expose drivers to more of the costs of their driving, the FAST Act commits a kind of bank robbery, raiding the Federal Reserve’s cash, an irresponsible one-time budget stopgap that leaves the question of long-term financing still unresolved.

3. Climate concerns steamrolled by FAST Act and cheap gas. Even as the UN hosts major climate change talks in Paris, our national transportation policy is pushing us in the wrong direction. With gas prices lower than they’ve been in years, it should be a good time for a small increase in the gas tax and other measures that make drivers internalize some of the costs they impose on society by driving—like greenhouse gas emissions. But the new FAST Act takes no such actions. In the meanwhile, cheap gas is already leading Americans to buy less fuel efficient cars, which will remain on the road for a generation, releasing 140 metric tons more carbon than if gas prices hadn’t fallen.

4. Cities have reason to be wary of Fed moves. After years of keeping interest rates low to stimulate the economy, the Federal Reserve is planning to raise them substantially over the coming years. While Fed rate changes may seem distant to the issues of urban neighborhoods, city leaders and residents should be concerned. For one, low interest rates have encouraged the construction of multifamily buildings that have added people and vitality to many inner-city neighborhoods. But more broadly, if the Fed’s rate hike slows the broader national economy, that slowdown will be felt on the ground in the economic health of cities and neighborhoods across the country.


The week’s must reads

1. It can be very challenging to explain to most people why they would benefit from less parking in their neighborhood, or where they go shopping—after all, most people only think about it when they’re frustrated that they can’t find a spot. But now, you can just direct them to this minute-long video from the City of Ottawa. As part of its campaign to reduce its parking requirements, the City made a video to help its citizens understand why they should want that—and it’s one of the best quick explanations for non-planners that we’ve seen.

2. So you want transit-oriented development in your community, but you don’t have any rail lines. Good news! It probably doesn’t matter. Via Streetsblog California, Daniel Chatman of the University of California, Berkeley writes that it’s not proximity to rail transit that seems to have the biggest impact on reducing residents’ driving. Instead, reducing parking requirements, providing high-quality bus transit, and creating shopping and service destinations within walking distance of housing seem to be the most important factors. As Chatman points out, that’s a good thing: rail transit is scarce and expensive to build, but it turns out you don’t need it to get many of the benefits associated with it.

3. Angie Schmitt writes up a new report arguing that suburban office parks are in trouble. The real estate firm Newmark, Grubb, Knight and Frank looked at markets in five major US cities and found that a key issue is that offices in more traditional urban areas have access to a larger number of amenities, which more isolated suburban offices need to pay to replicate inside their own campuses. They estimate that 14 to 22 percent of suburban office space is obsolete. Proximity to transit is also important: offices more than a quarter-mile away from a new light rail line in Denver had vacancy rates nine percent higher than those within a quarter mile.


New knowledge

1. Racial segregation continues its slow decline in American metropolitan areas, even as it remains at very high levels. William Frey at the Brookings Institution has parsed 2010-14 American Community Survey data to update our understanding of residential racial separation. Notably, some of the most segregated regions in the country saw the largest declines: in Chicago, for example, the average black resident’s surrounding neighborhood was 72.2 percent black in 2000, but 64.4 percent black in the 2010-14 ACS data. Overall, 45 of 52 metropolitan areas registered decreases.

2. In Los Angeles County, a full 14 percent of all land is used for automobile parking. In much of the county, there are more than 11,000 parking spaces per square mile. In many cases, those spaces were built as a result of legal requirements to provide off-street parking—a mandate for more sprawling development, and an implicit subsidy to drivers, who receive “free” parking whose cost is hidden in the higher cost of real estate or goods and services. A team of researchers have investigated how parking requirements have dramatically added to LA’s parking supply since 1950, with excellent graphics. Surprisingly few cities have a comprehensive inventory of parking supply, making this a model of the kind of information that would enable better-informed discussions of parking policy.

3. From Norway, new research adds to the evidence of social benefits from taxing housing. In addition to generating revenue (that could be used, as we propose above, for directly creating affordable housing), taxes on residential real estate can moderate demand for housing by removing its preferential tax status as a financial investment. That, in turn, can lower prices. This study suggests that taxing housing like any other capital asset would (in Norway) reduce housing prices by as much as 18 percent. While the exact numbers would obviously be different in the US—and certainly vary from place to place within the US—the basic dynamics are the same.


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

The Week Observed: December 4, 2015

What City Observatory did this week

1. Engaged communities, civic participation, and democracy. A guest post from the Knight Foundation’s Carol Coletta begins by noting some dismal numbers on voting in American cities—especially by younger people. But civic engagement can’t just be about once-in-a-while actions; it has to be a daily practice. Carol gives an example of a intervention into public space in Philadelphia, funded by the Knight Cities Challenge, that created a place for people from different backgrounds to “live life in public,” creating the foundation for a healthy civic society.

2. Is foreign capital destroying American cities? In the Guardian Cities, Columbia University professor Saskia Sassen expressed some alarm about the number of real estate purchases by large multinational corporations in cities around the world—creating a “de-urbanizing dynamic” and reducing diversity. But while there’s good reason to question some high-profile, large-scale corporate development deals, the larger question of the role of big corporations in our cities is less clear. Most corporate purchases are from other corporations, and Brooklyn—which Sassen singles out in her piece—has seen a dramatic rise in small businesses as well as large-firm employment.

3. You need more than one number to understand housing affordability. In October, we wrote a post called “Housing affordability beyond the median,” pointing out that the usual metric we use to gauge housing prices—the median—actually hides a huge amount of important information. Since then, two other researchers have jumped into the effort at creating more complex measures of affordability. Redfin, the online real estate company, created maps showing “affordable,” high-end,” and “mixed” neighborhoods, based on the distribution of costs within neighborhoods; and John Ricco of Greater Greater Washington created graphs showing how median prices are distributed by neighborhood across cities. Both are important moves to give our understanding of housing prices—and what counts as “affordable”—more nuance.


The week’s must reads

1. How common is gentrification? At Planetizen, Michael Lewyn makes the seemingly obvious, but little-acknowledged, point that it all depends on what you mean by “gentrification.” Many of the studies suggesting that gentrification is very widespread count any poor neighborhood that sees a notable decrease in poverty—even if it remains well above its region’s average poverty levels. Other researchers (including us, in our “Lost in Place” report) define gentrification as a more substantial transformation: moving from double the national poverty rate to at or below the national poverty rate, or (in the case of another study) from majority-non-white to majority-white. Using those definitions, gentrification is extremely rare. Lewyn also notes, citing “Lost in Place,” that “de-gentrification”—low-income or middle-class neighborhoods becoming poorer—appears to be much more common than the reverse.

2. Grab your headphones and take a listen to this talk by Harvard’s Raj Chetty at Equity Summit 2015, where he talks about his ground-breaking research on segregation and economic mobility—the heart of the American Dream. What correlates with upward mobility? What kinds of places foster it? Chetty’s research gets to the heart of City Observatory’s mission: creating the kind of cities that allow the American Dream, and it’s worth listening to Chetty himself explain what that means.

3. Sometimes pictures tell the story as well as words can. That’s the case withCleveland.com‘s historic photos of central Akron, tracing its history from a compact city with continuous urban fabric and high-quality public spaces to one methodically ripping apart that very fabric and destroying public spaces with highways, parking lots, and other interventions meant to appeal to private cars. (There’s a frame-by-frame description of what you’re seeing at the link, but if you need even more words about highways and cities, try this piece by Alana Semuels at The Atlantic.) Below, Akron in 1938 and the same shot in 2010.


New knowledge

1. If you’re getting this email, you’ve probably already decided that racial segregation is bad. But just in case, here’s another angle on the issue from researcher Jessica Trounstine at the University of California, Merced. She finds that more segregated cities spend less money on public services, all things being equal, than more integrated ones. And the difference is large: moving from the 25th percentile of segregation to the 75th percentile means about $100 less per person on all public services. By way of comparison, the average expenditure on police is just $180 per person. Why is that? Trounstine writes: “When a city is residentially segregated by race, issues cleave along racial and not just spatial lines and groups are more likely to be intolerant, resentful, and competitive with each other…. Less able to build consensus, [these cities] also have lower levels of spending on a wide range of public goods—from streets, to sewers, to assistance for the poor.”

2. And even more evidence that desegregation leads to more equitable economic outcomes. Eric Chyn at the University of Michigan revisits data from the Moving to Opportunity program, in which families in public housing were given vouchers to move to higher-income communities, and finds that the long-run effects are even larger than previous studies had indicated. Children in families given these vouchers were nine percent more likely to be employed as adults, and earned wages that were 16 percent higher. Importantly, Chyn also finds evidence that the people who choose to take vouchers actually benefit less from relocation than those who don’t choose to take them, suggesting further underestimates of the benefits from previous studies.

3. The “great inversion”—the return of demand for dense, inner-city neighborhoods—is well-established now. But what’s driving it? New research from researchers at UC-Berkeley and the University of Pennsylvania suggests that access to amenities like restaurants, retail, and entertainment is driving much of the demand from young, college-educated people. In contrast, other hypotheses, including shorter trips and slowing household formation, provide much less explanatory power. The authors argue that this means the revival of American downtowns has more staying power than believed by those who argue that urban living is a temporary trend.


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

A $1.6 billion proposal

Last week, San Francisco Magazine reported on what, at first glance, just looks like another those-crazy-San-Franciscans-and-their-crazy-housing-market story. It begins with a film school teacher who had bought a home in the Mission neighborhood twenty years ago for just $90,000, recently decided to move, and put her home on the market—sort of.

While similar homes in the area were going for over a million dollars, the teacher announced that she would give the next occupant of her home close to a $500,000 discount, selling for $650,000 and not accepting higher bids. In exchange, her many suitors would have to explain why they were a particularly good fit for the neighborhood, and sign a ten-year “cultural promissory note,” committing to provide some sort of cultural value to their new neighbors.

 

At CityLab, Kriston Capps has already made the case that this sort of “ethical landlording” is hardly the solution to San Francisco’s—or New York’s, Boston’s, etc.—housing problems. Capps zooms in on the fact that leaving the question of who gets to live in a neighborhood up to the people who currently live there could reach some dark places very quickly:

Instead, the point of the exercise was to exclude buyers. Lee aimed to exclude outsiders, exclude people who might complain about Dia de los Muertos, exclude people who don’t fit her vision of a Mission resident. This kind of character screening could bring up some ethical issues or implicit biases. Maybe nothing that rises to the level of discrimination under the Fair Housing Act, but still.

Capps’ critique is well worth reading in full. We would add two points.

First, this real-life parable does an excellent job of illustrating that the fundamental problem with high-priced real estate markets isn’t that housing is too expensive: it’s that there isn’t enough housing. Because we live in a market economy, we almost always use prices to choose who gets access to highly-sought-after homes, which creates some obvious problems in terms of social equity. But if you don’t discriminate based on price, you’ll still have to discriminate, because there are still more people who want to live somewhere than there are places for them to live.

So in this case, the property owner got rid of (or significantly reduced) the price issue, but the problem didn’t go away: there were so many applications for her home that she had to hold four open houses. To solve this problem, she simply shifted from discriminating based on price to discriminating based on the cultural whims of the current resident (her). The overwhelming majority of people who wanted to live there still lost out. And as Capps hints at, while this particular resident’s whims aren’t necessarily discriminatory in a way that reinforces pre-existing inequalities, there’s very little reason to be optimistic that if we shifted to a system in which everyone discriminated based on their own cultural prejudices, it wouldn’t ultimately end up perpetuating existing patterns of inequality.

(In fact, there’s a good argument that it did so even in this case: After all, having access to organic produce from an “uncle’s farm in Salinas,” as the film teacher suggested might be an appropriate cultural contribution to the neighborhood, is hardly a privilege evenly distributed by race and income.)

The new currency of Bay Area real estate. Credit: Wikimedia Commons
The new currency of Bay Area real estate. Credit: Wikimedia Commons

 

Second, this case highlights the fact that rising home prices create massive capital gains—not just for landlords and developers, but regular homeowners as well. In some cases, this is a actually a big win for equity, particularly when property values increase rapidly in neighborhoods where homeowners are predominantly lower income or people of color. That might represent a small blow against the racial wealth gap. (Although it is likely to be quite a small blow indeed, given research showing that black first-time homeowners actually lost wealth on net in housing over the course of the entire decade of the 2000s. Neighborhoods that see large increases in property wealth are actually disproportionately likely to be white.)

But from a policy perspective, these capital gains represent a huge opportunity. In this particular case, the homeowner was able to earn a nearly 700 percent return on her investment and still leverage half a million dollars to determine the occupancy of her home after she left. But even if we could count on other private residents to use that power as “ethical landlords,” it would leave the housing market open to private discrimination, as we already argued. Moreover, as Kriston Capps pointed out, there’s no guarantee of long-term, let alone permanent, affordability: the next owner is under no obligation to be similarly “ethical.” And finally, very few landlords, no matter how “ethical,” are likely to give up enough profit to provide deep subsidies: even in this case, the film teacher ended up selling for $650,000, which stretches the definition of “affordable” even in San Francisco.

What if, instead, we could harness a small percentage of these private capital gains for publicly-funded, truly affordable housing? After all, we already leverage the profits of developers for affordable housing in the form of inclusionary zoning requirements. But those programs almost never create very many affordable units, simply because preserving five, ten, or even 20 percent of newly constructed units for low-income people doesn’t add up to much when all newly built homes make up a tiny proportion of the community as a whole. In the five years from 2010 to 2014, San Francisco’s inclusionary zoning program produced, on average, 140 units of affordable housing a year—not nothing, but also hardly enough to make a real dent in the issue.

San Francisco is too big for that. Credit: Anita Retinour, Flickr
San Francisco is too big for that. Credit: Anita Retinour, Flickr

 

But a small tax on the capital gains of homeowners whose property values grew the most could produce funds to build or preserve a meaningful number of affordable units. To be more progressive and protect wealth for working- and middle-class homeowners, the tax could be structured so that it only fell on those who earned significantly more than “normal” returns, or whose homes were extremely valuable to begin with. It could also be collected only when a home is sold, to avoid adding to the burden of people with valuable homes but only moderate incomes. (As an added benefit, such a tax could have the effect of deterring other exclusionary behavior by homeowners, if William Fischel’s ideas are correct.)

The money collected could be used, not to sell a $650,000 home to whoever had the best organic produce, but to create permanent (or at least long-term) affordable housing to whoever needed it at prices actually targeted to the low income. How much money are we talking? Well, in 2013, the total value of homes in the San Francisco metropolitan area grew by $159 billion. A regional tax that captured just one percent of that value would generate nearly $1.6 billion a year. San Francisco’s Proposition A, by contrast, passed this November, creates a one-time bond issue of $310 million; and the in-lieu fees raised by SF’s Inclusionary Housing ordinance in 2014 were $30 million. Of course, it’s not quite fair to contrast a regional measure with a municipal one—but the point is that $1.6 billion a year is a lot of money, equivalent to thousands of new affordable units a year. And it’s money that Bay Area governments are currently leaving on the table.

Harnessing these capital gains in places where real estate values are rapidly appreciating to create a stream of truly affordable housing funds is an ethical housing policy. Asking current homeowners and landlords to discriminate based on their own private biases is not.

You need more than one number to understand housing affordability

Back in October, we wrote a post called “Affordability beyond the median.” While most discussions of housing costs measure based on a city’s or neighborhood’s median price, that’s not all that matters.

After all, the median is simply the home for which equal numbers of other homes are more and less expensive. That may be a good definition of “typical,” but it can make us forget that most homes don’t cost the median: they’re either more or less expensive. And it matters just how much more and less expensive they are. In other words, it matters how much housing prices vary. A neighborhood where every home costs $400,000 will have the same median price as a neighborhood where half of all homes cost $400,000, a quarter cost $150,000, and a quarter cost $650,000. But only the second neighborhood has a large number of homes that might be affordable to people with moderate incomes.

In fact, if we’re especially interested in affordability for people with lower incomes—who are likely to be buying relatively cheaper housing no matter the median cost—then we should also care about how much relatively cheaper housing costs. To illustrate the problem, we compared the West Ridge neighborhood in Chicago with suburban Flossmoor. Both have very similar median housing prices, right around $250,000. But a house at the 25th percentile price in West Ridge is much more affordable than one at the 25th percentile price in Flossmoor—and it’s probably not a coincidence that West Ridge is much more economically diverse.

 

Since then, we’re pleased that at least two researchers have published their own, more nuanced looks at housing costs. First, John Ricco, at his own blog and then at Greater Greater Washington, used our analysis as a jumping-off point to create an interactive chart of housing price curves across neighborhoods in major American cities. Importantly, these curves show the distribution of median rents by ZIP code—not the 25th percentile prices, as we did. Still, by breaking down costs within cities, you can see differences in housing cost dynamics that you can’t with just a citywide median.

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Comparing Chicago and Atlanta, for example, shows that two-thirds of the residents of both cities (the numbers along the y axis) live in ZIP codes where median rents are almost identical (the numbers along the x axis). But in the top third, Chicago pulls dramatically away from Atlanta, so that while nowhere in Atlanta has a median rent of over $1,433 per month, a full 10 percent of Chicagoans live in ZIP codes with median rents that high or higher.

Another fascinating report comes from Eric Scharnhorst, an analyst with the real estate website Redfin. Scharnhorst’s work actually predates our October post, though it has only recently been published. In that study, Scharnhorst divides neighborhoods in 20 cities into three types: “high-end,” “affordable,” and “mixed.” In a high-end neighborhood, there are at least three homes that are unaffordable to a median-income purchaser for every one that’s affordable; in affordable neighborhoods, that ratio is reversed. (A home is considered “affordable” if a household earning the median income for their metro area could buy it without paying more than 30 percent of their income.) Any neighborhood that didn’t reach either extreme was labeled mixed.

Like Ricco, Redfin’s study is looking at a slightly different question than we were: their hypothetical purchaser is middle class, while we were more interested in low-income households. But it contributes to an attempt to see housing markets as too diverse and complex to be summarized with a single number.

Scharnhost also produced an incredible series of maps demonstrating his findings. Here are just a sample:

income_home_price_mix_detroit

income_home_price_mix_philly

income_home_price_mix_losangeles (1)

These maps show how different affordability patterns can be from one metro to another. In Detroit, the vast majority of neighborhoods are “affordable,” except for a ring of high-end communities in the outer suburbs and in the “Grosse Pointe” suburbs east of the city along the riverfront. Most of the handful of mixed neighborhoods are in the inner suburbs. In Philadelphia, there’s more of an even divide between affordable and high-end neighborhoods. Mixed neighborhoods are found in inner suburban/outer city neighborhoods, as well as throughout the inner urban core. In Los Angeles, most neighborhoods are high-end, with an “affordable” corridor flanked by mixed areas south of downtown.

In addition to giving residents, advocates, and policymakers a better handle on the state of housing costs in their cities and neighborhoods, it’s notable that in most cities, the largest concentration of “mixed” neighborhoods are in central cities and older suburbs—indirect evidence for one of our hobby horses, which is the way that a diversity of housing types (small homes, large homes, apartments) can foster a diversity of people, along economic and racial/ethnic lines. As these maps show, that housing diversity is more likely to be found in central cities.

Both Scharnhorst’s and Ricco’s analyses and visualizations are worth spending some time with. Check them out!

Engaged communities, civic participation, and democracy

Today we’re publishing an edited version of a speech given by Carol Coletta, VP of Community and National Initiatives at the Knight Foundation, last month in Portland, OR.


Informed and engaged communities are fundamental to a strong democracy. But many of the signs of those communities are not encouraging:

Newspaper readership has plummeted in recent years. It is a particular problem with local papers. More depressing, no one believes there is yet a business model that will support robust local reporting.

Distrust among Americans is increasing. The share of the population that believes “most people can be trusted” has fallen from a majority in the 1970s, to about one-third today.

Economic segregation has gone up while middle-income neighborhoods decline. Between 1970 and 2009 the proportion of families living either in predominantly poor or predominantly affluent neighborhoods doubled from 15 percent to 33 percent.

Politically, we have sorted ourselves into like-minded geographies.  Nearly two-thirds (63 percent) of consistent conservatives and about half (49 percent) of consistent liberals say most of their close friends share their political views.

Credit: hjl, Flickr
Credit: hjl, Flickr

 

Portland State’s own Phil Keisling and Jason Jurjevich looked at voting behavior in local elections for Knight and found that turnout in most cities is abysmally low—typically hovering around 20 percent.

They also found that the age of those who do cast ballots was anywhere from 13 to 17 years higher than the citywide median age of the adult population. In other words, as Jason put it, “18-34 year-olds are almost entirely abdicating to their grandparents’ generation the key decision of who should actually govern them.”

Phil and Jason also found many “voting deserts” in cities—places where the percentage of people voting is half or less than the already-terrible overall rates—as low as half a percent! It’s tough to have informed and engaged communities when the trends are working so powerfully against them. On the other hand, there are a few hopeful signs.

As cities cut staff and services to parks and recreation, libraries, and public works in recent years, frustrated citizens have begun taking matters into their own hands. Do-it-yourself efforts to improve cities—sometimes known as “tactical urbanism”—continue to heat up, fueled by the massive move of young adults to core cities.

And while Millennials may not be reading newspapers, they lead the country in the civic use of social media. Pew found that half of 18-to-29 year olds decide to learn more about political or social issues because of what they read on social networking sites. Fifty-seven percent engage in political activity on social networking sites and nowhere else.

If only they could be convinced to vote.

Voting isn’t the only means of civic participation, of course. But a high and sustained voter turnout rate is the best single measure of whether all the other things we are doing to promote engagement are working—and that’s why we make increased local voter turnout the North Star for our efforts.

But here’s a conundrum: Knight, as a foundation, doesn’t support “get out of the vote” efforts. We don’t support voter registration. We don’t support efforts to overturn voter suppression.

So what’s left that looks promising?

To get the answer, we turned to Portland. Last year, thanks to my friend and colleague Ethan Seltzer, I had the opportunity to interview the founders of modern day Portland. They told me how they reclaimed power from the small group of elected elites who used to wield their influence from the basement of a downtown hotel.

They decided that if they were to engage Portlanders in the civic life of their community, they had to be convinced to “live life in public.” In other words, they had to be lured from the comfort and privacy of their living rooms and backyards and share public life in the company of strangers.

At the time, there were, they told us, a lot of impediments to doing that. There was, for instance, a prohibition against playing music in the park. Sidewalk cafes were illegal.

So they set out to eliminate as many of the things that discouraged public life as they could. And today, you have a wonderfully rich public realm and many signs of robust public life. Like the founders of modern day Portland, we believe that public life—or “living life in public,” as they put it—is critical to civic engagement.

And yet, many of our so-called “engagement processes” that are codified into law are clearly deficient. There is the requisite three-minute public comment period in every public meeting. Architects and planners must have engagement “specialists” on their teams. App developers have had a field day with their attempts to induce civic engagement via smart phones (many of them supported by Knight funding).

But our efforts are failing miserably. Just look at the rate of voting in local elections. Most Millennials don’t see voting in local elections as a way to express their values, nor do they see local government as a way to get things done. And apparently, a lot of other Americans agree.

As long as opportunities for civic engagement are episodic, tucked away, or on a schedule, I’m not sure we will ever have the broad engagement we need to make our communities successful. We don’t need the occasional well-attended community meeting with 100 people in the audience. We need thousands of people engaged every day in the civic life of their city. And we believe that the places we inhabit everyday can be a far more powerful way to stimulate a culture of engagement than any process or any app.

I want to offer up one very humble example of what’s possible. It’s called the Pop-up Pool in Philadelphia’s Francisville neighborhood, between a very poor neighborhood and one that is seeing a lot of new investment. It is the product of Ben Bryant, who submitted his idea to the Knight Cities Challenge.

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Public pools, as you may know, have tortured racial histories; and as private pools have proliferated, support for public pools has waned, leaving a customer base consisting of those with no other options—in Philadelphia, that means usually poor, usually black, and in the case of Philly’s pools, usually under 18.

Ben took a look at Philly’s pools and saw the potential for a much more dynamic neighborhood asset, one that could attract people from the two very different neighborhoods that bordered it.

How to do that? Pretty simple.

  • Add seating where there was none.
  • Add a few palm trees to amp up the emotional resonance of the pool as a stay-cation.
  • Add water Zumba classes that everyone could enjoy while looking slightly dorky doing;
  • Change the rules so moms could enter the pool with street clothes on vs. a bathing suit.
  • Promote it daily on social media in ways the city never would.

It was an immediate hit. The pool suffered no loss of existing patrons, but it gained new popularity with residents who discovered the pool for the first time. People of different economic status, different ages, and groups of singles along with parents and children were happily sharing the pool together.

It took less than a week for the City to announce that it planned to convert all of its pools to the pop-up pool model.

Writing in The New Yorker last month, Adam Gopnik described the mixing we need this way: “Cities…shine by bringing like-minded people in from the hinterland (gays, geeks, Jews, artists, bohemians), but they thrive by asking unlike-minded people to live together in the enveloping metropolis…. While the clumping is fun, the coexistence is the greater social miracle.”

If we can crack that one, we can unlock enormous opportunity for Americans.

The future of a city is not made with a few broad strokes by a few key people. The future is made by thousands of people making small decisions every day about what they believe about the future and their role in it. By building up the civic commons—parks, recreation centers, libraries, cultural centers—to support the active sharing of public spaces and activities by a wide mix of people of different economic statuses, different ages, we can encourage people to make those decisions in a way that builds more informed, engaged communities, and a stronger democracy.

 

The Week Observed: November 27, 2015

What City Observatory did this week

1. Ways forward to more equitable land use law. Following up on last week’s posts about William Fischel’s new book, Zoning Rules!, and its arguments about how America got into its current housing crisis, we look at what Fischel, one of the country’s foremost scholars on land use law, thinks can be done to smooth out some of the current system’s problems. His focus is on ending some of the policies that privilege housing as an investment over other financial vehicles—which is a worth goal. But we’re a little skeptical it’ll have the effect on zoning policy, and ultimately housing affordability, that he imagines.

2. It’s a good time for buyers to beware. Back in 2006, the National Association of Realtors launched an advertising campaign telling Americans: “It’s a great time to buy a home.” Nearly ten years later, most people who believed them has suffered as a result. According to MarketWatch, people who bought their homes between eight and ten years ago have, on average, earned practically zero equity in all that time. And many, as we know, are deep underwater on their mortgage, or fell victim to foreclosure. Given the experience of the last decade, it’s time to ask whether we really want to tell people that such a huge, high-risk investment as a home is their best path to middle class wealth and financial security.

3. Zoning and cities on the national economic stage. Cities are usually not on the radar of national macroeconomists. But last week, the Chairman of the President’s Council of Economic Advisers gave a speech focusing on the barriers to national economic growth and mobility posed by local zoning regulations. It’s extremely encouraging to see attention paid to this at the highest policy levels—but we’re less impressed by the proposed solutions.

4. Happy Thanksgiving! We’re thankful for a lot here at City Observatory, and hope you’re having a lovely holiday.


The week’s must reads

1. At The Century Foundation, Jacob Anbinder takes on the dysfunction of federal transportation policy. The problems are several, including the funding of dubious projects (the well-regarded TIGER grant program gave Rhode Island $9 million for a glorified gas station, in one particularly glaring example)—but the broader issue is that DC pays for capital expenditures, but not service. That means local agencies are building new lines and stocking up on new vehicles, even as the frequency of those lines falls below reasonable levels. Anbinder calculates that an increase of just 6.2 cents per gallon on the gas tax could on its own provide a major boost to local transit agencies.

2. At The Atlantic, Alana Semuels tells the story of Syracuse, New York—which has, according to the magazine, “the worst slum problem in America.” Semuels traces the story of urban renewal, highways that tore apart communities, segregation, and abandonment, especially by whites. It’s a story that’s familiar around the country, but grounding it in one city allows a level of detail and specificity that’s often lacking in conversations about urban poverty.

3. Today! Concerned urban residents around the country are using #blackfridayparking to share photos of underused parking lots—even on the day that should have some of the highest parking demand all year. The point is to demonstrate how parking minimum laws way overestimate the amount of parking people actually use, raising the cost of construction and forcing developers to create more sprawl. Read more at Strong Towns.


New knowledge

1. Music to our ears: Jason Furman, the Chairman of the President’s Council of Economic Advisers, gave a speech explicitly connecting overly restrictive local zoning laws to economic issues of national importance—including inequality, mobility, and productivity. While Furman broke no new research ground in his speech, it represents a major political victory for these issues to be discussed at the highest level of policymakers—and the narrative he lays out is a clear, concise, and compelling argument on its own.

2. How affordable is affordable housing? While HUD-backed rental assistance programs cannot force renters to pay more than 40 percent of their income for housing, the location of subsidized units can have a major impact on transportation costs. Reid Ewing of the University of Utah looks into those costs using estimates from the Center for Neighborhood Technology, and finds that location-based affordability—the total costs of housing and transportation—is highly correlated with location in the metropolitan area. Residents of centrally-located affordable housing pay relatively small amounts for transportation; those in more sprawling areas, or farther out in the suburbs, are much more likely to pay more than they can afford for transportation.

3. “Good drivers living in predominantly African American ZIP codes are charged significantly higher premiums than similar drivers in largely white communities, even after accounting for population density and income levels,” according to anew report on car insurance from the Consumer Federation of America. And the difference is huge: about 60 percent, or more than $600, in the densest neighborhoods, for example. In upper middle income ZIP codes, blacks are charged nearly three times whites’ rates: $2,113 versus $717.


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

Happy Thanksgiving!

Even we at City Observatory believe in taking a break from all things urban on Thanksgiving. But in the spirit of the holidays, we wanted to take just a minute to share some of the things we’re thankful for.

To begin with, we’re thankful for cities themselves: the places we live in and explore, that create the spaces where we try new things, meet new friends, and build communities.

We’re thankful for all the people who join us in the work of making cities even better and spreading their benefits to all—from the planners in City Hall, to the drivers of our buses and trains, to the researchers shining a light on urban problems and their potential solutions, to the community activists rallying our neighborhoods.

We’re thankful for you, our readers, who make all of our work worthwhile.

And finally, we’re thankful for the leadership and support of the Knight Foundation, without whom we would not be able to do this work.

Thanks to everyone! Have a great Thanksgiving.

A Turkey city. Credit: Moyan Brenn, Flickr
A Turkey city. Credit: Moyan Brenn, Flickr

The Week Observed: November 20, 2015

What City Observatory did this week

1. The high price of cheap gas. While many economists emphasize the positive effects of low gas prices—more disposable income in consumers’ pockets, which can act as a stimulus—it’s also important to acknowledge the costs. Reducing the price of driving, shockingly enough, makes people drive more—leading to more traffic congestion, more pollution, and more injuries and deaths as a result of vehicle crashes. But the changes in behavior we see as a result of fluctuating gas prices also serve as a kind of proof of concept that many of these driving-related problems can be mitigated by getting prices right. We don’t have to wait for gas to get more expensive; we can choose to enact congestion charges, dynamic parking fees, and other measures to show drivers the true costs of using their cars.

2. The shopkeeper: A zoning parable. How did American cities get the way they are? What kinds of regulations existed before zoning, and what motivated people to change them? Jumping off of arguments made in a new book by the highly influential academic William Fischel, we tell this story as, well, a story, following a shopkeeper from the early 20th century through the postwar decades as he navigates our changing urban form—and lobbies for laws that allow him to control it.

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3. The origins of the urban housing crisis. We examine Fischel’s arguments about why the 1970s were a pivotal time for American housing policy, and why our current crisis can be traced to changes made in that decade. Before the ’70s, the high-housing-price metro areas were about twice as expensive as the national average; by 2000, that gap was doubled. Fischel blames a newly restrictive crop of zoning laws, driven both by a fear of newly “encroaching” low-income and non-white residents to the suburbs, and the rapid increase in the proportion of homeowners’ wealth accounted for by their homes.

4. The Aspen Institute named “The high price of cheap gas” one of its “Five Best Ideas of the Day.” Not to brag or anything, but we were actually number one.


The week’s must reads

1. The Obama Administration’s Rental Assistance Demonstration program, or RAD, has the potential to transform American public housing more deeply than any reform since HOPE VI in the 1990s sought to replace midcentury towers with lowrise mixed-income developments. In the latest issue of Planning (warning: paywall), Jake Blumgart takes a closer look at RAD and another Obama program, Choice Neighborhoods, which grew out of HOPE VI. RAD responds to rapidly declining funding for public housing by allowing local housing authorities to transfer public housing units to project-based Section 8 units, which have a better shot at government funding and can leverage private investment. While the program requires one-for-one replacement and a right of return for tenants displaced by RAD-related rehabilitation of older units, Blumgart talks to some people who are concerned that current public housing residents will be made more vulnerable.

2. Are we in the midst of another housing bubble? The Federal Reserve of San Francisco suggests that the answer might be no. In contrast to the housing boom of the 2000s, which featured an extremely rapid rise in the ratio of housing prices to rents and household mortgage debt, the real estate cycle that began in 2011 has had a slower rise in prices and has actually seen a decline in the ratio of mortgage debt to personal income.

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3. When we talk about “density,” we’re usually referring to a place’s residential population—but Simon Vallée at Urban Kchoze points out that the density of commercial establishments is also an important part of a complete urban neighborhood. He argues that “urbanizing” suburbs won’t work until the problem of dense commercial corridors has been solved, since they serve as major destination centers—and as we’ve written about at City Observatory, the density of destination centers is one of the most important factors in allowing public transit and other non-automobile-based transportations to be efficient ways of getting around town. “Currently,” Vallée writes, “commercial centers [in suburban areas] tend to be both extremely low-density and far from residential areas. Both of these need to be reversed.”

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New knowledge

1. An economic impact analysis conducted for WMATA in the Washington, DC area finds that the growth in office rents has been much stronger close to 15 new Metro stations built since 1999 than in non-transit-served locations. While we often talk about demand for transit-served locations in terms of housing, this is additional evidence that the trend applies to office and employment centers as well.Increasing office rents are a sign of the growing value that employers place on being in the transit-served locations that appeal to workers who want to live in and near cities. Employers want access to workers; workers want travel choices and convenience.

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2. A team of Columbia University researchers has provided even more evidence for the “great inversion” of demand towards city centers, rather than suburban peripheries. They find that while in 1980, housing got more expensive as you traveled further from American downtowns, by 2010, that pattern had reversed. They propose that a large part of this trend is that high-skill, high-earning workers have a lower tolerance for longer commutes than previously, leading them to seek housing closer to their jobs. At the same time, this trend is self-reinforcing, as more high-skill jobs are moving to city centers to take advantage of the growing talent pool there.

3. At the Urban Edge blog at Rice University’s Kinder Institute for Urban Research, Andrew Keatts investigates some of the research about why liberals tend to favor denser, more urban neighborhoods than conservatives. As he points out, there isn’t necessarily any obvious reason why that should be so—but Arizona State University professor Paul Lewis has some ideas. His research suggests that there may not be any conscious ideological chain from political beliefs to urban planning preferences, but that both sets of ideas come from certain emotional intuitions: whether people feel a lot of in-group loyalty, for example.


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

The shopkeeper: A zoning parable

This year, William Fischel, a professor at Dartmouth and one of the country’s leading scholars of land use policy, published a new opus on zoning: Zoning Rules! There’s far too much in the book to do a comprehensive review, but we’re going to pick out some of the most interesting and important arguments for posts over the next week or so.

The chapter with perhaps the broadest interest answers a basic question: How did we get here? While many people who follow urban issues, especially housing, are familiar with some of the basic arguments about how zoning acts as an exclusionary policy that keeps home prices higher than they ought to be, few are familiar with where these issues came from, and why they have become so much more prominent in recent years.

Fischel describes the evolution of land use law from a series of somewhat ad hoc regulations imposed by people with mixed interests in neighborhood development, to the creation of zoning and all-residential suburban neighborhoods protecting themselves against residential “overdevelopment” and industry in the 1920s and 30s, and finally the land use revolution of the 1970s, in which the growing financial importance of homeownership and new powers to stymie developments changed “exclusionary zoning” from something that happened on the level of the municipality to something that happened on the level of the metropolitan area—with wealthy coastal regions beginning to pull away from the rest of the country in their cost of living.

Instead of simply summarizing Fischel’s narrative, we’ve turned it into a “zoning parable,” following one (long-lived) shopkeeper as he experiences (and takes advantage of) the twists and turns of local land use controls. This parable is meant only to reflect Fischel’s arguments—we’ll comment on and critique them in a follow-up post.


You’re a 20-year-old shopkeeper. It’s 1900. You live close to the middle of a large American city, in an apartment above your shop. The city is growing rapidly, and new apartments are going up all around your neighborhood, replacing smaller two-flats and single family homes. It’s a lot of change, and you remember when you were a child and the neighborhood was quieter, when there were more yards—but you also can’t help but notice that every time a new development is completed, the stream of customers to your shop gets a little bit bigger, and your cash register gets a little fuller. So you don’t complain.

A brand-new subdivision of apartment buildings, 1911. Credit: Chuckman Collection
A brand-new subdivision of apartment buildings, 1911. Credit: Chuckman Collection

 

A few years later, you move out to one of the new bungalow subdivisions in a newly-incorporated suburb just outside of town. You take a streetcar to work, so you can separate your life between the quiet of your residential neighborhood and the busy, densely-packed district that keeps business steady at your shop. But you notice almost immediately that they’re starting to build city-like apartments near the streetcar stops; within a year or two, a stretch of blocks that were all single-story single family homes, or even empty fields, are converted into a newer version of the neighborhood you left.

As the community grows, your tiny municipality’s ability to provide basic services is strained. It seems like the best solution is to accept annexation into the center city—just like your old city neighborhood had once been a suburb, and was swallowed up by the metropolis as it developed.

Several years later, your business is doing so well that you can afford to buy one of those newfangled cars. With the car, you move out beyond the city limits again—but this time, you don’t move next to a streetcar line. You know that that’s where developers build apartments. You move a mile or so away, to another new subdivision, from which you can drive to work. When the streetcar company requests permission to build a new line near your house, you and your neighbors organize to stop it, and keep away the apartments and density you know would come along with it.

You, driving past the streetcar you used to take to work. Credit: Wikimedia
You, driving past the streetcar you used to take to work. Credit: Wikimedia

 

But overnight, it seems, trucks begin appearing on the streets around your neighborhood. Businesses, freed from the need to locate along rail lines, have been building small factories and plants all over the suburban periphery. You’re not just worried about the noise and pollution—you’ve invested quite a bit of your savings into your new house, and you’re concerned that new businesses might affect your property value. Plus, you don’t live anywhere near your shop now, and you’ve got nothing to gain from new development that might bring more people to the area.

Fortunately, there’s a new legal mechanism your neighbors and city leaders are talking about: zoning. With zoning, you can make it illegal to build industry anywhere near your residential neighborhood. You can also make sure that no one builds apartments on your block of bungalows, which you worry might cast some shadows, add too much traffic, and reduce the value of your home.

Since growth in your community is now capped, when representatives from the big city come along asking about annexation, you’ve got no good reason to say yes. You don’t need their help with services, and you’d like to maintain control over the zoning process locally. Your community will stay a suburb.

Pro-zoning cartoon. Credit: weinlandpark.wordpress.com
Pro-zoning cartoon. Credit: weinlandpark.wordpress.com

 

This state of affairs works for a while. Jobs stay in the central city, and your suburban neighborhood remains mostly single-family residential, although it allows pockets of industry and apartments within certain districts. Some suburbs are even more restrictive, protecting their large homes on large lots; others are more open to development, according to their political balance and neighbor preferences.

But in the years after World War Two, things begin to shift. They start building highways from the suburbs to the city, which brings much more pressure for development. It seems way more people have cars now—including people who never would have been able to afford them before, people you might have wanted to stay in the city—and they start looking for housing outside in the suburbs. Traffic gets worse.

Over the coming decades, there are other issues, too. Civil rights organizations involved in the “open housing” movement begin talking about taking on suburban “exclusionary zoning”—places that use zoning in a discriminatory way to allow only high-end residential development, out of financial reach for most black households. It looks like only allowing high-end development might get you in trouble with the courts; some towns decide that not allowing any development is a safer course.

Credit: Mondale Law Library
Credit: Mondale Law Library

 

Moreover, over the course of your retirement, your home has made up a bigger and bigger part of your wealth—and the same is true of your neighbors. Although you don’t know it, this is a nationwide phenomenon: the proportion of household wealth owed to homeownership will increase by almost 50 percent from the 1960s to the end of the 1970s. That makes homeowners like you even more sensitive to any changes in the neighborhood that might affect the value of your largest investment.

At the same time as you and your neighbors have more reason than ever to be wary of neighborhood changes, there are new tools to help you exert control over those changes. You’ve heard of nearby towns using the National Environmental Policy Act, passed in 1970, to sue to stop development on environmental and conservation grounds. And the creation of a new regional planning body means that there are now at least two levels of government you can appeal to with the authority to stop development—and you just need one of them to agree with you to win.

This revolution in land use planning in the 1970s means that your metropolitan area no longer has a mix of pro- and anti-growth towns. Almost anywhere homeowners live, they’re demanding a stop to almost all development, worried about their massive investments in their homes—and most of the time, they have the ability to win.

But you’re not too worried about that. Sure, individual towns have been able to use zoning to keep their home prices high—that’s the whole point, right?—but there’s no way that could happen to an entire region. You can’t imagine a whole metropolitan area becoming so expensive that it forces people to move not just to a cheaper suburb, but a cheaper part of the country.

That probably won’t happen.

Credit: David Yu, Flickr
Credit: David Yu, Flickr

Ways forward to more equitable land use law

Last week, going off a recent book by William Fischel, we published a parable that explained the evolution of American zoning over the 20th century, from non-zoning land use in the early years to the introduction of true zoning in the 1910s and 20s, and the “land use revolution” of the 1970s that helped create the current crisis of high housing prices. Then we dove in more detail in Fischel’s theories about why that land use revolution happened in the 1970s—and what its impacts were on the country.

Today, we’ll look at his proposed solutions to what he sees as the problems created by zoning: the exclusion of residents based on class and race, both at the level of the neighborhood or suburb and, increasingly, at the level of the metropolitan area; and excessively low-density development that encourages environmentally and economically costly sprawl.

For Fischel, “the key to reform is understanding that zoning is not the product of top-down policies.” Rather, he sees it as a bottom-up demand from homeowners to protect the value of their property, which is usually the single largest asset they have—and which stands to cause them serious financial hardship if its value declines. In his view, any reform that doesn’t address this fundamental concern is bound to fail in a political system where homeowners wield large amounts of power, particularly at the local level. (He details a series of such losses: from professional planners’ attempts to demolish “nonconforming” buildings in the early years of zoning regulations, to court-led efforts to rein in exclusionary zoning during the “open housing” era of the Civil Rights Movement.)

One of the things that makes housing a more attractive investment than, say, stocks, is that the federal government subsidizes the purchase of housing through policies like the mortgage interest tax deduction. In fact, this is a key part of Fischel’s argument about why zoning became more severely restrictive in the 1970s: in an era of relatively high inflation, tax exemption becomes even more attractive because the nominal gains from any given investment are larger.

So a central part of Fischel’s proposal is to curtail the mortgage interest tax deduction. Ending a subsidy to large numbers of relatively influential voters, of course, is unlikely to get far in a democratic political process, so his reforms are somewhat more targeted:

  • First, allow the deduction only for one principal residence. After all, if the reason for subsidizing homeownership is that we believe owning a home makes people and society better off, then subsidizing second and third homes doesn’t really make sense to begin with.
  • Second, cap the amount of subsidy per household. At the moment, the mortgage interest tax deduction pays the vast majority of its subsidies to high-income owners of extremely expensive homes. Again, if the goal is simply to promote homeownership, it seems unnecessary to give very large subsidies to already high-income households.

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In addition to reforming the mortgage interest tax deduction, Fischel proposes restoring the capital gains tax for housing. This would also make housing a much less attractive investment, and reduce the incentive for homeowners to lobby for regulations that increased their home’s value, since they would now have to pay a tax on any increase in that value.

How promising are these reforms? It’s not totally clear. The two changes to the mortgage interest tax deduction seem underwhelming. After all, according to Fischel, what’s important about the mortgage interest tax deduction is not the total amount of money spent by the government on subsidies; it’s that it distributes enough subsidy to enough homeowners to create a broad political coalition with a strong incentive to push for zoning regulations that increase home values. Ending the subsidies to very high-income homeowners, even if it reduces the size of the program significantly, is unlikely to affect the majority of people in this coalition. (Of course, freeing up all that money for more deserving programs is a benefit on its own.)

Moreover, it seems unlikely that even existing homeowners affected by these changes would be more amenable to threats to their property value. The heart of the problem is that housing is an undiversified, unhedged investment—homeowners have put all their eggs in one basket, so to speak, and so are reasonably very, very cautious about anything that might affect its value. The real lever here, to the extent there is one, might be that prospective homebuyers would stay in the rental sector longer, reducing the size of the “homevoter” coalition.

By contrast, ending the exemption for housing in capital gains taxes would affect the entire coalition, dampening the demand for housing, and interest in it as a financial investment, across the board. That seems much more promising.

But there are still big problems. First is an issue that Fischel himself identifies: increasing zoning regulations seem to work as a one-way ratchet. In fact, that’s part of the point: if the goal is to give homeowners assurance that their property values will be protected, then the laws that do the protecting need to be hard to undo. But it’s also an empirical observation: the end of high inflation after the 1970s does not seem to have undone the more extreme zoning restrictions created in that period. In the same way, Fischel notes that during the housing bubble of the mid-2000s, there was a sudden rise in “neighborhood conservation districts,” which imposed even more development restrictions on the communities where they were adopted. After the housing crash, the number of new conservation districts plummeted—but there was very little evidence that those that had already been established were discontinued.

So even if these measures are successful in ending the demand for increasingly strict zoning laws, it seems far from obvious that they would clear the way for reducing the stringency of existing laws—which, as we’ve established, are already strong enough to have serious effects in raising housing prices and promoting segregation and sprawl.

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Moreover, as we alluded to before, the idea that people demand strict zoning primarily for financial reasons is not undisputed. As Sonia Hirt argues in Zoned in the USA, it may be that Americans are culturally invested in the ideal of low-rise, single-family housing. And it does seem to be true that many people who oppose higher-density homes argue based on cultural values—even if the stories they tell about the virtues of single family homes are demonstrably untrue. Moreover, maintaining “community character” clearly often has a social status element that racial and economic diversity directly attacks. That issue would be left untouched by Fischel’s recommendations.

Fischel also has some institutional changes that are less about changing political incentives than limiting their power—for example, removing the double-veto system in which both local and regional government bodies have the ability to block development independently. But in many cases, single veto points at the local level seem more than sufficient to create problematic growth controls.

Zoning Rules! is not only one of the most comprehensive explanations of how zoning works in American cities today, but also of why it is so widespread in its modern form. But partly because it is so convincing in its description of the political justifications for zoning, it makes the task of designing realistic but meaningful reforms daunting. We may still be waiting for the book that offers them.

The origins of the housing crisis

Yesterday, we published a “zoning parable,” based on William Fischel’s arguments for why and how zoning regulations developed in American cities over the 20th century. Today, we’ll expand a bit on one of the book’s major arguments in non-parable form.

The 70s: What happened?

For people who care a lot about housing but aren’t ready to read 430 pages about zoning, perhaps one of the most interesting and important arguments in the book is that our current crisis of high housing prices has its roots in the land use revolution of the 1970s.

Prior to that decade, Fischel writes, zoning had certainly been effective in creating exclusionary communities—since the 1920s, many critics (and some proponents) had argued that that was the whole point. It did so by creating legal districts where only high-cost housing could be built. But these exclusionary communities existed at the scale of the neighborhood or the suburb: other municipalities in the same metropolitan area acted as a kind of housing development safety valve, accepting higher-density development and keeping the regional housing market more or less in balance.

But in the decades after World War Two, something changed. Suburbs that had been pro-growth amended their zoning laws to shut the door on higher-density housing—and sometimes any housing at all. As a result, exclusionary zoning was transformed from something that constrained development in individual communities to something that could operate on the level of an entire metropolitan area.

The results have completely changed the economic geography of American cities. Before the zoning revolution of the 70s, the highest-cost metropolitan areas had home prices that were about twice the national average; by 2000, that gap had doubled to four times greater than the national average. The chart below shows this dramatic change in another way. It compares the number of metropolitan areas (along the y axis) by their median home price (along the x axis). In 1950, there wasn’t a ton of variation: some places were more expensive than others, but the gaps were relatively small. By 2000, there were many fewer “normal” metro areas around the peak, and a very long tail, representing the extremely high housing prices in elite regions.

Credit: Gyourko, Mayer, Sinai, "Superstar Cities"
Credit: Gyourko, Mayer, Sinai, “Superstar Cities”

 

As a result, migration to these high-cost, high-productivity regions has slowed significantly. All of a sudden, one of the major ways that low-income people had improved their economic status—moving to a place with more and better-paying jobs—became impractical in the face of steeply rising home prices. For many years, high-income states had seen the country’s highest levels of in-migration; but in this period, that pattern came to an end, as the high cost of living more than offset higher incomes for many people.

As these high-cost metro areas became more and more exclusionary, the gaps in average income between regions, which had been declining for a century, suddenly reversed course. In 1940, median income in Connecticut had been 4.37 times greater than that of Mississippi; by 1980, that figure had declined to 1.76. But in the next thirty years, it ticked back up to 1.77. The end of regional income convergence appears to have played a significant role in rising levels of national income inequality, which began to increase at around the same time.

Zoning Rules! is not the first or only place this story has been told. Fischel’s novel contribution is in trying to explain why this change took place. He identifies several major factors, including:

  1. The construction of the interstate highway system allowed industrial and commercial development to move into the suburbs. In addition to threatening the residential character of the suburbs, this development meant that lower-income people, who may previously have wanted to stay close to central cities for better access to jobs, had reason to move out to suburbs in pursuit of decentralized employment centers. Many suburbs reacted by increasing restrictions on new housing.
  2. The challenge to “exclusionary zoning” as part of the Civil Rights Movement. In the 1970s, a series of lawsuits challenged suburban zoning that favored single-family home districts on grounds of discrimination, and some of them, including the Mt. Laurel case, appeared to have a credible chance of overturning existing regulations. In response, Fischel argues, many suburbs adopted the “seemingly neutral policy of restricting all development, not just that for low-income people.
  3. The granting of legal standing to opponents of development. Laws like the National Environmental Policy Act gave neighbors the ability to sue to stop developments on environmental grounds, which were more sympathetic than previous arguments based on property values or “community character.” (More sympathetic and also, Fischel admits, sometimes actually legitimate.) Previously, “neighbor suits” against development had generally failed; they became much more successful starting in the 1970s.
  4. The creation of multiple veto points. In the 1970s, metropolitan areas began to create regional governments with some planning power. But rather than giving them the ability to overrule local regulation, the new bodies created a “double veto” system in which an objection at the local or regional level could derail a development project.
  5. The rapid growth of home values as a part of homeowner wealth. Between the 1960s and 1979, housing increased from 21 percent of net household wealth to 30 percent. Rising inflation and the mortgage interest tax deduction combined to make housing a much more attractive investment than more heavily taxed capital gains, like stocks. This made homeowners much more sensitive to development that might affect their property values.
Credit: Fischel, "Zoning Rules!"
Credit: Fischel, “Zoning Rules!”

 

Of these, Fischel puts by far the most weight on the last. One of the major themes of the book is that zoning, which is often portrayed as a technocratic, top-down set of regulations spearheaded by professional planners, is actually driven by grassroots—more specifically, homeowners’—demands to protect their home values. (Though that explanation isn’t uncontested—scholars like Sonia Hirt, for example, privilege arguments about the cultural appeal of single family homes in America.) Over and over, “elite” efforts to enact zoning changes against the wishes of these voters have been defeated. Notably, this is true both for efforts to make zoning more severe, as in the campaign to demolish “nonconforming” homes; and to loosen it, as in the case of court-driven attempts to break exclusionary zoning.

So increasing the incentives for these “homevoters” (to use Fischel’s term) to clamp down on new construction is hugely important—and, crucially, self-reinforcing, as successfully protecting property values makes homes an even larger part of homeowners’ financial portfolios, so people are even more sensitive to their price fluctuations, and so on. It also means that efforts to reform zoning laws to reduce their exclusionary effects (and their role in promoting sprawl by limiting density) need to address this demand for zoning.

Monday, in our last post on Zoning Rules!, we’ll talk about what Fischel proposes to do about that.

The Week Observed: November 13, 2015

What City Observatory did this week

1. What filtering can and can’t do. In most cities, the majority of homes that are affordable to people of modest or low incomes don’t receive special affordability subsidies—they’re just cheap market-rate housing. But since very little housing is built for people of below-average income, how does it get that way? The answer is “filtering”: the process of housing becoming cheaper, and occupied by lower-income people, as it ages. We look at a groundbreaking study on exactly how filtering happens to shed more light on the issue. Rental housing filters much more quickly than owner-occupied, and both only “filter down” (become cheaper) for the first half century or so of their existence. Most importantly, in regions where housing prices are rapidly rising—including much of the East and West Coasts—the filtering process is held back, eliminating a major source of “naturally occurring” affordable housing.

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2. A helicopter drop for the asphalt socialists. A popular idea to stimulate the economy among macro economists is a “helicopter drop”: simply crediting every American with a certain amount of extra money in their bank account. Not surprisingly, this has not caught on with politicians—especially the advocates of free markets and personal responsibility in Congress. But now, those same legislators have passed just such a helicopter drop for drivers, bailing out the Highway Trust Fund with money from the Federal Reserve to avoid raising gas taxes, or any other funds that would cause drivers to pay something closer to the actual cost of using public roads. It’s long past time to drop the charade that our transportation system is anything like a free marketplace, and recognize that when it comes to driving, we’re governed by asphalt socialists.

3. Journalists should be wary of “median rent” reports. Some real estate outlets have received media coverage recently for reporting median rents in cities across the country based on their listings. But these reports are often extremely unreliable. We look at one of the more prominent outlets, Zumper, and its “National Rent Reports” to see if the numbers hold up—and they don’t. Instead, because Zumper’s listings are heavily concentrated in high-end neighborhoods, its reports likely significantly overestimate true median rents. Rising housing costs are an important story, and should be covered—but they’re also worth getting right.

4. The Atlantic published another City Observatory piece this week. Under the headline “Are Food Deserts to Blame for America’s Poor Eating Habits?”, Joe Cortright explores recent research about to what extent breaking up “food deserts”—pockets of urban neighborhoods without full-service grocery stores—leads to healthier food consumption in those neighborhoods. The evidence suggests that low incomes are a much bigger impediment than “food deserts,” perhaps because neighborhoods can be considered “deserts” if there are no grocery stores within as little as a mile or half-mile radius.


The week’s must reads

1. In tony Park Slope, Brooklyn, eight cyclists were cited between 2008 and 2011 for riding on the sidewalk. In Bedford-Stuyvesant, a poorer, blacker neighborhood nearby, that figure was over 2,000. The New Yorker explores the extremely uneven application of “quality-of-life” policing more than three decades after the introduction of the extremely influential “broken windows” theory of crime, which suggested that tolerance for low-level infractions emboldened criminals to commit more serious, and violent, offenses. Despite the fact that some of the country’s most respected researchers have failed to find any evidence that this theory is true, it remains conventional wisdom in many police departments.

2. While we criticized Congress this week for continuing to shield drivers from the true price of using the road, Washington, DC, is making progress on that front.Greater Greater Washington reports on a new initiative there to change parking prices by location and time—raising them in places where parking is in high demand, and lowering them where it’s not. The idea is that by allowing parking prices to respond to demand, higher prices will keep people from occupying spaces on very busy streets for too long, making sure that newcomers have somewhere to park. On the flip side, reducing prices will encourage people to go where there are many open spaces.

3. A reminder that making progress on integration and affordable housing goes beyond passing laws: Chicago’s WBEZ investigates the Housing Appeals Boardcreated by Illinois’ Housing Planning and Appeal Act of 2003, and finds that it has yet to hear a single case. The state law was meant to be a potential override to exclusionary local zoning laws, allowing the state to override municipalities that rejected affordable housing developments. But although many municipalities remain below the 10 percent affordability threshold established by the state, home rule exceptions, and a general lack of faith in the board’s ability to enforce its decisions, have rendered it essentially defunct before it could even begin.


New knowledge

1. Via CityLab, the California Department of Transportation officially cited a UC-Davis policy brief concluding that “induced demand” is real: that is, building more highways and roads causes more people to drive. According to the brief, “a capacity expansion of 10 percent is likely to increase [vehicle miles traveled] by 3 to 6 percent in the short run and 6 to 10 percent in the long run.” Importantly, this doesn’t just mean that the expanded roads see more driving because people shift there from other routes: the total amount of driving in the whole system increases.

2. At Planetizen, Jennifer Evans-Cowley writes about research on the use of helmets by bike share cyclists. In general, bike share cyclists use helmets less often than other cyclists, though there’s lots of variation by place and demographics. And while the proportion of bicyclist injuries that are head injuries increased in five cities that introduced bike share systems, the total number of head injuries (and total injuries) decreased, probably because of some combination of the “safety in numbers” effect and improved bicycling infrastructure.

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3. Nick Revington of the University of Waterloo writes about the “youthification” of North American urban centers, showing how people between the ages of 25 and 34 are increasingly likely to live in relatively high-density urban neighborhoods, even as the home locations of older cohorts become increasingly correlated with lower density. This sort of “age segregation” is becoming more pronounced in many metropolitan areas, with potentially important implications for planning—both in how to accommodate young people in city centers, as well as how to accommodate older people in currently low-density, auto-oriented communities. (You may also be interested in reading a City Observatory take on this phenomenon, “Young and Restless.”) Below: maps showing the concentration of young people in Seattle, and the relative lack of young people in central Detroit, one of the few cities to buck the trend (as of 2010).

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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

Journalists should be wary of “median rent” reports

Trying to measure average housing costs for neighborhoods across an entire city—let alone the whole country—is an incredibly ambitious task. Not only does it require a massive database of real estate listings, it requires making those listings somehow representative at the level of each neighborhood and city.

For a number of reasons, just taking the average of all the listings you can find is likely to produce extremely skewed results, with numbers much higher than true average home prices. For one, many apartments, especially on the lower end of the market, aren’t necessarily listed in places that are easy to find—or at all. Instead, landlords find tenants with a sign on a fence or streetlight pole, local (and not necessarily English-language) newspapers, or just word of mouth. On top of that, if you have two homes of similar quality but even slightly different prices, you would expect the cheaper one to rent or sell more quickly. As a result, it would spend less time listed than the more expensive home; any given sample of listings, then, would tend to over-represent those more expensive, harder-to-rent homes. (If this doesn’t make sense, read the “visitors to the mall” example here, explaining a similar statistical problem with attempts to measure prison recidivism.)

So we’re sympathetic to anyone taking on this challenge. But that doesn’t mean that organizations who take it on but fall short should be given a pass.

Take, for example, Zumper. Zumper is a relatively new website that features rental listings in cities around the country. So far, so good. Zumper has also made a name for itself through its “National Rent Reports”—more or less monthly press releases that claim to track median rental prices around the country. These reports have received copious media coverage, from the Bay Area to Seattle to Nashville to Chicago to Boston to LA to Miami to Denver, and so on.

Unfortunately, Zumper’s reports also appear to be severely affected by the problems we listed above, and possibly others. I first noticed this in its report for my hometown, Chicago. Back in August, Zumper’s National Rent Report declared that the median one-bedroom apartment in Chicago cost $1,920—a number that would raise eyebrows among anyone who has actually looked for one-bedroom apartments in that city. A cursory glance at Zumper’s neighborhood-level data reveals issues that should call the entire report into question. 

From Zumper's website.
From Zumper’s website.

 

“Median,” of course, means that half of Chicago’s one-bedroom apartments ought to cost more than $1,920, and half ought to cost less. But according to Zumper’s own data, just three of the city’s 77 neighborhoods had median one-bedroom rents of over $1,920. While apartments are definitely not distributed evenly over the city, so you wouldn’t necessarily expect an even split in terms of neighborhoods, it’s simply not plausible (or supported by, say, the Census) that half of the city’s apartments are in just three of its neighborhoods.

It seems more likely that half of Zumper’s listings are in just three of the city’s (wealthiest) neighborhoods. As of the writing of this article, Zumper claims to have over 4,000 apartments listed in the Near North Side—the most expensive part of the city—and just 11 in Jefferson Park, five in West Garfield Park, and zero in South Lawndale, three of the cheaper neighborhoods.

Nor does it appear that Chicago is the only city with this problem. In Los Angeles, it appears that about 25 neighborhoods have median rents above the supposed citywide median—and about 70 have ones below. In Philadelphia, Zumper’s map shows just 11 neighborhoods with median rental costs at or above the supposed citywide median, and over 40 below; the proportion is similar in San Diego. The skewed distribution of Zumper’s listings is also apparent in these cities: the relatively more expensive Philadelphia neighborhoods of Rittenhouse Square, Center City East, and University City have 99, 219, and 94 apartments listed, respectively, while the less-expensive communities of Elmwood, Kingsessing, and Mill Creek have 19, 25, and 8.

These comparisons likely understate how inaccurate Zumper’s numbers are. After all, if its listings skew towards the higher end of the market, they likely not only oversample wealthier neighborhoods, but also more expensive properties in those neighborhoods, meaning that the true median rent in each neighborhood, not just the city as a whole, is below what Zumper reports.

Comparing Zumper’s citywide medians to estimates from Zillow, which is generally regarded as one of the more accurate estimators of real estate prices, reveals a mixed bag. (We looked at numbers for September, the latest month Zillow has reported listed prices.) In some cities, the two sources give roughly similar numbers: Zumper estimates the median listed one-bedroom apartment cost $2,110 in Washington, DC, versus Zillow’s estimate of $2,149; the estimates for Los Angeles are $1,830 and $1,850, respectively. But in many places, they’re quite different. In New York, it’s $3,160 versus $2,300; in Chicago, $1,920 and $1,550.

Zumper responded to our inquiries over Twitter and email. A spokesperson said that Zumper “stands firmly behind [its] rental data.” He added: “We have some of the strongest inventory from which to analyze…. We are reporting on true, asking rents seen in the market, and do not create an algorithm to estimate value.”

Of course, put another way, this is largely our point: Zumper takes the median from its listings, without compensating at all for the fact that its listings are disproportionately concentrated in higher-end neighborhoods. While it may be true that Zumper has a relatively large inventory of rental homes in its database, that’s akin to an online pollster saying that their polls must be accurate because they got so many votes. While quantity matters, at a certain point, quality—representativeness—matters much more.

On Twitter, Zumper’s CEO also told us that the National Rent Report focuses on the median apartment available for rent, and doesn’t claim to take into account apartments that are currently occupied. But as an explanation for Zumper’s concentration of listings in high-end neighborhoods, that doesn’t really pass the smell test: differences in housing turnover between wealthier and less-wealthy communities are several orders of magnitude too small to account for, say, the gap between the number of listings in the Near North Side and Jefferson Park. (Note that the Zillow estimates we described above are also for listed apartments.) Nor are claims that that gap is “in proportion to how many people move” to each of those neighborhoods plausible.

We should note that none of this is really a problem for Zumper’s main business, which is being a database for people looking for a place to rent. But it does mean that they should not be used as a reliable source for rental data, just as journalists shouldn’t report on real estate trends by simply adding up every listing on Craigslist.

Housing affordability issues are real, as we’ve written about here extensively, and the media absolutely should be reporting on home price trends, both locally and nationally. But precisely because these issues are so important, it’s crucial that the data that gets reported is reliable. Until it addresses the problems we’ve brought up here, Zumper’s rent reports are not, and journalists should be aware of that.

Fortunately, there are other organizations doing excellent work on the thorny, difficult task of finding true median housing costs. We’ll talk more about them in the near future.

The Week Observed: November 6, 2015

What City Observatory did this week

1. More doubt cast on food deserts. The concept of a “food desert”—typically low-income urban neighborhoods where a lack of nearby grocery stores leads to poor nutrition—is widely accepted. But a new study adds to the evidence that in most cases, poor nutrition isn’t a result of food deserts; it’s a result of too little income. Part of the issue is that food deserts are often defined in relatively small areas, sometimes as little as a mile or half-mile, so even people who live inside them may not be too far from another neighborhood with a grocery store.

2. City Observatory on the Knight Cities podcast. Our own Joe Cortright sat down with the Knight Foundation’s Carol Coletta to talk about the relationship between neighborhood inequality and national inequality; why we make desirable neighborhood illegal; and what City Observatory is planning for the future. Check it out!

3. Do the rich (neighborhoods) get richer? While conversations about neighborhood change focus on relatively poor communities, it’s not necessarily the case that income growth is concentrated in those neighborhoods: In fact, evidence from studies like “Lost in Place” and research on growing economic segregation suggests that upper-income neighborhoods may be seeing faster income growth. We look at five cities—Chicago, Detroit, Miami, Philadelphia, and Portland—and check out the relationship between neighborhood income growth and how wealthy a neighborhood was to begin with. Only in Miami were poor communities consistently growing faster.

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4. Election results for urbanists. This Tuesday, voters in several parts of the country went to the polls for off-year elections—and many of them voted on referenda or city council races with important implications for sustainable and equitable housing and transportation. In San Francisco, the “Mission moratorium”—which would have placed a hold on all market-rate housing development in the neighborhood—went down to defeat, while a bond issue for affordable housing was passed overwhelmingly. In Seattle, voters approved more funding for transit, and elected pro-housing growth council candidates in most races. And in Boulder, one of the most exclusionary zoning reforms in the country failed.


The week’s must reads

1. The Vision Zero movement has made lowering car speeds in urban areas a part of the urban policy conversation, and for good reason: while a pedestrian hit by a car traveling 20 mph has a 95 percent chance of surviving, those odds decrease to just 15 percent if the car is moving at 40 mph. But getting drivers to operate at safer speeds isn’t just a matter of putting smaller numbers on signs: As Eric Jaffe writes at CityLab, street design, more than anything else, determines how fast people will drive. Narrower lanes, curbside trees, and tighter turns all influence people to slow down—and a 20 mph sign on a wide open street is unlikely to accomplish its goal.

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2. At TechCrunch, Kim-Mai Cutler investigates the people on both sides of the fight over AirBnB rentals in San Francisco. (Proposition F, the proposed regulations, were voted down on Tuesday, hours after this piece came out.) The campaign reveals some of the odd politics of housing in the Bay Area—including the fact that many of the people leading the charge for affordable housing are in fact the benefactors of policies their opponents argue have been inflating home prices in San Francisco for decades. But neither the status quo nor the (failed) reforms of Proposition F come off looking good in Cutler’s piece.

3. In cities as different as Chicago and Houston, Chicago Magazine‘s Whet Moser points out that the numbers just don’t support the stereotype of the urban cyclist as a beareded twentysomething hipster. In fact, while people with upper-middle-class incomes are disproportionately likely to bike, so are people with incomes below $25,000. Research Moser cites from Rice University, as well as his own data, should dispel concerns that efforts to make biking safer on American streets is only about catering to relatively affluent white residents. Biking is a low-cost transportation alternative that’s valuable to all kinds of people. Moser’s table from Chicago is below.

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New knowledge

1. You’ve probably heard about America’s sky-high prison recidivism rate—that more than half of people in state prisons will return to jail within five years of being released. Except it turns out that estimate is wildly inflated because of a statistical mix-up. Researchers at Abt Associates, using a wider data set, discovered that earlier estimates had over-sampled repeat offenders by a substantial margin—and the real recidivism rate is closer to 30 percent, with just 11 percent of offenders returning to prison more than once. While those numbers aren’t exactly great, they’re a far cry from older studies, and suggest that anti-recidivist efforts could be much more targeted than previously thought.

2. In a worthwhile Canadian initiative, that country’s Ecofiscal Commissionreleased a report on the importance of road pricing for reducing congestion. The Commission points out that congestion pricing (charging vehicles more money as roads become busier) can help by getting drivers to internalize the full cost of their choice to drive—including the congestion costs imposed on other drivers. (This is a theme we’ve taken up at some length before.) The study goes on to give examples of successful congestion pricing policies in Stockholm, Minnesota, and elsewhere, and then make recommendations for their implementation in Canadian cities—which could easily be applied to American metropolitan areas.

3. New research serves as a useful reminder that while “physical” aspects of walkability matter—things like frequent intersections and crosswalks, wide sidewalks, and mixed-use neighborhoods—that’s not all it takes to create a community where people actually walk. Hee-Jung Jun of Sungkyunkwan University in Seoul shows that elevated levels of social capital—the kind of community-building social ties that are one of the goals of creating neighborhoods where people can interact outside of their cars—are correlated with “perceived”walkability, but not necessarily “physical” walkability. As Jun writes, “socioeconomic disadvantage is often high in the neighborhoods where physical walkability is high in the US”—that is, central city neighborhoods—and that disadvantage can translate to things like crime that make people warier of walking. Both community development that fights these issues and physical design are crucial parts of building a walking neighborhood.

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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

What filtering can and can’t do

“Affordable housing” can seem like a hopelessly vague term. First of all, affordable to whom? (Follow the link to a description of an “affordable” program targeting people making 40 percent more than the median income in San Francisco.) And even assuming we know who’s paying, what is a reasonable amount for them to pay?

But “affordable housing” also suffers from an ill-defined relationship to the market. Typically, the phrase “affordable housing” means “below market rate,” as in a home that receives some sort of subsidy, private or public, to be cheaper than what the owner could otherwise charge. (Of course, even this distinction—subsidized versus unsubsidized—is problematic, or just plain incorrect, given the massive subsidies to middle- and upper-income homeowners through mechanisms like the mortgage interest tax deduction.) But in most of the country, the vast majority of homes that are actually “affordable” to lower-income people are sold or rented at market rate. They just happen to have some characteristics—size, appearance, or location in a less-desired neighborhood—that make their market prices relatively low.

Homes that receive no special low-income subsidy, but are nevertheless relatively affordable, in Chicago’s Little Village neighborhood.

 

But very little private housing in the United States was originally built for low-income people. Instead, homes built for the middle or even upper classes gradually became cheaper as they aged, as people with high purchasing power moved into trendier, more modern homes in “better” neighborhoods. As higher income households move on, the now somewhat older homes or apartments they formerly occupied are sold or rented to people with more modest incomes.

This process is called “filtering.” While the evidence that filtering is a real phenomenon has been around for a long time—the core of nearly every American city contains neighborhoods with once-luxurious homes now occupied by people of modest incomes—the first study to provide a rigorous measure of how it happens was published only in 2013. In it, Stuart Rosenthal of Syracuse University uses nearly 40 years of data from the American Housing Survey to figure out the average pace of filtering across the country, and what makes housing filter more quickly in some places than others.

Rosenthal uses the AHS to compare the incomes of people living in the same units of housing over time. He estimates that nationwide, housing “filters” by roughly 1.9 percent a year—meaning that a 50-year-old home is typically occupied by someone whose income is about 60 percent lower than that home’s first occupant. (All of these numbers are adjusted for inflation.) You might think of this process as something like “reverse displacement.”

But that average nationwide figure obscures a lot of important variation. For one, owner-occupied homes filter much more slowly: just 0.5 percent per year, compared to as much as 2.5 percent for rentals. (Though homes that begin as owner-occupied are often converted to renter-occupied as they age.) Moreover, filtering doesn’t happen evenly over time: it’s much more dramatic over the first 40 years or so of a home’s life. That means the difference between a house that is brand new and one that’s 20 years old is much bigger than the difference between one that’s 60 years old and one that’s 80 years old. In fact, once a home hits the half-century mark, it’s as likely to “filter up” (become occupied by wealthier people) as filter down.

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From Rosenthal’s study.

 

Perhaps the most important nuance, however, is that strong regional housing price inflation—that is, metropolitan areas where home values grow much more quickly than the cost of other goods—can make filtering happen much more slowly, or not at all. That helps explain why homes in New England and the West Coast filter about 35 percent more slowly than homes in the Midwest or South. In those coastal regions, severe restrictions on new housing construction since the 1970s have created a “shortage of cities,” driving up home prices and preventing the kind of filtering that has historically produced the lion’s share of affordable housing—and which still does in much of the rest of the country.

From Rosenthal's study.
Also from Rosenthal’s study.

 

This makes a lot of intuitive sense: Filtering is driven largely by upper-income people who leave their aging homes for new ones. But if housing construction is restricted, there won’t be “enough” new homes, and some of those upper-income people will have to settle for older ones that might otherwise be occupied by people with less money. This is exactly the process that the apartments we wrote about in Marietta, Georgia went through. In the 1960s they were higher-end housing for middle-class singles and young couples; 50 years later, they were home to the city’s least prosperous citizens.

The lesson, then, is twofold. First, in normally-functioning housing markets, filtering really can produce a large amount of housing that’s affordable to people of modest incomes without special subsidies. One of the most common refrains in the housing affordability debate is that little to none of today’s newly-built housing directly serves low- or moderate-income households. And that’s true—but Rosenthal’s paper shows that that new housing is nevertheless crucial to making room for those households in older homes. While housing assistance is still necessary for people with very low incomes and to promote integration, the scale of the nation’s affordable housing challenge would be much, much greater without filtering.

Which leads to the second lesson. By putting severe limits on new housing, the wealthy metropolitan areas of the East and West Coasts have embarked on a several-decades-long experiment in what happens when housing filters down much more slowly than normal. The result has been a disaster: highly inflated prices for older homes that have left so little room for people of low and modest incomes that they’ve changed national migration patterns. 

As a result, these regions have created a need for much broader and deeper housing subsidies than would be required if they had allowed for normal filtering. (Recall the link at the top of this post to a story about San Francisco giving significant housing assistance to people making over $100,000 a year.) In the short run, Rosenthal argues (and we agree) that his paper helps make the case for a dramatic expansion of housing assistance in these metropolitan areas.

But in the long run, he also shows that places like San Francisco and Boston must re-start the filtering process. Many of these regions, by refusing to make that room, have clearly already reached the point where no realistic amount of low-income subsidies will create a sufficient amount of affordability—and if legal restrictions on new construction continue to exacerbate their housing shortages, that gap will only widen further.

Do the rich (neighborhoods) get richer?

Many studies of gentrification (for example, the Federal Reserve Bank of Philadelphia study we wrote about last week) begin by dividing neighborhoods into one of two categories: gentrifiable and non-gentrifiable. Usually, to qualify as “gentrifiable,” a neighborhood must rank relatively low on the socioeconomic ladder: one standard used by at least a few different reports is having a median household income that’s below average compared to the metropolitan area as a whole.

In the common understanding of gentrification, this isn’t a terribly unreasonable line. But that frame can give us a very distorted vision of neighborhood change and issues related to the shifting geography of economic privilege.

On the one hand, it becomes easy to conflate “below average” with “poor.” Some of the studies using this standard for “gentrifiable” have reported extremely high rates of gentrification in major cities, which might be understood to mean that low-income neighborhoods are rapidly filling up with the relatively well-to-do. But of course a neighborhood at the 49th percentile of median income regionally—or, for that matter, the 40th or even 30th—is probably very, very different than one at the 10th percentile. Studies that focus on truly low-income neighborhoods, including our own “Lost in Place,” have shown that gentrification is generally rare in communities with very high concentrations of poverty. If we’re worried about the plight of especially low-income people and neighborhoods, this is an important nuance.

From the other end, by writing half of all neighborhoods out of the story from the very beginning, these studies may imply that economic change in relatively higher-income communities is either less prevalent, or less important. It’s not clear that either is true—and at the very least, this question deserves to be a part of the conversation.

The Onion is on it.
The Onion is on it.

 

Socioeconomic shifts in neighborhoods whose residents are disproportionately low-income or people of color are particularly notable, because they involve changing some of the most highly visible social boundaries in American life. But that doesn’t mean that other kinds of changes, like a predominantly white, middle-class neighborhood becoming a predominantly white, wealthy neighborhood, don’t also matter. For one, this kind of economic segregation can put housing even further out of reach for working class and low-income households, requiring deeper, less efficient subsidies, or increasing housing prices so much that vouchers won’t cover the cost of rent. Moreover, growing high-income segregation has grave implications for cities, and society, as a whole.

Previous research, in fact, has demonstrated that much of the increase in income segregation over the past few decades has been driven by the “secession of the rich”: the phenomenon of the very wealthy separating themselves from everyone else. Increasing segregation of high-income households can reduce the resources available to support common, community-wide services—a problem that’s particularly bad when these elite neighborhoods happen to be separated from others by municipal or other government bodies, which can collect super-sized tax revenues to provide extremely high-quality “public” services, but only to their rich constituents.

New Trier Township High School in Winnetka, Illinois.

And looking at income growth across the whole distribution of neighborhoods can help tell us about how income segregation is growing—or not. After all, for income segregation to be declining, low-income neighborhoods have to see faster income growth than more affluent ones. If the opposite is happening—or even if gains are equally distributed—then we’re not making progress on income segregation.

So what would a study of neighborhood income change find if it didn’t define some places as “ungentrifiable”? To get some idea, we looked at five metropolitan areas: Chicago, Detroit, Miami, Philadelphia, and Portland, OR. Using 2000 Census data, we divvied up Census tracts (areas roughly the size of a neighborhood) into buckets based on their median incomes in 2000—below $25,000, from $25,000 to $50,000, and so on in increments of $25,000. We then looked at how fast median income grew in each of those buckets between 2000 and 2010.

The results are too complex to be summarized in a phrase—but of the five cities, only Miami appears to show a clear pattern of lower-income neighborhoods seeing faster income growth than middle- or upper-income neighborhoods. In Chicago, very low income neighborhoods—those with median incomes of below $25,000 in 2000—grew very fast, but many of those tracts appear to be in communities where public housing projects were dismantled in the 2000s, removing large numbers of low-income people and, as a result, making the median income higher. Above $25,000, Chicago appears to follow a “rich-get-richer” pattern—at least up to a median income of $125,000.

 

Portland shows the fastest income growth at the extremes of wealthy and poor, though its fast-growing upper-income bucket ($75,000 to $100,000 median income) grew faster, at 26.6 percent, than its lower-income bucket (under $25,000 median income), at 23.8 percent. The middle-income buckets grew more slowly. Even so, Portland’s incomes are notable for being evenly distributed: unlike the other metros in our sample, none of Portland’s neighborhoods had a median income of more than $125,000.

Philadelphia and Detroit both show a fairly clear pattern of “rich-get-richer,” with Detroit’s being particularly stark: The median neighborhood with an income below $50,000 grew not at all or actually became poorer, while those with incomes above $100,000 grew most quickly. In Philadelphia, very poor neighborhoods (those with 2000 incomes under $25,000) grew slowly, at 12.4 percent, while other neighborhoods grew faster: neighborhoods with incomes between $75,000 and $100,000, for example, grew median incomes by 27.1 percent.

So what to take out of all of this? In part, it isn’t surprising: We know that income segregation is growing nationally, and as we said, for that to be true, wealthy neighborhoods have to be growing faster than lower-income neighborhoods on average. As a caveat, by averaging out rates of income growth across many neighborhoods, we’re missing huge amounts of variation. There are some higher-income neighborhoods that are becoming less affluent, and there are some low-income neighborhoods that have seen very rapid income growth.

But looking at income growth across all kinds of communities gives some much-needed context to the conversation about neighborhood change. It’s not that change in low-income neighborhoods is less important: indeed, we ought to be concerned about the welfare of people who are most vulnerable, and what happens in their neighborhoods. But social equity involves the distribution of resources across all neighborhoods, and so it matters if high- and moderate-income communities are becoming even more exclusive.

The numbers we’ve come up with here are far from a full picture, of course—more like a first attempt to explore the question. We’re looking forward to learning more in the future.

The Week Observed: October 30, 2015

What City Observatory did this week

1. Introducing City Observatory policy memos. At City Observatory, one of our goals is to translate the best and latest urban policy research for advocates, organizers, and practitioners so it can inform their work. To better do that, we’re introducing the first of a series of policy memos: short, action-oriented, and highly readable documents meant to summarize the best evidence we have on a particular issue relevant to cities. Our first is on how to promote integration and economic opportunity. You can click here for a formatted PDF that’s easily sharable online or in hard copy.

R1_CO_PolicyMemo_PromoteEquity

2. Higher-inequality neighborhoods reduce inequality. While neighborhoods with close juxtapositions of the rich and poor extremes of our society can be jarring, and pose some special challenges, they’re ultimately a much healthier way to organize our neighborhoods than keeping everyone more “comfortably” separate. Recently, we got another piece of evidence to support this conclusion: New York University’s Furman Center published a report on how rising neighborhood incomes—often associated with gentrification—have affected local residents in public housing. Although there have been problems—including more difficulty finding affordable retail and a sense of belonging—there’s also much encouraging news. The highlights: public housing residents in affluent neighborhoods earn more than $4,000 a year more than those in low-income neighborhoods; suffer from less violent crime; and their children go to higher-performing local public schools, and perform better on tests themselves.

3. What’s really going on in gentrifying neighborhoods? Following up on the Furman Center study, we look at research from the Federal Reserve of Philadelphia that tries to answer the question: What happens to residents in gentrifying neighborhoods who live not in rent-protected public housing, but housing whose prices are set by the market? The results, perhaps surprisingly, are also encouraging: the study’s authors find little evidence of widespread displacement, with residents of gentrifying neighborhoods just 0.4 percentage points more likely to move in a given year, and those in the most rapidly gentrifying communities 3.6 points more likely. Just as important, those who leave are not more likely to go to lower-income communities. Those who stay are also likely to see an improvement in their financial condition, as measured by their credit score. Finally, it’s worth noting what happens to the poor neighborhoods that don’t gentrify. While it’s commonly assumed that they remain stable, this study shows that they actually experience severe decline, with average incomes falling 20 percent, and as a result—ironically—housing cost burdens rising by 10 percentage points.

4. Truthiness in gentrification reporting. In the last two posts, we looked at new evidence, echoing older evidence, that “gentrification”—the process of average neighborhood income and rents rising in otherwise lower-income communities—results in much less displacement of existing residents that commonly believed, and gives those residents, on average, some economic benefits. But despite this well-established and growing body of research, media narratives about gentrification continue to foreground stories of displacement while downplaying or dismissing positive stories. A New York Times piece about public housing residents in Chelsea, for example, spends its opening paragraphs on the challenge of traveling further to find more affordable groceries—and only reveals at the very end of the piece that the same resident considers herself “lucky” to have been in a neighborhood that has gentrified.

5. Knight Cities podcast. City Observatory founder Joe Cortright sat down with Carol Coletta of the Knight Foundation to talk about the latest research on neighborhood change, economic opportunity, housing policy, and more. Have a listen!


The week’s must reads

1. When cities set minimum parking requirements in their zoning codes, those estimates of parking needs are based on rigorous, reasonably accurate studies. Ha ha, just kidding. At the Dallas Morning News, Brandon Formby reports on research by University of Utah professor Reid Ewing, which showed that actual vehicle trip generation at a residential development near a suburban Seattle transit center was just 37 percent of what guidelines developed by the Institute of Transit Engineers predicted. As a result, the 441-space parking lot could have been reduced to 278, representing a huge unnecessary expenditure. Reducing these requirements where appropriate (which seems to be most places) can save money, potentially reduce housing prices, and lead to more efficient development—not to mention drop an unnecessary and costly subsidy to car ownership.

2. At Business Insider, Amir Sufi and Atif Mian explain “why debt fuels bubbles.” In short, price bubbles—in anything from housing to tulips—are driven by “optimists,” who believe that the true market value of a good will continue to rise, or by people who believe there are enough “greater fools” to buy at higher prices, even if the “correct” market price is lower. Easy debt increases the ability of optimists to continue to buy, and to buy at higher prices—which in turn increases other players’ optimism that there will be “greater fools” to buy from them. As the authors put it, “even rational spectators may enter the market if they belive that irrational optimists can still get loans as the bubble expands.”

3. One of the biggest urban transportation reforms to fly under the radar is the reorganization of Houston’s local bus network, masterminded by Portland-based consultant Jarrett Walker. Two months after the debut of the new system—based on maximizing the number of frequent, “show up and go” lines, and encouraging transfers through a grid of routes to enable travel from almost anywhere to anywhere, rather than just downtown—Walker surveys the ridership changes and sees good news. Though weekday rides are down, Walker says that’s to be expected as people adjust to the new routes (and because Houston opened a new light rail service designed to replace some routes at the same time). Most encouragingly, the massive increase in weekend service has already paid off: Sunday ridership is up nearly 20 percent.

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Houston’s frequent bus network before (top) and after (bottom) the reorganization.


New knowledge

1. Though we recently argued that affordable housing policy ought to be more like food stamps (now known by the acronym SNAP), new research from the University of Chicago shows that together, housing vouchers and SNAP are already performing much more poverty-eliminating work than we previously thought. As Vox explains, by using more reliable administrative data (rather than surveys), it turns out that these two programs alone have helped push down poverty rates by almost double previous estimates: from 13.6 percent to 8.3 percent, instead of only 10.8 percent. And this is just the direct effect; as we’ve covered extensively, housing vouchers that allow low-income people to live in mixed-income neighborhoods have massive, and multi-generational, long-term impacts on economic mobility. These programs work—and if we’re looking for effective public investments to reduce poverty, they should feature prominently on our list.

2. JPMorgan Chase digs through their own customers’ (anonymized) credit and debit card data to answer a question of great importance to urbanists, planners, and the broader economy as a whole: When gas prices go down, how do people use the money they save? The answer: they spend about 80 percent of it. Almost a fifth of the not-gas-anymore money went to restaurants. Importantly, the study suggests that Americans spend much more of their gas savings than previously thought—stimulating the economy. The report is also full of interesting tidbits, like the fact that the median American spends $101 a month on gas—but those in the top 20 percent of consumers spend $359 a month.

3. Do “creative class” workers actually use neighborhood diversity as a major factor in deciding where to live, and if so, what kind of diversity? A new paper from researchers at the University of Nebraska at Omaha suggests that this tendency may be overstated. Using data from Chicago, they find the strongest relationship to be diversity in sexual orientation, with the density of gay couples explaining about 6.5 percent of the variation in computer/engineering/science worker locations. Linguistic diversity also helped explain 3.2 percent of the variation in education/library/training workers. Other “fundamentals” seemed to matter much more. Median home value, for example, explained up to 65 percent of the variation in creative class worker density.


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

City Observatory on the Knight Cities podcast

This week, City Observatory’s founder Joe Cortright sat down with the Knight Foundation’s Carol Coletta for the Knight Cities podcast. Their conversation reflected on the work City Observatory has undertaken over the past year, and dug more deeply into some of the topics, like neighborhood change and inequality, that have been a focus of our recent work.

Listen in to find out more about these topics:

  • How higher inequality at the neighborhood level actually is one key to more integrated metropolitan areas.
  • Why public policy has ended up making the most desirable neighborhood types illegal, and what we can do about it.
  • Which indicators city leaders ought to be paying attention to if they want their cities to succeed.

Plus, listen in to hear what’s next for City Observatory.

Check it out!

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Election results for urbanists

On Tuesday, voters in Seattle, San Francisco, Boulder, and elsewhere went to the polls to vote on referenda and other local elections with important consequences for urban planning and policy. Here’s an overview:

Seattle:

There are very good rundowns of the Seattle results from an urban policy perspective at Erica C. Barnett’s blog and The Urbanist blog. The highlights:

1. Voters approved a property tax levy worth $930 million over nine years to support investments in transportation. The campaign, called “Move Seattle,” proposed spending $385 million on road maintenance and street redesign to accommodate 50 miles of bike lanes and safer pedestrian environments, and $166 million on public transit improvements, such as upgrading several bus lines to “RapidRide” service.

2. Three of the most anti-housing growth candidates for the nine-seat City Council lost, two of them by over 50 points. Housing development has become a heated issue in Seattle, as Mayor Ed Murray has proposed some of the boldest housing affordability measures in the country, including significantly expanding the supply of housing and making some tentative reforms to the city’s single-family-only zoning districts. The results of this election suggest that a backlash to this growth agenda is weaker than some may have thought. Voters also re-elected socialist Kshama Sawant, who has advocated for tougher inclusionary zoning requirements, linkage fees on new development, a one-for-one replacement of any affordable housing and a multi-hundred million dollar bond measure to provide housing for the homeless.

Seattle. Credit: tdlucas5000, Flickr
Seattle. Credit: tdlucas5000, Flickr

San Francisco:

1. The “Mission moratorium,” a cause that has received national attention for the better part of a year, finally went to the city’s voters—and failed. The moratorium, which we’ve written about at City Observatory, would have put a temporary hold on all market-rate housing construction in San Francisco’s Mission neighborhood. While advocates said the measure would help stem the tide of gentrification and give stakeholders time to create a comprehensive affordability plan, others—including City Observatory and San Francisco’s own Office of Economic Analysis—argued it would only exacerbate the massive housing shortage behind the Bay Area’s affordability crisis. While the Mission itself approved the measure, only two other neighborhoods in the city gave it a majority.

2. Meanwhile, another referendum that would make a measurable and positive impact on affordable housing passed overwhelmingly. Proposition A, a $310 million bond issue to create or rehabilitate thousands of units of below-market-rate housing, garnered about 75 percent “yes” votes. (It needed two-thirds to pass.) While Proposition A is hardly enough to solve the Bay Area’s housing needs—especially given that much of that figure is made up of “preserving” units that already exist—it’s a small step in the right direction.

3. Proposition F, which would have imposed restrictions on AirBnB and other short-term rentals, failed. As catalogued by TechCrunch’s Kim-Mai Cutler, Proposition F created a bizarre hodgepodge of temporary allies—landlords and renters on one side, progressive firebrands and pro-business politicians on the other—debating whether AirBnB is an important source of income for struggling renters and homeowners, or an end-run around hotel taxes that pushes rents higher by taking one to two thousand units off the regular rental market. We’re sympathetic to Cutler’s position that both the current regulatory framework and Proposition F are deeply flawed, but that referenda (which can effectively only be amended by another popular vote) are a problematic way  to regulate a fast-changing and unpredictable policy issue.

 

Boulder, CO

1. Voters rejected a measure that would have given Boulder, already famously anti-housing, one of the most exclusionary development approval processes in the country. As Kriston Capps explained at CityLab, ballot issue #300 would have divided the city of 100,000 into sixty-six micro-jurisdictions, each of which would then have veto power over any development within its borders—leaving members of the broader community who are impacted by such decisions without any voice in the supposedly democratic process. As we’ve written before, such hyper-local decision-making is usually a recipe for exclusion and competition in which the most disadvantaged lose out.

2. Another anti-housing measure, ballot issue #301, was also defeated. It would have required that development “pay its own way” by making large contributions to support social services and infrastructure demand. The measure would have added massively to the cost of building new housing, making it significantly more difficult to build below-market-rate or moderate-income homes. As the definition of “fiscal zoning”—that is, using zoning regulations to keep out anyone (like the low-income) who need more social services than they can pay for—this was a measure predicated on exclusion.

Boulder, CO. Credit: Chris, Flickr
Boulder, CO. Credit: Chris, Flickr

 

Other elections

For more information on other ballot initiatives—including a terrible highway construction proposal in Texas (which passed) and a slew of road-and-transit funding levies in Utah (which passed in 10 of 17 counties, but not Salt Lake City), check out Angie Schmitt’s analysis at Streetsblog.

What’s really going on in gentrifying neighborhoods?

Yesterday, we wrote about the Chelsea neighborhood in Manhattan, which is in the unique position of being one of the wealthiest urban communities in the nation, and also having almost a third of its housing be public or otherwise subsidized. The question was, what happens to the residents of public housing in a place like Chelsea when it gentrifies?

The answer was mixed, but mostly positive. A study from the well-respected Furman Institute at NYU showed that residents of public housing in wealthy or “increasing income” neighborhoods earned substantially more, on average, than public housing residents in low-income neighborhoods. Moreover, they experienced less violent crime and their children went to better public schools—and, likely as a result, did better in school themselves. While low income residents of gentrifying neighborhoods cited problems finding affordable local retail and a sense of alienation from the businesses and institutions catering to their very different neighbors, on balance, many thought their neighborhoods had changed for the better.

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Credit: Furman Center

 

But New York City is unique in having such huge concentrations of public and subsidized housing in many affluent or “increasing income” neighborhoods. In most places, low-income residents in low-income communities live in market rate housing that’s affordable because there is so little demand for it from middle class and upper-income households. In those cases, you would expect that as demand increases, those residents would be priced out, excluding them from the benefits of an increasingly resource-rich community.

A new study from the Federal Reserve Bank of Philadelphia challenges this narrative. The authors (Lei Ding and Eileen Divringi of the Fed, and Jackelyn Hwang of Princeton, who has written other notable studies on gentrification) tracked movement in and out of urban neighborhoods in Philadelphia from 2002 to 2014, and look at the effect of rising rents and incomes on existing residents. From our perspective, there are three big takeaways.

First, demographic change in gentrifying neighborhoods doesn’t happen the way most people think it does. Ding et al find that in gentrifying neighborhoods, existing residents are just 0.4 percentage points more likely to move out in a given year than they would be in a non-gentrifying neighborhood. (As a baseline, just over 10 percent of all residents moved in a given year.) Even in those neighborhoods with the most rapid increases in rents and income, existing residents are just 3.6 percentage points more likely to move. Moreover, because the authors are interested in involuntary displacement, presumably for economic reasons, they look at whether people who leave gentrifying neighborhoods are more likely to move to poorer communities. In most cases, the answer seems to be no.

Credit: Federal Reserve Bank of Philadelphia
Credit: Federal Reserve Bank of Philadelphia

 

So what explains the changing income and ethnic backgrounds of residents in these communities? In short, it’s not who’s moving out; it’s who’s moving in. People who would have left anyway are replaced by a whiter, more affluent group of people; most neighborhoods have turnover rates high enough that this dynamic alone can change the makeup of a neighborhood’s residents quite quickly. To quote the study: “Overall, the results are more consistent with the notion that changes in the characteristics of inmovers are a more important force in determining the demographic changes in gentrifying neighborhoods.”

Second, the Philadelphia Fed joins the Furman Center in finding that those residents who remain in gentrifying communities see some economic gain. In this case, the authors measure financial health through credit scores. Remaining in a gentrifying neighborhood is worth, on average, a gain of 11 credit score points over three years, compared to a situation in which the resident’s neighborhood did not see rising income and rent levels. It’s not entirely clear why this happens, but rising income (as suggested in the Furman report), or improved access to credit, might be a part of it. Complicating those results, residents with particularly bad credit saw relatively larger increases in their scores, though living in a gentrifying neighborhood was associated with slightly smaller increases than if they had lived in a nongentrifying area.

Finally, while many narratives about gentrification suggest that the choice is between neighborhood change versus stability, that is not what the Fed study depicts. While the average gentrifying neighborhood in Philadelphia saw its median income increase by nearly 42 percent between 2000 and 2013, nongentrifying neighborhoods did not remain the same—their median income fell by almost 20 percent, with an almost five percentage point increase in the poverty rate. Moreover, while gentrifying neighborhoods’ population grew by an average of 2.3 percent, nongentrifying neighborhoods lost nearly two percent of their population, driven not only by an exodus of non-Hispanic whites, but also a decline of almost five percent in the population of non-Hispanic blacks. Perhaps most amazingly, the proportion of residents who were housing-cost-burdened increased by over 10 percentage points in neighborhoods that didn’t gentrify—probably because of falling incomes.

We should pause for a moment to note that while the Philadelphia Fed study is valuable, in part because it uses a more detailed data set, none of its results are really new. As Lei et al acknowledge, studies of gentrifying neighborhoods (most famously Lance Freeman’s) have generally failed to find higher rates of outmoving among existing residents, compared to otherwise similar nongentrifying neighborhoods. The finding that residents who stay in gentrifying neighborhoods see some economic benefits, as we’ve already pointed out, echoes what the Furman Center reported in its study of public housing residents in New York, and a Cleveland Fed study from 2013. And the fact that low-income neighborhoods that don’t gentrify also don’t remain the same—that the alternative to a lack of reinvestment is a persistent pattern of economic and demographic decline—is what we found in our own study, “Lost in Place.”

"Lost in Place" found that neighborhoods that remained poor lost about 40 percent of their population from 1970 to 2010.
“Lost in Place” found that neighborhoods that remained poor lost about 40 percent of their population from 1970 to 2010.

 

The point here is not that everything in gentrifying neighborhoods is peachy. After all, there’s very little displacement of economically vulnerable people in exclusionary high-income neighborhoods, because there are no economically vulnerable people to begin with. But when there are problems, they’re less likely to be existing residents forced out by rising rents, and more likely to be potential residents who are turned away before they even arrive. The challenge, in neighborhoods that are becoming more affluent as well as ones that already are, is to make sure that there is a sufficient stock of affordable housing (both subsidized and “naturally occurring” at market rate) to accommodate people of whatever means who want to move in. The best way to do that remains to make sure there isn’t an overall shortage of housing, and that there’s a variety of housing types, from single family homes to apartments of various sizes; and to remain friendly to developers of subsidized housing and people holding housing vouchers.

But the fact that rigorous studies of neighborhood change consistently produce results that, at least, complicate widely repeated narratives about gentrification ought to give us pause. While there are certainly people who are forced out of their homes by rising rents, it’s curious that the focus on those cases tends to crowd out attention on people who would like to move to a neighborhood but can’t afford it, a situation that appears to be more widespread. Similarly, the implicit assumption of most gentrification coverage—that the absence of gentrification would result in the preservation of the existing neighborhood as is—clearly needs to be reassessed. We’ll write more about this media issue tomorrow.

Introducing City Observatory policy memos

One role we hope to play at City Observatory is translator: taking some of the best, most rigorous research on American cities and urban policy and turning it into smart, sophisticated, and readable pieces that can inform people actually working on the ground, from community organizations to policymakers. So far, we’ve done that with blog-style commentaries and longer, more detailed reports. But to provide an even more practical, directly usable product, we’re introducing policy memos: short, action-oriented pieces focused on a particular public policy lever or goal, and formatted to be easily printed or shared.

Our first memo covers what should be one of the most fundamental aims of urban policy: to create equitable cities where everyone has the ability to reach the economic opportunities they need. We invite you to take a close look at this memo, share it with colleagues, and let us know if you think we’re on target—both with its tone and organization, and in terms of the substantive content. Look for more policy memos in the weeks ahead.

Click here to download a PDF.

R1_CO_PolicyMemo_PromoteEquityR1_CO_PolicyMemo_PromoteEquity

Why creating meaningful transportation change is so hard

At his blog, The Transport Politic, Yonah Freemark pushed back this week on the idea that we’re seeing a revolution in the way people get around cities and suburbs, largely thanks to new transit-and-bike-friendly Millennials.

In fact, he cites one of our posts as an example of a narrative he doesn’t think is quite right: that despite an uptick in driving as a result of dramatically cheaper gas prices, economic and preference-based fundamentals suggest that we are still in the midst of a historic decline in driving after generations of consistently rising car dependence.

Freemark, who also works at Chicago’s Metropolitan Planning Council, is an excellent commentator on transportation and urban development, and we are all very much on the same page in believing in diverse, inclusive cities whose transportation systems contribute to walkable, integrated, sustainable neighborhoods.

Moreover, the central point of his post is not just correct, but hugely important for all transit advocates and urbanists to understand. As we’ve written, changing preferences are not enough to change transportation behavior, because a person’s behavior heavily depends on their options. Those options, in turn, depend on available transit services and land use patterns. If the only available public transit is a very slow bus that comes once every 30 minutes—or the only bike route is along a high-speed stroad without a bike lane—it’s likely that even the most car-hating Millennial will get behind the wheel to get to work. Land use is similarly important: if your job isn’t anywhere near a transit station, it’s extremely unlikely you’ll be able to avoid driving, even if you’d really like to. In effect, land use patterns lock in place the mode choice preferences of previous generations and changes in behavior can happen only slowly. We can’t have a transportation revolution without major improvements to transit services and road design, and major reforms to our land use laws.

It will be very hard to change transportation patterns in communities like this one in Bloomington, IL. Credit: Tim, Flickr
It will be very hard to change transportation patterns in communities like this one in Bloomington, IL. Credit: Tim, Flickr

 

(Another big part of transportation equation is transportation prices—which include gas prices, but also policy-driven pricing of scarce road space, parking, and insurance. In many cases, pricing may be one of the best and easiest ways to remove some of the subsidies we’ve given to private vehicle travel.)

But despite all that, there is more progress than Freemark allows. He shows, accurately enough, that total vehicle miles have hit a new record after a dip during the Great Recession. But population growth is doing most of the work there: per capita vehicle miles are still far below their 2005 peak, and while there has been a small rebound corresponding to the fall in gas prices, the pattern appears to remain consistent with a long-term slowdown in driving.

Freemark's VMT chart.
Freemark’s VMT chart.

 

VMT per capita. Credit: Advisor Perspectives
VMT per capita. Credit: Advisor Perspectives

 

It’s also extremely encouraging that, as we reported in Surging City Center Job Growth, employment is re-concentrating in downtowns after decades of decentralization. Even without major changes in residential patterns, increasing the destination density of relatively well-served central areas can represent a major improvement in non-car transportation options, allowing the growing number of those who are so inclined to use transit.

In addition, while available transit services and land use patterns limit the extent to which changing preferences can be translated into behavior, the flip side of that dynamic is that the modest changes in behavior we’ve seen so far mask a truly massive change in preferences. We can observe those preferences in urban real estate, where indicators like “the Dow of cities” reflect the increasing demand to live in relatively central locations, and other researchers like those at Walk Score show that people are increasingly willing to pay a premium to live in walkable, transit-served neighborhoods.

Freemark is right to suggest that our biggest challenges are political: how to convince decision-makers to invest in transit services and reform our streetscapes and land use laws to make transit, biking, and walking a viable option for those who would like to use them. But those changing preferences themselves constitute major political leverage. Localities in the position to allow more walkable, transit-served development are likely to reap the benefits of greater housing demand by satisfying some of our “shortage of cities.” In that sense, much of our work as urbanists should be about illuminating the connections between street design, transit service, and land use law—connections that are still far from well understood by many civic leaders and their constituents—and showing what kinds of changes can create the communities people envision for themselves.

A major challenge is turning the rising number of people who would like transportation alternatives into political leverage to create them. Credit: Noodles and Beef, Flickr
A major challenge is turning the rising number of people who would like transportation alternatives into political leverage to create them. Credit: Noodles and Beef, Flickr

 

But it’s also true that focusing only on changing preferences sometimes leads transit advocates to put less emphasis on what Freemark calls “an ideological claim” about why creating cities where transit, biking, and walking are viable options is a better choice for everyone. Different people will have different priorities, of course, but two of the central advantages of transportation networks that don’t depend entirely on private cars have to do with inclusion and environmental sustainability. Allowing people to go without a car—or to use it less than they might otherwise have to—can save low-income households thousands of dollars a year, money that would be much better spent on school supplies, food, clothes, or almost anything other than gasoline, insurance, and car payments. Removing a neighborhood’s total dependence on automobiles also allows people who are too young or old to drive, or who have a physical disability that makes it difficult to drive, to remain independently mobile.  And transit can dramatically reduce greenhouse gas emissions, not only through directly displacing polluting car trips with more emissions-efficient (or zero-emissions) travel modes, but by allowing cities to be built more compactly.

The car dependence of American cities today is the result of nearly a century of interventions, both dramatic and subtle, into the urban fabric. Reversing that work is a project of a similar scale. But there has been some progress. More importantly, changing preferences give us reason to believe that there is the will to make much more; and our understanding of the central role of transportation in equitable, sustainable cities gives us the mandate to pursue that progress. Millennials aren’t going to save our cities single-handedly any time soon, but they’re helping us move in the right direction.

Higher-inequality neighborhoods reduce inequality

A few weeks ago, in a post about what income inequality means in an urban (rather than national) context, we contrasted images of a lower Manhattan neighborhood with a Dallas suburb. The Manhattan street had subsidized housing on one side and very expensive homes on the other; the Dallas suburb just had the expensive homes. Our point was that putting affordable housing in otherwise affluent neighborhoods makes for high Gini coefficients, but is also better policy than the alternative.

 

Last week, the New York Times took a deeper look at what such a contrast actually looks like on the ground, reporting on the lives of public housing residents in Chelsea, Manhattan, one of the city’s wealthiest areas to feature large numbers of public housing units. The long article highlights both the benefits and challenges of such mixed neighborhoods.

Start with the good news. The Times references a May study by the New York City Housing Authority (NYCHA) and NYU’s Furman Center that compared outcomes for public housing residents in three kinds of neighborhoods: persistently low-income, persistently high-income, and “increasing income” (or gentrifying). Residents of public housing projects in wealthy and increasing income neighborhoods showed dramatically better economic and quality-of-life outcomes than those in low-income neighborhoods—even though their racial, ethnic, and age demographics weren’t significantly different. Annual household income for public housing residents was roughly $4,500 higher in more affluent neighborhoods, and $3,000 higher for those in increasing income ones. Predictably, violent crime rates are also significantly lower. And perhaps most encouraging, children of NYCHA residents in affluent and increasing income neighborhoods not only go to schools with much better test results, but score much higher themselves on reading and math.

Screen Shot 2015-10-27 at 9.08.38 AM

 

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In many ways, the study is yet another confirmation of earlier work by researchers like Raj Chetty and Patrick Sharkey, showing that being poor in a poor neighborhood is usually much worse than being poor in a middle-class or affluent neighborhood. While the juxtaposition of very high income households and very low income households in neighborhoods like Chelsea brings the problem of inequality into sharp relief, places that are home to a mix of household types neither cause income inequality, nor do they make the effects of poverty worse for the poor. If anything, these sorts of mixed-income neighborhoods actually work to reduce inequality—or at least improve mobility between income groups—compared to places that are more “comfortably” homogeneous.

There are also, however, some problems. One of them has to do with a gap in the housing market. New York is fortunate to have a large stock of relatively well-maintained public housing in many of its more affluent neighborhoods—in Chelsea, a full 29 percent of all homes are in public housing or other income-restricted units—but, as some of the most in-demand real estate in the world, the homes whose prices are set by the market are almost uniformly very expensive. That leads to a neighborhood where low income people can live in public housing, and rich people can live in market-rate housing, but there aren’t necessarily many places to go if you’re middle class.

But this may be one of those times when extreme cases make for bad policy. In most places, the solution to a missing middle is to build missing middle housing. Chelsea, and other Manhattan neighborhoods, however, combine some of the highest density in the country with some of the highest housing demand in the world; its affordable housing solutions are necessarily going to look very different than those of most American neighborhoods. (That is, building small apartment buildings and granny flats is unlikely to help anything in Manhattan.) While it’s unclear what to do about middle class housing in Chelsea, this problem is unlikely to be intractable in many other places. Or if it is intractable, it would be for political, rather than economic, reasons.

Another problem has to do with the fact that housing makes up only part of what makes a neighborhood “affordable.” In New York City, the second-biggest household expense—transportation—isn’t so much of an issue, since most of the city has excellent low-cost transit access, and few residents would need a car. But in some neighborhoods, like Chelsea, non-public housing residents are so wealthy (the largest single income category on one block the Times looked at was those making over $200,000 a year) that groceries and other retail may be priced at levels above what a very low income household can afford. As a result, those residents may have to travel farther to do their shopping, and may feel alienated from their own neighborhood if they feel like most of the businesses around their home aren’t “for them.”

Both of those are genuine issues, and policymakers ought to be aware of them. We at City Observatory have been particularly concerned with the latter; our “Less in Common” report focused on the decline in public amenities where people of different backgrounds can interact and build a sense of community. Making sure that mixed income neighborhoods have such public amenities—parks, swimming pools, markets, and so on—that people of all backgrounds feel welcome and attracted to is a crucial part of building successful urban communities.

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But it’s hard to read the report and not conclude that, on balance, the “gentrification” of neighborhoods around public housing is a win for its residents. The poor still face real problems living in neighborhoods with rich neighbors, but these problems—more expensive local shops, a need to travel further for some bargains—are of a different kind than the high crime, limited economic opportunity, and poor schools that are the rule in neighborhoods of concentrated poverty. Even the Times story, which foregrounds the challenges, gets around (in the very last paragraph) to quoting one of its subjects saying, “I’d rather have Chelsea as it is today…. There’s more people. It’s brighter, it’s beautiful, it’s more inviting than it used to be. We’re very lucky to be able to stay in housing that hopefully will not disappear.”

Perhaps our policy goal should be that everyone ought to have access to such luck, in the sense of living in affordably-priced housing in an economically healthy neighborhood with lots of educational and employment opportunities. That means both bringing back economic vibrancy to places that have lost it, and making sure that places that already have it provide both subsidized and market rate housing whose cost allows people with a full range of incomes to live there. (To be clear, by “economically healthy” we have in mind something slightly less excessive than the concentration of wealth in Chelsea—but that’s also not a concentration that most places have to worry about.)

At this point, some readers will be thinking: Sure, this works when low-income people live in public housing, whose affordability isn’t going away. What about neighborhoods where most low-income people live in homes whose prices are set by the market, and which may price them out if more middle- and upper-income people move in? A recent study has some encouraging news on that front as well. Look for us to take it up soon.

The Week Observed: October 23, 2015

Our partners and supporters at the Knight Foundation have announced a new round of the Knight Cities Challenge, which gives grants to people and organizations around the country for projects that make their cities more livable. The deadline to apply is October 27—check it out!


What City Observatory did this week

1. Affordability beyond the median. When we talk about how affordable a given city or neighborhood is, we usually reference median housing prices: the home for which equal numbers of homes are more and less expensive. But in most places, affordability is mainly a problem for lower-income people, who are likely to be purchasing relatively low-cost housing. In these cases, what matters more than the median price is the price of that low-cost housing. We illustrate the difference with two Chicago-area neighborhoods that have identical median housing prices, but very different 25th percentile prices (that is, homes that are cheaper than 75 percent of other homes in the area). The neighborhood with cheaper 25th percentile housing has much more economic diversity. Not coincidentally, the more diverse and affordable neighborhood also has a much more diverse range of housing types, from single family homes to small apartment buildings and a handful of highrises.

2. Eleven things you’d know if you read City Observatory. We may be preaching to the choir here, but as part of celebrating our first birthday, we’re collecting some of the highlights of our work over the last year. We put eleven of the most important research, analysis, and insights—from the way we subsidize car travel, to the “secession of the rich,” to the ways we’ve made traditional, diverse, and sustainable neighborhoods illegal—into a one-page PDF that we hope you’ll find helpful. If you do, feel free to share with others!

3. Why creating meaningful transportation change is so hard. We respond to an excellent post from Yonah Freemark at The Transport Politic, which argues we can’t rely on changing preferences alone to create an urban transportation revolution in the U.S. While we disagree somewhat on trends in driving—we tend to believe that the recent uptick in driving per capita is related to the sharp decline in gas prices, while Freemark argues it’s likely to continue regardless of gas prices—we agree that available transit services and land use patterns make it extremely difficult for people who might like to take transit, or bike, or walk, to do so. While the evidence strongly suggests a major change in Americans’ preferences towards more compact, walkable urban neighborhoods, our “shortage of cities” means that only a relatively small number of them can actually move to such areas.

4. Beyond gas: The price (of driving) is wrong. While we argue that gas prices have an important effect on driving behavior, they’re just part of the overall price of using private vehicles. When that price is too low, it hides the real cost of car usage—from the construction and maintenance of road infrastructure to the cost of more sprawled-out land use patterns and the public health costs of deaths and injuries caused by car crashes—and causes people to drive more than they would if they absorbed more of the real cost of driving. We revisit our review of a study from the Frontier Group that reveals just how much drivers reap in subsidies, busting open the myth that the gas tax covers the cost of public infrastructure for private vehicles.

5. Another City Observatory post was republished at The Atlantic this week: this time, our comparison of the way we give public assistance for food and housing, and what that reveals about the flaws in our affordable housing system.


The week’s must reads

1. For nearly two decades, the percentage of total national income going to workers has been falling. What’s making up the difference? As Matthew Yglesias shows at Vox, the answer is income accruing to the owners of housing. This trend shows that rapidly rising home prices, especially in urban centers where supply-restricting zoning regulations create a “shortage of cities,” are not just a concern because of neighborhood-level segregation: they’re also responsible for patterns of inequity at a national, macroeconomic level. This pattern has actually been established internationally as a possible explanation for Thomas Piketty’s widely-read theory about the underlying causes of growing inequality globally.

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2. Via Streetsblog, a major set of reforms to federal road design guidelines is giving a big leg up to “complete streets” advocates and paving the way (sorry) for safer, more pleasant, and more lively urban neighborhoods. The Federal Highway Administration is removing many of the “outdated” requirements for urban streets with speed limits below 50 mph, including leaving “clear areas” with no permanent objects, such as trees, within a certain distance of the road bed, and excessive width.

3. PBS takes a closer look at two Texas metropolises that are taking very different approaches to their light rail systems. While Dallas has built one of the most extensive light rail networks in the country, most of its track passes through extremely low-density neighborhoods, and many stations are surrounded by parking lots, with few jobs or other destinations within walking distance. As a result, its ridership per mile of track is extremely low, posing financial challenges. Houston, in contrast, has so far built a much smaller network, but its line goes through the densest parts of the city, and planners are trying to encourage more dense development within walking distance of stations. Not surprisingly, its ridership per mile is much higher: Houston’s light rail system gets about half the ridership of Dallas’, despite being just a quarter as big.


New knowledge

1. Who gets economic development subsidies? A new study from Good Jobs First suggests that small and local businesses are mostly shut out. The 4,200 deals in 14 states examined by the study were worth $3.2 billion—of which about 90 percent went to large or non-locally-owned businesses. GJF recommends that states reform their economic development programs to create public benefits for all employers by, for example, redirecting money to job training, education, transportation, and credit access programs.

2. Project-based rental subsidies, which provide affordable housing for more than 1.2 million households across the country, need to be periodically renewed to keep their subsidies. The Urban Institute reports that fully a third of PBRA units are up for renewal in the next few years, running the risk of dropping tens of thousands of affordable units from our cities in the midst of a growing housing affordability crisis. While most PBRA leases are renewed, the likelihood that projects are converted to market-rate rents increases in areas with high market prices—exactly where they’re most needed to promote integration and economic opportunity.

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3. More evidence on the problem of under-priced road space: researchers from Turkey and the Netherlands examine the cost of “cruising,” or driving around looking for parking, generated by a marginal shopping trip. They find that in a given shopping district in Istanbul (though these findings could be applied to other busy districts with under-priced parking, leading to an excess of demand), the direct cost of traffic congestion caused by a car trip is dwarfed by the cost of the additional time other drivers spend cruising for parking because that particular space is already occupied. The takeaway is that proper pricing of public parking spaces could significantly reduce one of the major social costs of car travel.

Affordability beyond the median

For a long time, we’ve been critical of the way we commonly talk about housing affordability.  We’ve published a threepart series about why the way we measure housing affordability is all wrong. In particular, we objected to using the 30 percent ratio of housing prices to income as the benchmark of “affordable,” basically because depending on income and other necessary expenses, a given household might actually be able to spend way more than 30 percent of their money on housing—or way less.

But now we have another nit to pick. To wit, the nit: measuring housing prices by only looking at the median. Recall from math class that in any given area, the median-priced home is the one for which an equal number of homes are more and less expensive. But most of the time—San Francisco and New York and their peers in housing market dysfunction notwithstanding—we’re not mostly concerned with the median housing purchaser; rather, affordability problems will be concentrated in the lower part of the earnings scale, and so what really matters is the lower end of the home price scale.

For an illustration of this problem, imagine two neighborhoods. In both places, the median home costs $300,000. But in the first neighborhood, every home costs exactly $300,000, while in the second, there are a range of homes from $100,000 to $500,000. Although both neighborhoods have the same median home price, the second neighborhood has some homes affordable to low-income people, while the first neighborhood does not.

So rather than the median, or 50th percentile, home price, we really care about something like the 25th percentile: the home for which 75 percent of homes are more expensive.

Now, to be fair, the price of a place’s 50th percentile home strongly predicts the price of the 25th percentile home. If the median housing price hits a million dollars—as it does in, say, San Francisco—you can be quite confident that the 25th percentile home is also far, far too expensive.

But in more normal markets, there is enough variation in 25th percentile prices in places with the same 50th percentile price to make a meaningful difference in affordability for lower-income people. Let’s take Chicago, for example. Happily, the Census has home price estimates for both the 25th and 50th percentile homes (and 75th—the home for which just a quarter of all homes are more expensive—but we’ll leave that to another post). If you plot these two prices by ZIP code in Cook County, which includes Chicago and its inner-ring suburbs, this is what you get:

As we said, the median home price of a given ZIP code very strongly predicts its 25th percentile price. But let’s zoom in a bit—to, say, anywhere with a median price within $25,000 of $250,000.

 

Now we can see a strong amount of difference. Right on the $250,000 median price line, for example, ZIP code 60645 has a 25th percentile home price of about $149,000, while ZIP code 60422 has a 25th percentile home price of $187,000. In the simplest terms, then, a low-price home in 60422 is a full 25 percent more expensive than a low-price home in 60645—even though an average-price home is almost exactly the same in both places.

How does that happen? Well, zooming in on what these two ZIP codes actually look like on the ground, we can hazard a guess. ZIP code 60422 is in suburban Flossmoor, which has a small, walkable, “illegal neighborhood”-type downtown around a commuter rail station, but otherwise is almost entirely made up of single family homes, ranging from medium-sized to large.

 

ZIP code 60645 is in the West Ridge neighborhood of Chicago’s far North Side. It has its share of medium-to-large single family homes; but it also has a large number of multi-family buildings, from a large tower-in-a-park development to copious numbers of two-flats, three-flats, and larger lowrise apartment buildings.

 

The contrast is actually a brilliant illustration of one of our favorite topics, which is the way that traditional, “illegal neighborhoods” can use a diversity of buildings to create a diversity of people. West Ridge simply has many more kinds of homes than Flossmoor: there are single family houses for parents and their children who can afford a $250,000 (or more) home; there are relatively large apartment and condo units in lowrise buildings; and there are smaller apartment and condo units in lowrise and highrise buildings that provide a stock of affordable housing without subsidies.

It helps, too, that West Ridge has buildings from a variety of time periods, dating back to the early 1900s. As we’ve written before, new construction is almost never affordable to people of low or moderate incomes—but often homes that are built for the upper middle class become much more affordable after a generation or two. Much of the low-priced housing in West Ridge fits this story.

All these differences add up to very different neighborhood demographics. West Ridge has a median age, income, and poverty level that are all fairly close to those of the city of Chicago or metropolitan area averages. In Flossmoor, by contrast, the median age is 46—more than a decade older than the metro area median—in part because there are few homes suitable for young people who might not yet have a stable middle-class income. Moreover, just 2.9 percent of residents in ZIP code 60422 live below the poverty line. As we’ve covered before, while that might sound like a good thing, in a region where nearly 14 percent of people live below the poverty line, such a low level in an individual city isn’t a sign of economic success—it’s a sign that Flossmoor has (in part) used its built environment to exclude low-income people from one of the most opportunity-rich parts of Chicago’s south suburbs. Economically integrated West Ridge, by contrast, manages to keep a strong middle class while remaining inclusive of people whose incomes are much lower.

But none of these differences can be explained by median home price—because West Ridge and Flossmoor have almost identical median prices. Instead, we need to look at the price of a typical low-priced home to understand what’s going on.

Affordability beyond the median

A few months ago, we published a threepart series about why the way we measure housing affordability is all wrong. In particular, we objected to using the 30 percent ratio of housing prices to income as the benchmark of “affordable,” basically because depending on income and other necessary expenses, a given household might actually be able to spend way more than 30 percent of their money on housing—or way less.

But now we have another nit to pick. To wit, the nit: measuring housing prices by only looking at the median. Recall from math class that in any given area, the median-priced home is the one for which an equal number of homes are more and less expensive. But most of the time—San Francisco and New York and their peers in housing market dysfunction notwithstanding—we’re not mostly concerned with the median housing purchaser; rather, affordability problems will be concentrated in the lower part of the earnings scale, and so what really matters is the lower end of the home price scale.

For an illustration of this problem, imagine two neighborhoods. In both places, the median home costs $300,000. But in the first neighborhood, every home costs exactly $300,000, while in the second, there are a range of homes from $100,000 to $500,000. Although both neighborhoods have the same median home price, the second neighborhood has some homes affordable to low-income people, while the first neighborhood does not.

So rather than the median, or 50th percentile, home price, we really care about something like the 25th percentile: the home for which 75 percent of homes are more expensive.

Now, to be fair, the price of a place’s 50th percentile home strongly predicts the price of the 25th percentile home. If the median housing price hits a million dollars—as it does in, say, San Francisco—you can be quite confident that the 25th percentile home is also far, far too expensive.

But in more normal markets, there is enough variation in 25th percentile prices in places with the same 50th percentile price to make a meaningful difference in affordability for lower-income people. Let’s take Chicago, for example. Happily, the Census has home price estimates for both the 25th and 50th percentile homes (and 75th—the home for which just a quarter of all homes are more expensive—but we’ll leave that to another post). If you plot these two prices by ZIP code in Cook County, which includes Chicago and its inner-ring suburbs, this is what you get:

As we said, the median home price of a given ZIP code very strongly predicts its 25th percentile price. But let’s zoom in a bit—to, say, anywhere with a median price within $25,000 of $250,000.

 

Now we can see a strong amount of difference. Right on the $250,000 median price line, for example, ZIP code 60645 has a 25th percentile home price of about $149,000, while ZIP code 60422 has a 25th percentile home price of $187,000. In the simplest terms, then, a low-price home in 60422 is a full 25 percent more expensive than a low-price home in 60645—even though an average-price home is almost exactly the same in both places.

How does that happen? Well, zooming in on what these two ZIP codes actually look like on the ground, we can hazard a guess. ZIP code 60422 is in suburban Flossmoor, which has a small, walkable, “illegal neighborhood”-type downtown around a commuter rail station, but otherwise is almost entirely made up of single family homes, ranging from medium-sized to large.

 

ZIP code 60645 is in the West Ridge neighborhood of Chicago’s far North Side. It has its share of medium-to-large single family homes; but it also has a large number of multi-family buildings, from a large tower-in-a-park development to copious numbers of two-flats, three-flats, and larger lowrise apartment buildings.

 

The contrast is actually a brilliant illustration of one of our favorite topics, which is the way that traditional, “illegal neighborhoods” can use a diversity of buildings to create a diversity of people. West Ridge simply has many more kinds of homes than Flossmoor: there are single family houses for parents and their children who can afford a $250,000 (or more) home; there are relatively large apartment and condo units in lowrise buildings; and there are smaller apartment and condo units in lowrise and highrise buildings that provide a stock of affordable housing without subsidies.

It helps, too, that West Ridge has buildings from a variety of time periods, dating back to the early 1900s. As we’ve written before, new construction is almost never affordable to people of low or moderate incomes—but often homes that are built for the upper middle class become much more affordable after a generation or two. Much of the low-priced housing in West Ridge fits this story.

All these differences add up to very different neighborhood demographics. West Ridge has a median age, income, and poverty level that are all fairly close to those of the city of Chicago or metropolitan area averages. In Flossmoor, by contrast, the median age is 46—more than a decade older than the metro area median—in part because there are few homes suitable for young people who might not yet have a stable middle-class income. Moreover, just 2.9 percent of residents in ZIP code 60422 live below the poverty line. As we’ve covered before, while that might sound like a good thing, in a region where nearly 14 percent of people live below the poverty line, such a low level in an individual city isn’t a sign of economic success—it’s a sign that Flossmoor has (in part) used its built environment to exclude low-income people from one of the most opportunity-rich parts of Chicago’s south suburbs. Economically integrated West Ridge, by contrast, manages to keep a strong middle class while remaining inclusive of people whose incomes are much lower.

But none of these differences can be explained by median home price—because West Ridge and Flossmoor have almost identical median prices. Instead, we need to look at the price of a typical low-priced home to understand what’s going on.

Eleven things you’d know if you read City Observatory

Last week, City Observatory celebrated its first birthday. This week, we’re taking some time to look back at all the reports and commentaries we researched and wrote in the last year, and picking out some of what we think are the most important facts and insights. We put eleven of them into a one-pager with links to some of our greatest hits. We think it all adds up to a good portrait of where American cities find themselves now: in the midst of a historic increase in demand for city living, but with considerable challenges from concentrated poverty, segregation, and too many street design, transportation, and land use policies that are stuck in the past. We hope that you’ll find it useful—and look out for more highlights of from the first year of our work over the rest of the week.

1. Less time in traffic. People are losing 40 percent less time to traffic congestion since 2010.

2. 12 to 1. The number of newly-poor neighborhoods exceeds the number of gentrified low-income neighborhoods 12 to 1.

3. We’ve got a shortage of cities. Building more great neighborhoods would go a long way towards addressing city housing affordability.

4. Cars don’t pay their way. Car user fees cover 30 percent of the total cost of roads.

5. City jobs are back. After decades of decentralization, jobs are coming back to urban centers.

6. The wealthy are leaving. The growth in income segregation has been driven by the secession of the wealthy.

7. Wider does not mean safer. Wider streets are not safer streets.

8. We’re driving less. Americans are driving less—and that’s good for our economy.

9. Cities are more poor. Two million more people live in high-poverty urban neighborhoods than did in 1970.

10. That neighborhood you love is illegal. The country’s zoning laws prevent us from building more high demand, great places like Soho in NYC and Over the Rhine in Cincinnati.

11. 85,000 more young people. In 2014, about 85,000 more people aged 20 to 29 moved to central cities than suburbs.

(Click here for a formatted PDF version.)

A modest proposal: treat affordable housing more like food stamps

Two of the most fundamental human needs are food and housing. As a result, we have government programs to help people who might not be able to afford them. But the way those programs work is wildly different.

So let’s imagine for a moment that we treated SNAP—the federal program, formerly known as food stamps, that gives money to low-income people for groceries—like American cities treat affordable housing.

Credit: US Dept of Agriculture, Flickr
Credit: US Dept of Agriculture, Flickr

 

First of all, local governments would suddenly have much more power over the program. Wealthy cities could decide that they wouldn’t give SNAP benefits to any of their residents, essentially banishing everyone who relied on them to feed themselves and their families to other parts of their metropolitan area. Those cities that did accept SNAP might have to cobble together many other different sources of funding to make it work, leading to wildly inflated food costs for beneficiaries.

In certain places, where the affordable food crisis got really bad, cities might institute price controls—but only for people who were already poor, and already living in the city, when the controls were passed. All newcomers, no matter their income, would have to pay full price, which would be inflated somewhat to cover grocers’ losses on the people who paid less.

And when it came time for local governments to put in their own revenue, they wouldn’t just use general funds; they would levy “affordable nutrition fees” on Whole Foods, boutique grocers, and fancy restaurants. They’d also create “inclusionary food” requirements, so that those grocers and restaurants had to donate ten percent of all the food they sold to the low-income. Of course, there’d be no guarantee that those measures would cover everyone who needed assistance buying food, and so literally thousands of people would end up applying for just a handful of grocery baskets.

Housing and food are very different goods, and there are obviously ways in which this is a bit of a strained analogy. But it does help illustrate some of the absurdities in the way we manage affordable housing.

In particular, while policies directed at making food more affordable surely are far from perfect, they have several key advantages over those that try to make housing more affordable. Most crucially, SNAP is funded through general revenue streams, and its benefits are guaranteed to anyone whose income qualifies.

In contrast, much of the affordable housing debate in many cities has focused on using impact fees, inclusionary zoning, or both, to extract resources from housing developers, who many accuse of creating the affordability crisis to begin with. But there are good reasons that’s not how we approach food policy, and most of them apply to housing, too. To begin with, blaming developers for high home prices just doesn’t reflect the actual reasons why some markets are more expensive than others. While it may make intuitive sense to many that greedy builders and landlords are ultimately responsible for the exorbitant rents they charge in places like San Francisco or Boston, for that to be true, it must also be the case that places like Phoenix and Memphis are so affordable because their developers and landlords are benevolent and self-sacrificing. And that seems a lot more far-fetched.

Phoenix: land of benevolent developers? Credit: Lee Ruk, Flickr
Phoenix: land of benevolent developers? Credit: Lee Ruk, Flickr

 

More importantly, though, by making local affordable housing programs dependent on such a narrow base of revenue—rather than general funds—we limit the number of households that receive help to far below the number who need it. (Of course, other programs that are funded at the federal level, including Section 8 vouchers and the Low Income Housing Tax Credit, get their money from other sources. But those aren’t sufficient either, and so it matters if local policies intended to fill the gap are doomed to miss that goal.) That’s how you get situations like 88,000 people applying for just 55 affordable units in New York City, or the fact that just 77 percent of those whose income qualifies them to receive housing assistance actually get any assistance.

As long as we have such a fragmented, ad hoc approach to housing, those issues will continue. As housing affordability becomes a larger problem, particularly in certain parts of the country, we need to deal with it in a comprehensive way, finding solutions that don’t just symbolically lift up a tiny fraction of those who need help, and that aren’t subject to the caprice of local governments that decide they don’t want to help anyone at all.

The Week Observed: October 16, 2015

Our partners and supporters at the Knight Foundation have announced a new round of the Knight Cities Challenge, which gives grants to people and organizations around the country for projects that make their cities more livable. The deadline to apply is October 27—check it out!


What City Observatory did this week

1. Why America can’t make up its mind about housing. American housing policy is simultaneously trying to accomplish two things: keep housing broadly affordable, and keep property values strong. In other words: keep home prices down, and keep home prices up. Not surprisingly, it has struggled to achieve both of these goals. The belief that homeownership is—or should be—a surefire means of wealth accumulation leads to public policies that in many respects undermine efforts to make housing of all kinds more affordable. The tilt of tax policies to subsidies for single family homeownership, and local land use policies that constrict the expansion of housing supply in the name of “protecting property values” help inflate house prices—but at the cost of affordability. We won’t be able to successfully address the nation’s housing problems until we grapple with this inherent conflict.

2. A modest proposal: treat affordable housing more like food stamps. Imagine if, rather than allowing anyone whose income qualified them to sign up for government aid to buy food, we imposed an “inclusionary food” requirement on boutique grocery stores. Ten percent of all their sales would have to be donated to food pantries, and thousands of people would line up to apply for just a handful of grocery baskets every week. That would be insane! And yet it’s how many cities are approaching affordable housing. Without denying the many differences between housing and food, we think there are some things to learn from contrasting affordable housing and food stamps—and that as long as our housing policies remain fragmented, ad hoc, and subject to the whims of potentially hostile local governments, we’re not going to come close to solving the problem of unaffordable housing.

3. Happy birthday to us! This week, we officially made it to our first birthday! It’s been quite a year: we’ve published four major reports covering concentrated poverty, the growth of jobs in city centers, and the declining civic commons; written well over a hundred commentaries on housing, transportation, the interplay of urban policy and economic opportunity, and much more; and taken on myths about American cities, from the idea that more highways will solve traffic congestion to fear about a (false) resurgence in urban crime. We’re excited about the next year, and thrilled to have you along with us!

4. Two of our commentaries this week were republished in The Atlantic, helping us spread the word about smart urban policy to a much broader audience. On Monday, it was Joe Cortright’s piece on the “least unequal” city in the country, and whether it offers any lessons for the rest of us. And on Wednesday, the magazine published “Why America can’t make up its mind about housing.” Look for more of these collaborations in the future.

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The week’s must reads

1. While the face of early 21st urban public transportation might be light rail and streetcars, David Alpert, founder of the excellent urbanist blog Greater Greater Washington, argues in the Washington Post that buses are actually the key to a workable transit system. In the vast majority of American cities, trains don’t serve most trips that most people have to take—either because there are no stations nearby, or because the rail line only goes in one direction, usually towards downtown. But better bus service has the potential to create reliable, affordable mobility. Dedicated lanes, all-door boarding, and other measures are relatively low-cost ways to improve these services. Unfortunately, as we’ve shown, the trend line appears to be heading in the wrong direction.

2. Also at the Washington Post, Emily Badger writes a convincing takedown of the idea that cities, neighborhoods, or even countries can be “too full” to take on new residents. Rather than a legitimate argument against allowing the construction of new homes, or accepting international refugees, the idea that a place is “full” is used to shut down discussion while eliding the often unsavory reasons that existing residents oppose sharing their neighborhood or country with more people.

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3. At CityLab, Eric Jaffe covers the demise of Leap, a startup that wanted to offer a private alternative to public transportation. Leap charged $6 for a “premium” bus ride, and led to early speculation that they might “disrupt” public transit the way Uber has hit the taxi business. But it never really got off the ground, and Jaffe has a great explanation of why that is: not just that people were turned off by its “tech bro” feel, but that public transit is simply not the kind of service that can be served by the private market in American cities. Just as roads need major government subsidies for car travel to work, very few transit lines can be sustained with fares alone, and having access to a large network of lines is what makes transit valuable.


New knowledge

1. While homeownership has helped many millions of American families build middle-class wealth, we’ve known for a long time that black homeowners are much less likely to see their property values appreciate. Now a new study from Johns Hopkins University paints an even bleaker picture: even during the boom years of 2005-2007, black first-time homebuyers lost 47 percent of their net worth—while white first-time home buyers increased theirs by 50 percent. These new numbers underscore that no discussion of the importance of homeownership as a wealth-building tool is complete without acknowledging these massive racial gaps, and that this strategy doesn’t just work less well for African Americans—it’s often actively a wealth destroyer.

2. A new study from the Philadelphia Federal Reserve confirms earlier findings on displacement in gentrifying neighborhoods, while adding new details. The paper finds that residents of low-income gentrifying neighborhoods are just 0.4 percentage points more likely to move than residents of low-income neighborhoods that don’t gentrify—and those people who do leave are not especially likely to move to lower-income neighborhoods. However, out-migration rates are higher for people in the most rapidly gentrifying communities, and for renters. On the whole, however, the authors find that gentrification is driven overwhelmingly by changes in the demographics of in-movers, rather than elevated rates of out-moving. Moreover, while the median gentrifying neighborhood in Philadelphia saw its average income increase by 42 percent between 2000 and 2013, low-income neighborhoods that didn’t gentrify saw their average income fall by more than 18 percent—confirming the “reinvestment or decline” pattern we found in Lost in Place.

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3. In a small glimmer of happy news, researchers from the US and Sweden dive into the decline of racial segregation in Los Angeles. While 40 percent of Angelenos lived in “strongly segregated” neighborhoods in 2000, just 33 percent did in 2010. This included significant declines among all major ethnic groups except for Hispanics, and in particular significant declines in homogenous white neighborhoods. Another finding: huge levels of racial change in most parts of the city. Of course, while racial segregation is at least slowly declining in most American cities, economic segregation—with a strong racial component—is growing quickly.


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

The Week Observed: October 9, 2015

Last week, our partners and supporters at the Knight Foundation announced a new round of the Knight Cities Challenge, which gives grants to people and organizations around the country for projects that make their cities more livable. The deadline to apply is October 27—check it out!

What City Observatory did this week

1. What’s behind the debate over American streets. Going off an excellent postfrom the Quebec-based traffic engineer and blogger Simon Vallée, we investigate the idea that many of the clashes about “complete streets” come from two incompatible visions of transportation policy: the “engineering approach” and the “economic or behavioral approach.” The engineering approach, which has been dominant for decades, takes a certain number of vehicle trips as an unchangeable given, and then asks how to redesign streets to allow those vehicles to move through as quickly as possible. The economic or behavioral approach, on the other hand, takes a step back, and asks how we might get the people in those vehicles to their destinations—without assuming that the answer will involve cars.

2. The end of peak driving? After a decade of decline, vehicle miles per person in the U.S. have started to creep up again. Is this a sign of the resurgence of car-dependent living? Hardly. Rather, it’s likely an effect of the steep decline in gas prices, which have fallen by more than a dollar in many places since a year ago. While the effect of gas prices on driving isn’t instantaneous—many factors, including the kinds of cars people buy and the home locations they choose, make driving levels sticky—it does have an impact. And unless gas prices continue to fall, we’re unlikely to see a sustained increase in vehicle miles per person.

Credit: Advisor Perspectives
Credit: Advisor Perspectives

3. Talent, opportunity, and engagement are essential to successful cities. To mark the beginning of Knight’s Cities Challenge, we wrote about what it means to be a “successful city” by imagining a successful neighborhood. From a park for people to gather and meet at, to local shops where people can conveniently run errands, to easy, affordable, and safe transportation, to abundant access to jobs, we have a good idea of what makes a place attractive and livable. Unfortunately, too often we throw up impediments—from making “illegal neighborhoods” to creating a “shortage of cities”—to meeting that vision.

4. The danger of taking policy lessons from extreme cases. Two recent media reports have lauded Ogden, Utah, as an unlikely beacon of hope in the battle against inequality. It turns out that Ogden has the lowest Gini coefficient—the most commonly used index of inequality—in the country. But is studying Ogden actually helpful? Mostly not. It turns out that its “success” is largely about being in the orbit of another, larger metro area (thus benefitting from the dynamic of relatively poor and wealthy people living in the city center), and by having the third-highest concentration of federal jobs in the country, which tend to support a strong middle class. Neither of those are scalable solutions to other cities—not to mention that we’ve questioned the premise that low inequality at the local level is usually a good thing.


The week’s must reads

1. Media representations of “urban” neighborhoods often make it seem like you need to go to the coasts, or at least Chicago, to find dense, walkable communities. But Granola Shotgun’s photo essay of urban Louisville, Kentucky, proves that’s just not true. In fact, walkable urbanism is a tradition all across the country—it’s just that sometime around the middle of the 20th century, many localities in the South, Midwest, and on the coasts adopted zoning codes and other regulations that created “illegal neighborhoods.”

Credit: Granola Shotgun
Credit: Granola Shotgun

2. At Planetizen, Todd Litman dismantles a paper from the Center for Opportunity Urbanism that claims sprawl and low-density neighborhoods are best for low-income households. Litman shows that the index of affordability used by the COU is actually meant to describe the typical expenditures of a relatively wealthy worker, and its assumptions categorically exclude savings inherent to urban areas. For example, while it includes the cost of gasoline, it does not include the likelihood of owning fewer or no cars, or changes in average distance driven. It also measures housing costs using only single family homes—eliminating the cost savings of multifamily housing in urban areas. (Litman published this piece back in August, but we missed it, and thought some of you might have, too!)

3. Also via Planetizen, the news that we have a traffic safety crisis because of the way we design infrastructure, and not because of the individual faults of drivers or pedestrians, has reached—of all places—Dallas, Texas. The Dallas Morning Newsreports on a charged debate in the City Council sparked by a report from the police and Department of Street Services, which claimed that the 32 pedestrian fatalities suffered so far in 2015 in Dallas are mostly the result of “pedestrian error.” Council member Philip Kingston, however, challenged that idea, arguing that the real problem is “infrastructure that places the pedestrian in harm’s way”: narrow or nonexistent sidewalks, excessively wide roadways, high speeds, and few crosswalks. Once again, the movement to reform our cities shows that it’s about much more than the big coastal cities.


New knowledge

1. The Urban Institute released its Q3 2015 Detroit Housing Tracker, with updates on the state of that city’s ongoing transformation. With summaries of key Detroit housing programs, a rundown of major market news, and more, it’s a must-read for anyone with an interest in Detroit, the broader industrial Midwest, or the future of American cities. One of the takeaways is the very different paths of the riverfront areas, especially east of downtown, and the Woodward corridor, which continue on a robust recovery, and much of the rest of the city, which is still struggling.

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2. Richard Benton, a professor at the University of Illinois, has published research showing that civic participation in groups like churches or neighborhood associations can play a key role in “reducing social capital deficits and fostering the ties that bridge the divide between upper- and lower-class status lines.” These ties, in turn, can be extremely valuable for an individual’s capacity to, say, find jobs or make other important connections to improve their lives. Unfortunately, opportunities for these sorts of face-to-face interactions may be diminishing, as we recorded in “Less in Common.”

3. Gizmodo reports on a new study from McGill University researchers about howdifferent types of commuting produce different levels of stress. This may not come as a surprise to many of you, but it turns out that driving is by far the most stressful way to get to work. The least? Walking, followed by transit—though part of what makes transit less stressful is the walk to and from the train or bus. Given what we know about the effects of chronic stress, we’d put this on the growing pile of research suggesting that neighborhoods that force everyone to drive to almost everything are a serious hazard to your health.


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

Talent, opportunity, and engagement are essential to successful cities

We’re very excited to spread the news that this fall, our partners and supporters at the Knight Foundation are reprising their wildly successful “Knight Cities Challenge.” Last year, Knight chose 32 winners out of more than 7,200 project proposals from people in cities all over the country, awarding them the resources and support they needed to jumpstart their ideas about how to improve their communities. 

This year, submissions are open until noon EST on October 27—and the application requires less than 300 words. If you or someone you know has an idea for your city, check it out!

Yesterday, we shared some thoughts about what goes into making a “successful city” on Knight’s blog. We’ve republished them below.


What makes a successful city? Maybe it’s easiest to start with an image of a successful neighborhood. Picture a place where people can get together—a small park, say. There are children playing in one area as their parents and grandparents watch from benches. Near the street, there’s a small market—an art fair, say, to raise money for a community group—and neighbors are perusing the stalls and making conversation, running into friends and acquaintances.

Near the park are some shops, which keep a steady stream of people walking by, so the park never feels vacant or forbidding. The people from the neighborhood can walk, bike or drive a very short distance to these shops—a hardware store, a cafe, a small grocery, a barber, a post office—to take care of most of their daily needs. Not only can they get a gallon of milk or mail a package without making a big inconvenient trip, but they know they might run into a friendly face, exchanging quick smiles or stopping for a chat as time permits.

The homes in the neighborhood fit the full range of people’s needs. There are houses with yards and large apartments for growing families; smaller apartments and backyard cottages for young people without children, and for the elderly who no longer want, or are able, to maintain a large home. The range of housing types means there’s a range of housing prices, so nobody is excluded from living here, and the neighborhood is a place where people who don’t earn much can hope to get a foothold towards a better life. The mix of single-family homes and apartments also means there are enough people around to support the community business district without huge parking lots meant to draw people from miles away.

The neighborhood is close to jobs. There are local jobs in the shops and the neighborhood school—also walking distance from most of its students’ homes—but it’s also a quick commute to downtown, via a reliable and frequent public bus, or a safe bike ride, or a fairly short drive. Traffic on local streets doesn’t zoom by at 45 miles per hour—the neighbors wouldn’t want that, because it wouldn’t be safe—but because the community is centrally located they don’t have to travel at highway speeds to get there fast. The neighbors are able to spend far less on transportation than people who live farther out, because they can take transit or walk for so many trips, and when they do drive they don’t have to go far. With extra room in their household budgets, they invest in home repairs, or better food for their families, or chip in to the local school.

This is a sunny picture, but it’s not unrealistic. If this, or something like it, is your vision of a successful neighborhood—and a successful city—the good news is that we have some idea of how to get closer to it. Vibrant, attractive community spaces, especially near hubs of activity like shops or transit stations, can help create places where neighbors can meet. Opening up our zoning laws (which have made places like the one I just described illegal in most American cities) can open the door to neighborhoods where you can run basic errands without getting in your car, and where a large range of housing types means there are homes for a large range of people, not just a few. Building a transportation system around access—the ability to actually get to the stores, schools and jobs that people need—rather than pure driving speed is crucial to safer, more humane and more affordable commutes. And attracting talent, especially people with college degrees, can help build a powerful local economy and grow jobs.

The Knight Cities Challenge is so exciting because it funds projects, and people, who are building great communities through many of these avenues. Even better, it empowers the people who know their neighborhoods best to create bottom-up change that’s distinctive to a given place, rather than trying to dictate a rigid one-size-fits-all program. Here at City Observatory, where we spend all day thinking about how to build more successful cities, we can’t wait to see what the next class of challenge winners comes up with.

Want to learn more about the Knight Cities Challenge? Attend a community information event or virtual office hours. Here is a schedule of what’s comingYou can follow the challenge at #knightcities on Twitter or sign up for our email newsletter. You can send questions to citieschallenge@knightfoundation.org.

Why America can’t make up its mind about housing

Here are two ideas that, if you’re like most Americans, you probably mostly agree with:

1. Government policy should help keep housing broadly affordable, so as not to price out people of low or moderate incomes from entire neighborhoods, cities, or even metropolitan areas.

2. Government policy should protect residential neighborhoods from things that might negatively impact housing values, because homes are an important investment and wealth-building tool.

Having read them together like that, you’ve probably already jumped ahead to the big reveal, which is that these two ideas are almost entirely mutually exclusive. The first essentially says, “Use housing policy to keep home prices down”; the second says, “Use housing policy to keep home prices up.”

It’s no wonder, then, that housing policy is a bit confused. The same municipal governments that require that housing on scarce urban land be taken up only with resource-intensive, high-building-cost single family homes; that use zoning to separate out unwanted apartments, shops, transit lines, and other uses on the grounds that they might hurt home values; and promote neighborhood beautification and other projects on the grounds that they will raise housing values, also issue affordable housing reports trying to understand why home prices aren’t lower, and levy “impact fees” on new development for the alleged crime of, you know, raising home values.

The problem is that, at least in certain contexts, both of these goals are legitimate and important. Of course, especially in the wake of the Great Recession’s housing market collapse, a number of people have expressed skepticism about homeownership as a wealth-building tool; surely there are less risky—that is to say, less potentially ruinous—ways to a retirement income or college fund than investing hundreds of thousands of dollars in a single asset whose appreciation, as we all now know, is far from guaranteed.

And perhaps, if we could go back to the New Deal and talk this over with President Roosevelt before he inaugurated the era of mass homeownership with a federally regulated and subsidized mortgage market, we would want to make that point. But today, some eighty years later, it’s a bit late. That’s because homeownership has already provided a route to middle-class stability for tens of millions of households—and those households are mostly white. As the Washington Post wrote in a fantastic series earlier this year, public and private housing discrimination has led to a situation where home prices in black neighborhoods—even ones where the vast majority of households have solidly middle-class incomes, or higher—are much, much more unstable than in white neighborhoods.

This inequality is buttressed by the fact that our homeownership subsidies have worked selectively to the benefit of higher-income homeowners: the mortgage interest tax deduction, for example, gives larger tax expenditures to people who own more expensive houses. The more your home appreciates in value, the more benefit you get from the exclusion of home sales from capital gains tax. Ditto the value of excluding imputed rent, and deducting property taxes. The net result, according to the University of Chicago’s Atif Mian and Amir Sufi, is that homeownership has significantly magnified wealth differentials in the US.

One result of all this is that many white families have built generations of wealth through homeownership, while black families have made barely any progress: In fact, The Atlantic reported on a study suggesting that homeownership has been a net financial loss to African Americans since 2000. In 2013, the median white household held $126,000 in wealth from their home, while the figure for the median black household was just $31,000. That gap, in turn, represents a massive difference in the ability of a family to withstand a big financial shock—unexpected unemployment, for example, or a serious medical crisis—that may go some way to explaining why black middle-class workers are much, much more likely than their white counterparts to fall back into poverty.

(And the resistance of many neighborhoods to growing property values is quite strong indeed: look at how much of central and southern Brooklyn has actually lost property value since 2004.)

Giving up entirely on the idea of homeownership as a path to wealth-building would essentially be saying that black Americans have just missed the boat on this one, and will have to remain behind forever. On the contrary, in the relatively few places where housing values finally do go up in mostly black neighborhoods, it represents—at least in part—a kind of justice: giving black homeowners the same access to financial gain that their white counterparts have enjoyed for the better part of a century.  

Unfortunately, that gain also represents a loss for people, especially renters, who can’t afford to pay much more than they already do, and for whom artificially low prices in largely minority neighborhoods meant access to locations that they would not be able to afford in a normal market where race did not play such a major role in housing prices.

There is no good reason for East Garfield Park, 20 minutes west of downtown Chicago, to be so cheap—except for issues related to being a segregated black neighborhood. Credit: Eric Allix Rogers, Flickr
There is no good reason for East Garfield Park, 20 minutes west of downtown Chicago, to be so cheap—except for issues related to being a segregated black neighborhood. Credit: Eric Allix Rogers, Flickr

 

So how to square that circle? Well, that’s basically the challenge of housing policy in a nutshell. Perhaps a start would be to acknowledge that there is, in fact, a tension here—that “protecting” or “promoting” property values is the same thing as “making housing more expensive.” It’s somewhat discouraging, for example, when community organizations claim that “affordability doesn’t mean housing values have to remain stagnant,” without acknowledging that if housing values aren’t stagnant—ie, they’re growing—that means they’re also becoming less affordable.

But there is some hope. For one, robust production of housing that isn’t priced by the market, and therefore isn’t affected by rising market prices. That can be accomplished through public housing, privately-developed affordable housing with programs like LIHTC, and housing vouchers. At the moment, few places produce non-market housing at anything close to a scale that would provide broad affordability, but there are encouraging examples: Portland, for instance, has created 2,300 units of affordable housing in its redeveloping Pearl District, adjacent to downtown, supported largely with funds from tax increment financing.

In many places, having a wide variety of housing types and sizes can also make room for people of a wide variety of incomes. My street in the Edgewater neighborhood of Chicago, for example, contains a handful of single family homes, whose value at this point probably reaches into the seven figures; expensive newer condo buildings; older multifamily buildings, some of which have large, luxuriously updated units, and others whose apartments are somewhat smaller, or have less up-to-date finishes; and a few single room occupancy buildings, with minimal accommodations. As a result, there is market-rate housing for everyone from upper-middle-class professionals to working-class immigrant families to low-income elderly adults. Of course, that sort of diversity is typical of a pre-zoning “illegal neighborhood”: a vanishingly small proportion of American neighborhoods allow that sort of mix to be created today, which is a large part of the problem.

We are, in conclusion, profoundly conflicted as a nation when it comes to housing: we want it to be affordable, but we also want its prices to rise fast enough to be valuable as a financial investment. That’s a contradiction we need to acknowledge if our housing policy debate—and, ultimately, our housing policy—is going to be coherent and constructive.

The Week Observed: October 2, 2015

What City Observatory did this week

1. Cities’ role in growing our nation’s economy. New data from the Oregon Office of Economic Analysis builds on our “Dow of Cities” post and Surging City Center Job Growth report to show that urban centers are at the heart of the country’s recovery. Large metropolitan areas—those with over a million residents—are growing faster than smaller metros, and central cities are growing jobs faster than their suburbs. Recognizing, encouraging, and taking advantage of this trend is important both for urban areas and the country as a whole.

2. The high cost of affordable housing and the shortage of cities: notes from a panel. Our own Joe Cortright took part in a panel at Oregon’s Metro regional government on whether San Francisco’s housing woes are in Portland’s future. Along with Tech Crunch’s Kim-Mai Cutler, Elissa Harrigan of the Meyer Memorial Trust, and developer Eli Spivak, Joe argued that a “shortage of cities” is driving rapidly rising home prices in places around the country. Cutler also brought up the shockingly large sums spent on affordable housing projects—often the better part of a million dollars per unit—and pointed out that at such prices, building those units on its own isn’t a scalable, sustainable strategy to getting out of the housing crisis.

3. When it comes to transit use, destination density matters more than where you live. While we often imagine that the decision to drive or take transit depends on where you live, it turns out that where you’re going is even more important. Using data from the American Community Survey, we show how much more concentrated transit use is by job location than home location. The lesson: land use should prioritize getting jobs and other important destinations (like schools and shops) near transit, especially central transit stations. That way, everyone in the region stands to gain from improved access.


The week’s must reads

1. The University of North Carolina – Charlotte’s Plan Charlotte blog takes a look at how their city zones land, and it fits the “illegal neighborhood” problem to a T. Just 9 percent of Charlotte’s land area is zoned for any kind of mixed-use buildings, making neighborhood corner stores, hardware stores, or cafes much, much more difficult to open. Moreover, fully 61 percent of Charlotte is zoned for single-family homes only—while just 7 percent is zoned for multifamily residential. Laws like these help explain why development has yet to catch up with demand for mixed-use, walkable urban neighborhoods, creating our “shortage of cities.”

2. Streetsblog New York City covers the case for a bus rapid transit line in Queens—from a public safety perspective. Woodhaven Boulevard, one of the main corridors for the proposed BRT line, is been one of the most dangerous streets in the city, with car crashes causing hundreds of injuries and several fatalities in just the last few years. Dedicated bus lanes and new pedestrian islands would help calm traffic and create a safer street for people in cars, buses, bikes, and on foot.

3. The Urban Institute has a new paper, “Housing Policy Levers to Promote Economic Mobility,” that’s a must-read handbook for anyone who cares about promoting long-term economic and social justice in America’s cities. The report’s authors go through the major governmental housing programs one by one, picking out ways they could be used to improve opportunity for the low income, and especially those living in high-poverty neighborhoods. Among the recommendations: incentivize Low Income Housing Tax Credits projects to be located in communities with good schools, transportation access, and employment opportunities; create a “renter’s tax credit”; and end exclusionary zoning laws that keep home values artificially high in desirable neighborhoods.


New knowledge

1. Via Streetsblog, a new study by the Transportation Research Board finds thatwithout public transit networks, American cities would have to be 37 percent larger. That’s because transit allows for more compact land use, by reducing the need for sprawling surface parking lots and encouraging development to be done within walking distance of stops. In fact, the TRB finds that the land use effects of transit are dramatically larger than simply the substitution of car travel for other modes: If everyone who takes the bus or train drove tomorrow, that would increase vehicle miles traveled by 2 percent. But if the land use effects of transit disappeared, that would increase vehicle miles traveled by 8 percent.

2. Researchers from Texas A&M University tested the hypothesis that improving walkability really creates economic value, and they found that it does. Moreover, the benefits may rise faster as the neighborhood becomes more and more walkable: In the most walkable neighborhoods, a one percent improvement in walkability leads to $1,329 in additional property values, while in moderately walkable neighborhoods, the same-sized improvement creates somewhat less new property value.

3. Katie Fitzpatrick of Seattle University writes about her new paper on the effects of “food deserts”—neighborhoods with little to no access to grocery stores—on food purchasing and consumption. The results contradict much of the conventional wisdom: holding other factors constant, residents of “food deserts” actually did not have significantly different outcomes on most measures than other people. What did matter, however, was transportation: people in food deserts who did not own a car had much worse outcomes, suggesting the importance of accessible transportation to destinations like grocery stores.


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!

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

What’s behind the debate over American streets

What are roads for? For that matter, what’s transportation policy for? Much of the urban reform movement of the last few decades has been about re-asking, and re-answering, these questions. Most people who follow trends in urban policy could outline at least a rough sketch of the debates: high-speed car traffic versus “complete streets” for pedestrians, bicyclists, and transit users; building more and more highway capacity for private vehicles versus investing in “alternative” modes of transportation.

Last week, at his blog, the Quebec-based traffic engineer Simon Vallée posted an excellent diagnosis of the wonkish roots of these disagreements. He frames it as the “engineering” approach against the “economic” approach—and, though he’s an engineer himself, he comes down on the “economic” side.

The basic distinction is this: Engineers typically look at roads as a closed system, with a certain number of vehicles and a given amount of space, and then ask how to arrange that space to ensure the most efficient passage of that quantity of vehicles. The preferences of the people inside the vehicles really don’t enter into the equation. As Vallée puts it, “the engineering approach…essentially eliminates humans from the problem.”

Would you want to walk on this street? Credit: Richard Masoner, Flickr
Would you want to walk on this street? Credit: Richard Masoner, Flickr

 

The economic, or behavioral, approach brings back humans—and with them, the idea that given amount of vehicle trips isn’t just a feature of the natural world, but the result of decisions by actual people who want to get somewhere in order to do something. The question then changes in a subtle but profound way: not how to speed vehicles through a road most efficiently, but how to best connect people with the places they want to go.

The engineering approach is simple, but inherently limited: because it takes the number of vehicles as a given, its tools are generally restricted to either creating more space by building new roads and widening existing ones, or getting rid of impediments to the flow of traffic—impediments like safe crossings for pedestrians, or sidewalk or plaza space that could be “better used” as wide-radius side lanes so cars don’t have to slow down as they turn.

In contrast, when vehicle trips aren’t a fact of nature but the result of decisions people make about how to get to the places they want to be—decisions that depend on many different factors, like travel time, cost, and the feasibility of other transportation options—you get a much bigger toolbox. Maybe charging for scarce and valuable road space through congestion pricing could help open up roadways in dense areas so that people who really need to use them can do so without crawling through traffic. Maybe the revenue from those congestion charges could help improve service on public transportation, so that some number of people choose not to drive, reducing the number or shifting the timing of vehicle trips (the same number that the engineering approach treats as unchangeable) and moving people onto much more space-efficient vehicles, like buses. Maybe changing land use policy would allow people to make fewer, shorter vehicle trips, or make other modes, like walking, biking, or transit, more attractive for some of them.

Here's a transportation solution for getting to school that doesn't involve traffic engineering. Credit: woodleywonderworks, Flickr
Here’s a transportation solution for getting to school that doesn’t involve traffic engineering. Credit: woodleywonderworks, Flickr

 

Bringing humans back into the question also allows you to acknowledge that people have desires that aren’t directly related to transportation. Safety, for example. Reducing the number and length of vehicle trips translates straight to fewer car crashes, and fewer avoidable serious injuries and deaths. Making streets a pleasant place to walk and gather—something that’s difficult when sidewalks have been narrowed to make room for speeding cars just feet away—can pay serious economic dividends and help establish a sense of community. In the economic or behavioral approach to transportation policy, all of these goals suddenly become fair game.

We would also add that the engineering approach means that a substantial amount of urban policy energy goes into “getting there”—rather than on the broader experience of “being there,” and how we might maximize those benefits, in terms both economic and social. Turning our cities’ streets into excellent conduits for high-speed vehicles means that they’re not excellent places for people to be. That takes a toll, both on our ability to create tight-knit, supportive communities that people are proud to be a part of, and to create thriving, prosperous neighborhoods with economic opportunities.

Vallée goes into much more detail on his blog, and it’s very much reading his whole post. The takeaway, however, is that transportation isn’t just about infrastructure: it’s about people, and what they want, and the full range of ways that we might help them get it.

When it comes to transit use, it’s all about destination density

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 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.

Philly
Source: ACS
Chicago
Source: ACS
TC
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 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.

Philly
Source: ACS
Chicago
Source: ACS
TC
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!

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

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.

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!

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

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:

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!

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

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.

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.


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!

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

Looking at housing injustice requires a broad lens

What does it mean for someone to be displaced by gentrification? And in a just world, what do our cities’ neighborhoods look like?

As reported by Next City, a team of researchers at the University of California-Berkeley has put together a an analysis that probes just those questions. But the stilted answers they come up with get at the heart of one of the greatest contradictions in the debate over where America’s cities are going, and where they ought to be.

Let’s back up for just a moment. The Urban Displacement Project, led by Miriam Zuk, wants to use predictive modeling to peer into the future of neighborhood change in the Bay Area. Drawing on previous theory, Zuk and her colleagues categorized every Census tract in the region into one of eight stages of gentrification, and used previous trends to project how much further gentrification might go.

So far, so good. But digging into the Urban Displacement Project’s methodology reveals a curious choice.

In their course of their analysis, Zuk and her team try to quantify the number of people who have been or might be “displaced” as a result of gentrification. How do you know if someone has been displaced? As the authors point out, previous researchers have generally cast a wide net: displacement might occur as a result of any number of factors, from disinvestment that makes a home unpleasant or dangerous to rising prices that force tenants to look for more affordable housing elsewhere.

But rather than attempt to sort through different types of change, the Urban Displacement Project simply assumes that any reduction in the number of low-income people in a neighborhood is a result of displacement. As Zuk acknowledges, this is rather extreme: it doesn’t leave room for someone to move away simply because, as people do, they decide that they would be happier living somewhere else; and it would define a low-income person who remained exactly in the same place but got a better-paying job as a “displaced person.” It’s unlikely that, in the teeth of the recession, this last number is particularly high—but unless we believe that economic progress in poor neighborhoods is impossible, it’s hard to see how this could be a viable assumption going forward.

This notion of displacement also seems to imply that neighborhoods are, or ought to be, entirely static and that their residents never move. We know that this isn’t true for neighborhoods in general, and poor neighborhoods in particular. As the Urban Institute has shown, one of the main ways that poor families improve their economic situation, get access to better schools and reduce their risks of crime is to move to different neighborhoods. As the Berkeley team writes, it’s probably not fair to describe those sorts of moves as totally “voluntary,” since the movers are reacting to deficits beyond their control in communities they may otherwise want to remain in. But in a context that’s heavily focused on gentrification, rolling this other kind of “displacement” may obscure more than it illuminates.

Neighborhood demographic change, after all, mostly depends on two things: who’s moving in, and who’s moving out. That means a neighborhood’s poverty rate will remain the same only if the poverty rate for each of those two groups is exactly the same. It also means that this balance can be thrown off by a change in either group. If the people moving in become less poor, the neighborhood’s poverty rate will fall even if nothing has changed about the people moving out. Even if, that is, people are not being displaced at any greater speed than they were before.

Much of the research on gentrification has focused on trying to untangle these two threads. In doing so, it has often found that neighborhood change is driven as much or more by a change in the “move-in” group than the “move-out” group. One of the most famous studies, by Columbia’s Lance Freeman, found that low-income residents of gentrifying neighborhoods were only somewhat more likely to move than low-income residents of non-gentrifying neighborhoods: the real difference was who was coming in to replace them. The Urban Displacement Project counts this shift in in-migration as displacement—which doesn’t leave room to interpret, say, a decline in neighborhood stigma that causes middle-income people to stop shunning a poor neighborhood as a positive development.

But the most fundamental problem with this definition of displacement is what it implies about the kinds of neighborhoods we want in our cities. If every reduction in the number of poor people in a neighborhood is “displacement”—and we agree that displacement is something to be avoided—then the only conclusion is that every neighborhood must remain exactly as poor as it is now.

Claiming that every neighborhood ought to stay as it is with respect to poverty—or, for that matter, racial segregation, although Zuk et al are mostly focused on economics—would be one thing in a country where the status quo was relatively egalitarian, and where the neighborhoods that people lived in reflected their own agency in a just, fair, and free society. But obviously wherever that country is, we do not live in it. When the status quo is the result of generations of discrimination and cruelty, taking Zuk’s position is chaining ourselves to a continuing legacy of terrible injustice.

In fact, a full 88 of the 129 tracts that the Urban Displacement Project identify as “gentrifying” are still poorer than the Bay Area as a whole. Obviously that doesn’t mean they’ll stay that way; gentrification and displacement is a process along a spectrum. But it does demonstrate how much room there is in many American neighborhoods to reduce the poverty rate without becoming an exclusionary bastion of privilege. The question is whether, once the process has begun, it can be arrested before housing prices push out all or nearly all of the original community of residents. The answer to that is not obvious everywhere, though our report, Lost in Place, showed that nationally, instances in which this process of improvement managed to reduce the poverty rate in previously high poverty neighborhoods are extremely rare. Despite high-profile examples of neighborhood change in some coastal cities, it’s not at all clear that there’s necessarily a gentrification “tipping point” that leads inexorably to the exclusion of all the poor.

None of this is to minimize the fact that, especially in places like San Francisco, rising home prices often constitute an injustice. Clearly, being forced to leave your home is wrong, even if you live in a neighborhood that has been a target of economic or racial segregation. But we need a framework for understanding housing and neighborhood change that allows us to talk about and address the full range of challenges our cities face. A definition of “displacement” that implicitly rejects any change to the status quo is not up to that task.

Instead, we need to ask what will lead to more open, diverse and integrated neighborhoods in our metropolitan areas. Just as it’s reasonable and necessary to ask how we’ll promote greater housing choices in the nation’s wealthy suburbs (a discussion provoked by the Obama administration’s Affirmatively Furthering Fair Housing rule), it’s necessary to think about what rectifying the pattern of segregation in America’s poor neighborhoods would look like as well.

The Week Observed: August 28, 2015

What City Observatory did this week

1. Another tall tale from the Texas Transportation Institute. This week, TTI released another episode of its “Urban Mobility Report,” claiming to measure the cost of congestion and track the continued worsening of traffic in American cities. The problem, as Joe Cortright explains, is that these reports are riddled with problems that TTI has declined to address. From failing to distinguish between mobility (the ability to travel great distances) and access (the ability to actually get to the places you want to be); to comparing data from years that used wildly different and incompatible methodologies; to ignoring evidence that adding roads has failed to reduce congestion even by TTI’s own metrics, it’s either time for the “Urban Mobility Report” to wise up, or for reporters to stop giving it such credulous coverage.

2. Are racial tipping points overblown? Daniel Kay Hertz looks at the popular idea of the “tipping point”: the theory that very mild racial housing preferences can lead to total segregation if just a few people of color move into a previously all-white neighborhood. While the theory is elegant, it turns out that the actual evidence is much more mixed, and there is good reason to believe that tipping points are no longer a major factor in most American neighborhoods. That’s important both for our understanding of why segregation happens, and for giving us reason to believe that more integrated urban communities aren’t an impossible dream.

3. Growing e-commerce means less urban traffic. Joe Cortright examines the potential effects on vehicle travel of increasing reliance on online delivery retailers like Amazon. Because these purchases reduce individual trips to brick-and-mortar stores while increasing the delivery density (and therefore efficiency) of delivery trucks, more e-commerce is probably creating a net negative impact on urban vehicle miles traveled.

4. New Orleans’ missing black middle class. Joe Cortright digs a little deeper into an article by FiveThirtyEight‘s Ben Casselman, who reports that the ranks of New Orleans’ black middle class has shrunk substantially since Hurricane Katrina ten years ago. Cortright finds that this narrative only applies to the city proper, however: New Orleans’ suburbs have seen an increase in middle class black residents, strengthening a trend that existed even prior to the hurricane.


The week’s must reads

1. Transportation for America reports that Phoenix’s voters have approved a sales tax increase that will generate more than $17 billion over 35 years to expand the famously sprawling city’s public transit network. Importantly, much of that money will be used not just to build new infrastructure, but to improve service—including adding frequency on bus lines. About 28% of the funds will go to tripling light rail capacity, and 7% will improve city streets, sidewalks, and bike lanes.

2. Robert Puentes at the Brookings Institution is also skeptical of TTI’s “Urban Mobility Report,” and asks what it would take to move towards a people-centered understanding of transportation priorities. In particular, understanding the distinction between simply covering great distances and actually reaching the jobs, stores, schools, and homes that people need access to is crucial.

3. At CityLab, Richard Florida writes about the dubious efficacy of “broken windows” policing. Rather than “public disorder” leading to more serious crime, a study by Robert Sampson and Daniel O’Brien finds that escalating private conflict is a much stronger producer of violence. Florida concludes that rather than focusing on physical signs of disorder, cities would be better off with a people-focused policing strategy that seeks to defuse tensions between neighborhood residents.


New knowledge

1. David Levinson, Brendan Murphy, and Andrew Owen of the University of Minnesota investigate the “safety in numbers” phenomenon: the idea that the presence of more pedestrians and cyclists reduces the crash rate for those non-vehicular street users. The authors find empirical support for this idea, showing that intersections in Minneapolis with more pedestrian traffic have much lower pedestrian crash rates. Exactly how the effect works is still unclear.

2. More evidence that segregation is one of the chief barriers to racial equality: Jeremy Fiel of the University of Arizona examines school segregation and resource allocation in American schools between 1993 and 2010. Fiel finds that “school segregation…was highest when and where resources such as teachers and expenditures were more unequally distributed across schools and school districts.” Mandatory desegregation programs, on the other hand, were successful in reducing levels of desegregation.

3. Patrick Button of the University of California, Irvine has bad news for economic incentives. Looking at motion picture production incentives, Button finds that these measures can have effects in areas where different cities are highly substitutable—like filming location—but not in other areas, like employment or the establishment of film production firms. Button concludes that the importance of agglomeration effects overrides whatever benefits the incentives provide.


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!

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

Are racial “tipping points” overblown?

Why are America’s neighborhoods so segregated? For a lot of people, the answer requires reaching deep into history: explaining the rise of the subsidized mortgage market and redlining; racial violence in towns from Cicero, Illinois to Charleston, South Carolina; restrictive racial covenants; blockbusting; and on and on.

But back in 1971, a professor named Thomas Schelling proposed a much simpler answer. It was called the “tipping point” model, and it suggested that near-total segregation might be the inevitable outcome of even very modest preferences for neighbors who look like you.

The intuition is very simple: imagine an all-white neighborhood where white people have a range of preferences about the racial makeup of their block. One day, a black family moves in. All the white families are okay with having a black family on their block—except for one of them, which moves away and is replaced by another black family. Now all the white families are okay with having two black families on their block, except for one of them, which moves away and is replaced with a black family. And so on, until there are no white families left.

Late last year, the tipping point model got a renewed burst of attention thanks to an incredibly well-made interactive web page called the “Parable of the Polygons,” which explained Schelling’s theory with anthropomorphic rectangles and triangles. The “Parable” was linked to across the Internet, with headlines like “An Immersive Game Shows How Easily Segregation Arises,” and “Math Explains Segregation.”

The evidence for tipping in American history…

But while tipping makes for elegant theory, it’s less clear that it actually works to describe what happened—or is happening—in American cities. The first study to search for empirical evidence of tipping looked at how the racial composition of neighborhoods changed depending on its starting point—and found something that looked very much like Schelling’s tipping point:

Screen Shot 2015-08-05 at 6.06.24 PM

This graph compares the percentage of a neighborhood’s population that was non-white in 1970 with racial change over the next decade. What you want to look at is the vertical line at about 5% minority in 1970. If there were no tipping point, you would expect the trend lines on either side of that vertical line to match up. Instead, they’re extremely far apart, suggesting that something happened when a neighborhood hit about 5% black and Hispanic that caused it to suddenly lose lots and lots of its white residents. In other words, a tipping point.

…and the evidence against tipping

But a follow-up study by William Easterly put some limitations on those findings. Instead of simply asking whether tipping points exist at all, it asked whether their results were as extreme as predicted by Schelling. Remember that in the original model, a small number of new black or Hispanic households could tip a neighborhood to being almost entirely black and Hispanic. That’s important for explaining American residential segregation, because many segregated neighborhoods do, in fact, have virtually no white residents.

But that’s not what the Easterly study found. Instead, while most neighborhoods became less white between 1970 and 2000—which makes sense, since the country as a whole did, too—there was very little evidence of a tipping point that led to all-black and Hispanic communities. While racial change did take place, with about 10% of all neighborhoods switching from majority-white to majority-black or Hispanic over that time period, they didn’t follow the pattern predicted by Schelling.

Screen Shot 2015-08-05 at 6.08.51 PM

For one, even nearly all-white neighborhoods—the ones on the far side of the “tipping point” that should be racially stable—became much less white over that time period. Even more surprising, neighborhoods where more than 75% of residents were black or Latino actually became whiter from 1970 to 2000. In a way, that makes sense, since we know that racial segregation is slowly declining; but it’s very confusing from a “tipping point” perspective, since even much smaller proportions of people of color are supposed to send white residents running.

So neighborhoods at the two extremes of segregation didn’t behave as predicted by the Schelling model. What about relatively integrated neighborhoods? According to tipping theory, these should be the least racially stable, quickly becoming dominated by one group or another. Instead, they were among the most stable: the typical neighborhood that was 50% white in 1970 changed less than neighborhoods that were 100% black or 100% white.

Why it matters

Now, there are important caveats to all this. This doesn’t at all contradict the large amounts of evidence that Americans, and especially white Americans, have pronounced racial preferences with regard to their neighbors, or that those preferences have major consequences. (Recall the Ed Glaeser and Jacob Vigdor study that explains lower property values in black neighborhoods, everything else being equal, by the artificial drop in demand that results from whites’ avoidance.) Also, because the available data only begins in 1970, we can’t totally rule out that something like the more extreme version of Schelling’s tipping point model actually did lead to segregation before 1970.

Still, in putting limits on Schelling’s model, Easterly’s study helps shine light on some of the dangers of relying too heavily on “tipping” to explain segregation. First, the tipping point model can be seductive because it tells a story about segregation in which there are no real villains: in a world with very mild racial preferences, it’s amazing “how easily segregation arises”—it’s “math”!

But we know that’s a very selective reading of the evidence. The historical record of racial segregation in American cities is clear, and there are lots of villains. They include the federal, state, and local governments, and the white voters that elected them; the realtors and bankers who enforced discriminatory real estate practices; and the many regular, everyday people who reacted to new black neighbors by throwing bricks or burning crosses, and the even greater number who failed to stand up to them.

But the fact that tipping points aren’t nearly as extreme as they’re often made out is also cause for optimism. Taken literally, the tipping point theory would lead to a pretty fatalistic view about the persistence of segregation: if only very small differences in preferences necessarily lead to widespread segregation, then it may be nearly impossible to make progress.  In the wake of the Obama Administration’s announcement that it would be more aggressively pursuing the mandate to “affirmatively further fair housing” in the 1968 Fair Housing Act, many skeptical commenters suggested that any attempt to introduce racial or economic diversity in privileged white communities would turn those neighborhoods into “Detroit”—the country’s poster child for white flight.

That’s a theory that’s more than a little self-interested, since many of the people arguing it live in exactly the kinds of communities that have “benefited” from exclusionary practices for decades. Look, for instance, at the outcry in Westchester County, NY, when HUD suggested that some of the policies that had kept many of its towns so privileged, like a refusal to allow subsidized housing or multi-family buildings, ought to change. Or the people who stood up at a public meeting outside St. Louis to insist that, while they personally didn’t have anything against allowing lower-income black students from a nearby district coming to enjoy the high quality of their schools, other people would probably pick up and leave, and soon the whole district would be poor and black.

But its plausibility comes from the broad acceptance of something like the “tipping point” idea. Easterly’s study shows that the breakdown of one kind of segregation doesn’t automatically lead to segregation at the other extreme—and that’s a thin reed of hope that less divided, and less unequal, cities might be more realistic than we think.

The next road safety revolution

“The automobile tragedy is one of the most serious…man-made assaults on the human body,” wrote Ralph Nader in 1965. “It is a lag of almost paralytic proportions that these values of safety…have not found their way into legislative policy-making for safer automobiles.”

Those words come from the preface of Unsafe at Any Speed, an expose of just how dangerous many midcentury cars were for their occupants, and helped usher in a revolution in automobile safety. In the post-Unsafe world, car makers now advertise protection against death or injury from accidents as one of the major attractions of their products, from arsenals of airbags to cutting-edge sensors that can avoid collisions to begin with.

But fifty years after that car safety revolution, we’re in desperate need of another one. The threat now isn’t the faulty design of cars: it’s the faulty design of streets.

The scope of the problem

Over the course of the 20th and early 21st centuries, American cities and suburbs transformed most of their streets from public spaces designed for walking, biking, and other kinds of transportation (as well as socializing, putting on public spectacles or demonstrations, or just watching the world go by) into highways that are dangerous for anyone not ensconced in a motor vehicle. The cartoon below, which was passed around the urbanist web a few months ago, may at first seem alarmist to many people—until you remember that on most American streets, stepping off the curb without a signalized intersection really would be courting death or serious injury.

Credit: Claes Tingvall
Credit: Claes Tingvall

Nor is this just a problem for postwar sprawlsvilles. Until recently, even New York City’s street design guidelines prioritized motor vehicle traffic over all other users of the public way, in ways that the city now acknowledges were extremely dangerous.

The result is that car crashes are one of the leading causes of unnecessary death and injury in the United States. In 2013, according to the CDC, there were 16,121 homicides nationally—to take an extremely serious problem that has received much attention in the past several years. In  In the same year, 33,804 people died in car crashes.

Even more alarmingly, many of those were children. For those under 25, car crashes are the leading cause of death.  Over 3,000 Americans age 19 and under died in car crashes in 2013. Many of them weren’t even in cars: almost 500 were simply walking down a sidewalk or crossing the street.

And if you add nonfatal injuries, the numbers are staggering. More than three million Americans were sent to the emergency room as a result of car crashes in 2013—more than half a million of them children and teenagers. It’s hard to imagine another part of our daily lives causing this much damage without an outcry to stop it. In fact, there isn’t much else that does: car crashes are the single most common cause of death for teenagers, and even one of the leading causes of death for children too young to drive.

The culpability of urban planning

True, some of this can be mitigated through changing behavior, in particular drunk driving and failing to wear seatbelts. But we shouldn’t be led to believe that these issues are behind all, or even most, of this public health crisis. According to the CDC, about 4 in 5 car crashes that result in the death of a child don’t involve drinking. And while wearing a seatbelt can reduce the risk of death in a car crash by about 50%, two-thirds of younger children, and nearly half of older children and teens, were wearing a seatbelt or appropriate booster seat at the time of the fatal crash.

The fact is that urban planning bears a major responsibility for the incredibly high numbers of serious injuries and deaths on our streets. We’ve known for years that relatively small increases in the travel speed have huge impacts on the severity of car crashes: A car that strikes a pedestrian at 20 mph has a 5% chance of causing a fatality; the probability of death rises to about 40% at 30 mph and more than 80% at 40 mph.

And yet the primary goal of street design, even in relatively densely-packed urban areas, has been to keep cars moving at high speeds. In cities like New York or Chicago, this has often been 30 or 35 mph—or more when drivers go faster than the speed limit. In many other cities, speed limits on arterial streets are 45 mph or more, virtually guaranteeing that full-speed crashes with pedestrians or bicyclists will be fatal.

Other measures, including narrow sidewalks or no sidewalks at all, and large distances between controlled intersections, also make roads more dangerous. These design choices result in cases like that of Raquel Nelson, who in 2011 was convicted of vehicular homicide because a driver hit one of her three children as they crossed the street. Prosecutors accused Nelson of recklessness because she wasn’t in a crosswalk—but there were no crosswalks anywhere nearby.

Nor is all of this some inevitable byproduct of modern life in a developed country. The United States has one of the highest rates of traffic deaths adjusted for population in the rich world: more than twice that of Spain, three times greater than that of the United Kingdom, and four times more than Sweden.

Even if you adjust for the fact that Americans drive more, the United States’ roads still stand out as some of the most dangerous: 20% worse than Germany, 40% worse than Denmark, and 71% worse than Norway.

As we’ve noted before, this is one of the cases where cities and urban living are the solution.  Because people drive less and drive more slowly in cities, traffic death rates are lower in more urbanized places.

Nor are dangerous streets an unchangeable part of national culture. In 1990, the US and UK had almost identical road fatality rates. But since then, the US has made much slower progress—and today, we suffer 71% more deaths for the same amount of driving. The difference is worth 14,000 American lives every year.

The good news is that we have examples to follow, both abroad and in our own country. American cities have begun to adopt the Vision Zero program pioneered in Sweden with a proven track record for improving safety. The program includes shifting infrastructure to prioritize safe mobility, rather than pure speed; using new technologies; and changing transportation management and regulation, including lowering speed limits where appropriate, such as New York City’s recent move from 30 mph to 25 mph on many streets.

We know these measures are effective at saving lives and preventing serious injuries. Given the state of American road safety, the only question is what we’re waiting for.

The suburbs: where the rich ride transit

This isn’t actually a post about transit. It’s about land use. But we’ll get there in a second.

Enrique Peñalosa, the former mayor of Bogotá, Colombia, is responsible for one of the most widely-shared quotes in the urbanist world: “An advanced city,” he said, “is not one where the poor use cars, but rather one where the rich use public transport.” The idea is that the end game of “development” isn’t to maximize private resources, but to create such strong public infrastructure that everyone is happy to use it.

But what about the opposite kind of city—one where the rich use public transit more than the poor? What can we say about that kind of development?

Well-to-do suburbanites on public transit

Philly

 

As it turns out, we don’t have to look very far. Above is a map of the Philadelphia region. Blue areas represent the familiar situation in which transit riders are poorer than drivers; but in orange areas, transit riders are richer than drivers. (I’ve whited out both kinds of places if fewer than 5% of all commuters use transit.)

The city itself, as we would expect, is mostly blue. After all, one of the main advantages of taking transit is that it’s much cheaper than driving—which is something you’d expect to be more and more important as your income declines. (In fact, research suggests that, sensibly enough, some low-income people choose to live in inner cities in part to get access to low-cost transportation.)

But most of the rest of the region is orange, turning our expectations on their head twice over: not only is it odd that there are places where transit riders are richer than people who drive, but to the extent those places exist, our intuition (or at least mine) would dictate that they would be in central cities, where transit service is very good—in other words, where we come closest to meeting Peñalosa’s vision. Instead, they’re overwhelmingly in the suburbs.

(And note that the map compares people only to their neighbors—so transit riders in the suburbs don’t appear richer just because the suburbs are wealthier in general. This shows that suburban transit riders are wealthier than suburban drivers.)

Nor is Philadelphia unique. The Minneapolis-St. Paul region, for example, shows a similar pattern.

TwinCities

 

What’s going on?

So how do we explain this? Well, here’s where we get back to land use. In America, people with higher incomes tend to have certain kinds of jobs: in particular, white-collar office jobs in fields like insurance, law, finance, and so on. In many American cities, those jobs are heavily concentrated in the downtown core. In cities like Philadelphia, which has an extensive commuter rail network, or Seattle and Minneapolis-St. Paul, which have a pretty good network of regional express buses, that makes commuting from the suburbs quite convenient: You can walk from the downtown station to your office, avoiding both the frustrations of driving in rush hour traffic and the expense of downtown parking.

But the situation looks very different for lower-income people. Those jobs are disproportionately likely to be blue-collar manufacturing or service sector, which are much more scattered across the metropolitan area. If you live in the suburbs, the prospect of commuting to another suburb by transit is probably pretty bleak: in most regions, very few suburban jobs are walking distance from a rapid transit station, and local suburban buses are often unreliable and too slow to efficiently travel across the massive distances of American metropolitan areas.

Faced with unreliable, extremely slow commutes by transit, most of those blue-collar and service sector workers will just find a way to buy a car and drive—even if it eats into the money they have for other important expenses. And so you end up with a situation where a lot of wealthy people have an easy transit commute to their jobs, but lower-income people do not.

Partly, this is a story about how different kinds of transit investments can have very different impacts: building another commuter rail line, for example, versus increasing frequency on a suburb-to-suburb bus.

Where are the jobs? Where are the stores?

But as I said at the top, it’s really a story about land use. Given the exact same access to transit infrastructure, the wealthy are able to use it more—simply because their jobs are clustered around transit, and other people’s jobs aren’t.

Not so much to walk to from here. Credit: Paul Sableman, Flickr.
Not so much to walk to from here. Credit: Paul Sableman, Flickr.

 

Looked at one way, that’s actually good news: rather than spending years planning and scrounging up money for new transit infrastructure, American metropolitan areas can massively increase the usefulness of the infrastructure they have—and improve their residents’ mobility, both physical and economic—by changing their zoning laws to encourage development within walking distance of transit. A few years ago, a meta-analysis of almost fifty travel behavior studies found that a density of destinations in a central location was one of the most important factors in making transit a useful form of transportation.

That applies to jobs, from manufacturing (where possible) to call centers—but since most trips aren’t actually commutes, it should also apply to all the other things people need access to: supermarkets, grocery stores, and homes. In many cases, bringing people, jobs, and amenities closer to transit is easier, and just as effective, as trying to bring transit closer to them.

* I should note that this pattern—with suburban transit riders being wealthier than suburban drivers—doesn’t hold everywhere. The necessary conditions seem to be 1) a concentration of high-paying jobs in a relatively dense downtown; 2) some sort of high-quality suburb-to-city transit, whether commuter rail or express buses; and 3) poor suburb-to-suburb transit service. Where one or more of these conditions are missing, you’ll get very different results. Here, for example, is Miami:

Miami

The suburbs: where the rich ride transit

This isn’t actually a post about transit. It’s about land use. But we’ll get there in a second.

Enrique Peñalosa, the former mayor of Bogotá, Colombia, is responsible for one of the most widely-shared quotes in the urbanist world: “An advanced city,” he said, “is not one where the poor use cars, but rather one where the rich use public transport.” The idea is that the end game of “development” isn’t to maximize private resources, but to create such strong public infrastructure that everyone is happy to use it.

But what about the opposite kind of city—one where the rich use public transit more than the poor? What can we say about that kind of development?

Well-to-do suburbanites on public transit

Philly

 

As it turns out, we don’t have to look very far. Above is a map of the Philadelphia region. Blue areas represent the familiar situation in which transit riders are poorer than drivers; but in orange areas, transit riders are richer than drivers. (I’ve whited out both kinds of places if fewer than 5% of all commuters use transit.)

The city itself, as we would expect, is mostly blue. After all, one of the main advantages of taking transit is that it’s much cheaper than driving—which is something you’d expect to be more and more important as your income declines. (In fact, research suggests that, sensibly enough, some low-income people choose to live in inner cities in part to get access to low-cost transportation.)

But most of the rest of the region is orange, turning our expectations on their head twice over: not only is it odd that there are places where transit riders are richer than people who drive, but to the extent those places exist, our intuition (or at least mine) would dictate that they would be in central cities, where transit service is very good—in other words, where we come closest to meeting Peñalosa’s vision. Instead, they’re overwhelmingly in the suburbs.

(And note that the map compares people only to their neighbors—so transit riders in the suburbs don’t appear richer just because the suburbs are wealthier in general. This shows that suburban transit riders are wealthier than suburban drivers.)

Nor is Philadelphia unique. The Minneapolis-St. Paul region, for example, shows a similar pattern.

TwinCities

 

What’s going on?

So how do we explain this? Well, here’s where we get back to land use. In America, people with higher incomes tend to have certain kinds of jobs: in particular, white-collar office jobs in fields like insurance, law, finance, and so on. In many American cities, those jobs are heavily concentrated in the downtown core. In cities like Philadelphia, which has an extensive commuter rail network, or Seattle and Minneapolis-St. Paul, which have a pretty good network of regional express buses, that makes commuting from the suburbs quite convenient: You can walk from the downtown station to your office, avoiding both the frustrations of driving in rush hour traffic and the expense of downtown parking.

But the situation looks very different for lower-income people. Those jobs are disproportionately likely to be blue-collar manufacturing or service sector, which are much more scattered across the metropolitan area. If you live in the suburbs, the prospect of commuting to another suburb by transit is probably pretty bleak: in most regions, very few suburban jobs are walking distance from a rapid transit station, and local suburban buses are often unreliable and too slow to efficiently travel across the massive distances of American metropolitan areas.

Faced with unreliable, extremely slow commutes by transit, most of those blue-collar and service sector workers will just find a way to buy a car and drive—even if it eats into the money they have for other important expenses. And so you end up with a situation where a lot of wealthy people have an easy transit commute to their jobs, but lower-income people do not.

Partly, this is a story about how different kinds of transit investments can have very different impacts: building another commuter rail line, for example, versus increasing frequency on a suburb-to-suburb bus.

Where are the jobs? Where are the stores?

But as I said at the top, it’s really a story about land use. Given the exact same access to transit infrastructure, the wealthy are able to use it more—simply because their jobs are clustered around transit, and other people’s jobs aren’t.

Not so much to walk to from here. Credit: Paul Sableman, Flickr.
Not so much to walk to from here. Credit: Paul Sableman, Flickr.

 

Looked at one way, that’s actually good news: rather than spending years planning and scrounging up money for new transit infrastructure, American metropolitan areas can massively increase the usefulness of the infrastructure they have—and improve their residents’ mobility, both physical and economic—by changing their zoning laws to encourage development within walking distance of transit. A few years ago, a meta-analysis of almost fifty travel behavior studies found that a density of destinations in a central location was one of the most important factors in making transit a useful form of transportation.

That applies to jobs, from manufacturing (where possible) to call centers—but since most trips aren’t actually commutes, it should also apply to all the other things people need access to: supermarkets, grocery stores, and homes. In many cases, bringing people, jobs, and amenities closer to transit is easier, and just as effective, as trying to bring transit closer to them.

* I should note that this pattern—with suburban transit riders being wealthier than suburban drivers—doesn’t hold everywhere. The necessary conditions seem to be 1) a concentration of high-paying jobs in a relatively dense downtown; 2) some sort of high-quality suburb-to-city transit, whether commuter rail or express buses; and 3) poor suburb-to-suburb transit service. Where one or more of these conditions are missing, you’ll get very different results. Here, for example, is Miami:

Miami

Between highrises and single-family homes

 

 

One of the most controversial recommendations from Seattle’s affordable housing task force, or HALA, was to reform zoning laws that only allow single-family homes in certain neighborhoods. That was always going to be a challenge—as Sonia Hirt argues in her history of American zoning, Zoned in the USA, prioritizing and protecting single-family-home-only neighborhoods from other kinds of uses, including multi-family apartments and condos, is possibly the defining feature of American urban planning. Unsurprisingly, opponents launched a campaign warning their fellow single-family-home dwellers of impending doom: multi-story apartments towering over quiet streets, bringing traffic, shadows, and all sorts of unsavory renter types.

But the HALA suggestion was much more modest than that vision of catastrophe. Rather than building highrises, or even midrises, in previously suburban-looking streetscapes, they wanted to allow a kind of housing that’s become practically extinct in many cities: duplexes and triplexes.

Extinct, anyway, in new construction. This kind of mid-density, low-rise housing—including duplexes, triplexes, townhomes, and other low-density multi-family buildings—has been called the “missing middle”: American cities build lots of single-family homes, and (in a certain places) some larger apartment complexes, both in the form of sprawling suburban “apartment communities” and downtown highrises. What we don’t build are the kind of human-scaled, moderately-dense housing that has historically made up the bulk of America’s urban neighborhoods.

Neighborhoods in Chicago, San Jose, and New Orleans with a traditional mix of single-family homes and lowrise multi-family.
Here, for example, is the breakdown of all new construction in the Seattle metropolitan area over the last ten full years:

  And it’s not just a Seattle thing. Cities across the country have the same issue:

 

Why care about housing’s “missing middle”?

Why does any of this matter? Several reasons. In places where housing prices are an issue, small multi-unit buildings can provide lower-cost housing at market rates—and lower construction costs for nonprofit developers building subsidized housing. These buildings can be placed in single-family districts, many of which are low-poverty “opportunity areas,” without disrupting their lowrise character.

Second, duplexes and triplexes can be a low-visual-impact way to add people to a single-family-home neighborhood. The added density, in turn, can make those communities viable for walkable neighborhood commercial districts, or high-frequency, “show up and go” bus service.

In other words, the “missing middle” is a way to diversify and urbanize low-density neighborhoods without drastically changing the appearance or character of quiet, “suburban”-looking streets that residents of single-family-home areas often value. Charles Marohn of Strong Towns has written about this extensively as a kind of gradual “maturing” of residential neighborhoods, rather than “leapfrog” construction that jumps from mostly single-family homes to midrises or highrises right away.

And missing middle housing can be one key to helping older Americans age-in-place, staying in the same community that they’ve been in, but trading a larger, single family dwelling, for a smaller, but still very much in character unit in a duplex, triplex or other one of these “middle” type housing units.  Many aging baby-boomers live in suburban, single family tracts where there are few alternatives to down-size in their current neighborhoods.  As we’ve noted, all of the net growth in home-ownership in the next two decades is expected to be among households whose heads are aged 65 and older.  Many of these households would no doubt enjoy being owners of smaller scale properties in their own neighborhoods–if they were available.

Of course, denser forms of building are still important. Midrises and highrises allow lots and lots of people to live near major commercial corridors, job centers, and transit hubs, all of which is crucial for giving our cities’ residents economic and social opportunities. High-density buildings also minimize disruption in their own way—a 100-unit highrise downtown might only take up a street corner, but 50 duplexes would take up several whole blocks.

Still, it seems like too many of our cities, including Seattle, have just two settings for urban growth: sprawl and full-on urban density. Figuring out exactly where the roadblocks are to a more moderate kind of density—regulation, financing, and so on—may help keep neighborhoods open to more (and more diverse) people, while respecting the look and feel many residents of relatively low-density communities would like to keep.

Urban buses are slowing down

Back in June, we catalogued how riders weren’t really abandoning buses—buses were abandoning their riders, with significant cuts to service in many metropolitan areas that appeared to be driving declines in ridership.

Further analysis of transit data since 2000 suggests that bus riders may have another problem: not only are there fewer buses on their route, but when they do show up, they’re slower.

In this chart, we’ve used data from the National Transit Database to compute the average system-wide bus speed, by dividing the total number of revenue miles traveled by the total number of revenue hours operated.  This gives us a single, highly aggregated measure of how fast a “typical” bus is moving in each city in each year.

Since 2000, the median urbanized area of a million people or more has seen their average public bus speed drop from 13.6 mph to 12.7 mph, or about 6.6%. That might not seem like a lot, but it adds up to about 20 minutes a week for someone whose commute used to be half an hour each way. Especially if the wait for the bus is longer, adding another few minutes for each trip, that could be significant.

Interpreting these numbers is difficult, though. There are any number of reasons that average speed might decline. The most obvious possibility, perhaps, is simply that there’s more general traffic, slowing buses along with all other motorized vehicles on the road. In some ways, this makes sense. It’s clear that for the most part, larger cities and those with more congested roads have slower buses: the average bus speed in New York in 2013 was 9.5 mph, while Phoenix’s buses traveled at a much faster 12.2 mph. (Of course, as with private vehicle congestion, slower doesn’t always mean worse accessibility: if New York buses are 25% slower, but your destinations in New York are 50% closer, you’ve got better access to where you’re going in New York.)

On the more nefarious side, cutting service could end up slowing buses down if there are now more passengers per pickup, forcing the bus to wait longer at its stops for everyone to get on and pay. While that may be a problem for some lines and in some metropolitan areas, there doesn’t appear to be any overall correlation between cutting service and slower buses:

It’s also possible that average speeds could decline without any clearly negative impacts on service. Our measure of system-wide bus speeds will pick up changes in the mix of route types that a city runs, so some year-over-year changes may reflect that, rather than changes in the speed of any particular route. Imagine, for example, a transit agency that decides to cut back on suburb-to-city commuter express buses with little ridership and instead focus on local routes in neighborhoods where residents, jobs, and amenities are more densely packed. That would almost certainly reduce the agency’s average bus speed, but might at the same time increase the number of people with access to useful transit service.

Still, though it’s impossible to know with this data, that explanation seems unlikely to be behind the change across the more than forty urbanized areas with over a million people included in this analysis. To know for sure, you’d have to look metro by metro—and probably agency by agency—and look at their service changes over the last thirteen years.

At the very least, though, these numbers should give transit advocates pause. While vehicle speed isn’t the only, or even most important, factor in good bus service, it does matter—and slow speeds are hardly inevitable. Better stop spacing, all-door or proof-of-payment boarding, and bus lanes can all dramatically improve speeds. The current downward trend suggests that these interventions may be increasingly needed.

The Week Observed: August 7, 2015

What City Observatory did this week

1. Let’s talk about neighborhood stigma. Daniel Kay Hertz reviews some of the literature on the interplay between a neighborhood’s reputation and its disadvantage—and finds a surprising reversal in the conventional understanding of the issue. Rather than problems like greater crime or vandalism leading to bad reputations, researchers like Harvard’s Robert Sampson have found that communities acquire reputations in large part because of factors like racial makeup. Those reputations, in turn, create stigma that actually create many of the disadvantages that they supposedly reflect.

2. Urban buses are slowing down. A look at the data shows that since 2000, the average bus speed in urban areas of at least a million people has slowed by close to 7%, from 13.6 to 12.7 mph. Daniel Kay Hertz goes through why that matters, and a few of the possible culprits.

3. Revisiting Marietta. Joe Cortright returns to the subject of the Atlanta suburb that’s tearing down “naturally occurring” affordable housing for a private commercial development. Joe argues that it’s wrong to single out Marietta—many other cities have simply been more successful in keeping out low-income housing, and low-income people, to begin with. Those municipalities, and the laws that enable them, also ought to come under criticism.

4. The McMansion mirage reappears. Joe Cortright returns to the question of what it means for McMansions to be “back.” Several media outlets have made that claim, following reports that the median square footage of newly-built single family homes is climbing. But actual levels of McMansion construction are down over 40% since before the housing bust.

5. We got an assist this week from Justin Palmer, who used data from our report “Lost in Place” to visualize income trends in major metropolitan areas across the country. Check it out! This is just a taste:

Screen Shot 2015-08-07 at 10.51.44 AM


The week’s must reads

1. It’s not a read, but The Problem We All Live With, New York Timesreporter Nikole Hannah-Jones’ hourlong documentary for This American Life, is a must-listen. Hannah-Jones covers the problem of school segregation through the story of a school district outside St. Louis that did something very unusual—it accidentally desegregated. What happened afterwards is both a reason for hope and a damning account of the racial hurdles many Americans still aren’t ready to overcome.

2. In Where Should a Poor Family Live?”, Thomas Edsall criticizes some affordable housing advocates and developers for building housing mostly in low-income neighborhoods, rather than higher-income areas that might lead to greater economic and racial integration. He even notes that several affordable housing organizations wrote an amicus brief to the Supreme Court asking it to strike down the stronger “disparate impact” interpretation of the Fair Housing Act. (For an opposing view, professor Edward Goetz has some critiques of the move to disperse affordable housing.)

3. We don’t generally cover city finances at City Observatory, but thisGoverning piece on how many public pension funds are struggling should alarm anyone who’s committed to using local resources for maintaining important social services, including housing support, transit, and other community development. Philadelphia, for example, saw a return of just 0.5 percent in Fiscal Year 2015, and in New York City, four of five public pension plans saw returns of under 5 percent—but most pension plans are funded under the assumption they will see an average return of 8 percent.


New knowledge

1. At the Urban Institute, three writers argue that existing data on local businesses, while able to shed some light on neighborhood change, is inadequate to the needs of planners and researchers. Christina Plerhoples Stacy, Brett Theodos, and Carl Hedman write that two rapidly gentrifying neighborhoods in Washington, DC, have seen faster growth in total businesses compared to a non-gentrifying district—but, somewhat counter-intuitively, have actually seen a decline in the number of full-service restaurants, while limited-service restaurants spiked. Existing data, however, can’t distinguish between a fast-food McDonald’s or high-priced cafe, and so make it hard to interpret these numbers in a shifting social and economic context.

2. A new paper from Robert Noland and Stephanie DiPetrillo in the Journal of Transport and Land Use provides even more evidence for the impact of transit-oriented development on the choice of transportation. Shockingly enough, even with a bevy of controls, those who lived in housing close to train stations in New Jersey were much more likely to use transit that those who lived further away.

3. Conventional wisdom is that racial segregation in America, though still unacceptably high, has been declining since about 1970. But a new paper from Daniel Lichter, Domenico Parisi, and Michael Taquino in the American Sociological Review challenges that view. While acknowledging that neighborhood-level segregation has declined, the study suggests that municipality-level segregation has actually increased since 1990. Moreover, because municipalities are the level of both social service delivery and exclusionary policies, the authors argue that this may be a more meaningful geography of analysis, casting doubt on progress many believe American cities have made.


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!

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

The Week Observed: July 31, 2015

What City Observatory did this week

1. Our old planning rules of thumb are “all thumbs.” Joe Cortright argues that many of the heuristics that have guided urban planning for decades, such as “wider streets are safer streets,” and “faster traffic flow is always better,” have long outlived their usefulness. We offer five of these outdated rules of thumb, and four new ones in their places, including “closer is better” and “slower is safer.”

2. How cutting back on driving helps the economy. While earlier predictions saw oil consumption climbing throughout the early 21st century, it turns out that oil use has flatlines, even as population continues to climb. What’s going on? Joe Cortright shows that less driving, more than any other factor, is leading to the difference. In addition to having positive benefits for the environment and urban safety, it’s also helping to balance out our macro-economy.

3. The difficulty of applying inequality measurements to cities. The Brookings Institution is perhaps the most high-profile of several outlets to try to discuss income inequality at the local level. But is that the right way of looking at it? Joe Cortright points out that measuring income inequality at the city or even metropolitan level rewards cities that have managed to push out the poor through a lack of services or high housing prices. On the flip side, if a city like Detroit adds some well-needed middle- and upper-income residents to help support its tax base, its inequality will appear to worsen.


The week’s must reads

1. One step back, one step forward: The Urbanist reports that Seattle’s Mayor Ed Murray has walked back some of the more aggressive proposals for zoning reform produced by his own affordable housing task force, including allowing duplexes in single-family zones. The other sixty-plus recommendations may still go forward. Meanwhile, Chicago is moving forward with its own proposal to eliminate parking requirements up to half a mile from rapid transit stations, and give extra density bonuses for affordable housing. The Metropolitan Planning Council has put together an interactive display to show the proposed ordinance’s effects.

2. Lawrence Schall, the president of Oglethorpe College in Atlanta, spent some time as an Uber drive to understand the new “sharing economy.” One of his major discoveries: most of his fares weren’t young professionals taking a ride back from a bar – they were often lower-income people taking routine trips that in another city might have been served by transit. Many of his riders, in fact, were going to or from MARTA stations – spending an extra $5 on his fare in addition to the $2.50 transit cost. Several even used Uber to commute. Schall’s experience hits home how stranded many Atlantans are without transit – and that Uber, though it can fill some gaps, isn’t as affordable or reliable for routine trips as a good public transit system.

3. Announced plans for a vastly improved LaGuardia Airport in New York City have met with major pushback from transit advocates, reports CityLab. In particular, groups like the Riders Alliance object that the new plans prioritize access to the airport by car, rather than transit — and that characterizations of LaGuardia as “third world” are inappropriate given the much more dire conditions in much of the New York subway and bus service.


New knowledge

1. New research on how cities dispose of vacant properties reveals a clear tradeoff: while auctions allow municipalities to make some financial gain quickly, often within 24 hours of sale, there are downsides. Because of the more difficult conditions for buyers — a lack of time to inspect the properties, for example — the land often ends up in the hands of flippers who aren’t interested in making investments. Managed sales, on the other hand, allow both planning staff and buyers more time to understand the deal, encouraging new owners who are interested in long-term investments. The study, by Margaret Dewar of the University of Michigan, found that properties sold via managed sale were in much better condition afterwards than properties sold via auction.

2. A study from UC-Berkeley’s Transportation Sustainability Research Center shows that about 40% of ZipCar customers either sell their car or don’t make a car purchase they would have otherwise. That suggests that carsharing services like ZipCar or Enterprise CarShare could have dramatic effects on overall car ownership patterns in neighborhoods where they’re heavily used, reducing parking needs and encouraging other kinds of transportation. The same study finds that 41% of ZipCar customers take transit more than they did before and 22% bike more.

3. Comparing cities in five countries, a paper from the OECD looks at what characteristics might help drive urban productivity. Among those: larger populations, as well as larger populations of nearby cities. On the flip side, cities with more governmentally fragmented metropolitan areas — that is, more sub-regional units of government — are generally less productive.

Note: Last week, we wrote that a study found that “project-based affordable housing does not improve ‘neighborhood quality’ for residents, compared to voucher-based housing subsidies.” That was a misleading description — both Housing Choice Vouchers and LIHTC projects performed better at locating recipients in high-quality neighborhoods than traditional public housing, but neither HCV nor LIHTC consistently outperformed the other.

Let’s talk about neighborhood stigma

My hometown, Chicago, is having a fight over words: in particular, “Chiraq.” That’s a portmanteau of “Chicago” and “Iraq,” which is meant to analogize the city not to that country’s rich cultural heritage, or extreme weather, but to its war. The name seems to have come from a South Side rapper, but has since been popularized by headlines in decidedly non-South Side outlets, at least three different VICE mini-documentaries, and most recently an in-the-works Spike Lee movie.

Most cities might not have a nickname with such staying power, but they’re familiar with the concept. “Killadelphia”; “Murder Worth”; “Bullet Town”; even “Murder Kroger.” Last year, a website called “Judgmental Maps” made a name for itself by posting annotated maps of American cities; some of the entries for Atlanta, to take a city at random, included “Little Crackistan,” “Dangerous Mexicans,” and “Avoid.” The map for Washington, DC, labeled all of the Anacostia area simply “GUNS & AIDS.” Around the same time, an app called SketchFactor announced that it could help you get where you were going while avoiding “sketchy” neighborhoods.

Judging by the debate in Chicago, many people don’t see a problem with these expressions of local reputation. In a widely-shared essay, one prominent writer declared that “Chiraq” was indicative of real problems, from violent crime to concentrated poverty, and “arguing over what to call” that “shameful reality” was simply a tool of distraction—putting up a Potemkin facade to avoid dealing with the real issues.

Part of Judgmental Maps’ map of Washington, DC.

 

It’s certainly true that the problems “Chiraq”—and, for that matter, “Killadelphia” or “Bullet Town”—was meant to encapsulate are real. (Even the “Murder Kroger” really did witness a murder.) But the second part of the argument—that the name itself is harmless—is simply not true.

Over the last few years, issues of racial and economic segregation have seen a new burst of attention, covering historic issues like redlining and cutting-edge research on the effect of concentrated poverty on economic mobility. But one of the squishier sides of segregation has received much less coverage: stigma.

Stigma creates the very problems it supposedly reflects

In part, that’s understandable: it’s much harder to measure stigma than it is to measure segregation—or even, as it turns out, to measure intergenerational economic opportunity. But that doesn’t mean it’s not a real, and powerful, force. In fact, strong evidence suggests that stigma can help create the very disadvantages it supposedly reflects.

In his book Great American City: Chicago and the Enduring Neighborhood Effect, the Harvard sociologist Robert Sampson recounts an experiment that involved taking extensive data, including resident surveys, from neighborhoods across Chicago over several years, from roughly 1995 to 2002. One question was whether they could use data collected in 1995 to predict what would happen to neighborhoods over time—including what would happen to their poverty rates.

The results are amazing: a neighborhood’s reputation in 1995 was a stronger predictor of poverty in 2000 than almost any other variable, including the neighborhood’s poverty level in 1995. Put simply, if you want to predict what a neighborhood’s poverty rate will be in a few years, knowing whether that neighborhood has a bad reputation is just as useful as knowing its actual poverty rate today.

But don’t neighborhoods get bad reputations because they already have serious issues? To some extent, yes. But Sampson also found that neighborhoods stigmatized as places where, say, public drinking, fighting, or drug dealing were a major problem were not necessarily the neighborhoods with the highest levels of those activities. Instead, the race and immigrant status of a neighborhood’s residents had a “more powerful” effect on reputation than the actual amount of undesirable behavior.

Reputation as a mechanism of inequality

In other words, much of the popular understanding of how neighborhood reputation works is backwards. Communities acquire a reputation for being “sketchy” to some extent independently of whether or not that “sketchiness” is real—and in a way that’s heavily influenced by racism. Once they have a bad reputation, however, the stigma helps create the very problems it warns others away from—in part by causing people to avoid the neighborhood. In Sampson’s words, “stigmatization” becomes a “self-fulfilling prophecy,” and “shared perceptions of disorder…appear to be a mechanism of durable inequality.”

Nor is Sampson’s work the only evidence pointing towards this conclusion. In a paper published in April of this year, researchers from NYU found that online classified ads from stigmatized neighborhoods received many fewer responses than the exact same ads that described the poster as being from a non-stigmatized neighborhood, suggesting that a neighborhood’s reputation may affect its residents’ economic opportunities. And anecdotally, many city leaders say the same thing. Our colleague Carol Coletta at the Knight Foundation once asked then-Newark Mayor Cory Booker what his greatest challenge was. His replied, “Getting people to believe that things can be different.” He saw a realistic hope that things could get better as an important factor in creating and sustaining positive change.

One part of a system of disadvantage

To be clear, the geography of inequality is not simply an invention of our heads. Very real economic and social systems stretching back generations have led to dramatic and devastating differences in quality of life from one neighborhood to the next in nearly every city in America, and pretending that those inequalities don’t exist would ensure that we don’t do anything to rectify them.

But it is now very clear that the reputations we help create through the way we talk about local inequalities—perceived or actual—have a real, and dangerous, power. At the extreme, I suspect we’ve always know this: presumably even the defenders of “Chiraq” would acknowledge that popularizing a community as “Little Crackistan” could not possibly do anything positive for that neighborhood’s trajectory. But stigma doesn’t need to be so crass to work perniciously. The challenge, then, is to talk about our deeply unequal cities in a way that is tightly tied to the actual facts on the ground, and not racial stereotypes; to describe, without dismissing or caricaturing.

That’s a pretty vague charge, it’s true. But maybe we can start simply by acknowledging that words, and the stigmas they can represent and shape, aren’t harmless.

Measuring housing affordability: What about homeowners?

Over the past two posts, we’ve argued that the most common measure of housing affordability – whether someone is paying more than 30% of their income – has a lot of serious problems. For one, housing costs are only one facet of overall location costs: if you move from the city to the suburbs for cheaper housing but end up having to buy a car, you might not be saving any money at all. On top of that, the 30% metric ends up telling us that lots of wealthy people who choose to spend lots of money on luxury housing are “burdened,” while a lower-income person who spends less than 30% of their money on housing but still doesn’t have enough left over for other necessities is not.

We also suggested that a “capabilities-based” approach to housing affordability – one that’s focused on whether the price of a given location allows people to have access to the basic building blocks of modern American life – might end up with something very much like the “residual income” approach advocated by Michael Stone of Boston University. With that measure, you subtract the location-based costs a household pays from their total income, and compare what’s left over – the “residual” – to what they need to spend on other necessities like food, clothes, and telecommunications.

Both of those posts focused mainly on renters. In this post, we’ll look at owner-occupied homes – where the situation is even more complicated.

Why is trying to grasp what “affordability” means to someone who owns their own home complicated? Probably the biggest issue is that unlike rent, your mortgage payments are really buying two products: a place to live, and an investment vehicle. For the vast majority of homeowners, a home is a wealth-building engine that they hope will appreciate in value, so that one day it can be sold at a profit, either for themselves or their children. In principle, the idea isn’t terribly different from buying a stock portfolio.

Housing wealth makes up close to half of total American household wealth, and can help pay for college tuition, retirement, and other important life events. In other words, it’s very important – but it’s not exactly as necessary as having a roof over your head. As a result, it doesn’t really make sense to include home-as-investment-vehicle in basic measures of affordability. At the very least, it may make sense to discount the potential profit a homeowner can expect to earn from their investment against their mortgage payments.

But there are several complications to doing that. For one, we can’t necessarily know how much a home is going to appreciate in value, or whether it will appreciate at all. On top of that, the profit that a homeowner enjoys comes at a different time than their house payments – in other words, they have a cash flow problem. Imagine a retiree on a fixed income whose home value increases dramatically: she is now much wealthier on paper, but may not be able to actually make her property tax payments because she can only access that wealth by selling her home.

On the other hand, because homeowners expect this payoff – and because many homeowners expect to live in their homes for many years – a buyer may decide to spend more money on their home than they would otherwise be willing to spend. Buyers may also take into account that their incomes are likely to rise over the time they are living in their home. Imagine a 30-year-old buying his first home, and planning on living there for up to ten years. By the time he’s 40, his income will probably be higher – and knowing that, he may be willing to pay more for a home than he would be willing to spend on rent.

In practice, it still makes sense to use the same residual income method to measure owner-occupied housing affordability. But when it comes to looking at particular policies, taking into account the dual shelter/investment nature of homeownership is important. For example, homeowners in neighborhoods where housing values are rapidly appreciating may find that their property tax bills are higher than they anticipated when they bought – and higher than their income allows them to pay without making unreasonable sacrifices. While some advocates have suggested property tax forgiveness in these cases, property tax delay may actually make more sense. After all, a homeowner’s rising tax bill is a sign that they are becoming wealthier – just in a way that doesn’t change their immediate cash flow. Rather than giving a tax break to someone experiencing a windfall, and denying local governments revenue for essential services, it may be better to simply collect them if and when the homeowner actually sells their home and experiences the gains from their investment.

But either way, using a 30% ratio of housing costs to income isn’t going to give us a good idea of who is really burdened by unaffordable housing and who isn’t. For both renters and homeowners, we need something new. The residual income approach does a much better job of indicating when a given household is capable of paying both for housing and the other necessities of a modern American life. It deserves a more prominent role in our ongoing affordability debates.

Residual income: a better way of measuring affordability

This week, we’re running a three-part series on the flawed way that we measure housing affordability. Yesterday, we looked at exactly what’s wrong with one of the most common ways we determine what “affordable” means. Today, we’re looking at an alternative measure, “residual income.” In the final part, we’ll examine the particular challenges of understanding “affordability” for owner-occupied homes.


Yesterday, we investigated some of the shortcomings of the most common index of housing affordability. Most measures rely on a 30% threshold, and suggest that someone is housing-burdened if they pay more than 30 cents per dollar of income on their rent or mortgage. But that figure obscures a lot of other important information: how much money someone has left to pay for other necessities; how much someone will have to pay in other location-related costs, like transportation; and whether the housing purchased is of acceptable quality.

So how might we improve on that?

Well, what the 30% (or 45%) threshold is trying to capture – what the concept of “affordability” really means – is “ability to pay.” What we really want to know, when we ask if housing is affordable, is whether a given person or family can buy themselves acceptable housing without sacrificing any other necessities, from decent food to work-appropriate clothing, child care to retirement savings. We want to know whether the price of housing – including the transportation options that go with that housing – makes you more or less financially capable of living a reasonably comfortable life.

Two-flats in Chicago. Credit: Jeremy Atherton, Flickr.
Two-flats in Chicago. Credit: Jeremy Atherton, Flickr.

 

So what would a capability-based housing affordability measure look like? Fortunately, there’s already a good proposal. The “residual income” approach, promoted most notably by University of Massachusetts-Boston professor Michael Stone, looks explicitly at non-housing costs – either for real individual households or an imagined “typical” household meant to represent a particular demographic – and subtracts those from total income. What’s left over – the “residual” – is how much you can afford to spend on housing without sacrificing other necessary payments.

Unlike the 30% threshold, the residual income approach actually measures your ability to pay, which means that it won’t spectacularly fail “tests” like the one in Part 1 of this post. It acknowledges that different people have different spending needs, and that affluent people who choose to buy expensive housing are indulging in a luxury, not suffering from an affordability crisis.

In addition to addressing equity concerns, the residual income approach automatically adjusts for other location-based costs. If choosing to buy a home in a particular place means that transportation costs go up by $300 a month, then the residual income method will require that there be an extra $300 budgeted outside of housing costs in order for that home to be “affordable.”

It’s less clear how to incorporate housing quality. If access to education, for example, is one of the “capabilities” we think is essential, then you might say that anyone whose housing location doesn’t give them access to decent public schools – and who can’t afford to send their children to private schools – doesn’t have access to affordable housing of acceptable quality. But what sorts of cutoffs to use, and what else counts towards “acceptable housing quality,” is obviously up for debate. How to integrate those sorts of concerns into the housing affordability conversation is a difficult question, but one that needs to be acknowledged.

New housing in Dallas. Credit: Matthew Rutledge, Flickr.
New housing in Dallas. Credit: Matthew Rutledge, Flickr.

 

Another issue is that “residual income” is a bit harder to calculate than the 30% threshold, since it requires knowing much more about a given household than just their total income. But it’s far from impossible, and is already being employed at scale by the Department of Veterans Affairs, which uses a version of the residual income approach to qualify veterans for mortgages.

Michael Stone has also worked out how the national affordable housing landscape changes if you use residual income, rather than income ratios, as your yardstick. It turns out that the number of people suffering from unaffordable housing stays roughly the same – it’s just that they’re different people. As in our example above, residual income sees far less of a problem for wealthier, smaller households, and far more of a problem for poorer, larger households.

And when it comes to deciding who to target with affordable housing policies – and how much help they need – that can make a big difference. As affordable housing becomes one of the defining issues for many of our largest, most economically successful cities, making sure we understand what “affordable” really means is crucial. The 30% standard, though sometimes useful as a rule of thumb, is too blunt to be our main tool. It makes sense to shift to an approach that measures whether or not people can afford the makings of a stable life in America, which requires going beyond a simple cost-income ratio. The residual income metric is a good candidate.

The Week Observed: July 24, 2015

What City Observatory did this week

This week, we ran a three-part series on what we mean by “housing affordability.”

1. In The way we measure housing affordability is broken, Daniel Kay Hertz writes about the problems with the most common way “affordable housing” is interpreted: as housing costs that make up no more than 30% of household income. Three major problems include a) equity issues, because lower-income households may be less able to spend 30% of their income on housing than higher-income households; b) a failure to include other place-based costs, like transportation; and c) a failure to consider the quality of housing purchased – including the characteristics of the surrounding neighborhood.

2. In Residual income: a better way of measuring affordability, we suggest an alternative to the 30% ratio. The “residual income” approach, championed by University of Massachusetts – Boston professor Michael Stone, suggests that a household’s “housing budget” should be determined by subtracting their other necessary expenses from their income. We like this method because it takes a “capabilities approach” – it asks what we want people to be able to do, like be able to buy healthy food or work-appropriate clothing, and then builds an affordability standard around that level of quality of life.

3. Finally, we ask: What about homeowners? It turns out that owner-occupied housing creates some complications for “affordability” that rental housing doesn’t. In particular, when people buy rather than rent, they’re getting two kinds of goods: shelter and an investment vehicle. That suggests that we need to make some adjustments when we apply affordability questions to homeownership.


The week’s must reads

1. This week, Politico released a special issue on America’s transportation problems. The entire thing is worth reading, but we would highlight “Overpasses: A love story,” which zooms in to Wisconsin to examine how departments of transportation prioritize massive, incredibly expensive new highway projects over maintenance of existing infrastructure, or more efficient transit.

2. Sticking with transportation, the New York Times‘ architecture critic Michael Kimmelman reviews the city’s experience with its enhanced bus routes, called Select Bus Service, and declares the initiative a success. SBS generally involves some combination of bus lanes, off-board fare collection, and more widely-spaced stops – which can all be bought for pennies on the dollar of a major urban rail (or, for that matter, highway) project. SBS routes have seen faster service and increased ridership, but Mayor Bill de Blasio has been slow to expand them across the city.

3. While Marietta, Georgia is tearing down low-income housing in a rerun of the bad old days of urban renewal, Colorado is moving in the opposite direction. The Denver Post covers how municipalities across that state are questioning the powers given to redevelopment authorities, including eminent domain. Littleton has already passed a referendum reining in its RDA; a similar measure is on the ballot in Wheat Ridge this fall.


New knowledge

1. San Jose State University’s Mineta Transportation Institute released a report looking at transit from a cost-benefit perspective. Among the findings: the benefits of transit projects can vastly exceed costs in small towns, not just large cities; transit can pay for itself in congestion relief in medium-sized and large cities; and many cost-benefit analyses understate the benefits of transit from increased safety and fewer car crashes.

2. Researchers from the University of Kansas find that project-based affordable housing does not improve “neighborhood quality” for residents, compared to voucher-based housing subsidies, and can actually make things worse. They consider the implications for federal and local housing policy.

3. In CityLab, Richard Florida writes about a new study on the link between public transit and gentrification in New York City. While transit-accessible neighborhoods tend to be wealthier than those with less access, the study did not find a strong link between transit access and change in average neighborhood income – suggesting that the connection between transit service and gentrification is less robust than is sometimes argued.


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

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

If you have ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

 

 

The way we measure housing affordability is broken

This week, we’re running a three-part series on the flawed way that we measure housing affordability. This post looks at exactly what’s wrong with one of the most common ways we determine what “affordable” means. Tomorrow, we’ll look at an alternative measure, and on Wednesday, we’ll examine the particular challenges of understanding “affordability” for owner-occupied homes.


Given how much time media outlets, policy shops, and community groups have spent talking about America’s affordable housing crisis over the last few years, you might think that we’ve at least settled on a pretty good way to define what housing affordability actually is. After all, how can we talk about solving a problem if we don’t have a reliable way of determining who’s suffering, and where, and why?

Unfortunately, you’d be wrong.

As an illustration, picture yourself as an employee of a local supermarket, making $1,500 a month. You live with a friend in an outlying neighborhood, and your share of rent is $400, plus $300 a month for car expenses. After all that, you have $800 a month left over – which dwindles pretty quickly between child care, groceries, and prescriptions. When you get sick or your car breaks down, you can’t avoid racking up some credit card debt.

The front page of Craigslist for apartments in San Francisco.
The front page of Craigslist for apartments in San Francisco.

 

Across town, a man who works as a VP in marketing makes $8,000 a month. He pays $3,000 in rent for a brand new loft apartment near downtown. Because he can walk to work and takes public transit most other places, he buys a monthly pass for $100 and doesn’t own a car. After those costs, he’s got $4,900 to spend every month, which buys lots of nice meals out and international vacations while leaving room for healthy retirement savings.

You’re having trouble making rent, and the marketing VP can make their payments easily. But according to our most common standard of housing affordability, it’s the VP who’s rent-burdened, and you’re doing fine.

That’s because those standards rely on a simple ratio: if you pay more than 30% of your income in housing costs, your housing is unaffordable. If you don’t, it’s not. And the supermarket worker pays just 27% ($400 of $1,500), while the marketing VP pays 38% ($3,000 of $8,000).

The supermarket/VP story is an extreme example, but it demonstrates several of the fundamental problems with the 30% threshold as a measure of housing affordability.

1. Equity. Most obviously, it doesn’t take into account that, depending on how much money you start with, leaving 70% of your income for all non-housing expenses may be plenty – or not nearly enough. Affluent people have the luxury of deciding whether to spend relatively large proportions of their incomes to buy housing in a better location, or with particular amenities, without sacrificing other necessities like food or clothing. Low-income people generally don’t. In that way, comparisons between people with different earnings can turn out misleading or unfair, as in the example above.

Craigslist apartments in Boston.
Craigslist apartments in Boston.

 

But it can also fail in analyzing the burden of housing costs on people with similar incomes. Not everyone, after all, has the same non-housing obligations: for a healthy, childless twentysomething, a salary of $40,000 might easily cover housing, food, insurance, and other necessities. But someone who has to do much more non-housing spending – because of a chronic medical condition, say, or children with special needs – might struggle on the same income.

2. Other location-based costs. On top of that, there’s increasing recognition that housing choices are closely tied to other costs, which need to be considered part of the package. In other words, the cost of housing is less relevant than the total cost of a location. By far the most important of these other costs is transportation. While housing closer to the center of a metropolitan area is often more expensive, it also requires less driving – and often no driving at all, thanks to public transit – which saves a lot of money. According to Harvard’s Joint Center for Housing Studies, low-income people who manage to spend less than 30% of their income on housing actually end up paying $100 a month more on getting around, which eats into their savings, and sometimes erases them entirely.

Some organizations, like Chicago’s Center for Neighborhood Technology, have tried to take this into account. CNT’s H+T Index shows the total housing and transportation costs for various locations, set against a combined affordability standard of 45% of income. That’s a major step forward – but using a ratio like 45% still has all the other problems of the 30% ratio we’ve already covered.

3. Quality of housing. The 30% threshold can’t tell us anything about what a given household is getting for their money. Few of us would say that affordable housing needs are met by homes that are low in cost but lacking in basic modern amenities like heating or indoor plumbing. While those problems are now relatively rare in major metropolitan areas, many cities have a stock of affordable housing that is predominantly located in neighborhoods with high crime rates, failing schools, few options for fresh food, or other major quality of life issues. Do that housing satisfy our need for affordability?

Craigslist apartments in Memphis.
Craigslist apartments in Memphis.

 

This is an especially important question if we care about housing for its effects on opportunity and mobility. As recent research from Raj Chetty has reinforced, the kind of neighborhood you live in can dramatically change your prospects for living a comfortable middle-class life. It seems odd, in light of those findings, to measure housing access without taking into account whether that access includes communities that offer a shot at economic stability in addition to cheap rent.

In conclusion, the way that we currently measure housing affordability – a simple 30% ratio of cost to income – is simply inadequate to the task. It fails to give us an equitable picture of who is in need and who isn’t; fails to consider the total cost of a location, missing housing-dependent payments, like transportation, that can add a significant burden to low-income households; and fails to consider questions of housing and neighborhood quality that exert significant influences on the life chances of the people who live there.

(Why, then, do we use it? This Bloomberg piece from last year, also pointing out the 30% ratio’s flaws, is probably correct that its durability has to do with simplicity.)

Tomorrow, we’ll look at an alternative way to measure housing affordability that addresses some of these problems.

What can conservatives do for cities?

Imagine an urban policy agenda defined by simplifying business regulations and promoting entrepreneurship as the key to prosperity. Add to that an attack on overly restrictive zoning laws that hold back housing construction, inflate real estate prices, and keep high-opportunity cities closed to low-income people looking to improve their lives. Round out the party platform by promoting regionalism and metropolitan-level decision-making.

According to National Affairs, this is what American conservatives have to offer their increasingly urban-centric countrymen. In an article published in the magazine’s most recent issue, Michael Hendrix of the U.S. Chamber of Commerce Foundation and National Affairs editor Andrew Evans lay out the case that the political dominance of liberals and leftists in nearly every big city in the country is a bad thing, and not just for conservatives.

The first part of their premise, at least, is undeniably correct. Large American cities are overwhelmingly left-of-center: Hendrix and Evans point out that of the top ten cities by population, only one has a Republican mayor, and he only got there because the previous Democratic incumbent had to resign in a sexual harassment scandal. Nor is National Affairs the first to notice: cities’ one-sided voting patterns are a regular subject of angst, both by Republicans who loathe surrendering the nation’s major economic and cultural hubs and Democrats who wonder if they’re missing something.

(Forgive, for now, the conflation of left-right ideology and party identification, which also appears in the National Affairs piece.)

The problem seems to have two parts. Politically, modern American conservatism is built around a particular brand of social conservatism popular among white evangelicals, and small-government libertarianism. The first seems in direct opposition to cities’ role as places of social experimentation and cultural cosmopolitanism. As for the second, to paraphrase Ed Glaeser, just as there are no atheists in foxholes, there are no libertarians in cities. Living in close quarters with hundreds of thousands or millions of other humans makes “rugged individualism” sound like a kind of joke: from noise complaints to traffic to “unsavory” businesses, it’s hard to find an urban resident who doesn’t favor some suite of strong government regulations.

So many externalities. Credit: Matt Baran, Flickr.
So many externalities. Credit: Matt Baran, Flickr.

 

But it also seems to be the case that, speaking broadly, conservatives don’t like cities, and don’t want to live in them. There are some exceptions, of course. The relatively young Smart Growth for Conservatives blog has been making a vigorous right-of-center case for pro-urban policy, and the traditionalists at The American Conservative have long appreciated the communitarian aspects of city living.

And yet, when explicitly asked to weigh the tradeoffs between more space and more walkable amenities, the ideological split is massive: a Pew survey found that “consistent liberals” will choose the dense, walkable neighborhood three out of four times, while “consistent conservatives” are equally likely to choose the more classically “suburban” neighborhood. And as Slate’s Will Oremus pointed out a few years ago, even where conservatives live in large cities, they tend to be among the country’s least dense and walkable.

Screen Shot 2015-07-13 at 11.42.57 AM

 

Hendrix and Evans seem to think they’ve found a way around these issues by appealing to the self-interests of otherwise liberal city dwellers: more prosperity, more opportunity, better governance.

The problem is that Hendrix and Evans have simply repackaged what are already planks in the liberal urban platform. While it’s true that getting a permit from a big city bureaucracy can be a terror, major Democratic mayors like Rahm Emanuel and Ed Lee have made streamlining regulations and creating a more business-friendly environment a top priority. (And in the process, they’ve frequently received a good deal of blowback from their urban constituents, a fact which doesn’t bode well for National Affairs’ campaign strategy.) I suppose they could argue that “real” conservatives would do a better job, but that’s a debate over administrative competence, not ideology.

The last two points of their “urban agenda for the right” are even more dubious: not only have they already been adopted by portions of the urban left, they are vociferously opposed by conservatives. President Obama’s new HUD rules specifically take aim at the kind of exclusionary zoning laws that Hendrix and Evans say are keeping cities “closed” – and, far from being welcomed as a move towards less government intervention in the economy, has been blasted as a disaster comparable only to the hated Affordable Care Act. Where Obama’s HUD has previously attempted to loosen zoning controls in Westchester County, just outside New York City, the Republican country executive protested vigorously, vilifying the order and energetically defending low-density zoning regulations.

How Republican County Executive Robert Astorino responded to Hendrix and Evans' "conservative" proposals, which were actually proposed by Obama's HUD. Credit: Wall Street Journal
How Republican County Executive Robert Astorino responded to Hendrix and Evans’ “conservative” proposals, which were actually proposed by Obama’s HUD. Credit: Wall Street Journal

 

As for regionalism, one of the most prominent cases in the country is the Twin Cities area in Minnesota, where the “Metropolitan Council” holds a much greater than normal amount of power over land use decisions. One of the greatest proponents of its regional influence is Myron Orfield, who spent several years as a state legislator in the Democratic-Farmer-Labor Party. On the flip side, Minnesota Republicans have launched a campaign to weaken the Metropolitan Council and devolve power to municipalities – exactly the opposite of Hendrix and Evans’ proposals.

To be clear, the vast majority of American cities, regardless of ideology, fail miserably on all of these counts. Anyone who’s been reading the news out of San Francisco knows that liberals are perfectly capable of viciously opposing open zoning laws. But where some political leadership has staked out a position in favor of the changes National Affairs wants – particularly on the issues of exclusionary zoning and regional planning – it is almost always left of center. Meanwhile, the Obama Administration’s new HUD rules appear to have convinced the conservative establishment that setting extreme land use regulations is an inviolable right of local government.

Screen Shot 2015-07-15 at 11.17.37 AM
Fox’s coverage has been less than positive.

 

Does conservatism have nothing to offer cities, then? I wouldn’t go that far. More than liberalism, whose philosophical roots are based on the primacy of individual rights, certain strands of philosophical conservatism understand that complex webs of relationships, rather than simply individuals, are the buildings blocks of society. When we use the language of community, of ties to people, places, and institutions that should be valued not because they promote any tangible good but because they are part of the traditions that give our lives meaning, we are arguably borrowing from a conservative vocabulary. We need that vocabulary to fully understand what cities offer us, and what we lose when communities are displaced, whether by rising home prices, low quality of life, urban renewal, or some other force.

Conservatism also offers a skepticism of ambitious, top-down planning that fits very well into a certain kind of urbanism. Jane Jacobs’ The Death and Life of Great American Cities is all about how successful urban spaces depend on a respect for gradualism and the kind of organic changes that can’t be planned. The critique of Robert Moses’ “meat ax,” of his plans to create a blank slate on which to build his own version of utopia, relies more than a little bit on an Edmund Burke-style understanding of the problem with sweeping away old institutions that may appear irrational but are in fact of tremendous value.

Unfortunately, none of that appears in the National Affairs piece. Instead, we get a series of policies that have already either been adopted by liberals or to which conservatives have proven themselves openly hostile. When the next conservatives-in-cities essay appears – as it certainly will – there will hopefully be a bit more on offer.

The Week Observed: July 17, 2015

What City Observatory did this week

1. Why aren’t we talking about Marietta, Georgia? Joe Cortright covers a Robert Moses-style case of “slum clearance” in suburban Atlanta. The city of Marietta is demolishing a complex of apartments that, over the last few generations, have transitioned from upper-income and homogeneously white to relatively high-poverty and mostly people of color. While plans to relocate the residents are vague, the city knows what it wants to build in their place: a private retail and office development. Given the intense coverage of the displacement of low-income people of color in places like San Francisco and Brooklyn, we ask: Why aren’t we talking about Marietta?

2. What can conservatives do for cities? Daniel Kay Hertz considers the conservative urban policy agenda put forth by a recent National Review essay, but finds something odd: Two of its major ideas have already been proposed or enacted by left-of-center decision-makers, and are vociferously opposed by the conservative establishment. Still, conservatism does have something to offer city dwellers – you can find it in Jane Jacobs.

3. In The value of walkability across the US, Joe Cortright digs through some numbers in the newly-published book Zillow Talk, from the online real estate company. Using their own extensive data sets and Walk Score, Zillow’s authors reinforce earlier research by Cortright showing a strong link between walkability and home prices. On average, a 15-point increase in a neighborhood’s Walk Score increases home values by 12% – though it ranges from 4% in New York City to 24% in Chicago.


The week’s must reads

1. NYU’s Furman Center hosts a discussion on place- and people-based economic development strategies from some of the smartest thinkers on issues of urban inequality. Harvard sociologist Robert Sampson argues that while mobility vouchers can be effective, they may be difficult to scale, and need to be combined with durable investments in low-income communities across the country – including cash transfers to people living in “compounded deprivation”: low-income residents of high-poverty neighborhoods. Roseanne Haggerty, the CEO of Community Solutions; professor and author Richard Florida; and professor Michael Stoll respond with their own ideas.

2. What is the political cost of supporting fair housing? At CityLab, Kriston Capps explores what kind of backlash we might expect from the Obama Administration’s move to more aggressively enforce the 1968 Fair Housing Act. He cites Westchester County, just outside New York City, where a Republican won back-to-back elections for County Executive, partly by campaigning against a HUD lawsuit that would have required more affordable housing and looser zoning laws.

3. Was one of the fathers of modernism in urban planning a humanist visionary or a fascist? The New York Times covers a new exhibition on Le Corbusier in Paris that has reignited a debate on one of the most famous architects of the 20th century. Although Le Corbusier’s airy, minimalist designs helped revolutionize postwar construction, he also had ties to far-right groups in the years leading up to World War Two, and his grand plans, including “Contemporary City” and “Radiant City,” were open about designing cities around class stratification. If nothing else, the controversy serves as a reminder that urban planning has always been about social planning as well.


New knowledge

1. Why is American zoning so different from the rest of the developed world? Planning Perspectives reviews a new book by Sonia Hirt, Zoned in the USA, which seeks to answer just that question. Hirt notes the discrepancy between the US reputation for extreme attachment to property rights and its land use law, which stands alone in its aggressive regulation of the built environment. She takes on William Fischel’s “homevoter hypothesis,” which speculates that zoning was created by homeowners looking to increase their property values, and instead turns to cultural factors and available land to explain legally mandated low-density housing.

2. In “Transportation Access, Rental Vouchers, and Neighborhood Satisfaction,” Casey Dawkins, Jae Sik Jeon, and Rolf Pendall examine the effect of transportation access – both in terms of private vehicles and public transit – on the neighborhood satisfaction of Housing Choice Voucher recipients. They find that greater access to both kinds of transportation increases neighborhood satisfaction – but that the importance of private vehicles depends on whether there is good public transit access.

3. In 2012, the state of California ended its Redevelopment Areas (RDA) program, a kind of tax-increment financing. In Economic Development Quarterly, Charles Swenson finds that RDA had not led to significant positive economic impacts in the areas where it was implemented, and that the state was probably correct to end the program.


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

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

If you have any ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

To sign up, click “Subscribe” at the top of the page!

The Week Observed: July 10, 2015

What City Observatory did this week

1. In More evidence on the changing demographics of American downtowns, Daniel Kay Hertz looks at a recent study from the Cleveland Fed on growing high-income neighborhoods in city cores. While there has been dramatic growth in “upper-third” areas near American downtowns – with New York, Chicago, and Portland leading the pack – most city cores are actually still disproportionately poor. And tying this new data to our own Young and Restlessreport, the number of “upper-third” neighborhoods in city centers is highly correlated with the number of young, well-educated residents.

2. In The devilish details of getting a VMT fee right, Joe Cortright picks apart the latest proposal for a vehicle miles tax in Oregon. The heart of the problem is that road use costs society a lot of money in congestion, road maintenance, and pollution, but road users don’t see those costs when they drive. A successful VMT should charge drivers what their use actually costs, which means it should be higher for larger, less fuel efficient vehicles. Unfortunately, the Oregon law charges a flat rate – which means it will essentially be punishing fuel-efficient vehicles to subsidize ones that are more polluting.


The week’s must reads

1. This week, HUD announced its final rule on requiring local governments to “affirmatively further” fair housing based on the 1968 Fair Housing Act. At theWashington Post, Emily Badger explores what this means for American cities. One of the main new requirements is periodic reports from local governments on conditions of segregation within their jurisdiction, and what may be preventing greater integration. HUD will also create a clearinghouse of fair housing data for the entire country, allowing people to see concentrations of public housing, poverty, and racial groups.

2. In 65% of Seattle, building apartments – or any kind of multi-family housing – is illegal. But as the Seattle Transit Blog explains, a mayoral panel has broached whether it makes sense to continue to mandate low-density, higher-cost housing at a time when the city is growing rapidly. STB also covers some of the panel’s other interesting ideas, including eliminating parking requirements that raise construction costs and subsidize car ownership at the expense of those who have fewer vehicles; and increasing height limits across the board in multi-family neighborhoods to allow more homes to be built, increasing access to the city and giving supply a better chance to catch up to housing demand. You can also read more at The Urbanist.

3. It’s stunning coming from a Department of Transportation head, but Iowa’s DOT chief Paul Trombino said this week that his state’s road network has been overbuilt and needs to shrink to a more reasonable size that’s easier to maintain. CityLab‘s Eric Jaffe backs Trombino up, pointing out that per capita driving in Iowa has been falling since 2004, and the state is already struggling to keep its existing highways in good condition. Iowa’s recognition of the problem comes after Washington State’s DOT finally changed its official travel predictions to acknowledge that driving there is falling as well. These are examples for other state and local DOTs to be following.


New knowledge

1. The Census’ Longitudinal Employer-Household Dynamics data doesn’t get a lot of love, but it’s one of the best sources of information about the geography of jobs and work that exists. This week, LEHD updated its “On the Map” web app with the results of its 2012 origin-destination employment statistics, giving access to another year’s worth of information about how the locations of jobs and workers are shifting in American cities.

2. Sound pollution – from airplanes, heavily-trafficked high-speed roads, or other sources – is a major issue for urban quality of life. Now a new company, HowLoud, is looking to be the WalkScore of sound pollution, giving people a quick look at how it varies from one neighborhood to another. The website currently has data only for Los Angeles and Orange County, but is looking to expand to the entire United States and Canada.

3. Does faster Internet access improve student productivity and learning? A new NBER paper looks at random variation in Internet speeds among English households to see whether students who had faster Internet access had better educational performance than kids with lower speeds. Their finding: Internet speed had “exactly zero” impact on educational attainment. They also found that improvements in Internet speed had no effect on the amount of time students spent online or offline.


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

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

If you have any ideas for making The Week Observed better, we’d love to hear them! Let us know at jcortright@cityobservatory.org, dkhertz@cityobservatory.org, or on Twitter at @cityobs.

To sign up, click “Subscribe” at the top of the page!

The Week Observed: July 3, 2015

What City Observatory did this week

1. Three more takeaways from Harvard’s “The State of the Nation’s Housing” report. Daniel Kay Hertz picks out three important but overlooked findings from the massive study released last week:

  • a nationwide shortage of rental housing is pushing up prices
  • for many black and brown homeowners, home prices are too low, holding down household wealth
  • in the next ten years, more than two million subsidized homes will lose their subsidies

2. Climate concerns crush Oregon highway funding bill. Joe Cortright looks at an important precedent: a transportation package that was voted down because of its effect on global warming.

3. Paving Paradise. Joe Cortright puts the defeat of the Vancouver transit funding referendum in the surprisingly disappointing context of recent Pacific Northwest transportation policy decisions.


The week’s must reads

1. Transportation for America breaks down the Senate’s draft transportation bill, the DRIVE Act, and suggests three improvements. One of them: create a new way for local communities to apply for federal funds directly for smart, high-quality projects.

2. CityLab has an interactive history of the rails-to-trails movement, with lots of photos and maps to ogle.

3. In “Revisiting Black Urbanism,” the Chicago-area planner Pete Saunders asks an important question: Where are the black urbanists?


New knowledge

1. In “Spillovers from Immigrant Diversity in Cities,” Abigail Cooke and Thomas Kemeny ask whether a immigrants can make native-born workers more productive. The answer: yep.

2. University of Illinois professor David Albouy quantifies “quality of life” in over 2,000 sub-metropolitan areas around the country. What do people like? Density, sun, and good schools. (Non-paywalled version here.)

3. The Washington Post has compiled a database of every fatal police shooting so far this year.

The Week Observed: June 26, 2015

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

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

Each issue of The Week Observed will have three parts. First, we’ll recap our own work. Next, we’ll link to three of the most interesting articles or blog posts about urban issues. Finally, we’ll include links to longer reports, either from academics, think tanks, or independent researchers, that have expanded our knowledge about cities and how to make them better.

The Week Observed is a new project, and we’d love to hear about ways about ways to make it better. Feel free to contact either of us at our email addresses below, or shoot a note over Twitter to @cityobs.

Thanks!

  • Joe Cortright (jcortright@cityobservatory.org)
  • Daniel Kay Hertz (dkhertz@citobservatory.org)

What City Observatory did this week

1. Portland, the Mission, and the housing affordability debate. Daniel Hertz says critics of the proposed “Mission moratorium” are right that holding back new construction will only drive up prices regionally – but argues that fear of displacement is sometimes a separate question.

2. The new trend in homeownership: Gerontrification. Joe Cortright digs into two new housing reports from the Urban Institute and Harvard, and finds an under-reported shift in homeownership towards the elderly.

3. In case you missed it, earlier this month we released our latest CityReport, “Less in Common.” In it, we find evidence that our common civic spaces are shrinking, with terrible consequences for economic vitality and opportunity.

The week’s must reads

1. The American Planning Association and the National Resources Defense Council give a good overview of the Senate’s proposed federal transportation bill, the unfortunately-named DRIVE Act. Particularly worrisome is the replacement of the popular TIGER grants program with the “AMP,” which would give even greater privilege to highway projects. Next month, Congress faces (yet another) deadline to fix the Highway Trust Fund, so look for action on the DRIVE Act next week.

2. The AP has a good overview of the Supreme Court’s landmark decision to uphold the “disparate impact” standard under the 1968 Fair Housing Act, giving a big win to affordable housing advocates and the Obama Administration’s HUD.  In many cities, the location of publicly subsidized housing has reinforced concentrations of poverty, especially for people of color.

3. Margery Austin Turner at the Urban Institute synthesizes the new evidence about place-based economic mobility from Raj Chetty, and argues that we have to redouble our efforts both to improve the quality of low-income neighborhoods, as well as to give residents of those neighborhoods the chance to move to higher-opportunity communities if we so choose. (Turner’s piece came out before this week, but it’s important, and seeing as this newsletter did not yet exist, we’re going to cheat.)

New knowledge

1. The Urban Institute’s “Headship and Homeownership: What Does the Future Hold?”, and Harvard’s Joint Center for Housing Studies’ “The State of the Nation’s Housing 2015” – which Joe built off of in the post linked above – are both worth a read on their own.

2. Smart Growth America released “Core Values: Why American Companies Are Moving Downtown.” The findings here are consistent with the trends we spotted in our City Observatory report on “Surging City Center Job Growth” earlier this year.

The report includes interviews with 40 of the almost 500 companies that have chosen to create jobs in walkable downtowns in the last five years. They find relocation decisions were driven by:

  • proximity to educated workers,
  • proximity to customers and business partners, and
  • a desire for a distinct office culture, among other reasons.

We really like that this report “shows its work”: They’ve compiled a list of the companies that moved or expanded downtown, and even created an online mapping tool so you can see the current and former locations of the firms that moved.

3. At the Urban Institute, Corianne Scally discusses a paper she co-wrote on why so many programs designed to increase the housing mobility of low-income residents don’t work as well as one might hope. At the heart of the issue: sources of instability, including job loss or other personal circumstances, that cause frequent and urgent moves.

Three more takeaways from Harvard’s “State of the Nation’s Housing” report

“The State of the Nation’s Housing 2015,” the report published last week by Harvard’s Joint Center for Housing Studies, has already garnered a lot of attention. We wrote about how it points to a new “gerontrification” of homeownership, with all the growth in non-renter households predicted to come from the 65+ age range; Emily Badger focused on the rising popularity of renting among all age groups; and so on.

But before the urbanist news cycle moves on completely, we wanted to point out three more takeaways from the long, data-rich report that we hope don’t get lost.

1. There is a national shortage of rental housing that’s pushing prices higher.

The shift to renting has led to competition over scarce apartments (and for-rent single family homes) – even as production of rental properties has picked up. JCHS reports that the national vacancy rate fell to a nearly 20-year low of 7.6% in 2014, pushing rents up by 3.4% in the same year, or twice inflation. What’s more, the rental market might be about to get another shock of demand as the economy improves and young adults who had been living with their parents decide to move out.

While the demand for apartment living isn’t evenly spread around the country, the fact that there is now a clear shortage of rental housing nationwide ought to suggest even more strongly that places where demand is most concentrated need to step up and provide the housing that people want to live in. Of course, something close to the opposite is happening: cities like San Francisco are allowing very little new housing, rental or otherwise, exacerbating their own housing crises.

2. In many communities with high concentrations of low-income households and people of color, home prices are still too low.

The financial crisis and collapse of the housing market struck a terrible blow to Americans’ household wealth – a blow that was felt most acutely by people with low incomes and people of color. As an excellent Washington Post series catalogued earlier this year, by 2013 the median black household held just $11,000 in net assets – half of which was in housing – while the median white household held $134,000.

The JCHS report finds that “in about a tenth of the nation’s zip codes…, [home] prices are still more than 35% below peak,” and more than one in four homeowners in those neighborhoods is still underwater on their mortgage. In more than half of those zip codes, people of color make up the majority of residents. Of zip codes where home prices have risen – or fallen by no more than 10% since their pre-crisis peak – only 10% are predominantly minority.

Credit: JCHS "State of the Nation's Housing 2015"
Credit: JCHS “State of the Nation’s Housing 2015”

 

(We should also note that Zillow’s research department has also done great work on the racial disparities of homeownership. Here’s a fantastic post from earlier this year breaking down racial gaps in home price trends by metro area.)

3. More than two million subsidized affordable homes are set to lose their subsidies in the next ten years.

Many affordable housing programs – including the largest, the Low Income Housing Tax Credit, or LIHTC – create subsidies with expiration dates. Over the next ten years, 1.2 million LIHTC homes, and about a million homes subsidized by other programs, are set to return to prevailing market prices – usually far above what’s affordable to the very low income populations they serve.

That puts many American cities in the unenviable position of trying to grow their stock of affordable housing even as their existing affordable housing starts to disappear. Over the next decade and beyond, how to solve this Sisyphean problem will have to be a major part of the housing policy debate. At City Observatory, we certainly don’t think we have a solution yet – but we’d like to see more attention brought to the issue.

More evidence on the changing demographics of American downtowns

Earlier this year, Daniel Hartley of the Cleveland Fed and Nathan Baum-Snow of Brown University published a novel analysis of what has been called the “Great Inversion”: the shift of higher-income people from the periphery of American metropolitan areas towards the center. (Previously, we covered another excellent visualization of this phenomenon from the University of Virginia.)

Essentially, Hartley and Baum-Snow broke down every Census tract in over a hundred metro areas into thirds, based on their income. Then they measured what percentage of people within three miles of their city’s central business district lived in a Census tract that was in the top third. Unsurprisingly, in almost every city, that percentage increased dramatically between 1980 and 2010.

Pay particular attention to cities that crossed the 33% threshold, which we’ve highlighted with a dotted line in the chart above. If high-income neighborhoods were evenly distributed across a metropolitan area, you would expect exactly 33% of downtown residents to live in a top-third tract. But in 1980, these tracts were underrepresented in all but two of the 49 largest American cities’ downtowns. By 2010, in many of these regions, they were overrepresented, reflecting the increased desirability of dense inner-city areas.

Still, despite all the progress American central cities have made in economic development, it’s important to note that most of these areas remain disproportionately poor. Even in 2010, cities where upper-income neighborhoods were underrepresented in central areas outnumbered those where upper-income neighborhoods were overrepresented by 32 to 17. And in two cities – Detroit and Indianapolis – there are no upper-income Census tracts within three miles of their respective downtowns.

Although the phenomenon is complex, we were also struck by how much overlap there was between the Cleveland Fed’s data and our findings from City Observatory’s Young and Restless report late last year. We looked just at a small slice of central cities’ demographic change – the growth in the number of young adults with at least a bachelor’s degree – but there’s a strong relationship between that indicator and Hartley’s indicator of central city prosperity:

Of course, it’s likely that a big part of this effect is about college-educated residents in general, not just the young ones. Still, juxtaposing the Cleveland Fed study with Young and Restless underscores the linkages between highly-educated residents and more prosperous central cities – as well as just how dramatically many American metropolitan areas are changing, and how far many of them have to go.

Portland, the Mission, and the housing affordability debate

It would be tempting to call the eight hours of testimony over a proposed moratorium on housing construction in San Francisco’s Mission neighborhood, and the SF Board of Supervisor’s subsequent failure to approve that moratorium earlier this month, a climactic moment in the battle of two very different perspectives about affordable housing. Tempting, but almost certainly wrong, since the vote was hardly the end of the housing crisis in San Francisco or elsewhere. More and even bigger battles probably await.

In the interim, two West Coast writers have taken another shot at convincing a sometimes skeptical audience that blocking new development is not the path to affordability. At Portland’s Willamette Week, Aaron Mesh takes on what he calls “five myths about Portland apartments.” (City Observatory’s own Joe Cortright makes an appearance, too.) Most importantly, he points out that new apartment buildings are a symptom, rather than a cause, of higher rents. Ultimately, both are a result of the fact that many more people – and more people with more disposable income – want to live in central Portland than did ten or twenty years ago.

Over at Planetizen, Reuben Duarte goes into much more detail about the relationship between new apartments and rising rents, both in theory and in reality. Because rents will grow as long as there are people who are willing and able to pay more, simply preventing new construction can’t bring down prices. In fact, as the number of people who want to live in places like the Mission grows, a smaller and smaller percentage of those people will actually be lucky enough to snag an apartment. And how will the lucky ones manage it? By offering to pay more, of course. Duarte’s own, more nuanced explanation of this dynamic – using the metaphor of baseball tickets – is very much worth a read.

He also points out that this all isn’t just economic theory; it’s also reflected in what’s actually happening. Since the 1970s, coastal California, from the Bay Area to Los Angeles, has seen dramatically slower housing growth than the United States as a whole – even as the region’s population has boomed. This tracks with the Mission’s experience in particular, which saw fewer than 100 new apartments built in the year prior to the proposed moratorium. If low levels of construction were associated with affordability, you’d expect the California coast, and the Mission, to be models of low-cost housing. Instead, of course, it’s entirely the reverse.

Credit: CA Legislative Analyst's Office, "California's High Housing Costs: Causes and Consequences"
Credit: CA Legislative Analyst’s Office, “California’s High Housing Costs: Causes and Consequences”

 

(This also seems like a good place to make the necessary caveat that San Francisco in particular, with its combination of extreme anti-growth laws and overwhelming demand, is a highly unusual case in American housing policy. Its high profile can distract from the more common problem of increasing poverty. On the flip side, it puts problems that exist in several other major American cities in much lesser forms in heightened relief, and makes something of a worst-case scenario for a future in which those places, too, have failed to head off this kind of massive shortage.)

I would, however, also like to add something to both of these pieces. From a big-picture perspective, Mesh and Duarte are right that new construction can slow or reverse the growth in regional housing prices, and restricting construction will tend to exacerbate that growth. But people don’t live their lives from 30,000 feet; they live them on the ground, which is why these ideas often seem so counterintuitive. More importantly, the people who packed the SF Board of Supervisors’ meeting to testify in favor of the moratorium don’t necessarily care about the medium-to-long-term trends in regional housing prices; they care about whether their own rents, and those of their family and friends nearby, will increase by more than they can afford in the next year, six months, three months.

Which means that arguments about supply and demand, though important, aren’t necessarily addressing their immediate needs and fears. Cities like Portland and San Francisco need better housing growth policy, it’s true: more construction now means less displacement, regionally, in the coming years. But if we care about preserving the option for people to remain in their communities now – which we should, for reasons both ethical and political – then we need to acknowledge the need for both housing growth policies and anti-displacement policies.

An affordable housing development in Portland, OR. Credit: Brett VA, Flickr
An affordable housing development in Portland, OR. Credit: Brett VA, Flickr

 

The problem, of course, is that it’s not at all clear what those immediate anti-displacement policies should be. A moratorium won’t work; neither will supply. Inclusionary zoning won’t produce nearly enough units. Unfortunately, the case that affordable housing in San Francisco, and much of the rest of the Bay Area, is doomed under any realistic policy regime is pretty strong. In part, this ought to serve as a cautionary tale for cities that fail to respond quickly to shifts in housing demand, neither allowing housing growth to match nor devising any other durable protections for residents.

The intense movement of concentrated wealth and demand for housing in places like the Mission, though, also suggests that we need to think about housing prices not just at a regional level, but in particular local communities. In places where demand simply overwhelms supply, we need other strategies. If we really want our cities to be integrated, diverse places in the long run, we need to be prepared to offer low-income people off-market housing units and vouchers – not in the almost token-sized quantities of most inclusionary zoning programs, but at a scale that actually preserves housing choice for more than a lucky few.

Squaring off with the Storefront Index

Yesterday, we introduced our latest report, The Storefront Index, which aims to quantify and map one aspect of a neighborhood’s vibrant street life—customer-facing businesses—in every neighborhood in the 51 largest metropolitan areas in the country. The Washington Post wrote more about it here.

To illustrate one way the Storefront Index can help illuminate urban planning issues on the ground, take February’s Washingtonian article by Greater Greater Washington contributor Dan Reed about a seeming mystery: why are some parks full of people while others are empty?

The article focuses on Farragut Square and Franklin Square in downtown DC. The two spaces are just a few blocks from each other, and are both adjacent to office buildings and a Metro stop, but according to Reed, Farragut is “full of people—eating, strolling, sitting on the immaculate grass,” while Franklin is “desolate.”

The well-used Farragut Square. Credit: Karen Rustad, Flickr
The well-used Farragut Square. Credit: Karen Rustad, Flickr

 

Reed makes a number of hypotheses about why that is, including the design of Franklin Square’s paths and its size. But he also notes that Farragut Square is surrounded by ground-floor businesses, while Franklin Square has only a few on one side. Our Storefront Index map illustrates the issue:

 

SFI_DC_Parks.labels.fw

The stores around Farragut Square help keep a steady stream of people dropping by to get lunch or buy a newspaper, some of whom will stop to talk to a colleague they run into, or take a seat in the park to eat or read. At Franklin Square, there’s little to generate that kind of foot traffic—and because people generally like to congregate in places where there are other people, that becomes a self-reinforcing cycle.

As Jane Jacobs observed decades ago, when they work well, urban spaces are a dynamic and symbiotic mix of the public and private: public spaces like parks and squares and sidewalks provide places for walking and sitting and being in public. Shops, restaurants, and bars—particularly when they are clustered together—stimulate the hustle and bustle that conveys a sense of activity, interest and safety that helps activate the public realm.

In this case, Reed found an underused space in his daily life, and realized that the different concentration of businesses could be part of the problem. The Storefront Index can be useful in cases like this to quickly and clearly demonstrate to people who aren’t familiar with these spaces how their commercial character differs.

But planners and active neighbors can also use the Storefront Index to identify public spaces that may not be used to their full potential by looking for parks and squares with few storefront businesses around them. As we update the Index over the coming years, they will also be able to see how changing numbers and locations of storefront businesses track perceptions or data about street life and neighborhood vibrancy.

Urban residents aren’t abandoning buses; buses are abandoning them

“Pity the poor city bus,” writes Jacob Anbinder in an interesting essay at The Century Foundation’s website. Anbinder brings some of his own data to a finding that’s been bouncing around the web for a while: that even as American subways and light rail systems experience a renaissance across the country, bus ridership has been falling nationally since the start of the Great Recession.

But it’s not buses that are being abandoned. It’s bus riders.

The drop in bus ridership over the last several years has been mirrored by a decline in bus service, even as transit agencies have managed to resume increasing frequency and hours on all types of rail lines – heavy, light, and commuter.* (In this post, “service” means vehicle revenue miles – literally, multiplying a city’s bus or rail vehicles by the number of miles they run on their routes.) After a post-recession low in 2011, by 2013 rail service had increased by over 4% nationally in urban areas of at least one million people. Light rail in particular has continued its decade-plus boom, with a service increase of more than 12% in just two years. By contrast, bus service – which already took a heavier hit in the first years of the recession – was cut an additional 5.8%.

 

And it turns out that when you disaggregate the national data by urban area, there’s a very tight relationship between places that cut bus service between 2000 and 2013 and those that saw the largest drops in ridership. If you live in a city where bus service has been increased, it’s likely that your city has actually grown its bus ridership, despite the national trends. In other words, the problem doesn’t seem to be that bus riders are deciding they’d rather just walk, bike, or take their city’s new light rail line. It’s that too many cities are cutting bus service to the point that people are giving up on it.

 

Admittedly, this is a crude way to demonstrate a very complicated relationship. To rigorously test the impact of bus service on ridership, you’d want to take into account all sorts of other things: the presence of other transit services; population density; gas prices; demographics; and so on.

Fortunately, we don’t have to do that, because researchers at San Jose State University’s Mineta Transportation Institute just did it for us. And they found that even if you control for those other factors, service levels are still the number one predictor of bus ridership.

Still, I can imagine two big objections to the idea that cuts to bus operations are behind ridership declines. First, a lot of cities have opened new rail lines since 2000 – many of which, if not most, replaced heavily-trafficked bus routes. In those cases, cities are adding rail service and reducing bus service, but it obviously wouldn’t be right to say that those bus riders are being abandoned.

But while that has surely happened in some places, it just doesn’t match the overall data. Rail service, including new lines, has been booming since long before the recession – but up until about 2009, bus service was growing, too, or at least holding steady. If rail expansions were driving bus cuts, you’d expect to see those cuts all the way back to the beginning of the data. But you don’t. Instead, cuts to bus routes appear right as transit funding was hit hard by the recession.

Second, you might argue that service and ridership are linked, but the other way around: as ridership declines, agencies cut back on hours and frequency to match demand. Teasing out which way the causation runs would be difficult – and the answer would almost certainly include at least some examples in both directions. One quick-and-dirty way to get an idea, though, is to compare ridership changes from one year to service changes in the next year. If agencies cut service because of earlier ridership declines, then you’d expect to see that places with larger drops in ridership in “Year One” tend to be the places with larger cuts to service in “Year Two.”

 

But, again, they don’t. In fact, just 3% of the variation in service cuts is explained by ridership changes from the year before.

So while that’s hardly ironclad – and I look forward to further research that sheds more light on this problem – it does appear that a major part of the divergence in bus and rail ridership is a result of a divergence in bus and rail service: since the recession, transit agencies have cut bus service year after year, while returning service to rail relatively quickly.

Why did they do that? I don’t know. But I can speculate that it has something to do with the fact that bus transit supporters are not always the same kinds of people as rail transit supporters. Even though more people take buses than trains in nearly every metropolitan area in the country, train riders, on average, tend to be wealthier and whiter. Not only that, but many civic and business leaders who don’t use transit at all are heavily invested in rail service as an economic development catalyst for central city neighborhoods. In other words, rail tends to have a more politically powerful constituency behind it than buses.

As a result, when the recession blew a hole in transit budgets around the country, it may have been politically easier for local governments to fill those holes by sustaining cuts to bus lines, rather than rail.

To be clear, the problem here has nothing to do with whether transit agencies are running more services that are rubber-on-asphalt or steel-on-tracks. As Jarrett Walker has eloquently argued, the technology used by a particular line matters far less than the quality of service: how often it runs, how quickly, for how much of the day.

But there are at least two problems here. First, because of the spread-out nature of even relatively dense American cities, it will be a very, very long time before rail transit can connect truly large numbers of people to large numbers of jobs and amenities. When Minneapolis opened the 12-mile Blue Line light rail in 2004, for example, it was a major step forward for Twin Cities transit – but still, only 2% of the region’s population lived close enough to walk to one of the stations. For everyone else, transit still meant taking the bus, even if they were taking the bus to a train station.

And even in places with well-developed rail networks, those systems are usually oriented to serve downtown commuters. Especially in outer neighborhoods, crosstown trips in places like Chicago, Boston, or DC are heavily reliant on buses. Abandoning buses means abandoning those trips, and the people who depend on them.

 

Boston's T reaches both Dorchester and Jamaica Plain, but a bus is by far the easiest way to get from one to the other on transit. Credit: Google Maps
Boston’s T reaches both Dorchester and Jamaica Plain, but a bus is by far the easiest way to get from one to the other on transit. Credit: Google Maps

 

Second, there are serious equity issues with shifting resources from bus to rail – again, not because of anything inherent to those technologies, but simply because of who happens to use them in modern American cities. In most cases, shifting funding from bus to rail means shifting funding from services disproportionately used by lower-income people to ones with with a stronger middle- and upper-middle-class constituency. And while transit ought to be viewed as much more than just a service for the poor, we can’t ignore the equity impacts of transit policy.

In light of all this, we have to stop talking about America’s bus woes as a ridership problem. All the evidence suggests that when service is strong, and buses are a reliable way to get to work, school, or the grocery store, people will take them. Instead, the problem is that fewer and fewer people have access to that kind of strong bus line. If we care about ridership, we need to restore and enhance the kind of transit services that people can rely on.

* “Heavy rail” includes traditional subways and elevated trains found in cities like New York, Washington, and Chicago. “Light rail” includes many newer systems, with smaller train sets that are sometimes designed to run on streets as well as in their own right of way. Rail lines in Seattle, the Twin Cities, and Dallas are typical of light rail. “Commuter rail” services generally reach from central business districts far out into the suburbs, and are meant almost exclusively for peak-hour workers.

Baltimore’s problems belong to 2015, not 1968

In the wake of violent protests against yet another apparent police killing in Baltimore, variations of this meme spread rapidly in certain corners of social media. Their message went something like this: Pundits and politicians may think Baltimore’s crisis began with the first brick that hit a window at CVS, but we – the people who live there – know the crisis goes back much further, and much deeper.

With this in mind, there’s some irony to the spate of columnists warning that the disturbances in Baltimore mark a return to the “bad old days” of the mid-to-late 1960s, when a series of violent protests in America’s black neighborhoods held the nation riveted. Those riots, too, were treated as a crisis by pundits who had not applied the term to decades of housing discrimination, or illegal violence on the part of police officers and white civilians.

But using violent protests as a point of analytic departure – rather than the underlying crises that provoked them – doesn’t just (unintentionally) reveal one of the similarities between 1968 and 2015. It also misses a lot of the major differences.

At the Washington Post, Radley Balko has covered some of the ways in which things are much better now. For one, the wave of violent crime that plagued American neighborhoods – and especially ones whose residents were predominantly low-income and black or brown – has receded, even if it remains far too high. Balko reminds us that the U.S. saw 500 fewer murders in 2013 than in 1969, despite the fact that there were over 100 million more people.

In other ways, things are much worse. As we’ve covered here at City Observatory, concentrated poverty has exploded since 1970, with three times more neighborhoods with poverty rates of at least 30 percent in 2010. And even as crime has declined, the incarceration rate – particularly among black men – has skyrocketed, disrupting millions of lives and leaving communities across the country with millions of “missing” men.

From our "Lost in Place" report.
From our “Lost in Place” report.

But especially when it comes to the role of cities, the comparisons to 1968 miss the very, very different trend lines of that era. In the 1960s, America was decades into – and had decades remaining in – a period in which wealth, and anyone who had enough of it, was moving as far as it could from urban centers.

For a variety of reasons, those trends have now reversed. The geography of metropolitan wealth is now double-peaked: downtowns and surrounding neighborhoods are catching up to rich outer suburban neighborhoods, and the ring of poverty that separates them is moving further out into outer city neighborhoods and inner-ring suburbs.

Houston shows a typical pattern, with growing wealth in the center and an economically shrinking middle ring.
Houston shows a typical pattern, with growing wealth in the center and an economically shrinking middle ring.

Importantly, this movement of middle- and upper-income people and jobs back to center cities has taken place despite the presence, and growth, of intensely concentrated poverty within those very same cities. That is, the prediction of people like Joel Kotkin that the problems of poor neighborhoods in Baltimore will hold back this trend just doesn’t appear to match the evidence.

It is true, of course, that so far reinvestments in places like Baltimore’s Inner Harbor have mostly not translated to meaningful improvements in the lives of residents in struggling neighborhoods. But we believe that the return of wealth to America’s inner cities at least provides a valuable opportunity to make those improvements.

That’s because broadly speaking, the built form of cities – defined as anything from a dense Manhattan neighborhood to the “streetcar suburban” communities in Midtown Memphis – really is a better arena for seeking social justice than most automobile-oriented suburbs.

For one, urban neighborhoods tend to offer a larger proportion of public, rather than private, space. This can take the form of anything from public parks, libraries, and civic centers, to simply a sidewalk. For people who are low-income, that means access to services, amenities, and cultural life that might be denied to them in the suburbs: think of the difference between a city with public pools and a suburb where people only go swimming in their backyards, private athletic centers, or a shared private pool in a gated community.

Second, because urban neighborhoods tend to offer a wider range of transportation options – including walking, biking, and public transit – transportation costs are much, much lower. In a city, you can save thousands of dollars a year by not owning a car – money that would be better spent on higher-quality food, your kids’ education, or retirement savings, but which in a typical suburb would instead go to insurance and gas. Even where a family doesn’t want to give up car ownership entirely, moving from one car per adult to one car per household can mean significant savings.

As you move away from the heart of metropolitan areas, transportation costs skyrocket. From the Center for Neighborhood Technology's "H+T Index."
As you move away from the heart of metropolitan areas, transportation costs skyrocket. From the Center for Neighborhood Technology’s “H+T Index.”

Finally, urban neighborhoods tend to be located in larger municipalities. (This isn’t always true, of course – there are urban neighborhoods in small suburbs and very “suburban” neighborhoods in large cities – but for historical reasons, it generally is.) That means city services can draw on taxes from both high-income and low-income neighborhoods – as opposed to smaller suburban municipalities, where high tax revenues from rich areas feed back into high-quality services for the wealthy, while low-income municipalities struggle to fund services for their poorer residents.

The return of wealth to central cities has the potential to enhance all three of these factors: balancing tax rolls in historically disproportionately poor cities allows those governments to provide better public services and amenities, while creating jobs in central cities, rather than suburbs, allows more people to get to work via affordable transit. On top of that, attracting middle class households back to cities that have gone decades without them creates the possibility of more economically integrated neighborhoods – which, as recent research shows, can lead to more social mobility for low-income residents.

So far, of course, we’re very far from realizing that potential. But that’s a very different failure than the situation cities like Baltimore found themselves in fifty years ago.

Gentrification: The state of the debate in 2015

Gentrification continues to command an enormous amount of attention in the media, and several prominent publications – from The Economist to The Week – have made provocative arguments on the subject since our previous roundups in December.  Here’s our take on what’s being said.

We worry too much about gentrification

1. “Bring on the Hipsters,” says one of the anonymous writers (hi, Ryan Avent) at The Economist. The British magazine argues that gentrification is a blow against the much more serious scourge of segregation and concentrated poverty, citing our study in the process.

2. Evan Horowitz at the Boston Globe makes a similar argument, pointing to studies that suggest that gentrification causes less displacement than is generally believed, and that rising home prices are actually a good, wealth-building trend for low- or moderate-income homeowners. He also notes that gentrification is unlikely to happen to poor, non-white neighborhoods.

3. In the Chicago Sun-Times, Marisa Novara points out that the vast majority of Chicago’s neighborhoods are experiencing growing poverty, not rapidly climbing property values.

4. Another Chicagoan, Natalie Moore, calls gentrification “the least of Chicago’s worries” at Grist. She points out that not only are most neighborhoods in economic decline, but even signals of gentrification, like an announced Whole Foods in the Englewood neighborhood, don’t actually seem to be having much of an effect. She calls for renewed investments in retail corridors and vacant properties in struggling neighborhoods.

…or maybe we don’t

5. Megan McArdle, at Bloomberg View, points out that even if rising home values are good for homeowners, and falling levels of segregation are good for society as a whole, and civic leaders and urbanists love to see inner-city neighborhoods get an infusion of retail and building renovations, gentrification will still have its victims. In particular, people who rely on the social capital of their communities – their location-based networks of friends and family – can be in serious trouble if rising rents push them, or their contacts, out of touch.

6. Gothamist takes a look at The Economist‘s unabashedly pro-gentrification arguments and is not convinced. “We’d love to hear some of the Southside’s Puerto Rican and Dominican locals’ thoughts on that,” they write.

Concentrated poverty, concentrated affluence

7. Alana Semuels at CityLab writes up a report from the University of Minnesota about where all the rich people who don’t live in poor neighborhoods are hiding themselves. The Detroit area, for example, though a symbol of urban poverty, also has 55 “racially concentrated areas of affluence,” which are at least four times wealthier than the average neighborhood in the metropolitan area and are just 1.1 percent black.

Liberals are urban egalitarians, so why have they failed so miserably on housing policy?

8. At The Week, Ryan Cooper takes the left to task for its inability to come up with a coherent agenda on affordable housing and, relatedly, gentrification. He says Democrats in well-to-do cities like Washington, DC, are under the influence of affluent residents who may support redistribution in theory, but are unwilling to allow housing construction in their own neighborhoods that might relieve pressure in the market – let alone spend the money for a “massively expanded” public housing program.

How we got here

9. At the blog of the Economic Policy Institute, Richard Rothstein reminds us that the patterns of racial segregation that gentrification (occasionally) disturbs were not formed simply by a desire for African Americans or Latinos to live together. Rather, they were created through racist housing policies and violence that enforced separation.

So what do we do?

10. In the New York Times, Héctor Tobar suggests that we ought to embrace the potential gentrification carries for desegregation, observing the changes that have happened in his own Los Angeles neighborhood. Acknowledging the potential for displacement, however, Tobar endorses rent control to prevent housing price increases from pushing out older residents and resegregating along higher-income, whiter demographics.

11. But Ben Adler at Grist responds that this is doubly wrong. He argues that gentrification is as much a threat to integration as a friend. But Adler also believes that rent control, as an anti-displacement policy, is counterproductive, offering no assistance to people who don’t already have an apartment in the affected neighborhoods, and ultimately raising uncontrolled rents by distorting the market. His preferred policy solution involves the construction of more market-rate housing to satiate demand and keep overall prices down, coupled with co-operative ownership structures that can shield residents somewhat from the dangers of rising costs.

Policy takeaways

One of the things that makes gentrification such a contested subject is that there is little consensus about exactly what it is, how it works, and what its ultimate results are – subjects of much of the debate in the pieces we’ve posted here. But it’s also worth jumping past those arguments to look directly at the policy responses people have proposed, what they’re intended to do, and what the evidence suggests that they might accomplish. In a follow-up piece, we’ll do just that.

Undercounting the transit constituency

By far the most common way to measure transit use is “commute mode share,” or the percentage of workers who use transit to get to their job. For the most part, this is a measure of convenience: it’s the most direct way the Census asks about transportation, which means it’s the easiest way to get consistent data from any city or metropolitan area in the country.

But it also has a lot of problems. For one, the vast majority of trips – about 84% – aren’t simple home-to-work commutes. And it’s not just that people who work also go to the grocery store, restaurants, or friends’ homes. Lots of people don’t work at all, and those people – largely students, the elderly, or people with disabilities – are disproportionately likely to use transit for all or almost all of their trips. Finally, plenty of people who do work might drive three or four days a week and take transit the other one or two. But since the Census only asks about what they do most of the time, they’ll show up as “drivers.” All of these things will tend to undercount a place’s reliance on public transit.

People take transit for lots of reasons! Credit: Juliana Swanson, Flickr
People take transit for lots of reasons! Credit: Juliana Swenson, Flickr

Recently, a handful of people have proposed their own measures to try to correct for some of these problems. One of the best came from Reuben Fischer-Baum at FiveThirtyEight, who ranked American cities based on annual transit trips per capita. That has the advantage of counting all trips, whether they’re work-related or not. It can’t, however, tell you much about the distribution of use across people: maybe a place scores highly because 10% of people use transit a lot, or 40% of people use transit occasionally.

In the spirit of this work, City Observatory would like to offer our own measures of transit use, based on data from the Census’ American Housing Survey. (The 2013 AHS includes just 25 metropolitan areas, which is why many larger cities are left out of our list below.) And these measures suggest that, indeed, commuting mode share dramatically understates Americans’ reliance on transit.

The first, more restrictive measure is the percentage of households that report using transit to get to school or work “sometimes, most of the time, or always” (leaving out people who reported “once in a while” or “never”). The second, broader measure is the percentage of households that report using transit for any purpose.

These measures have two big advantages over commute share. First, like Nate Silver’s index, they include a broader sample of trip destinations than just work. Second – just as importantly – they recognize that transportation decisions are usually made at the household level, not individual. Consider a couple who both work outside the home.  That is, if a man takes the bus to work, then his wife or husband also depends on that transit service, even if they usually drive. After all, if the bus stops running, they’re going to have to figure out a way to carpool, or even buy another car – a major logistical or financial burden for many families. The same is true for parents of children who take transit to school, or adult children who live with elderly parents who rely on transit to get to social services or other activities.

That means that these figures better demonstrate the number of people with a direct stake in transit service, whether or not they themselves ride it on a regular basis. (Of course, lots of people who “have a stake” in transit are still left out, including people who would like to use transit but can’t because the service isn’t good enough, or people who drive but benefit from reduced congestion because of transit, or employers whose employees wouldn’t be able to show up for work without transit.)

And that matters because the people who make decisions about transit investments – politicians – look at how many of their constituents benefit from a given service as a major component of whether they benefit politically from supporting it.

And if they’re just looking at commute share, they’re looking at too few people. Even transit-rich metropolitan Boston doesn’t look so great by that metric: only 12% of workers there usually take transit to their jobs. But 29% of households include someone who regularly takes transit to school or work, and fully 56% of households use transit for at least some of their trips. In sprawling Houston, just 2% of workers commute with transit – but more than twice that proportion of households use transit for work or school, and more than one in ten households use transit for some of their trips. That’s still not great, but it’s much more significant than the minuscule commute numbers. It also suggests that even in one of the most transit-hostile regions of the country, a remarkable number of people find public transit useful for certain trips, forming a toehold for better service to produce even more ridership.

Where transit is convenient enough, people take it - even in Houston. Credit: wordjunky, Flickr
Where transit is convenient enough, people take it – even in Houston. Credit: wordjunky, Flickr

Of course, critics of these measures will point out that using households rather than individuals will make the proportion of car use increase, too, since a large number of households use both transit and private automobiles. But that’s really the point: people’s transportation behavior is much more diverse and flexible than the simple commute numbers suggest, and we ought to be giving as many people as possible as many choices as possible so they can determine what makes the most sense for a given trip.

In the end, the fact that transit use is broader than we think is evidence of its usefulness, and evidence that where service is adequate, many people will recognize that usefulness. But the case for better transit service goes beyond that. It’s about connecting people with opportunities in an affordable, efficient way, whether that’s a job or a cultural event. It’s about giving people the freedom to access what their own city has to offer. Everyone ought to have that choice.

How we measure segregation depends on why we care

Segregation is complicated and multi-dimensional, and measuring it isn’t easy

In 2014, NYU’s Furman Center hosted a roundtable of essays on “The Problem of Integration.” Northwestern sociologist Mary Pattillo kicked it off:

I must begin by stating that I am by no means against integration…. My comments are not to promote racial separatism, nor to argue that people of the same “race”–-and we must always signal just how time- and place-specific “race” is–“naturally” want to be around each other….

Instead, my point is simply to identify the following conundrum of integration politics: Promoting integration as the means to improve the lives of Blacks stigmatizes Black people and Black spaces and valorizes Whiteness as both the symbol of opportunity and the measuring stick for equality.  In turn, such stigmatization of Blacks and Black spaces is precisely what foils efforts toward integration. After all, why would anyone else want to live around or interact with a group that is discouraged from being around itself?

I thought of this problem, and this roundtable, while reading about FiveThirtyEight’s fascinating metric for residential racial segregation in American cities. By creating “diversity indices” at both the metro area level and neighborhood level, Nate Silver was able to distinguish between two relevant kinds of racial makeup, and – by subtracting one from the other – create a segregation statistic that takes into account the fact that Salt Lake City’s overall population does not look like Atlanta’s. In doing so, Silver came to the (perhaps not so surprising) conclusion that more diverse cities also tend to be more segregated.

Screen Shot 2015-05-04 at 10.38.35 AM

But another number jumped out at me from this analysis. Or rather, the lack of one: New York City did not appear on the “most segregated” list. Why was this? After all, on what is probably the most-cited measure of segregation, the dissimilarity index, metropolitan New York City ranks as the third-worst city in the country for black-white segregation (behind only Detroit and Milwaukee), and second-worst for Hispanic-white segregation (behind only Los Angeles).

(New Yorkers, of course, are frequently surprised to hear that their city is so divided. Then again, they only recently discovered that Los Angeles has art galleries, so.)

The answer, of course, has to do with the difference between Nate Silver’s segregation index and the dissimilarity index. Silver’s measure looks at whether people of any racial or ethnic group live in neighborhoods where they’re as likely to run into people of other groups as they would be in their metropolitan area as a whole. That is, you get a really bad score for having neighborhoods that are made up overwhelmingly of a single racial group.

On that measure, New York is clearly less segregated than, say, Chicago, to take the worst city by Silver’s count. Here, for example, are the areas in New York where 90% or more of the residents are black:

And here it is in Chicago:

In New York, this kind of single-race neighborhood is relatively rare, while in Chicago it’s almost the norm on the South and West Sides. Why, then, does the dissimilarity index suggest that New York is so segregated?

It’s because the dissimilarity index asks not just about any racial mixing – it usually asks specifically about whether blacks and whites, or Hispanics and whites, live in the same neighborhoods. And if that’s the question, then New York looks much, much worse. In fact, if you look for places where both blacks and whites make up at least 10% of the population, it turns out only a small minority of New York neighborhoods meet that criteria. (New York City overall is about 35% non-Hispanic white and 25% black.*)

NYCSeg

So which measure is “right”? Both of them, of course – they just answer different questions.

But to bring us back to the Furman Center’s roundtable, I think at this point it’s useful to ask why we think segregation matters. If the answer is that we think that our lives are enriched by being in proximity to – and, hopefully, forming meaningful friendships with – people of other backgrounds, then Silver’s index makes sense.

But one of Furman’s respondents, the sociologist Patrick Sharkey, suggested another, perhaps weightier reason. Segregation is important not just because it troubles our dreams of a country where people of different backgrounds can all get along, Sharkey wrote; it matters because segregation is how deep racial inequalities get reproduced from generation to generation:

Living in predominantly black neighborhoods affects the life chances of black Americans…because black neighborhoods have been the object of sustained disinvestment and punitive social policy since the emergence of racially segregated urban communities in the early part of the 20th Century. Residential segregation has been used consistently over time as a means of distributing and hoarding resources and opportunities among white Americans and restricting resources and opportunities from black Americans. Racially segregated communities provide one of several mechanisms through which racial inequality is made durable.

That is, it’s easier to send black children to inferior schools if their schools are all on one side of town, and white schools are on the other. It’s easier to target housing and mortgage discrimination against blacks – one of the most important causes of the wealth gap – if all the black-owned houses are in one area. It’s easier to unleash abusive policing and incarceration practices on black communities without disturbing – or even attracting the attention – of whites for decades if whites and blacks don’t live in the same neighborhoods.

The New York Times‘ visualization on how the neighborhood a child grows up in affects their future earnings reinforces this idea. As Yonah Freemark pointed out, a map of counties where social mobility is worst looks pretty similar to a map of counties with large black – or Native American – populations.

And that includes the large black populations in the New York metro area.

If this is why we care about segregation, then Silver’s measure – which doesn’t care which racial groups are mixing, as long as there is some mixing going on – is less useful. What matters then isn’t just integration: what matters is that privileged groups live in the same places as traditionally oppressed groups, so that place-based discrimination is made more difficult. In the United States, that means whites and people of color living in the same neighborhoods. Where that doesn’t happen – even if an area is integrated with, say, blacks and Latinos – then place-based discrimination is still viable, and it will be much easier to reproduce racial inequality.

This is also at least a partial resolution to Mary Pattillo’s concern that wringing our hands about the problem of segregation could, effectively, be implying that black people and their neighborhoods are inferior. Instead, focusing on place-based discrimination underlines that segregated neighborhoods aren’t inferior – they’re just more vulnerable to discrimination from more powerful groups whose members don’t live there. That, of course, is not the end of the story, and there are other tradeoffs involved in integration. But focusing on this rationale provides some clarity both to conversations about, and measures of, what continues to be one of the defining traits of the American city.

* Here, for the sake of convenience, I’ve switched to city, rather than metro-area, numbers, but I promise it looks pretty much the same at the larger scale, too.

Peaks, valleys, and donuts: a great new way to see American cities

In my inaugural post, I claimed that county-level population data is bad at telling us much of anything about cities and housing preferences. Counties just contain too many multitudes – of built environments, of types of neighborhoods, of zoning regimes – and vary too much from place to place to be very useful in cross-metro comparisons.

But happily, as of February, we have a much better way of turning the millions of moving parts in a given metropolitan area into a coherent story. That’s when Luke Juday of the University of Virginia’s Cooper Center for Public Service published “The Changing Shape of American Cities.”

“The Changing Shape” includes a traditional PDF report, which emphasizes the emergence of what writer Aaron Renn has called “the new donut”: a wealthy core, surrounded by a ring of relatively low-income outer city neighborhoods and inner suburbs, surrounded by wealthy outer suburbs. That, of course, is very much worth reading.

But what really makes our hearts go pitter-patter is this:

Screen Shot 2015-04-21 at 10.30.44 PM

If you click over, you’ll see an interactive data presentation for over sixty metropolitan areas – as well as a handful of regional groupings – that shows how each region’s demographics change as you move further from the city center. As you move from left to right on the graphs, you literally travel through the city, beginning downtown and then following the trends mile by mile. The data illustrate the “new donut” phenomenon as well as anything I’ve seen, showing, for example, a steep peak in residents’ college attainment at the city center, then a deep trough, and a second peak several miles out. Here, for example, is the graph for college attainment, aggregated over eight Rust Belt cities – places you wouldn’t necessarily expect to be seeing lots of privileged people moving downtown:

Screen Shot 2015-04-21 at 9.52.18 PM

The purple line shows the data from 2012; just as dramatically, the orange line shows the data from 1990, back when American cities followed the “old donut” model: a poor inner city and wealthy suburbs.

What’s so valuable about this presentation of metropolitan data – as opposed to county, or even municipal, based analysis – is that it doesn’t require the historical accidents that are government boundaries to correspond with subtle and ever-changing social and economic geography. By simply showing what happens to, say, the proportion of residents living under the poverty line as we move mile by mile through a metropolitan area, we get a much better sense of a region’s shape than we do by drawing a handful of sharp lines and measuring how many people fall on one side, and how many on the other.

Juday’s work even gets past some of the issues of more sophisticated approaches to urban categorization. For example: Trulia’s Chief Economist, Jed Kolko, recently made an urban/suburban distinction based on whether most housing units in a given neighborhood were in multi-family or single family buildings. In America’s biggest, densest cities, that makes a lot of sense: most New York- or Chicago-area neighborhoods where most people live in single family homes are probably not considered very “urban” there.

But in a lot of other places, especially medium-sized cities away from the East Coast, that standard doesn’t necessarily apply. The Midtown district of Memphis, where I lived for a year, generally looks like this:

In other words, it’s mostly single family homes. But it’s also centrally located, and, in the Memphis area, is popular specifically for its centrality, relative density and walkability, and other “urban” amenities. Kolko’s criteria, though they sound perfectly reasonable at first blush, mischaracterize the role Midtown plays in Memphis – and the role that many other similar neighborhoods play in their regions across the country. Juday’s charts, on the other hand, easily register Midtown’s popularity among the young and well-educated as a close-in neighborhood.

Of course, no form of analysis is perfect. One thing that you can’t see in these visualizations is the phenomenon of the “favored quarter.” That is, demographic patterns tend not to form perfect concentric rings around a city center: more often than not, they’re a composite of rings and wedges, beginning downtown and moving out in one direction. That, too, has been well-presented by Radical Cartography, among others.

This map from Radical Cartography shows per capita income in Atlanta. The wealthy (pink) favored quarter is clearly visible to the north.
This map from Radical Cartography shows per capita income in Atlanta. The wealthy (pink) favored quarter is clearly visible to the north.

But that is a relatively small issue. “The Changing Shape of American Cities” is an excellent approach to urban demographics, and the fact that the data are publicly available to play around with in an interactive display means there should be many, many more insights to come from Juday’s work.

How we measure segregation depends on why we care

Last year, NYU’s Furman Center hosted a roundtable of essays on “The Problem of Integration.” Northwestern sociologist Mary Pattillo kicked it off:

I must begin by stating that I am by no means against integration…. My comments are not to promote racial separatism, nor to argue that people of the same “race”–-and we must always signal just how time- and place-specific “race” is–“naturally” want to be around each other….

Instead, my point is simply to identify the following conundrum of integration politics: Promoting integration as the means to improve the lives of Blacks stigmatizes Black people and Black spaces and valorizes Whiteness as both the symbol of opportunity and the measuring stick for equality.  In turn, such stigmatization of Blacks and Black spaces is precisely what foils efforts toward integration. After all, why would anyone else want to live around or interact with a group that is discouraged from being around itself?

I thought of this problem, and this roundtable, while reading about FiveThirtyEight’s fascinating metric for residential racial segregation in American cities. By creating “diversity indices” at both the metro area level and neighborhood level, Nate Silver was able to distinguish between two relevant kinds of racial makeup, and – by subtracting one from the other – create a segregation statistic that takes into account the fact that Salt Lake City’s overall population does not look like Atlanta’s. In doing so, Silver came to the (perhaps not so surprising) conclusion that more diverse cities also tend to be more segregated.

Screen Shot 2015-05-04 at 10.38.35 AM

But another number jumped out at me from this analysis. Or rather, the lack of one: New York City did not appear on the “most segregated” list. Why was this? After all, on what is probably the most-cited measure of segregation, the dissimilarity index, metropolitan New York City ranks as the third-worst city in the country for black-white segregation (behind only Detroit and Milwaukee), and second-worst for Hispanic-white segregation (behind only Los Angeles).

(New Yorkers, of course, are frequently surprised to hear that their city is so divided. Then again, they only recently discovered that Los Angeles has art galleries, so.)

The answer, of course, has to do with the difference between Nate Silver’s segregation index and the dissimilarity index. Silver’s measure looks at whether people of any racial or ethnic group live in neighborhoods where they’re as likely to run into people of other groups as they would be in their metropolitan area as a whole. That is, you get a really bad score for having neighborhoods that are made up overwhelmingly of a single racial group.

On that measure, New York is clearly less segregated than, say, Chicago, to take the worst city by Silver’s count. Here, for example, are the areas in New York where 90% or more of the residents are black:

And here it is in Chicago:

In New York, this kind of single-race neighborhood is relatively rare, while in Chicago it’s almost the norm on the South and West Sides. Why, then, does the dissimilarity index suggest that New York is so segregated?

It’s because the dissimilarity index asks not just about any racial mixing – it usually asks specifically about whether blacks and whites, or Hispanics and whites, live in the same neighborhoods. And if that’s the question, then New York looks much, much worse. In fact, if you look for places where both blacks and whites make up at least 10% of the population, it turns out only a small minority of New York neighborhoods meet that criteria. (New York City overall is about 35% non-Hispanic white and 25% black.*)

NYCSeg

So which measure is “right”? Both of them, of course – they just answer different questions.

But to bring us back to the Furman Center’s roundtable, I think at this point it’s useful to ask why we think segregation matters. If the answer is that we think that our lives are enriched by being in proximity to – and, hopefully, forming meaningful friendships with – people of other backgrounds, then Silver’s index makes sense.

But one of Furman’s respondents, the sociologist Patrick Sharkey, suggested another, perhaps weightier reason. Segregation is important not just because it troubles our dreams of a country where people of different backgrounds can all get along, Sharkey wrote; it matters because segregation is how deep racial inequalities get reproduced from generation to generation:

Living in predominantly black neighborhoods affects the life chances of black Americans…because black neighborhoods have been the object of sustained disinvestment and punitive social policy since the emergence of racially segregated urban communities in the early part of the 20th Century. Residential segregation has been used consistently over time as a means of distributing and hoarding resources and opportunities among white Americans and restricting resources and opportunities from black Americans. Racially segregated communities provide one of several mechanisms through which racial inequality is made durable.

That is, it’s easier to send black children to inferior schools if their schools are all on one side of town, and white schools are on the other. It’s easier to target housing and mortgage discrimination against blacks – one of the most important causes of the wealth gap – if all the black-owned houses are in one area. It’s easier to unleash abusive policing and incarceration practices on black communities without disturbing – or even attracting the attention – of whites for decades if whites and blacks don’t live in the same neighborhoods.

The New York Times‘ visualization on how the neighborhood a child grows up in affects their future earnings reinforces this idea. As Yonah Freemark pointed out, a map of counties where social mobility is worst looks pretty similar to a map of counties with large black – or Native American – populations.

And that includes the large black populations in the New York metro area.

If this is why we care about segregation, then Silver’s measure – which doesn’t care which racial groups are mixing, as long as there is some mixing going on – is less useful. What matters then isn’t just integration: what matters is that privileged groups live in the same places as traditionally oppressed groups, so that place-based discrimination is made more difficult. In the United States, that means whites and people of color living in the same neighborhoods. Where that doesn’t happen – even if an area is integrated with, say, blacks and Latinos – then place-based discrimination is still viable, and it will be much easier to reproduce racial inequality.

This is also at least a partial resolution to Mary Pattillo’s concern that wringing our hands about the problem of segregation could, effectively, be implying that black people and their neighborhoods are inferior. Instead, focusing on place-based discrimination underlines that segregated neighborhoods aren’t inferior – they’re just more vulnerable to discrimination from more powerful groups whose members don’t live there. That, of course, is not the end of the story, and there are other tradeoffs involved in integration. But focusing on this rationale provides some clarity both to conversations about, and measures of, what continues to be one of the defining traits of the American city.

* Here, for the sake of convenience, I’ve switched to city, rather than metro-area, numbers, but I promise it looks pretty much the same at the larger scale, too.

Peaks, valleys, and donuts: Visualizing cities in cross-section

Too often, the descriptions of urban form are reduced to excessively simple binary classifications (city v. suburb), or rely on data grouped by counties, which are maddeningly disparate units. County-level population data is bad at telling us much of anything about cities and housing preferences. Counties just contain too many multitudes – of built environments, of types of neighborhoods, of zoning regimes – and vary too much from place to place to be very useful in cross-metro comparisons.

It is possible to build a much more fine-grained and nuanced picture of the contours of urban areas, looking at variations in population, educational attainment, race and ethnicity and poverty as they vary across the landscape. One of our favorite examples of this kind of high-definition statistical analysis is Luke Juday’s “The Changing Shape of American Cities,” published by the University of Virginia’s Cooper Center for Public Service.

“The Changing Shape” includes a traditional PDF report, which emphasizes the emergence of what writer Aaron Renn has called “the new donut”: a wealthy core, surrounded by a ring of relatively low-income outer city neighborhoods and inner suburbs, surrounded by wealthy outer suburbs. That, of course, is very much worth reading.

But what really makes our hearts go pitter-patter is this:

Screen Shot 2015-04-21 at 10.30.44 PM

If you click over, you’ll see an interactive data presentation for over sixty metropolitan areas – as well as a handful of regional groupings – that shows how each region’s demographics change as you move further from the city center. As you move from left to right on the graphs, you literally travel through the city, beginning downtown and then following the trends mile by mile. The data illustrate the “new donut” phenomenon as well as anything I’ve seen, showing, for example, a steep peak in residents’ college attainment at the city center, then a deep trough, and a second peak several miles out. Here, for example, is the graph for college attainment, aggregated over eight Rust Belt cities – places you wouldn’t necessarily expect to be seeing lots of privileged people moving downtown:

Screen Shot 2015-04-21 at 9.52.18 PM

The purple line shows the data from 2012; just as dramatically, the orange line shows the data from 1990, back when American cities followed the “old donut” model: a poor inner city and wealthy suburbs.

What’s so valuable about this presentation of metropolitan data – as opposed to county, or even municipal, based analysis – is that it doesn’t require the historical accidents that are government boundaries to correspond with subtle and ever-changing social and economic geography. By simply showing what happens to, say, the proportion of residents living under the poverty line as we move mile by mile through a metropolitan area, we get a much better sense of a region’s shape than we do by drawing a handful of sharp lines and measuring how many people fall on one side, and how many on the other.

Juday’s work even gets past some of the issues of more sophisticated approaches to urban categorization. For example: Trulia’s Chief Economist, Jed Kolko, recently made an urban/suburban distinction based on whether most housing units in a given neighborhood were in multi-family or single family buildings. In America’s biggest, densest cities, that makes a lot of sense: most New York- or Chicago-area neighborhoods where most people live in single family homes are probably not considered very “urban” there.

But in a lot of other places, especially medium-sized cities away from the East Coast, that standard doesn’t necessarily apply. The Midtown district of Memphis, where I lived for a year, generally looks like this:

In other words, it’s mostly single family homes. But it’s also centrally located, and, in the Memphis area, is popular specifically for its centrality, relative density and walkability, and other “urban” amenities. Kolko’s criteria, though they sound perfectly reasonable at first blush, mischaracterize the role Midtown plays in Memphis – and the role that many other similar neighborhoods play in their regions across the country. Juday’s charts, on the other hand, easily register Midtown’s popularity among the young and well-educated as a close-in neighborhood.

Of course, no form of analysis is perfect. One thing that you can’t see in these visualizations is the phenomenon of the “favored quarter.” That is, demographic patterns tend not to form perfect concentric rings around a city center: more often than not, they’re a composite of rings and wedges, beginning downtown and moving out in one direction. That, too, has been well-presented by Radical Cartography, among others.

This map from Radical Cartography shows per capita income in Atlanta. The wealthy (pink) favored quarter is clearly visible to the north.
This map from Radical Cartography shows per capita income in Atlanta. The wealthy (pink) favored quarter is clearly visible to the north.

But that is a relatively small issue. “The Changing Shape of American Cities” is an excellent approach to urban demographics, and the fact that the data are publicly available to play around with in an interactive display means there should be many, many more insights to come from Juday’s work.

City Observatory Welcomes Daniel Kay Hertz

We’re delighted to announce that Daniel Kay Hertz is joining City Observatory as our new Senior Fellow. Its likely that if you’ve been following the discussions on a wide range of urban issues in the past year or so, you’ve become familiar with his views on his own blog City Notes, and in a range of social media forums and even the editorial pages of the Washington Post. Daniel’s finishing up his graduate studies at the University of Chicago’s Harris School of Public Policy, but is already contributing to City Observatory. Let me pass the microphone to Daniel so he can tell you why he’s here.

There’s a joke that became famous – in certain circles, at least – because David Foster Wallace included it in his widely-read commencement address at Kenyon College a decade ago. A simple version of the joke goes: There are two fish. One fish says to the other fish: “Hey, how’s the water?” The second fish says: “What the hell is water?”

The point, of course, is that most of our environment – the systems, rules, and physical objects that determine the shape of our lives – is, from our perspective, so all-encompassing as to be invisible.

For most Americans, cities (which I’m using here in the “built-up area” sense, including suburbs) are our water. The kinds of homes and streets that predominate in our neighborhoods determine whether we walk, ride a bus, or drive to work – which, in turn, determines whether our monthly transportation budget is $25, $100, or $500. The geography of our city’s social networks determines who our friends and neighbors are, what kind of job openings we’ll hear about, and where we would consider moving. The economic relationship of our neighborhoods to the rest of the metropolitan area – and to the rest of the country, and the world – determines what kinds of jobs are available to us, how much they will pay, and how long our commutes will be. Our cities’ political architecture determines, to a large extent, the quality of our children’s schools, how much we trust the police, and whether we bother to vote.

Of course, it’s not news to most people that where you live matters. But the particular ways in which cities and neighborhoods create opportunity – or, conversely, reproduce inequality – remain mostly vague and up for debate. How much, and in what directions, we can or should use public policy and private initiative to push them towards opportunity and equality – and for whom – is even less settled.

The beauty of cities, for me, is that they contain so much. In a meaningful way, they are life for most people in 21st century America. (I’ll leave it to some hiker in Denver to tell me about all that I’m missing beyond the last subdivision.) Friendship, history, the arts, the thrilling awe of modern feats of engineering and the comfort of the familiar in your home: all of these are, for most people, particularly urban phenomena.

But what makes an organization like City Observatory so necessary right now is the urgency of hashing out what role cities play – and what role they should play – in a country facing profound civic and economic challenges. The abstract racial and class fault lines that go a long way towards defining our lives don’t just physically rearrange our neighborhoods; our neighborhoods can also rearrange them, for good or bad. A changing climate has important implications for how we live in cities, but the reverse is also true.

Which is why I’m very excited to be a small part of the conversation towards solutions on both of those fronts, and more, here at City Observatory. If you’re interested, some of my previous writing – and a little more about my previous experiences – is at my personal website. Soon I’ll have more up here, though, and I’m looking forward to it.

Travis County, TX is booming. Cook County, IL is shrinking. What does that tell us about cities? Not much.

For the last few years, counties at the center of their metropolitan areas have been growing faster than those at the edge. But late last month, the Washington Post‘s Emily Badger – citing analysis by demographer William Frey at the Brookings Institution – reported that the Census’ latest population estimates show that in 2014, the country returned to its pre-recession norm of faster growth in the exurbs.

This reversal, Badger and Frey argue, sheds some light on Americans’ housing preferences. In particular, it suggests that part of the much-heralded “return to the city” may just have been people delaying their moves to the suburbs while they held out for better economic conditions.

Badger is one of the best writers on urban affairs working today, and she takes pains to emphasize how limited and provisional that conclusion is. But I would take that one step further: even if 2014 is a return to the “old normal,” this particular data tells us very little about national housing preferences. Moreover, it necessarily misses important strengths and important weaknesses in urban cores.

The problem is that county-level data, on its own, is just not good at telling us anything about what kinds of neighborhoods Americans want. It’s as if the answer to the question we’ve asked has passed through a long game of telephone: by the time it gets to you, you have no idea whether what you’re hearing has anything to do with what you actually want to know.

There are at least two big reasons for this. The first is that counties at the center of their metropolitan areas aren’t a good proxy for “urban cores,” in the sense that Frey seems to mean. If Americans’ housing preferences have shifted towards the urban, then presumably that means not just neighborhoods that are closer to downtown: it means walkable streets, decent access to transit, perhaps a mix of housing stock that includes more apartments, and so on. But in the vast majority of American cities – and Brookings’ analysis includes all metropolitan areas with more than half a million people – those kinds of neighborhoods represent a minority of even the innermost county.

Take, for example, Travis County, Texas, which sits at the heart of the five-county Austin metropolitan area. Travis County’s neighborhoods range from newly-minted skyscrapers walking distance from the state capitol, to low-rise but recognizably urban communities like East Austin, to prototypical car-oriented suburbs like Pflugerville, to farmland. Travis County happens to be growing substantially – 26% in the last decennial Census – but without more detailed information, it’s impossible to know whether that’s because people are flocking to its urban core, or because places like Pflugerville are booming.

Downtown Austin:

Pflugerville:

Even in many of the largest, densest cities – ones that are definitely experiencing a continued boom in their urban core – using county-level data can be highly misleading. Chicago, for example, led the nation in the 2000s in population growth within two miles of its city hall, and has seen some of the most rapid gentrification of its urban neighborhoods of any city in the country. (It also showed up as one of the cities attracting the most “young and restless” – 25-to-34-year-olds with a four-year college degree – within three miles of downtown in our report late last year.) But Cook County, which contains all of the city of Chicago as well as its inner-ring suburbs, lost more than 3% of its population in the last Census. Again, county-level data completely erases the real growth in more recognizably “urban” neighborhoods.

The second reason is that a growing demand for city living might show up in two different numbers: one is population, but the other is housing prices. After all, in order for people to move to a city, there has to be somewhere for them to live. If the city doesn’t allow new housing to be built – or allows less than what people would like to buy – then population might flatline, but prices will skyrocket. Badger mentions this possibility towards the end of the piece, but it’s a much more serious problem for the data than is portrayed. It’s well-established that virtually every economically healthy city in the country permits less housing to be built than would be without zoning restrictions. In some places, that leads to population stagnation, or even loss, in places that are clearly in extremely high demand: in the 2000s, Brooklyn’s Park Slope saw its population increase by just one half of one percent – despite being one of the most desirable neighborhoods in one of the most desirable cities in the country. At the same time, according to the real estate website Trulia, the median home sales price in Park Slope rose by over 50%, or nearly $200,000.

And of course, rents and home prices are rising quite rapidly in many other urban neighborhoods, too. Moreover, as we’ve pointed out before at City Observatory, in some places, there’s evidence that prices are rising faster in central cities than in their suburbs. Taken with what we know about the restrictive power of local zoning codes, that’s overwhelming evidence that a large amount of the demand to live in urban cores translates not into population shifts, but higher housing prices.

The point here is not that, in a correct reading of the data, cities are “winning” in some simple sense. In fact, county-level data can hide some of the problems of characteristically urban neighborhoods, too. Many central counties contain lots of inner-ring suburbs, or outlying city neighborhoods, that may not be as dense as those right outside downtown, but still have urban-type grids, walkable retail districts, and much higher density than the younger suburbs further out. A generation or two ago, these places were bastions of the middle class; today, many are struggling, stuck between the newer, larger homes of the exurbs and the more dynamic, trendy urbanism of the core. By blending data from those areas with data from healthier city centers, we end up missing both.

Finally, county-level data ends up putting our focus on the few very recent years – 2011 to 2013 – when core-county population growth exceeded exurb-county growth. But that’s a very misleading portrayal of the timeline of urban revival. Signs of growing interest in living in the urban core were evident in places like New York City, San Francisco, and Chicago in the 1970s. But the work done on urban economic geography by Sean Riordan and Kendra Bischoff shows that even beyond the usual suspects – in cities like Denver, Seattle, or Dallas – there were signs that people with options were beginning to move back to urban neighborhoods decades ago.

On these maps, from the Stanford Center on Poverty and Inequality, show relatively wealthy neighborhoods in green and poorer neighborhoods in purple. The growing number of high-income households choosing to live in the center of Dallas is clear as early as 1980 - 1990.
These maps, from the Stanford Center on Poverty and Inequality, show relatively wealthy neighborhoods in green and poorer neighborhoods in purple. The growing number of high-income households choosing to live in the center of Dallas is clear as early as 1980 – 1990.

 

And, for all the reasons outlined here, county population numbers can’t tell us whether those decades-long trends are slowing or picking up steam, or whether more or fewer people actually want to live in “urban” neighborhoods. The answer to that question is very difficult, and mixed up in the interpretation of any number of demographic and economic indicators – including (but not necessarily limited to) home prices, new construction, and population on a much more geographically detailed level. But if we really want to know what most people want in a neighborhood, that’s where we have to look.