What City Observatory did in 2019

We spent a lot of time this year addressing Portland’s proposed half-billion dollar Rose Quarter freeway widening project. You may have thought Portland put its freeway fights behind it in the 1970s, when it killed the Mt. Hood freeway and used the money saved to start a light rail transit system. But the freeway-builders haven’t gone away, they’ve just gotten a good deal more glib–and in our view, less honest–about the implications and impacts of their projects. While this particular battle is specific to Portland, as Alissa Walker of Curbed pointed out in December, a distressingly large number of self-proclaimed climate Mayors are also supporting freeway projects around the country. If we’re serious about climate change, building wider freeways is taking us in the wrong direction.  We summarized our extensive analysis of the Rose Quarter freeway widening project in the post “25 reasons not to widen Portland Freeways”

Our most read post of the year was: “Ten things more inequitable than road pricing.” Road pricing seems to automatically generate push back that its somehow unfair to lower income people; what that argument misses is the larger context of a transportation system that is systematically inequitable. Those without cars a second class citizens at best, and our current systems of transportation finance force people to pay for cars and car travel whether they own cars or not.  Moreover, these existing subsidies are overwhelmingly regressive.

Everyone has a pet explanation of gentrification, and we’ve compiled all the suggested suspects into an A to Z list.  Everything from Arts to Zoning is on the list, and while lots of things are blamed, its mostly guilt by association. The underlying problem, in our view, is the shortage of cities and our chronic failure to allow the construction of housing in the great urban neighborhoods we have. The growing demand for urban living has run headlong into a slowly growing stock of housing in dense, walkable places. Perversely, efforts to block new development in the name of preventing gentrification typically have the opposite effect, making housing even more expensive.

A solution for displacement? Frequently, the tactics proposed to deal with gentrification–by trying to block new development–backfire, by limiting the growth of the housing supply and pitting new residents against existing ones in bidding up the price of a fixed or slowly expanding housing stock. If we want to avoid or minimize displacement in urban areas, we need to build more housing, both market rate and subsidized. One tactic for capturing the value from property appreciation in gentrifying neighborhoods is to dedicate a portion of tax increment revenues to building affordable housing. Portland has done just that for more than a decade, and amassed nearly half a billion dollars to support affordable housing, and built thousands of affordable units in rapidly redeveloping neighborhoods.

New Knowledge

Two of the most important studies of the year come from a single author:  the Upjohn Institute’s Evan Mast.  If you care about housing, you should read both of these papers.

The first study looks at the process of filtering, the way in which the construction of new housing sets of a chain of household moves that makes more housing available for people of all incomes.  We summarized it in our commentary, Kevin Bacon and Musical Chairs teach us housing economics. It’s an article of faith among economists that more housing, even higher end housing, will help ease rising rents. But to lay-people, that seems counterintuitive. A new paper from the Upjohn Institute shows that the construction of new housing creates a kind of chain-reaction of moves by households that propagates to housing in low income neighborhoods. When a household moves to a newly built, market-rate unit, they move out of the home they previously occupied–and the household moving into that unit frees up another unit, and so on.  The Upjohn paper uses a detailed private database tracking changes of address to see exactly how moves into one unit create vacancies elsewhere. And like the famous game “Six Degrees of Kevin Bacon,” it turns out that just a few moves connect widely disparate neighborhoods. The paper estimates that building 100 units of new market rate housing generates 60 household moves into housing in low income neighborhoods.

Mast’s second paper, with two co-authors looks at a closely related question, whether the construction of new high priced housing causes the prices of nearby homes to rise or fall.  We summarized this research in our essay: Myth-busting:  Building new market rate housing doesn’t drive up nearby rents. A favorite assertion of some housing supply-side skeptics is the theory that building new market rate housing in a neighborhood drives up rents in the immediate area. It’s a mistaken analogy to the idea of “induced demand” in transportation. The idea is that expensive new housing makes an area more desirable, and rents rise nearby. A new study uses fine-grained data on changes in rents around newly constructed market-rate apartment buildings in eleven strong-market cities around the country to test this theory.  It finds that new buildings tend to depress the level of rents and rent increases in their immediate vicinity.  The myth of “induced demand” for housing driving up rents is busted.

In the News

Some of our most prominent media mentions during 2019 included the following:

Joe Cortright’s Op-Ed, “Portland’s phony, failing climate policy,” was published in the December 14, 2020 Oregonian.

Willamette Week cited Joe Cortright’s work in fighting the Columbia River Crossing in its story on “The 20 moments that made Portland famous in the past 10 years.”

The Vancouver Columbian included in its Top Ten Stories for 2019 our debunking of state Department of Transportation claims that Oregon and Washington would have to repay the federal government $140 million if they didn’t build a $3 billion Columbia River Crossing.

Slate reported on our comparative analysis of pedestrian death rates in the US and Europe in their article “Don’t count on US regulators to make self-driving cars safe for pedestrians.”

In June, Governing Magazine covered our A to Z list of the supposed causes of gentrification in “The Fables of Gentrification.

In November, The New York Times quoted City Observatory’s report Less in Common in their article “Are my neighbor’s spying on me?”

City Journal cited research from our City Observatory report Lost in Place in its article on “The Bifurcated City.”

Happy 2020 Everyone!