What City Observatory this week

1.  How housing segregation reduces Black wealth.  Black-owned homes are valued at a discount to all housing, but the disparity is worst in highly segregated metro areas.  There’s a strong correlation between metropolitan segregation and black-white housing wealth disparities. Black-owned homes in less segregated metro areas suffer a much smaller value reduction that Black-owned homes in highly segregated metro areas.  The value penalty suffered by Black homeowners is greatest in hyper-segregated metro areas, shown in the lower right hand corner of this chart.

Half a century after the passage of federal fair housing legislation, the persistent segregation of many US metro areas is still imposing a financial hardship on Black households. More progress in racial integration is likely a key to reducing Black-white wealth disparities.

2. Disobeying the Governor on congestion pricing.  The Oregon Department of Transportation has specifically disobeyed an order from Governor Kate Brown to take a hard look at congestion pricing before deciding on the course of its environmental review for the proposed $800 million I-5 Rose Quarter freeway widening project. In December 2019, the Governor directed her transportation agency to carefully consider how congestion pricing on I-5—mandated by the Legislature in 2017—would affect the need for the freeway widening project. Separate ODOT studies showed that pricing could eliminate the need to widen the freeway, but ODOT decided to move ahead without including any analysis of pricing in the project’s Environmental Assessment.

Must read

1. Zillow prediction for 2021:  A city rebound:  In the early days of the Covid-19 pandemic, we heard dire predictions that cities were doomed, both out of a mistaken fear that urban density spread the virus, and then based on the assumption that work-at-home would undercut downtown employment.  As we’ve pointed out at City Observatory, rents have softened relative to home prices, and some of the biggest declines have been in superstar cities, like San Francisco and New York.  But as we begin to turn the corner on the pandemic, there are signs that process will reverse.  The analysts at Zillow are bullish about a city rental rebound in 2021, fueled by young adults coming to cities.

In 2021, those that may have left cities temporarily during the pandemic will likely return as a vaccine becomes more widely available and local economies begin to open up again. Young adults moved back in with their parents at much higher rates this year than last, with nearly 2 million 18 to 25 years old still living at home in August. The majority of this age cohort tend to be renters and 46% of Gen Z renters tend to rent in urban areas, suggesting that when young people are ready to strike out again they will return to amenity-rich cities.

2. Where New York City is gaining and losing housing.  A new report from the New York City Planning Department provides a clear picture of where the city is gaining–and losing–housing units.  Since 2010, New York has added a net total of about 200,000 housing units, but growth has been concentrated in just a few areas in the city.  And, strikingly, some neighborhoods have actually seen their housing stock shrink.

Overall, the cities growth has occurred primarily on the west side of Manhattan and in relatively close-in neighborhoods in Brooklyn and Queens.  There’s been very little growth in much of the city.  A third of the city’s growth is in just three areas, all of them former industrial or commercial zones that have been redeveloped for high density residential use, including conspicuously Hudson Yards.

Perhaps the most surprising finding in the report is the fact that neighborhoods in the Upper East Side and Upper West Side are actually experiencing a net decline in housing units.  This is mostly due to remodeling projects that join two (or more) previously independent apartments or houses into a single much larger home.  It’s a reminder that when prices are high and it’s difficult to build new homes, that results in pressure spilling over into the existing housing stock, making it both scarcer and more expensive.   New York’s ten year retrospective on the change in its housing stock is an invaluable baseline for thinking about urban housing issues.  Does your city have a report like this?

3.  A wonder down under:  Falling rents and home prices in Sydney.  Sydney, Australia is one of the world’s most beautiful and expensive cities.  But in the past couple of years, thanks to local policies that make it somewhat easier to build denser housing, both home prices and rents have come down.  A new essay from Anya Martin, describes what happened.  Long concerned about housing affordability problems, the state government of New South Wales set up a regional planning commission to assign housing production targets to local governments in and around Sydney.

As with California’s similar “Regional Housing Needs Allocation” (RHNA) there was a lot of pushback from local governments, especially in higher income suburbs, but in the end, the policy had the effect of facilitating higher densities.  According to Martin, the number of new housing units permitted in the Greater Sydney area rose from an average of 20,000 per year prior to the change, to about 36,000 per year over the past five years.  And, in turn, that’s led to a decline in rents and home prices:

From a peak of A$550 per week in 2015 (£310, US $420), the median unit rent had fallen a substantial 7.3% by December 2019. House prices fell from a median of A$1,075,000 in December 2017 to A$865,000 a year later.

Sydney housing is still expensive, by any standard, but the progress made so far shows that expanding the supply of housing with policies that make it easier to build to higher densities represents movement in the right direction.

New Knowledge

How fighting climate change can improve human health. It turns out the reducing greenhouse gas emissions isn’t just good for the planet, its good for your health, too.  The kinds of measures we need to take to reduce carbon pollution (driving less, walking and biking more, eating less meat and more plant-based food) also will produce significant health benefits.  How significant?  A new study published in the Lancet evaluates the health benefits of alternate greenhouse gas reduction strategies compared to the current trajectory of emissions in several major countries.
The authors conclude that pursuing the goals set in the Paris accords would produce substantial health benefits, and that these could be amplified if climate policies explicitly embraced health-related objectives.  The study compares a “business as usual” current pathways scenario, with two alternatives:  a “sustainability” scenario (SPS) aimed at emissions reductions alone, and a health-focused scenario (HPS), that emphasizes interventions with the greatest health effects.  As the author’s conclude:
Compared with the current pathways scenario, the sustainable pathways scenario resulted in an annual reduction of 1.18 million air pollution-related deaths, 5.86 million diet-related deaths, and 1.15 million deaths due to physical inactivity, across the nine countries, by 2040. Adopting the more ambitious health in all climate policies scenario would result in a further reduction of 462 000 annual deaths attributable to air pollution, 572 000 annual deaths attributable to diet, and 943 000 annual deaths attributable to physical inactivity. These benefits were attributable to the mitigation of direct greenhouse gas emissions and the commensurate actions that reduce exposure to harmful pollutants, as well as improved diets and safe physical activity.
The improvements in mortality are a product both of less pollution (including both greenhouse gases, and other pollutants like particulates, which are reduced in tandem with GHGs), and also with the beneficial health effects of better diet and exercise from the implementation of measures to reduce car travel and carbon-intensive foods.  The report estimates population-adjusted numbers of deaths avoided for nine countries.
Ian Hamilton, Harry Kennard, Alice McGushin, et al, “The public health implications of the Paris Agreement: a modelling study,” The Lancet Planetary HealthFebruary, 2021, DOI:https://doi.org/10.1016/S2542-5196(20)30249-7

In the News

WBFO in Buffalo, cited our ranking of cities by level of housing segregation in their report, “A history of Redlining: housing group calls for more equitable mortgage lending practices.”