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.
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“Caltrans does not restrict the right of free speech with handheld banners, but attaching flags or banners is not allowed,” a Caltrans-Spokesman told the San Jose Mercury News. He added, “We are concerned that people waving handheld banners could cause driver distraction — putting their safety or that of the motoring public at risk.”
Today, we have prioritized the ‘motoring public’ over all other aspects of public life.
Our failure to cultivate the value and quality of our public spaces and public life is found in this picture of protesters and political advocates on a freeway overpass. Our cities are made up of public buildings, streets, squares and private lots, blocks and buildings. But when people want to be heard, seen, and get their message out to as many people as possible, they now gather on freeway bridge overpasses… for its on the freeways where everyone else can be found today, and not on our public street corners and squares.
Public assembly, free speech, and protests are cornerstones of American society. Our history includes the creation of National Parks and grand public spaces, such as Central Park, Golden Gate, and Balboa Park. They were created by us to, among other things, excercise our inalienable right to free speech and assembly. And, we continue to express our values in public and innovative ways as seen in the Occupy Wall Street protests, vile Trump rallies, and New York’s High Line success. These events are reflective of how our civilization grows and transitions over time.
We collectively expect access to public space in order to communicate with the bureaucracy running the machinery of our nation, state and city. We also know we must endeavor to protect these rights, as well as the spaces where these rights are exercised; Neither of which is easy.
In San Diego, our historic downtown ‘Speakers Corner’ is now long forgotten as 5th & E Street was the scene of great civil unrest a century ago. And, today’s homelessness explosion in our city has disturbed our relationship with public spaces. And, now our public parks and plazas are security patrolled, well-programmed, and require permits to use.
We also expect them to be animated with attractions to hold our limited attention spans or they’re considered ‘boring.’ As Camillo Sitte wrote over a century ago that, “In former times the open spaces—streets and plazas—were designed to have an enclosed character for a definite effect. Today we normally begin by parceling out building sites, and whatever is left over is turned into streets and plazas.” And, admittedly so, these stand-alone left over space ‘parks’ are too often inadequate and in need of bells and whistles to attract the ‘motoring public’ from far flung suburbs.
When I see people expressing their views on freeway overpasses, I see our civilization under duress or at least in transition – from gathering in the square to holding signs on an overpass bridge. These are one-way statements and this type of conversation does not facilitate a dialog and understanding. Sadly, this illustrates how far we’ve receded from what urban design guru Leon Krier teaches, “The architecture of the city and public space is a matter of common concern to the same degree as laws and language – they are the foundation of civility and civilization.”
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
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
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.
A few years ago in New Orleans, Dwayne Shelley, a former resident of the Housing Authority of New Orleans (HANO), recalled how he systemically watched as HUD rehabilitated and rebuilt homes in his development after Hurricane Katrina. He complained that he and his neighbors were relegated to watching the progress while others came in and did the work.
Today, Mr. Shelley has a different story to tell. Thanks to construction skills he developed while working as part of a Section 3 program contract, Mr. Shelley had the opportunity to help create a new future for HANO.
That’s why Section 3 of the HUD Act of 1968 is such an important program. The Section 3 program requires that recipients of HUD funds, such as housing authorities receiving Community Development Block Grant funds – to the greatest extent possible – use a portion of those funds to provide job training, employment, and contract opportunities to local low-income residents, public housing residents and to the companies that significantly hire them.
HUD invests billions of dollars each year in economic development projects and opportunities for communities, so this program has the potential to be a big factor in the lives of the families who need it most.
Less tangible but just as important, Section 3 helps to foster neighborhood improvement and increase individual self-sufficiency.
The Section 3 program has always been a key component of HUD’s efforts to increase economic opportunities in neighborhoods, but in the past few years we have put new energy behind the program and taken more aggressive steps to provide low-income individuals with the training and jobs they need to lead productive lives.
Between 2012 and 2015, Section 3-applicable HUD funding generated more than 110,000 new Section 3 employees and trainees. Further, that funding was responsible for $4.8 billion in contracts being awarded to more than 26,000 Section 3 businesses. Read HUD’s new report on the impact of the Section 3 program here.
We also made significant progress in meeting, and recently exceeded, the program’s statutory requirement that 30 percent of all new jobs resulting from Section 3-applicable HUD funding be directed to local low-income persons. In 2015, low-income residents represented a record high, 53 percent, of new Section 3 hires.
During the same period of time, we expanded the Section 3 business registry, our online system that allows businesses to self-certify that they meet HUD’s definition of a Section 3 business. The registry began as a pilot in five metropolitan areas, but it is now a national resource that is connecting local businesses with HUD contracting opportunities. As of mid-April, about 2,100 businesses had indicated their eligibility to be considered for HUD-funded contracts.
And because we know that the success of any program hinges on the ease with which it can be accessed, we designated Section 3 points-of-contact in each of HUD’s 10 regions. In addition to fielding questions about Section 3, they reach out to resident boards, low-income community organizations, businesses, and jobs skills trainers to collaborate on the program.
But Section 3 is about more than just numbers. It’s also about the positive impact the program is having in the lives of low-income individuals trying to build a better future.
Take Mark Rogers. A five-year resident of the Cincinnati Metropolitan Housing Authority (CMHA), Mr. Rogers was making $10 an hour as a maintenance worker before a remodeling company with a CMHA Section 3 covered contract hired him. The father of two is now making twice as much, lives in a market rate apartment, and recently completed a homeowner’s class.
His story is just one example of the difference we make when our investments go directly to the individuals and families that call our nation home and are not limited to buildings and infrastructure.
In the coming months we will continue to work with cities and housing authorities to help them comply with the requirements of the program, push for additional Section 3 authority, and finalize a Section 3 rule that will clarify provisions of the program that are left to interpretation and formalize “best practices” utilized by high-performing housing authorities and entitlement grant jurisdictions.
We still have much to do, but we are proud of our Section 3 efforts and look forward to using this vital program to create the employment and contracting opportunities low-income individuals need the most.
Gustavo Velasquez is the Assistant Secretary for the Office of Fair Housing and Equal Opportunity.
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.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
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.
Low in fat, packed with fiber and dollar-for-dollar more protein than meat, beans are the cornerstone of every Blue Zones diet in the world. Tim McGreevy, the proverbial King of Beans (CEO of the USA Dry Pea and Lentil Council and the American Pulse Association) talked with us recently and shared 10 things you might not know about these powerful legumes.
- They’re Cheap!
At about 98 cents per pound, black beans are one of the most affordable protein sources available. , Compare that to $4.60/lb for beef and $3.50/lb for chicken . One gram of protein from black beans is one cent, whereas a gram of beef protein will cost about four cents.
- There is a Whole Organization Promoting Beans
Beans are part of the pulse family that also includes peas, lentils and chickpeas, all of which are prevalent in the Blue Zones. USA Pulses aims to promote and educate about the benefits of consuming pulses. This year they are celebrating the International Year of Pulses with the Pulse Pledge.
McGreevy said, “If you want a simple, quick and easy guide on how to prepare these crops, whether it’s in their dry form, from a can or from the frozen section, I encourage you to take the Pulse Pledge – it provides simple recipes I think people will really enjoy.”
- You CAN Pass on Gas
Beans contain complex carbohydrates that our gut can have trouble digesting. As a result our stomach bacteria ferments these carbohydrates and can produce gas. You can reduce the gas by: 1) Slowly adding beans into your diet. (the gas problem usually evaporates after a week or so of regular bean-eating. 2) Cooking beans with spices like turmeric, ginger or fennel. These spices also add complex flavor profiles to any dish!
- Americans Need More
U.S. Dietary Guidelines suggests that Americans eat about a half cup a day. We only eat about 4 tablespoons. In Blue Zones, we found that the longest-lived people eat a full cup of beans every day.
One study found that for every 20g intake of legumes (beans, peas, etc.), the risk of death fell by 6 percent. .
Pulses have often been overlooked because they are difficult to cook or take too long to prepare. McGreevy said, “There are so many more options now. You can get flash frozen chickpeas or canned beans, which makes it really easy, like two or three minutes of cooking time. What people don’t realize is that lentils don’t need to soak and they take just about as long to cook as it does to boil pasta. People don’t scoff at cooking pasta!”
- The Darker the Better
Like veggies, the more color the higher the antioxidant content there is in beans . One study found that black bean hulls contain 40 times the amount of antioxidants found in white bean hulls .
- They Can Be a Digestive Aid
Mung beans can actually help with digestion due to their high fiber content . All varieties of beans have notable fiber content, but what makes mung beans easier to digest is that in combination with being high in fiber, they have lower levels of the specific carbohydrate strain that our stomachs have trouble digesting.
- Use them as Natural Fertilizer
Centenarians in Okinawa garden every day, which increases range of motion and nudges them to move naturally without thinking about it. While zucchinis and tomatoes might garner a beautiful harvest, beans and peas are also great for gardens and are really easy to grow. McGreevy noted, “Even if you don’t harvest them they are great for your garden because they put nitrogen back into the soil. They’re beautiful, delicious and nutritious – an all around great garden crop.” Beans support a healthy agricultural cycle. They enrich, rather than deplete, soil by leaving behind nutrients for the next crop .
- Double Duty
Beans are the only food that can fit into both a vegetable and a protein category according to the USDA .
- Celebrity Status
Ancient Romans based their names on common legumes: Lentulus (lentil), Fabius (fava), Piso (pea), Cicero (chickpea) . Roman leaders believed these everyday foods embodied the characteristics of the general population and by taking these names they would prove they had public interest in mind.
- How Old?
Isreaili researchers found fava seeds at a 10,000 year-old archaeological site . This suggests that people from the Neolithic era were some of the world’s first subsistence farmers. Their diets contained important cereal grains, but their protein and fiber was almost solely from fava beans, lentils, peas and chickpeas. The manner in which the bean seeds were stored showed signs of planning for future agricultural sustenance. Beans may have been the foundation of food in the past and they’re making a comeback to be the food of the future in terms of nutrient profile and sustainability for an increasing global population.
Pulses are the most sustainable crops available, which make them critically important for food security in our growing world. McGreevy said, “Whether you’re in the northern tier where they raise peas, lentils and chickpeas or whether you go south where they raise black-eyed peas and warm-season pulses, there is a pulse that grows in every culture…Pulses can stand alone as a tremendous plant-based food or they can be a complement to just about any other food and make it better for the planet and the better for your health at the same time. That’s really the message of pulses and the promise they hold. That’s why I believe they are the future of food.”
- Pass On the Gas: 7 Ways to Avoid Bean Flatulence
- Nutritional Value of Dry Beans
- Aging, Food, Culture and Health
- USDA Dry Beans
- Average Food and Energy Prices, U.S. and Midwest Region
- What’s New and Beneficial About Black Beans
- Dry Beans Inhibit Development of Mammary Cancer
- Antioxidant Activity of Extracts, Condensed Tannin Fractions, and Pure Flavonoids from Phaseolus vulgaris L. Seed Coat Color Genotypes
- Identification of the flavonoids in mung bean (Phaseolus radiatus L.) soup and their antioxidant activities
- Sustainable Superfoods
- A Selective History of Beans
- The Lentil: “Poor Man’s Meat”
- Archaeologists Find World’s Oldest Fava Seeds at Site in Galilee
Thanks to technological innovations, our lives are in many ways better, faster, and safer: We have better communications, faster, cheaper computing, and more sophisticated drugs and medical technology than ever before. And rightly, the debates about economic development focus on how we fuel the process of innovation. At City Observatory, we think this matters to cities, because cities are the crucibles of innovation, the places where smart people collaborate to create and perfect new ideas.
While the emphasis on innovation is the right one, like any widely accepted concept, there are those who look to profit from the frenzy of enthusiasm and expectation.
Around the country, dozens of cities and many states have committed themselves to biotech development strategies, hoping that by expanding the local base of medical research, that they can generate commercial activity—and jobs—at companies that develop and sell new drugs and medical devices. There’s a powerful allure to trying to catch the next technological wave, and using it to transform the local economy.
Over the past decade, for example, Florida has invested in excess of a billion dollars to lure medical research institutions from California, Massachusetts and as far away as Germany to set up shop in the Sunshine State. Governor Jeb Bush pitched biotech as a way to diversify Florida’s economy away from its traditional dependence on tourism and real estate development.The historic Florida capitol. Credit: Stephen Nakatani, Flickr
Of course it hasn’t panned out; Florida’s share of biotech venture capital—a key leading indicator of commercialization—hasn’t budged in the past decade. And several of the labs that took state subsidies are down-sizing or folding up their operations as the state subsidies are largely spent. Massachusetts-based Draper Laboratories (which got $30 million from the state) recently announced it was consolidating its operations at its Boston headquarters and closing outposts in Tampa and St. Petersburg—in part because they were apparently unable to attract the key talent that they needed. The Sanford-Burnham Institute, which got over $300 million in state and local subsidies, is contemplating leaving town and turning its Orlando facilities over to the local branch of the University of Florida.
And while Florida’s flagging biotech effort might be well-meant but unlucky, in one recent case, the spectacular collapse of a development scheme has to be chalked up to outright fraud. As the San Francisco Chronicle’s Thomas Lee reports, both private and public investors have succumbed to the siren song of biotech investment. Last month, the Securities and Exchange Commission issued a multi-million dollar fine, and a lifetime investment ban, to Stephen Burrill, a prominent San Francisco-based biotech industry analyst and fund manager. Burrill diverted millions of dollars meant for biotech startups funds to his personal use. Not only that, but Burrill was a key advisor to a private developer who landed $34 million in state and federal funds to build a highway interchange to service a proposed biotech research park in rural Pine Island, Minnesota, based on Burrill’s promise he could raise a billion dollar investment fund to fill the park with startups. In the aftermath of the SEC action, Burrill is nowhere to be found, and the Elk Run biotech park sits empty.
But puffery and self-dealing are nothing new on the technological frontier or indeed, in the world of economic development. The most recent example, biomedical equipment maker Theranos, which claimed that it had produced a new technology for performing blood tests with just a single drop of blood. The startup garnered a $9 billion valuation, and conducted nearly 2 million tests before conceding that its core technology didn’t in fact work. Theranos has told hundreds of thousands of its patients that their test results are invalid. As ZeroHedge’s Tyler Darden relates, the company rode a wave of fawning media reports that praised its disruptive “nano” breakthrough technology (WIRED) and lionized its CEO as “the world’s youngest self-made female billionaire” and “the next Steve Jobs.” All that is now crashing to earth.
When it comes to biotech breakthroughs, consumers, investors and citizens are all easy prey for the hucksters that simultaneously appeal to our fear of illness and disease and our hope—borne from the actual improvements in technology—that theirs is just the next step in a long chain of successes. Investors pony up their money for biotech—even though nearly all biotech firms end up money losers, according to the most comprehensive study, undertaken by Harvard Business School’s Gary Pisano. And as my colleague Heike Mayer and I pointed out nearly a decade ago, it’s virtually impossible for a city that doesn’t already have a strong biotech cluster to develop one now that the industry has locked into centers like San Francisco, San Diego and Boston.
At first glance, biotech development strategies seemed like political losers: you incur most of the costs of building new research facilities and paying staff up front, and it takes years, or even decades for the fruits of research to show up in the form of breakthroughs, products, profits and jobs. No Mayor or Governor could expect to still be in office by the time the benefits of their strategy were realized. But as it turns out, the distant prospects of success always enable biotech proponents to argue that their efforts simply haven’t yet been given enough time (and usually, also resources) to succeed. And likewise, no one can pronounce them failures. When asked why the struggling Scripps Institute in West Palm Beach hadn’t produced any of the spin off activity expected, local economic developers had a read explanation, reported the Palm Beach Post:
“Biotech officials urge patience and repeat the mantra that a science cluster needs decades to evolve. “This takes a lot of time to develop,” said Kelly Smallridge, president of the Business Development Board of Palm Beach County.”
“The biotech bonanza Jeb Bush hoped for? It didn’t go as planned,” Palm Beach Post, June 15, 2015
So rather than being a liability, the long gestation period of biotech emerges as a political strength. Apparently, you’ve got to give the snake oil just a little bit more time to kick in.
The end of the school year is approaching, which is an opportunity for students in HUD-assisted communities to continue their education outside the classroom. Throughout the country, HUD convenes a growing number of students for workshops focusing on STEM— Science, Technology, Engineering, and Math—through partnerships with STEM Innovation Networks and public housing agencies.
These workshops provide middle school students with enrichment activities, high school students with paid internships, and college students with STEM scholarships and job placement assistance, in addition to mentorship from community coaches.
Twelve-year-old LeVar Tyson-Ames, III, who lives in HUD-assisted housing in Montgomery County, Maryland, is a STEM participant. After learning that his grandfather had been paralyzed from cancer, LeVar was inspired to learn how to use technology to help people. “I came up with an idea for all the other cancer patients who can’t walk, to make a robot that would allow them to walk,” he explains.
LeVar hopes that the values that he takes away from each workshop will carry him far into the future. “Hopefully, in five to ten years I will have helped people who have cancer, people who can’t afford gas, who can’t buy a house, who can’t do any of those things.”
When describing HUD as the Department of Opportunity, Secretary Julián Castro has stated, “Our nation must make the investments necessary to prepare youth to compete in our 21st century global economy. That means we must cultivate brainpower and match it to economic opportunity. We must also create enrichment opportunities for young people outside of the classroom.”
According to the US Department of Education, only 16 percent of American high school seniors are proficient in math and interested in a STEM career. That’s why HUD is working on STEM and other initiatives to support students’ futures, including ConnectHome – which connects HUD-assisted households with low-cost, high-speed Internet access, devices, and digital literacy.
Not only is HUD’s support of STEM providing students with educational opportunities, but it is also changing their lives.
Fifteen-year-old Tenderly Diaz, who lives in HUD-assisted housing in Hampton, Virginia, has been a STEM scholar since 2013. Tenderly describes building her first robot at a STEM workshop, “I felt smart. It was something new and something that I have never done before.” Since then, Tenderly has won several individual and team awards during STEM workshops and events.
Through these events, Tenderly has learned to collaborate with fellow students to accomplish a common goal. “It taught me how to communicate well with other people in order to be our best.”
With newfound skills and confidence, Tenderly feels empowered to reach for her dreams. “I see myself graduating college as a double major. I want to major in Film Directing and also major in Civil Engineering.”
All children need safe, affordable, and stable housing as a foundation for their healthy development and upward mobility. Yet the vast majority of low-income children in this country lack this basic support. HUD’s mission ultimately is about closing this gap to ensure that all children, in all communities, can reach their full potential.
Through our affordable housing programs and public-private partnerships for STEM, ConnectHome, and other educational initiatives, we are making a difference!
For more information about HUD’s STEM efforts, contact Jerryl E. Bennett at (202) 402‑4120 or via email at firstname.lastname@example.org.
Lourdes Castro Ramirez is the Principal Deputy Assistant Secretary for the Office of Public and Indian Housing.
What are cities worth? More than big private companies, as it turns out: The value of housing in the nation’s 50 largest metropolitan areas ($22 trillion) is more than double the value of the stock of the nation’s 50 largest corporations ($8.8 trillion).
Market capitalization is a financial analysis term used to describe the current estimated total value of a private company based on its share price. It’s a good rough measure of what a company is worth, at least in the eyes of the market and investors. The market capitalization—or “market cap,” as it is commonly called—is computed as the current share price of a corporation multiplied by the total number of shares of stock outstanding. In theory, if you were to purchase every share of the company’s stock at today’s market price, you would own the entire company.Checking up on your cities. Credit: OTA Photos, Flickr
In roughly similar fashion, we can compute the market capitalization of cities—or at least of their housing stock. We start with Zillow’s estimate of the market value of owner-occupied housing in each of the nation’s largest metropolitan areas which is computed by estimating the current market price of each house in a metropolitan area, and sum that value over all of the owner occupied houses. We also estimate the value of rental housing. For rented units we use a commonly accepted technique of estimating current values based on the income generated from rent. (Americans paid about $535 billion in rent in 2015, according to data compiled by Zillow; we can use this data and some financial formula to estimate the value of rental housing. Details of this calculation are explained below.) Then we add together the value of all owner-occupied housing and the value of rental housing to compute the total market cap of housing in each metropolitan area in the US.
Together, the 50 largest publicly traded private corporations in the United States had a market capitalization of $8.8 trillion at the end of 2015. The total market value of housing in 2015 in the 50 largest metropolitan areas was $22 trillion. For reference, the gross domestic product—the total value of all goods and services produced in the US in 2015—was estimated at $18 trillion. It’s hard to find things measured in trillions of dollars, so we’ve juxtaposed GDP against the market cap of housing and businesses. Keep in mind that the GDP is a flow (trillions of dollars per year) while the value of corporations and housing is a stock (trillions of dollars in value at one-point in time).
The following table shows the market value of housing in each of the nation’s 50 largest metropolitan areas and the current market capitalization of the nation’s 50 largest publicly-traded private sector businesses.
For metro areas, the value of housing is divided into two components (owner-occupied housing) shaded blue, and rental housing (shaded orange).
The most valuable company is Apple, with a market cap of $541 billion; the most valuable metro area is New York, where the market value of owner-occupied and rental housing is $2.9 trillion—more than five times higher. The current market value of Apple is about the same as the current market value of housing in Seattle (the twelfth most valuable market on our list).
Some modest-sized metros have housing that’s worth as much as the entire value of some very well-known corporations: IBM’s market cap ($128 billion) is about equal to Indianapolis housing ($138 billion). Orlando’s housing ($208 billion) is valued at more than 25 percent over all of Disney ($164 billion). Three Seattle-based companies (Microsoft, at $418 billion; Amazon, at $285 billion; and Starbucks, at $84 billion) are worth more combined ($787 billion) than all the housing in Seattle (about $617 billion).
The differences are smaller at the bottom end of our two league tables. The fiftieth largest firm, the oil services company Schlumberger, is worth about $15 billion more than the fiftieth most valuable metro housing market, Buffalo: $82 billion versus $67 billion.Buffalo! Credit: Zen Skillicorn, Flickr
It may seem strange to compare the market value of houses with companies, but this exercise tells us more than you might think. Just as the share price of a corporation reflects an investor’s expectations about the current health and future prospects of a company, the price of housing in a metropolitan area also reflects consumer and homeowner attitudes about the quality of life and economic prospects of that metropolitan area. So, for example, as the price of oil has fallen, weakening growth prospects in the oil patch, it’s quickly translated into less demand and weaker pricing for homes in Houston. Just as stock market investors purchase and value stocks based on the expectation of income (dividends) and capital gains from their ultimate sale, so too do homeowners (and landlords)—they count on the value of housing services provided by their home as well as possible future capital gains should it appreciate.
In fact, these two commodities—housing and stocks—are among the most commonly held sources of wealth in the United States. And while the financial characteristics of the two investments are dramatically different the underlying principle is the same, making market cap is a useful common denominator for assessing the approximate economic importance of each entity.
Each day, the financial press reports the market’s assessment of the value of individual firms, through their stock prices. But viewed through a similar lens, the housing markets of the nation’s cities are by this financial yardstick an even bigger component of the nation’s economy.Technical Notes
How we computed the value of rental housing. In real estate, the value of rental housing is usually estimated using a “cap rate” capitalization rate, that approximates the rate of return on capital that real estate investors expect from leasing out apartments. To estimate the current market value of apartments, we take Zillow’s estimate of the total amount of rent paid in each market and deduct 35% to estimate “net operating income”—the amount the investor receives after paying maintenance, other operating expenses, and taxes—and then we divide this number by a capitalization (cap) rate of 6%. Both of these figures (net operating income and capitalization rates) are rough estimates—values vary across different times of properties, different markets, and over time with financial conditions (such as with the change in market interest rates).
Many thanks to Zillow’s Chief Economist Svenja Gudell and Aaron Terrazas for doing the hard work here of estimating property values and rental payments. For more keen insights on housing markets, follow their work at Zillow’s Real Estate and Rental Trends blog.
I just spent a week exploring the depopulated areas of Detroit on foot and by bicycle including an excellent stay with some young homesteaders. At the end of the trip I had an exchange with a noted civil engineer and city planner who had stayed in the newly revitalized downtown attending a convention. We had very different interpretations of what he called the “Doughnut of Despair” in the penumbra outside the urban core.Detroit lost 60% of its population from its peak in 1950. Most of the residual empty buildings are single family homes and the civic buildings that once served them. The city has far too much public infrastructure to maintain and entirely too little tax revenue with which to do it. The engineer/planner proposed cherry picking the remaining viable buildings and transporting them to a single close-in neighborhood where municipal services could be more efficiently provided. I rolled my eyes. . . . . . This is right up there with the suggestion that the city should just cut off power and water to people in big chunks of the city to “encourage” them to migrate. Try that on rich white people living in far flung suburbs that also have negative tax-to-municipal-services ratios and see how that goes. Let’s look at how previous plans to “save” Detroit worked out. . . . . . Option #1 The Great Society.
Bulldoze entire blocks of historic urban fabric. Concentrate the poorest people into giant high rise towers managed by unresponsive and underfunded bureaucracies. Intentionally cut them off from jobs, good schools, and the wider culture. Then blame the residents for failing to thrive after everything that was done for them. . . . . . Option # 2. The Ownership Society.
Bulldoze entire blocks of historic urban fabric and create an imitation of the suburbs complete with cul-de-sacs and gated communities. Give subprime mortgages and multiple auto loans to low income families. Then blame the residents for failing to thriving in spite of all the opportunities that were offered to them. . . . . . . . Option # 3. Back to the Future.
These homes and families are the survivors of decades of white flight, the collapse of the auto industry, benign neglect, the criminalization of poverty, and a dozen plans to reform the city and “rescue” the poor unfortunates left behind. All these photos were taken within walking distance of each other in the same general part of the city. The ruined husks, the high rise projects, and the plastic subdivisions are all cheek by jowl with little islands of normal life, charming old homes, and neatly tended gardens. These are the people the next wave of self appointed do-gooders are looking to “help.” . But there’s that lingering problem… Detroit can’t maintain all of its infrastructure so something has to change. But what? If we were to go back to the Detroit of 1880 the population would have been smaller and concentrated near downtown – just as the engineer/planner proposed. But all around the nascent industrial metropolis were farms and small rural hamlets. Cities need large scale municipal facilities for water, sewer, and transportation. They also need abundant regulations and multiple bureaucracies to oversee them. Country villages don’t. . Google . Google . . . . . Significant portions of Detroit are now essentially rural again. On any given block there may only be two or three occupied homes. The official options are to fill the space with new construction of a dubious nature or scrape the landscape clean. But there’s a third option. What would it take to allow these rural properties to revert to rural utilities? Homes in the country have private wells or rainwater catchment with cisterns instead of city water mains. Country homes have septic systems instead of city sewerage treatment plants. Country homes have propane tanks instead of piped natural gas. Homes in the countryside have narrow paved roads or gravel lanes. Converting the remaining viable homes to these smaller independent systems would be significantly less expensive than trying to maintain the endless miles of municipal infrastructure across the entire city. Rural cooperatives could be established to serve such homes and businesses rather than the existing utilities. . . . . . . There are also emerging clusters of viable urbanism. These are small towns really, often in unlikely spots that wouldn’t occur to an engineer or city planner. Grand old homes are being renovated in close proximity to each other and shops are reopening to serve the boomeranging population. These areas may still benefit from cost effective city services, particularly if the momentum continues with small scale incremental infill development that thickens over time. . This slow dispersed organic approach is asking a great deal from city regulators. This isn’t a broad sweeping program with a lot of flash and ribbon cutting ceremonies. These individual block-by-block solutions are unique rather than easily standardized. But this is the most economical and civilized policy moving forward for the citizenry – if not the bureaucrats. So do we want to make life easy on the experts, or make the city a better place that can also pay its bills?
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.
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:
And here’s a bit of what this looks like on the ground, via Google Streetview, with these two midcentury suburban homes in 2007…
…becoming four townhomes in the same amount of space by 2014.
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…
…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.
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.
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
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.)
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
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.
Many years ago when I was infinitely younger and a lot poorer I rented a little 9′ x 18′ back yard cottage behind an old Victorian in San Francisco. Today you might call it a Tiny House or Micro Flat. But back then it was just a 1930’s potting shed that had been fitted with a toilet, shower, and kitchenette. I was incredibly happy there. The space was exactly what I needed, the rent was low, and I didn’t need room mates to make ends meet. The landlord was also happy to have rental income to augment his pension as he aged. This was “affordable housing” that was entirely supplied by the private sector without government subsidies. Yet every aspect of this little backyard cottage is completely illegal under today’s zoning and building codes.
Many years later I find myself the owner of a rental property in Sonoma County. As a landlord in a very tight obscenely expensive housing market I saw an opportunity to both provide an additional rental unit at a minimum wage price point and make a little extra money for myself. The existing property is a 700 square foot two bedroom tract home that sits on a half acre of land. An additional 300 or 400 square foot cottage in the back garden could be affordable for me to build on a cash basis and affordable for a low income renter – without blighting the rural landscape.
Sonoma County is a hotbed of Tiny House activity. I spent a few years exploring all sorts of possibilities. But at each turn I confronted a regulatory environment that was aggressively opposed to absolutely any form of new construction. Putting a house on wheels circumvented some of the rules, but living in a mobile home in the back yard is illegal. As a landlord I won’t subject myself to the risk of legal action, so that option was out as far as I was concerned.
It’s technically legal to build a permanent Accessory Dwelling Unit on a proper foundation, but the cost of compliance with endless regulations was ridiculous. A permit is $24,000. There’s an obligation to rip up the street and trench a completely redundant sewer line (minimum $15,000) instead of just tapping the existing sewer from the main house. The code requires fire sprinklers that will come in at about $10,000. The requirement for off street covered parking means building a garage larger than the cottage itself. Then there’s the internal conflict of many of the codes. Permeable pavement is required for storm water runoff control, but that runoff is caused by the required added driveway and garage. Meanwhile a plain vanilla gravel parking space in the front yard is forbidden. The list is absolutely endless and only a professional architect along with a consulting engineer can possibly understand the entitlement process and all the code minutiae, so factor in those billable hours as well. At the end of the day even a very modest backyard cottage was completely off the table for me. I will not go in to that kind of debt and I won’t tolerate charging the required high rent to service the loan. It’s a lose/lose proposition all around. No thank you.
The county eventually realized that all these regulations were contributing to the housing crisis so they came up with a plan to reduce the cost and complexity of building ADUs. But then they loaded up on poison pills that imposed all sorts of other limitations that made it equally unpalatable. There weren’t many takers. Another “lite regulation” option was put in to place that allowed temporary portable cottages for health care workers looking after the elderly or infirm. You need a note from a doctor, regular government inspections, annual fees, and once Granny shuffles off this mortal coil you need to remove the units from your property. NFW.
Community activists came up with their own proposals to build affordable Tiny House communities. They have some merit, but are based on a combination of government grants which come with their own endless strings and conditions, and a long laundry list of constraints that attempt to keep them permanently affordable and “green.” And the proposed price point? $200,000 per Tiny House. In what universe is that affordable to people earning a low income wage? Maybe this will work for someone else. But I can’t even pretend to involve myself with that kind of bureaucratic process. It also presupposes a car dependent rural or suburban growth model. There are hundreds (if not thousands) or acres of aging surface parking lots and half dead strip malls with existing infrastructure across the region. Many of them are in completely walkable and transit served locations that would work far better for people on tight budgets and no car.
So here’s what I’m doing instead. I bought a prefabricated flat packed cedar garden shed and installed it in the back half acre. It’s 10′ x 12′ which puts it exactly at the 120 square foot cut off that doesn’t require a permit. It has no electricity or plumbing so – again – no permit required. It isn’t a house. No one can every live here. It can never be rented. But I’ll be using it for my own short visits when I drive up to do maintenance and gardening on the rental property. It’s more convenient than having to commute back and forth from the city in a single day and ultimately less expensive than renting hotel rooms over the next decade or so.
I’ll be insulating the interior, putting up finished walls and flooring, and setting up proper furniture over time. It will be a perfectly comfortable guest room for the odd night or two when I’m up in the country. I’ve come to an agreement with the tenants. They let me use the facilities in the main house and they get to use the shed the 98% of the time when I’m not around. Everyone’s happy.
Many years ago I bought these wooden doors at an old warehouse in San Francisco that was about to be torn down to make way for the new baseball stadium downtown. I fitted them with mirrors and will eventually be bolting them to the walls. They add warmth, multiply the garden views, and bounce light around.
Since I was avoiding any permanent electric service to work around the dreaded county inspector I’m using 5 watt LED lights plugged in to little USB battery packs. These same batteries also charge iPads, laptops, cell phones and other small devices. I now have light, communications, music, podcasts, and so on with no need for wall plugs. The climate in Sonoma is mild year round so there’s no need for heat or air conditioning. Even in the wet cool winter months proper clothing and a few blankets will keep you warm in bed.
This arrangement does nothing for the housing crisis and I won’t ever be gaining rental income from the place, but the little cedar shed was so inexpensive and easy to install that I don’t have to care about those other things. That’s someone else’s problem. Now it’s the obligation of the police and social services to sort out the hordes of needlessly homeless people living in tents under the freeway and in rusty RVs – which is the de facto affordable housing policy that’s been adopted all across the Bay Area. Meh.
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.
Why is CNU Still Relevant in the Design, Development and Governance Conversation? (A #CNU24 Reflection)
As of Saturday June 11, the Congress for New Urbanism has convened for 24 times. Since its inception, it’s gone through an evolution, an evolution powered by its roots in the architectural tradition of design and critique. It’s precisely this history which makes it still relevant in the greater design, development and governance (which I’m going to shorten to DDG) conversation.
Exactly why is CNU still relevant? For three reasons: the new focus on diversity of both voices and vernaculars, the approachability of the conference venues and the ability to debate the principles of new urbanism and push for their integration into other key parts of the DDG conversation.
Diversity in Voice and Vernacular and Body
— Victor Brandon Dover (@VictorDover) June 10, 2016
First of all, my introduction to CNU happened because of my willingness to speak up and speak out against the seemingly lack of diversity, at least in online spaces, in the DDG fields. I was invited, as part of what was then a separate track of NextGen ideas, to speak on diversity and equity. I felt unworthy to do it alone and I brought in two people who I knew would knock out the conversation in their respective spaces.
Fast forward to 2016. While Andres Duany has always brought a bit of the Cuban/Latin vernacular into his talks, you couldn’t beat the multitude of people of color, both women and men, on various stages in this conference. From Pashon Murray bringing the group her work with Detroit Dirt and the local ground perspective, to Mitchell Silver bringing in planning and landscape architecture and good governance, to Tony Garcia holding down the banner for the small scale public project work to myself debating the racialized aspect of the gentrification conversation and why we should use more words in talking about place-based social ills to task and Army base planner Alexander Dukes sounding off on the autonomous cars debate. Not to mention so many other attendees of color, from not just Detroit, the Midwest and the United States doing great work in many fields and other presenters of color who I may have forgotten, being that I was only in Detroit for the Friday and Saturday portions of the Congress.
Finally, on the diversity front there’s a growing Women’s Caucus. Women of all stripes have struggles in an industry cluster that has often failed to pay, respect, promote and engage women on the same levels as men. While I love writing and graphic design, those areas of the project often bill lower and are often the domain of the women in the firm. Then there are the issues around work-life balance, especially in design firms that seem to know no end to the workday. I’m looking forward to helping get this started and supporting the other ladies, with both moral and technical support.
Approachability of Conference Venues
— Mike Christensen (@MRC_SLC) June 10, 2016
Detroit is the poster child of urban decay, grit and resilience, along with car culture and sprawl and highways. Yet, it provided this year’s Congress with the dream venue, a walkable cluster of theaters, hotel ballrooms, parking lot vendor bazaars(also with many vendors of color) and even an open street with the planned weekend closing of Monroe Street through Greektown for us to enjoy. You could also get a quick sense of the downtown via the People Mover and Ubers and bikeshare bikes were at the ready to whisk you away to the Eastern Market and Lafayette Park.
Even though I was staying with my aunt (and also visiting mom) in the upper Northwest corner, while I was downtown, the venues were compact. Many mentioned how much they were able to enjoy proximity to venues at the various hotels and AirBnB options, in addition to others leveraging family and friends. I also purchased food from the food trucks and shades from the fashion truck. I missed out on the downtown bowling, but enjoyed giving my presentation in a presentation venue that was essentially the top floor loft space of a bar and maintained the relaxed feel you expect from such a space.
And lastly, with the Pecha Kucha, the dance party and the closing party, we blended our conference and regular Detroit fun and idea sharing together. It felt like the best of the CNU 19 Madison project lodge and yet it was a long way from that congress’s $75 closing party.
Ability to Debate Amongst New Urbanism and Also Through Other Design, Development and Governance Principles
Having been at this blog and my design, development and governance education and career for almost six years now, I’ve had the opportunity to not just attend five CNUs, but also two state level APA conferences, two New Partners for Smart Growth, several Streetsblog trainings and meetups, one state-level City and County Manager Association conference, another city governance focused training two N.C. State Urban Design Conferences, a major design charrette where lots of out-of-town professionals were brought in and the inaugural Strong Towns meetup. As I’ve written before, it’s vital in our sector to present ones work and discuss best practices.
I used to think that my value in the space was getting paid to present my work (and it is, to a certain extent still). Yet, now that I’m doing field work, I’ve found the best thing for me to do is to go to as many of our conferences and tell the story of my work and remind folks of my design philosophy. My goal in my career is to be able to have a solid balance between field work (project design and stakeholder engagement) and peer critique, debate and training (keynote speeches and workshop facilitation, along with actual debates like on Friday night that other can spread the word about inside and outside the room).
Lastly, most other conferences in our field only exist to throw information at folks for the sole purpose of retaining licensure in that discipline’s certification. CNU, while offering licensure and education of its own under it’s own and other licensure programs, centers idea exchange for the sake of idea exchange, and not just from the big deal people. Now this is something that has evolved over the years and there is still an emphasis in the main program of “big deal” folks. Yet, there’s nothing stopping me from showing up in town, getting my own venue and telling people I’m going to be hosting a talk, book signing or the like and getting them to show up. In the past two years, efforts have been made, if I announce it with enough advance notice, to get it in the main program book and on the website.
Remember, I am a young writer, without licensure, but with plenty of passion and skill in interpreting what’s going on in the DDG world. I’m a black woman who’s not very wealthy. I shouldn’t be here. Yet, in its current iteration, CNU’s big tent allows me to flourish without limits. There may be people in the fold who are my polar opposites and may even say harmful things not just to our profession, but the world in general. Yet, at the end of the day, the greater force of the movement is behind open doors, diverse voices and spirited debate. The relevance comes in allowing more people like me to come inside and be welcomed immediately. Even if it’s just me doing the welcoming.
I’m Kristen Jeffers. Over five years ago I started this space to discuss diversity in the design, development and governance professions. I currently write this blog and also do stakeholder engagement, speaking and other writing work. I hold a Master of Public Affairs with a Concentration in Community and Economic Development. I am a North Carolina native living in Kansas City. You can follow me on Twitter and Facebook, as well as Instagram. You can email me. You can get emails from me. Learn more about who I am and why I do what I do. And here are all my prior reports on CNU.