The American housing crisis

I am beginning to think that the United States is facing a terrible housing crisis. The fact that we are is pathetic. We know how to build high-density housing in inexpensive ways. But we do not allow it. So places that boom in the northeast and California see little housing growth. But they see price explosions.

We are moving to Washington this summer. Our rent on a two-bedroom apartment (big enough for two adults and two small children) is $2525. When we moved in back in 2009 it was $2300. That is an increase of only 1.9% per year. In real terms, no change.

But the owners want to charge the new tenants $3200 for the same unit. That is an increase of 6.8% per year: well over inflation and a clear indication that something is off the rails in the Boston housing market.

The ultimate problem, of course, is that you simply can’t knock down the short buildings on this block and build more high-rises like the one in the background. It’s ridiculous. We are less than a quarter-mile from a T station; residential buildings here should reach 20, 30, 40 stories. But you can’t build them because, uh, Franklin Street is just so pretty as-is.

WTF? What in the name of God is wrong with Brooklyn? Build Brooklyn here! And for those of you in Brooklyn, go build Manhattan over there. Manhattan is great!

Here is my proposal for a tough tight restrictive zoning code.

1. Adjacent units shall not lose more than two hours of sunlight on the shortest day of the year unless their current occupants so agree.
2. Monthly rents on a third of the units in any new rental buildings shall not exceed 0.003% of the median household income in the municipality per square foot. The price of one-third of any new for-sale units shall not exceed 2.5% of the median household income in the municipality per square foot.
3. New developments must at least double the number of units of any housing structures demolished in their construction.

And we’re done! No parking requirements, no height restrictions, nada. Just the above. And truth be told, I would prefer to replace clause (2) with a tax on luxury units. Calling Bill de Blasio! (Or Muriel Bowser.)

Note that this is an incredibly restrictive code. Just less so than the bullshit we currently have. Historical preservation is stupid, un-American, and contributes to income inequality.

Massively. How much of the increase in income inequality is due to changes in housing costs? I suspect it is large; someone should do the decomposition.

Comments

[Will Baird]

Did you see the tech crunch article about the sf housing splat I linked to?

[Eric Moore]

Is that all adjacent units? Seems silly to me to me if you have a 20-story building, and want to replace the one-story building to it's south with a two-story building, not being able to because the 1st floor apartments might lose 2 hours of sunlight.

Not sure I like the rent caps either. You can still build super-large luxury apartments that only the rich can afford, but can't build small studios in highly desirable areas (well, you can, but are discouraged from building there because you can't charge more for the desirability). Seems counterproductive.

Heck, not sure I like the doubling requirement either. Maybe if uninhabitable buildings are exempted. And certainly needs a square foot minimum on "unit".

My sample zoning ordinance (mostly written from a Manhattanite's perspective):

1) You can build a 5 story building on any lot.
2) No building may be built more than 20% taller than the tallest building on the block 5 years ago.

You can build

[Noel Maurer]

Those two rules are very restrictive. I've talked to developers at zoning meetings: Cambridge's five-story limit doesn't give them incentives to give up two or three years of rent from a one-story structure. In Manhattan, only ludicrous values per square-foot would compensate for that ... but lowering values per square-foot is the point of the reform.

Your suggestion 20% limit makes no sense whatsoever if the goal is to bring down rents and real estate values. If you're worried about a shadow externality, then that should be addressed directly. Heights caps serve only to make housing more expensive.

Your other requirements are generally found in building codes, not zoning laws.

I don't understand your point about luxury units; the caps I suggested are in terms of square footage, not units.

You lost me, amigo.

[Jonathan]

And here I was so happy, because the convenience store and accessory parking lot on the corner of Mass Ave & Upland Rd was being torn down and replaced with a multi-family apartment building.

It's my opinion that the underlying issue is parking. Neighbors don't want dense housing on their block because they worry that all 50 of those new families will park on the street.

[Noel Maurer]

I'm with you on that, Jonathan. There are solutions, like not issuing permits to residents in new buildings.

It's sad that one short new condo in Porter Square can get us both excited. Our ancestors in the 1960s would find that pathetic.

[Eric Moore]

Well, to explain my point about the square footage caps, with your formula, a 2,777 square foot apartment would rent (annually) for the median income. I'm hard pressed to call an apartment that large, that rents for more than the *whole* salary of half the population anything but a luxury apartment.

The 20% limit allows housing to grow, while not fundamentally altering the character of a neighborhood overnight. And hey, it's better than the current state in Manhattan where many areas are built to their zoning limits and can't add housing at all. I'm also good with just plain "ok, build what you want", but as a concession to the ostensible purpose of zoning laws I came up with that idea :)

[Noel Maurer]

I'm tracking with the first. I see your point. There would have to be a cap on the total rent.

The second ... well, who cares about preserving the character of a neighborhood? Screw that.

This is a post about something that has become a very serious problem in 21st-century America. Half-measures aren't enough. (More relevantly, I'm not sure that your proposal is looser than the typical code in most of NYC, although I take your point in places up against the cap.)

[Jonathan]

If I recall correctly, you were the person who pointed out to me that the gentrification of Somerville and Watertown was due entirely to Cambridge's reluctance to add housing.

It is pretty pathetic.

[Eric Moore]

Most of Manhattan is close enough to the cap that knocking the whole block down and putting up a building 20% talller than the tallest building on the block would definitely allow more housing to be built. The rest of the city, well, replacing all of queens with 5 story buildings would be a *lot* of new housing.

Hey, I'm good with the "Zoning laws, we don't need no stinking zoning laws" solution too.

[Bernard Guerrero]

+1

[Noel Maurer]

Eric, gotcha on Queens. The Bloomberg down zoning of most of the borough was one of the unheralded terrible developments of his mayoralty. I was mislead by your "Manhattanite perspective" comment.

Are you back in NYC these days?