Skip to main content

Posts

Showing posts from July, 2019

The wrong approach to affordability

A Chicago Alderman just demonstrated why trying to solve affordability at a local level works poorly at best.  Alderman Maldonado down zoned a collection of properties to "combat gentrification".  On it's own, that would be the worst solution as it's decreasing available housing, which will only push up the prices of the remaining housing.  There's a small silver lining in that he claimed this was a negotiating tactic to push more affordable housing into development plans.

The problem here is, that while affordable housing is a great goal, this is a poor way of getting it.  It's not necessary to negotiate for it if you act in a comprehensive way, because you can simply legislate the requirements.  Legislating creates a predictable and equal environment for development.  Negotiating creates friction, uncertainty and is at risk of being arbitrary.  The developers who succeed in such an environment are often going to be that are best at bending the politicians i…

How to make housing affordable

Housing costs in many areas across the States have been rising quickly.  One of the major causes is restrictive zoning that keeps housing in short supply, allowing demand to push prices higher.  Two weeks ago Oregon passed a bill with similarities to the failed California SB50.  This bill takes a statewide response to zoning, upzoning many single family areas to automatically allow higher density housing (quadplexes).

It's a fairly amazing development that other states (and cities) should pay close attention to.  Localizing zoning is a fine idea when the concerns are truly local, but when it comes to housing costs, the effects are much more regional.  Left to business as usual, zoning changes at a pace that does not accommodate demand.  Worse yet, when zoning changes it's often only can occur via a backroom deal, which privileges developers with access, ability, and willingness to manipulate the systems.

When a developer spends 1 year planning a project, prices go up.  Part of…