I read the news about Moore’s housing plan and saw that 25% “affordable units” poison pill. It’s something that NIMBYs demand to handicap housing initiatives.
If we want housing to be affordable to low income persons, then expand housing voucher along with upzoning. Don’t demand developers take a loss.
SORRY FOR HIPPY-PUNCHING BUT it's important to remember that in non-negligible swaths of the left, Developers are coded as Bad People. They have capital or whatever. They are the, uh, uptrodden. Forcing them to take a loss in order to simply conduct their regular business is a feature, not a bug. For a lot of terminally online losers, it might even be more important than actually creating any fucking housing for anyone.
The move is to convince city councilors/mayors/state legislators that these people don't make up a meaningful part of the electorate and thus don't need to be catered to over every legislative priority.
The structure of state and local government is different. When you are part-time and have two meetings a month in front of your constituency voting on policy a loud and vocal minority moves the needle. This is what locals face. This is why states need to enact higher level policies that locals then can tell their residents they have to follow the state’s rules.
In the housing horseshoe, these parts of the Left go hand in hand with the conservative NIMBYs who also see developers as evil, money-grubbing scum. Power to the people!
That may well be part of it but as a life long Marylander my read is that they believe this is what it will take to buy the Democratic delegation from PG County, possibly also the de facto left NIMBY contingent in Montgomery County too. There are a lot of great things about the state but despite being very blue the political culture is extremely parochial, and not particularly visionary. Wes Moore himself seems like a nice guy (I voted for him) but my read has always been that he is a lightweight who would prove incapable of getting much done beyond granting the wishes of the various entrenched interests in the legislature.
The transportation cuts will probably not actually happen in full. Moore just didn't want to be the guy to propose increases in taxes/MVA fees (so the legislature will have to do it over the next couple of weeks)
Developers take a loss or pass on the expense to the other buyers in the building, which is proxy-tax on "the rich". This cross subsidy is a scam and I hope more people see it for what it is. The government has a legitimate interest in making it affordable for poorer sections of society. That's alright. But the way to accomplish this goal is by directing tax revenue to this purpose. Unfortunately, it would require some transparency that's in short supply.
I've lived in a large new build with an affordable housing carve out and it's great. It's not just about subsidy - it's about actual socioeconomic integration across class, within buildings and within neighborhoods. But, as others have pointed out, the math still needs to work and at a certain threshold just doesn't.
Cambridge MA recently passed an amendment to their affordable housing law. The premise is for "Affordable Housing Overlay" zones, where developers can build taller buildings (12-15 stories) if it is 100 percent affordable housing (affordable meaning rent no greater than 30 percent of Area Median Income, it seems).
I'm not familiar with Cambridge zoning, so take this with a grain of salt, but one example: it looks like the Mass Ave corridor (by Porter Square) is zoned BA-2, allowing for most residential and institutional uses and with a max height of 45 feet. It seems that the initial affordable housing law would have allowed a max height of 65 feet, and this amendment ups it to 12 stories. Again, I have not followed this closely so if someone has been please weigh in.
This seems to differ from IZ in that, rather than requiring x percent affordable in a development, it creates a different development option: 5 stories of market rate housing, or 12 of affordable. Seems promising, IMO
Affordable is not profitable without extensive tax benefits and only rarely and barely pencils out with them, so the real choice is 5 stories of market-rate housing or nothing.
That's the core point of this article and attendant discussion.
I am not a housing developer so I’ll take your word that affordable is not profitable, but I guess my point is, if an area is currently zoned single family, upzoning to allow 4 plexes is an improvement - and if the jurisdiction also says, you can build 8 units if they’re all affordable, then it at least creates the potential for more density. I agree that if no upzoning for market rate housing takes place, then “upzoning if units are affordable” will have a negligible impact
I agree, and if one out of 10 developments can make an affordable project pencil, then I think it is great that they'll be allowed to build more units.
I guess the point I'm trying to make is that, so long as a jurisdiction is upzoning as a general baseline, I don't see anything wrong with allowing even more density if some units are affordable. I wholeheartedly agree that if upzoning is only permitted for "affordable" developments and not market-rate, then it won't really solve anything.
I think it also bears mentioning that as long as supply is restricted, the "market rate" will ALWAYS be unaffordable. And every new building that gets built will STILL be unaffordable UNTIL the market has enough supply.
[This is not directed at you, BUT] ... It's like someone turning on the shower and complaining that the water will NEVER get warm just because it came out icy cold and stays that way for a good 10-20 seconds.
I mean are they counting college students as residents in Cambridge salary statistics or not? Maybe they should do median wage + median trust fund allowance statistic?
The AHO has already created several hundred new housing units, whereas an equivalent market rate upzoning would have created zero (because it didn't have the votes). The advocates are perfectly aware of the economics!
It’s deeply self-defeating, because this is all posed as a way to help middle-class citizens. If it can’t do that then they will turn on it before we ever get there.
The AHO wasn't posed that way though. It's Cambridge MA, there is a very strong coalition for helping lower income people, and a less-strong coalition for making My Parking more contentious. The pro-housing fraction of the city council increased three times in a row, each time in an election defined by debates over the AHO. By now there's seemingly enough pro-housing councilors to do real market rate reforms
Its not clear if its a poison pill or if its targeted at large lot redevelopment. If the 25% affordable is just required to be part of the project, vs in the building, then it would direct redevelopment to large assemblages, which are easier in existing commercial areas. For example, to redevelop a mall parking lot, you could imagine proposing three market rate buildings and one 4% LIHTC building, and with Maryland's super high area median incomes that 4% LIHTC deal is probably feasible without additional subsidy. Some of the richest developers I know are LIHTC developers, and they're typically paying market price for land.
Much of the left of the Democratic party hates the idea of people making money and loathes capitalism. And those who don't hold such views are fearful of being canceled or primaried or attacked by those who do. News at 11. And so when housing abundance plans get hatched—which usually means Democrats these days given that the GOP has decided they need to defend the Constitutional Right to tell your neighbor they can't build stuff—there have to conspicuous and ludicrous nods to "affordability" (scare quotes very much intended). Profits are evil, after all.
It's tiresome and depressing. I guess we should all be happy at least the winds of change are finally blowing when it comes to housing. Baby steps.
I think people are *vastly* overestimating the proportion of folks who genuinely believe this as opposed to seizing on it as an excuse to oppose changes in their neighborhoods or towns.
So, so many NIMBYs that want to fight against the country club itself! And collateral damage from this was an HOA being a bunch of assholes by closing of a small but critical path that's going to put a lot of non-motorists at risk. Argh.
I agree that the biggest driver is status quo bias, but read any reddit thread about housing and the top comments will invariably be about how the problems are caused by greedy developers and landlords.
In short, the housing affordability crisis has turned America pretty YIMBY. The trick is not listening to the top Reddit commenters or the loudest citizens at the local city council meeting (probably the same people). If you work in local government, trust that if you build new housing, rent will go down, the homeless population will gradually fall, and voters will re-elect you. Because in most cities rent and homeless are literally the top issues people want solved.
"The trick is not listening to the top Reddit commenters or the loudest citizens at the local city council meeting"
Sage advice for life in general.
"If you work in local government, trust that if you build new housing, rent will go down, the homeless population will gradually fall, and voters will re-elect you."
This is what Boise's elected officials did, and they all got re-elected!
I love this, but I think it's important to set realistic expectations: I can't think of any localities that have added housing fast enough to drive rents down. (And would love to be wrong.) Imo, it's better to promise stabilization.
Yeah, of course. Always a good rule to underpromise and overdeliver, rather than the opposite. The point mainly being that local politicians shouldn't be scared into inaction.
>I can't think of any localities that have added housing fast enough to drive rents down<
Pretty sure the rent went down in parts of the US circa 2008-2012. And before you say "but we had a recession" the fact is rents *didn't* decline in many metros that were already experiencing housing shortages by then (and that exacerbated recovery and reduced prosperity).
The point is, more supply relative to demand equals more affordability, full stop. In some cases that may mean absolute declines in the cost of housing. In some cases not. But in *all* cases it will mean "lower housing costs than we'd see without the increased supply." To put it another way, Manhattan is unlikely to ever be cheap, but, under Yglessian Yimbyism, an UWS studio in 2040 might "only" be $6,300, instead of the $8,100 it might be if NYC continues with mandatory supply restrictions. In either case that's an increase in absolute terms, but the smaller increase is better for most people, and for the economy.
I'm 100% on board - that's what I was gesturing at when I suggested that it's better to promise stabilization instead, but your longer explanation is better.
I responded because someone caught me out once when I was arguing for housing abundance. I carelessly said "rent will go down" and they asked, in front of a group of people, "oh really? Can you point to some places where rents have gone down because of building?" In that kind of situation it's hard to recover by reframing. I lost ground for YIMBYism that night.
Status quo bias is the biggest driver of NIMBYism writ large, no question. I'm not sure it's the biggest driver of "using affordability set asides." I think savvy NIMBYists know damn well such policies impede new supply. But *most* overtly NIMBYist efforts are channeled into things like environmental lawsuits, or opposition to zoning changes, or what have you.
Affordability set asides from what I can see tend to mostly be used to plactate the anti-capitalist hard left, when a housing abunandance deal needs their support to get over the political hump. Cynical professional NIMBYists, of course, are the anti-capitalist Left's allies in all this, because they're well aware such policies protect stasis, and do the opposite of "increase affordability" (save for a tiny, lucky few).
That was rather my point, as I recapitulated in more detail above: the "buildings bad" crowd can't be placated by anything and should be ignored and the "profits bad" crowd is actually *vanishingly small* as a part of the electorate, so the politicians need to stop considering the former group's opportunistic anti-developer rhetoric as a sign that the latter has real throw weight.
Human nature wants to make policy into a morality play. This is useless until we can identify leavers for making people less greedy, and they are few and frail.
Post-coffee, let's see if my brain can unpack this logic better:
I see the "profits evil" view as having an analogous position on the liberal-to-leftist spectrum as the worst of the IDpol bullshit; for a long time no one was willing to say that the emperor's balls were out for all to see because everyone was afraid "the Emperor is fully clothed" was a majority view left of center.
It's slowly, painfully becoming apparent (perhaps a year or two behind the illiberal racialist left's implosion) that "profits bad" is also a tiny-but-loud minority view and we can mock the poor morons with impunity. The only thing that gives them any weight at all is their alliance with the "opportunistic rhetoric in service of building nothing" coalition, to whom no reforms are ever going to be acceptable and who must be ignored at the state level if anything is ever to be done.
Which is to say, the politicians need to stop pandering to the "profits bad" crowd because it's actually very, very tiny, and the "buildings bad" crowd cannot be placated by anything anyway.
>as opposed to seizing on it as an excuse to oppose changes in their neighborhoods or towns.<
Sure, there's plenty of that, too (see "Preston, Dean, Democratic Socialist from San Francisco").
But those folks would have a lot less ability to gum up the works if basic, irrational, economic illiteracy were not so common on the Left.
Just once before I give up the ghost I'd love to hear some prominent Democrat say "No, we're not making any special concessions based on income or race or proximity to trains or anything else. We aim to drown housing scarcity in a sea of production. If it's safe, fucking build it."
Ehh, I'll buy "trains" in Philadelphia, Chicago, New York, or Washington.
It's impossible to graft a larger highway system atop these cities.
But otherwise yes.
Though I'll note that Chicago's approach is basically "if it's safe, fucking build it," and that is still getting drowned by Illinois' shitshow clusterfuck of a state government making the entire state an uncompetitive, unattractive mess.
Outside the Loop, Chicago has hard zoning caps on building height. You can get a building in the West Loop approved up to 11 stories with alderman bribery but that area could easily support 75 story buildings right now.
I... am unconvinced that demand exists to drive that at any significant scale. The fixed costs of a structural and MEP system for a 75-story building, that need to be amortized across unit prices, are very large.
At the end of the day, in Chicago, like Philadelphia, public safety is the single most effective housing affordability measure we could take. Make all our neighborhoods safe and the housing stock will improve in quality everywhere, with moderate in-fill development and density increases everywhere to meet demand.
Well the West Loop is unique because (1) it was - maybe still is - the hottest RE market in the US and (2) they have Loop zoning east of Halsted between the highway so you can see 75+ story buildings going up on one side of the street and then 8-11 story buildings capped right across on the other side.
EDIT: Good news is it's changing! They got a 43 story building approved and have a 600 foot apartment tower up for City Council approval too.
I certainly have no objection to slapping up as many units as possible near train stations. I object to a rule that says "they must be near a train station" or you can't build them.
I, despite mainly agreeing with the prevailing sentiments of this comment section, actually *don't* have an objection to stricter limits on high-density housing in urban centers in places poorly served by transit.
If and when Philadelphia has zoned, geofenced, universally enforced congestion pricing, then I don't care anymore, but in the meantime I need to.
Sure that makes sense in the abstract, but in the real world liberals want to help their poorer citizens and just saying, "Let's build like crazy and eventually rents will fall enough to help them" just won't cut it. Politically, that smells like "trickle down."
So you need to compromise. Build like crazy but set aside a reasonable percentage of units (like the 10% here in Los Angeles) for low income families.
I understand you meant that in an ideal sense, but it's still worth pointing out why doing some housing for the low income is a necessary part of the solution.
Sure, but you don't need to use income set asides to help poor people or avoid "trickle down" (nor *should* you use such self-defeating policies).
A far better way to go about is: A) build like crazy and B) help them with the rent, C) especially in light of the fact (and it's a fact!) that income set requirements actually *reduce* affordability for the many. Affordability set aside policies are basically analogous to saying "Ok, we're going to fuck you over but claim it's helping you."
If the goal is purely promotion of "help the poor optics" (and I get it, politics ain't beanbag), I suppose theoretically there's some number (3%? 5%?) that, if set aside for the non-affluent, wouldn't kill too many projects or impede supply. But it seems safer to just let builders build (and provide rent money for those who need it).
Just giving money is typically the best way to go. I'm a big fan of GiveWell.
But, as you note, that's not how politics works. Action at a distance doesn't get politicians reelected; they need to show a direct impact. But we agree that high set asides are crazy. I like our 10% set aside here in LA.
I think the problem is easier to see if you turn it inside out: politicians can't sell big changes unless those changes are subordinate to a moral crusade.
It's not just the far-left that believe this; the greedy developer has been a stock antagonist in movies and TV for decades - for example, the pilot episode of Dukes of Hazzard, and it was hackneyed then.
There are a lot of people who don't think about their opinions, and that stock plot is the first thing that comes to mind about developers.
How come these out group representations so often exaggerate a claim without bring the receipts?
How much of the quote "left" actually believes this? Or have you found some college students or stray opinion piece from Jacobin that thinks the profit is inherently immoral?
Like why build up the potency and influence of these folks, except to justify your own beliefs? Or perhaps your reactionary politics?
In a recent Rising piece about free speech Brianna Joy Taylor drove the point home that you can’t call universities leftists because they teach things like business and economics that are inherently free market and therefore conservative. She loves to grand stand on this stuff. But there are many on the left that haven’t accepted that free markets are the most efficient way you can allocate resources and produce the greatest amount of human flourishing. That’s not to say some amount of redistribution of wealth isn’t also needed for those that don’t benefit enough, for whatever reason, from free markets. Matt’s piece today seems to generally agree with this view.
It's not just on the left, a lot of people think like this. It's zero-sum thinking: "if someone is making a lot of money, someone else is getting ripped off." morehousing.ca/zero-sum
I’d go one further and claim that strict affordability requirements discredit the whole YIMBY project because they create the implication that local control preemption means central planning rather than market freedom. IMO the underlying tension around how to get affordable housing built has not been resolved satisfactorily by YIMBY advocates, and that is pretty fundamental to NIMBY support.
The choice between “build what the local planning board thinks should go here” and “build what Annapolis HUD thinks should go here” is not a flattering one for the YIMBY movement.
It hasn't happened to any appreciable degree in my small city or state.
And while I sympathize with those of you who have that problem in your local area, I really don't want a possible solution to your particular problem to negatively impact me and curtail our local control.
There's this weird default supposition that local governments are never going to do the right thing and state governments always will, when in my experience and in observing plenty of others it's the opposite.
I mean that is nice but I think it fair to say that the extremely intense ways land use can be policed in the US is antithetical to economic growth and personal freedom and we should be happy whenever someone claws some of that back, even if it is throw state or federal action. California has a tendency to everything-bagel proposals and isn't shy to overcomplicate regulation yet the state action on zoning has been the opposite of central planning. They have fought a hard series of battles to give people the freedom to scary things like build a granny flat.
You could ask that about every form of financial assistance we have in this country. Most people loathe the idea of direct cash assistance in case the "wrong" people benefit so we generate all these hoops to jump through to make sure there's no "waste" when in reality it's the hoops that generate the waste.
I do know some folks back in Seattle that basically did not work most of 2020 and 2021, received basically their whole salaries anyway, did not pay rent, did not pay student loans, and received the stimulus checks. They are now back working and paying rent and are mad at Biden. Musta been nice
We can quibble about the exact amount and whether too much money had an inflationary effect, but it really made me wish we had tried "give the people money" back in 2008/2009
The forgiven loans part of the PPP does seem like it may have crossed over the threshold from enabling "honest graft" to affirmatively subsidizing the most corrupt and dishonest.
I think we should just shrug on the PPP people and focus on funding the IRS so they get caught later on and pay society back with nice fines added on top.
It didn't work at all for the auto market. The week after the first increased UI check went out - which gave some crazy high % of recipients a raise - low end vehicles (10 Model Years and older) started flying off the lot. Within 6 weeks weeks - so like by July 2020 - dealer's Days of Inventory dropped from 2-3 months normally to less than 1 week. That demand signal then started rippling up market (new model years) and back into the wholesale channel. This is all 15 months before supply chain issues.
Congress gave people money in spring 2008. In 2009 it tried a weird combination of immediate but temporary payroll tax cuts and spending on roads/bridges that didn't actually take place until mid-late 2010.
Most people work, and most people also know people who don't work and find a way to scam and freeload off the government. A couple people are giving examples below and I have a few of my own that I've brought up many time here just from my own family.
Sure, but most people also know people who can't work and are getting nothing or much less than they need/deserve because the systems designed to stop the scammers are only stopping honest people.
If you talk to some of my colleagues, they'll tell you the only people who get disability payments are the scammers and the people who really need them never get a penny. That's not true, but it certainly feels true if you have any relatives who really need help.
My attitude has always been that the people who just want to freeload are also people who'd be terrible workers - the people who complain about a freeloader they know, I always ask "do you want to be that person's line manager?" and you get this visceral revulsion, which is one of the very few ways I've ever found of changing people's minds. I will honestly pay taxes to pay them welfare just to avoid having to manage that sort of work-avoider. Can't even call them lazy; they will work harder avoiding working than they would have to if they just did a job.
Also, direct cash assistance will make the total cost much more transparent to the public, and unless there is a country wide embrace of Nordic levels of taxation, people won't accept it.
Knowing that we're collectively trying to help those who are trying to help themselves probably leads to a higher-trust society. And building the habits of showing up on time, following directions, etc. are valuable skills than really do benefit people.
I think if someone is working very hard, very long hours but simply isn't making much, then most people I feel would be supportive of helping them out.
in their defense, especially at the lower end of the economy, there is a benefit in being able to just prove you are willing to work - to show up every day, do what your boss tells you to do, and not get into actual fights with your team. Heck, maybe learn SOME skill that you could leverage later.
The evidence of your working adds to your human capital.
"Why not just give people money?" is not a stupid question. But the answer is, we need to give people money for housing, and we also need to build more housing.
I'll try to summarize. There are two different problems here.
1. In some areas of the country, there is not enough housing for everybody. People who reasonably ought to be able to afford housing cannot get it because there is not enough of it.
2. Some people at the lower end of the income scale will never be able to afford housing at a price a landlord is able to deliver it.
In a world of problem 2, where there is abundant housing, but some people with the lowest incomes can't afford it, then giving money or vouchers is the solution. But in a world of problem 1, lack of supply, giving people money doesn't solve the problem, and instead makes it worse, because housing becomes more expensive but not better or more abundant. The person with the money will just displace someone else.
If for example teachers can't afford housing and you give them money or housing vouchers, they'll just displace someone else, and then clerks or office workers or middle managers won't have housing. It's just not a solution. If you're playing musical chairs, and you give someone rocket boots so they're faster at getting to a chair, that doesn't change the fact that someone else will end up with no chair; if there are not enough chairs you need more chairs, not faster feet. The answer to lack of supply of housing is building more housing.
In a world of problem 2, where there is abundant housing, but some people with the lowest incomes can't afford it, then giving money or vouchers is the solution.
But trying to avoid giving people money by creating supply constraints is also inflationary. Easing supply constraints and giving people money is the proposal here, and it’s an open question what the net direction of that is.
I think we’re basically in agreement on this narrow point: I was responding to a comment asking why this program rather than, “instead of just giving people money.”
Affordability mandates imposed on developers is not removing supply constraints, it’s just trading one type of constraint for another.
The people who support these sorts of set asides want the developer, not the taxpayer, to front the bill. Housing with less profit for developers is their goal.
Obviously if you dig a level down you get a cross subsidy from other renters and/or subsidies via tax breaks etc for developers and it doesn’t actually come from developer bottom lines, but that is the logic to the policy.
Giving people money requires raising taxes and writing checks. It’s much more politically convenient to make rules that require other people to lose money in exchange for permission to operate (especially where their operations are unpopular to begin with) than to raise revenue yourself.
There tends to be this paternalistic fear that the people given money won't do the "correct" things with that money. I always appreciated the horseshoe opportunity Milton Friedman offered on this angle.
It's the political economy and bias towards doing something clear over doing something effective. Subsidies create costs on taxpayers. Affordable unit requirements create costs for developers. When the few developers who can build the affordable units, the politicians take the credit. When housing starts slow politicians raise their arms and say "we did what we could, it's the greedy developers!"
That's not a stupid question. You're right that we should give people money instead. But as a polity we're not very competent, and we love unfunded mandates.
I left this comment on your Heritage post: "In the case of leftists, my observation is that don't insist on [focusing exclusively on subsidized housing] merely because they believe filtering doesn't work. It's more that they believe that filtering is immoral *even if it does work* because with filtering, you're employing a process where the poor and working-class 'get table scraps.' In their minds, truly caring about the poor and working-class means delivering housing to them the same way you'd deliver a gift to a personal friend: you need to pick out the gift, and you need to deliver it in person or with a nice card, otherwise you're just 'treating them like numbers on a spreadsheet.' So no matter how many economics papers are published showing that filtering works, they're not going to be convinced."
Moore isn't a leftist, but I suspect that like some other progressives, he has a gentler version of the same beliefs. The idea of filtering is unappealing because all the nice new stuff goes to rich people, the companies that make money make money from the nice new stuff that goes to rich people, and working-class people get "leftovers" that can only indirectly rather than directly be traced to the governor's policy.
This is a crucial insight. I suspect the surest way to get the left fighting for YIMBYism is to persuade influential figures who fit this profile that housing abundance is the best way to accomplish their goals.
Yeah. It's tough because I understand where the impulse is coming from. We just have to somehow persuade people that the ethical obligations of the state differ from the ethical obligations of an individual. Like say you were a member of a church and one family was in need, you wouldn't say, "Let's make stuff available to the more affluent families in our congregation, who can then decide what they don't need and give that to the needy family." That would be offensive. But governments aren't people, and it's good and correct for them to be more utilitarian, consequentialist, whatever term you want to use. But that's a hard pill for conscientious people with sensitive personalities to swallow (setting aside the hardline leftist ideologues).
I think the way scale affects morality is actually a huge driver of extreme political positions. Like I used to be a Libertarian and man the number of Libertarian and Anarchocapitalist reddit posts I've seen that imagine the world as having a tiny number of people in it and then voting 2 to 1 on something and using force to do it is bad is too high to count.
A lot of left extremists do something similar and imagine th world as one big extended family to be taken care of.
I actually think (more controversially) that the core problem with modern libertarianism is that it has much too generous assumptions regarding the average person’s intelligence.
I’m not talking about Reddit here (any ideology seems inane and full of holes if you judge based on Reddit discourse); rather, I mean that the Caplan / Tabarrok / Friedman arguments for elaborate Coasian bargaining and smart contracts and conditional prediction markets as load-bearing elements of conflict resolution in a libertarian society rely on a hypothetical populace that is way smarter (and more rational) than our own.
It's a difficult thing though to try and thread the needle on defining affordable percentage to a specific market that cross subsidizes enough for a non public entity to want to build. Just pick a low number seems much easier and if you want to build public housing at cost or at a loss do that.
I do not understand why the yimby movement supports the "affordable housing" kludge at all. It distorts incentives, distributes the benefits randomly to a small number of people, and is susceptible to being gamed.
If your goal is to subsidize less affluent people, then why not just tax all new construction and use the income for some sort of voucher program?
I doubt most folks who genuintely "support" the affordability set-aside kludge really are YIMBYists. When actualy YIMBYists sign on to something like that, it's because they don't have much choice, politically: it's either half a loaf (really a few crumbs) or nothing.
I belong to my local YIMBY group (meaning I participate in their discord) and it's eye-opening. I'm part of the group because I want more housing, and I don't really care how we get there, but think at bottom government needs to get out of the way in a lot of areas.
The group is filled with a lot of activists who are more focused on cheap than plentiful housing and others who come to their pro-housing position through urbanism. They're still pro-housing but seem much more in favour of over-designed solutions (read: government restrictions) to make buildings pretty and more like in Europe, bring them up to tighter green building standards, funnel new housing to the homeless, create way more bike lanes etc. These are people who are generally skeptical of markets but have made an exception for some housing regulation.
Not that I am against all their priorities, but I feel the way the left kills hosing is by treating it like any other priority, and trying to balance it against everything else. But a crisis demands setting other priorities aside and just building, which I don't think people on the left are capable of.
And that's fine and your perogative. I just have a hard time taking governments and activists seriously when they (correctly) identify we are in a housing crisis but then stress the importance of other priorities (aesthetics, green building standards) that will objectively raise the cost of housing.
Soviet-style apartment blocks are better than homeless people, or are better than people not eating enough because their rent is too high, in my opinion. Let's build enough housing and then worry about other housing goals.
I don't support aesthetic requirements, and green building standards can go too far, but I think it's reasonable to be YIMBY and _also_ support green building standards/energy efficiency standards because climate change is also something worth considering.
But you'd want to impose the same standards on single family homes as well. If you strangely exempt them (especially since density is usually _already_ greener) then it feels more like NIMBY in disguise.
I feel confident that I speak for all the people that, when they see one Soviet-style monstrosity erected in their neighborhood because quantity uber alles, will make sure no more such things are ever built.
I live in a semi in front of a boxy, pedestrian 12-story apartment building and have no issues with it.
Look, if you oppose boring, simple and shabby-ish apartments, and are okay with the people who could otherwise live in them comfortably being poorer, hungrier, and maybe even homeless, then we should probably agree to disagree and move on.
If you check out the article I posted above the cost difference between Soviet and luxury is minimal. $600k/unit is Soviet and adding some architectural flourishes, a dog washing room, a few pelatons and upgrading to Bosch appliances might add $25k.
Aesthetics are almost always necessary to get normies on board with a program of building stuff, lol. It's a practical concession, not a principle, in most cases.
Developers almost always, in my experience, run up bad-looking initial renderings of oversized buildings specifically to have concessions in their back pocket when dealing with the public and civic organizations.
Likewise, while I don't agree with some of the green standards, good weatherization, glazing, and insulation are just not significant drivers of costs.
In the main, good double-glazed windows are barely more expensive than bad ones, weatherization is a question of competent installation and if done poorly will have far worse consequences than heating bills running high, and thicker insulation is an absolutely trivial expense. Even sprayed foams are not terribly expensive.
My ass-pull guess based on the budget I'm building for my own addition is that the difference between modern and 1990's standards for these three adds perhaps a single percent to construction costs.
Insulation, in particular, pays for itself astonishingly quickly. Glazing doesn't in a retrofit context but the marginal cost of better glazing at initial build does.
All the "Soviet-style" buildings were was early-generation precast/prestressed concrete panel buildings.
We use that technique pretty widely today, but it's only marginally competitive with podium construction with site-built cladding for high-rise buildings; erection costs are pretty limiting. It's also very logistics- and site-dependent for mid-rise (4-8 story) buildings, so only sometimes out-competes podium construction of wood-over-steel or concrete-over-wood.
To be clear, I am not advocating for this policy. It just seems to be a more fair and less distorting mechanism for achieving the objectives of the affordable housing set aside.
I stopped most of my support (donations/volunteering) with SF Bay Area yimby causes for this reason. "Affordable housing" bills like SB-35 (streamlined approvals for >50% subsidized projects iirc) were extremely hard to pass, and have had fairly marginal effects. This report[1] puts them at 18,000 units in five years, some of which would have been built anyway. That's very good for the thousands of people who will have homes, but it's a pretty marginal in a state that is estimated to need millions of new units.
The underlying reason is that while many affordable housing advocates oppose market rate construction, but are one of the only other coalitions (along with construction unions) that supports building homes. And a lot of progressive groups in SF don't even want to form alliances with groups that only instrumentally favor housing subsidies. They need to talk the talk, not just walk the walk. So the choice for YIMBY organizations in California is to get nothing done or to ally with construction unions and affordable housing groups, yielding laws that upzone but have affordable unit requirement ("inclusionary zoning") and pro-union requirements ("prevailing wage"). I get the political calculus, but even to the extent i support housing subsidies, "affordable" units kinda suck. They are a bureaucratic solution requiring landlords to check tenants' incomes to make sure they qualify. The AMI percentage requirements mean that in well-off jurisdictions like SF, your housing subsidies may go to people who make pretty high incomes nationally. It's a very inefficient way to spend housing subsidy dollars. Direct subsidies or housing vouchers to poor people would be better.
It was frustrating since the reason i got involved in the YIMBY movement was that, despite having a high income, my personal rent was too high and increasing rapidly. I wanted to work on solutions that would stabilize or reduce rents, but the set of allies the YIMBY organizations ended up with thought concerns about market rate rents being too high were totally baseless. So i ended up spending my time/energy/money advocating for polices that would not help me at all, and would have marginal effects for people less well-off than me.
Affordable housing set-asides, for which the technical term is "inclusionary zoning," are exactly that: making developers of new housing pay for housing subsidies. But my question is, why should the developers be on the hook for this, instead of everyone? Why shouldn't this tax be levied on everyone in the community, instead of developers of new housing?
It is fine to offer developers the opportunity to build something they otherwise could not, at the cost of paying for these housing subsidies. You just have to have your eyes open and be aware that you will get far less new buildings built, because of it.
You won't get any fewer buildings if you offer more density in exchange for some affordable units, because the developer doesn't have take you up on the offer. But you will get fewer buildings if you require affordable units as a condition of approval.
There's a weird thing going on in my city, where we have preposterously high affordability requirements. But the number of affordable units we require of developers also allows them to build extra market rate units, under the State Density Bonus. And then NIMBYs are mad about the increased density.
I'm not sure if you misunderstood me. I just meant that If you require developers to pay in order to build something they could not otherwise build, you may get more building than if you did nothing. However, you will get less building than if you allowed the new buildings without the added costs.
I think it would be beneficial to analyse why people are NIMBYs and not YIMBYs. Not the pabulum about how people in local areas should have the right to determine the size of the neighbourhood, but the >real< reasons. The real reasons are that people want to live in a clean and orderly area with minimal crime. Abundant housing upsets the apple cart, and offers the potential for people with Challenging Behaviour to move into the area. Extortionate housing minimises the risk of this happening.
And in this respect, adding large numbers of "affordable" housing will have the effect of driving more people into the NIMBY camp.
Just stop trying to use every single government intervention to push a "help poor people" agenda. Push taxes and redistribution for that. For literally every other government activity, just serve and help everyone equally.
I don’t get why every government policy needs to have unrelated objectives tacked on as a condition of funding. It’s a much less efficient use than just pork barreling.
I would hesitantly guess that while it may be less efficient than pork barreling, it's also less legible, whereas it's harder to hide the combination of waste and parochialism implicit in "Bridges to Nowhere." Also as a state-level initiative there may just not be a lot of cross-subsidy that's realistically on the table here.
Yes. People tend to be risk-averse. Their neighborhood is great; why risk a change that could make it better but could also potentially make it worse?
Similarly, when people buy a house, they expect the value to increase over time. And while building more housing could increase the value of homes in a town, it could theoretically go the other way, so why risk it?
If people want YIMBYism to spread, then I think they need to convince people that the downside risk is minimal and/or nonexistent
Residents of expensive suburbs don't want crime, but allowing plexes (sixplexes, twelveplexes, modest three story apartment/condo complexes) in expensive neighborhoods would not bring those things and residents know it. The biggest concern I hear is about cars: traffic and, especially, parking. People believe, and are not shy about saying that they believe, that the street in front of their house ought to be available for them to park their cars in for free, and anything that allows people other than themselves to store their cars there is a terrible tragedy. They think they own that space and their city ought to enforce their ownership.
Height of buildings is also a huge concern to NIMBYs. That's why we see ridiculous rules requiring upper stories to be set back from lower stories, even (in my city) in three story buildings: so that new buildings won't cast shadows.
Yes. I think everyone is mostly aware the "real" reason for NIMBYism is that incumbent homeowners (in the main) like things as they are. You write as if this is controversial, or unknown.
There’s a real tension between helping the poorest 15% and helping those closer to the median.
Pro market reforms won’t much help the poorest because their market incomes are simply too low. Housing abundance might reduce rents materially, but that doesn’t mean a single mom who makes $10 an hour and works part time will be able to make rent. However, housing abundance makes a huge difference for a family making $50-$100k a year, who can live much better if they go from spending 38% to 32% of their income on housing and might build equity if they can buy a starter home.
The same is true of professional licensure. Dental hygienists aren’t poor, they make about $70k. Letting them work independently would increase their incomes and the expense of dentists who make two or three times as much. It would help customers in the broad middle afford better dental care, but it wouldn’t do much for a dude who makes $12 an hour-- he probably needs a subsidy to keep his teeth from rotting.
Politically, helping the worst off is a loser. They are unlikely to vote and easily demonized. They are also very expensive to help. Helping the very worst off- the terminally ill-- is a huge money pit. Practical progressives will aim their policies at the 15th through 80th percentiles. There are a lot of votes in that group and a lot of workers with enough guile and discipline to take advantage of opportunities.
Helping the middle would be best politically, but I think the problem is a lot of advocate groups are advocating for the worst-off. No one advocates for the family of four making $70k a year. I think that's reflected in this proposal...do something minor that can pass but talk it up a lot to appease advocate groups to get them off your back. Why they don't tell the advocate groups "here's what we're doing, it's the best we can get now, we'll try more next year, but in the meantime we're keeping this quiet so as not to tick anyone off" I have no idea.
Housing policy is like paying for college at Harvard. If you're rich, no problem. If you're poor (and somehow we slip and admit you) then we'll give you a free ride. If you're between those, good luck, sucker.
Because advocate groups have to do advocacy. Keeping things quiet is a failure mode for advocate groups.
If you want a coalition with advocate groups in, you have to give them something to talk about. That means that coalition cannot do things quietly so as not to tick people off.
I would think in aggregate there is some supply of housing, and each person has some amount they are willing to spend on housing, and the market forces align the people with the housing while capturing all the available spend.
You might re-arrange where individuals live, but only true increases in supply can address the total cost issue, no? You want a world where units are competing for occupants, and that world requires many more units be built, right?
The middle class vastly outnumbers both the poor and the rich in America. Reagan-era policies like supply-side deregulation and indexing tax brackets to inflation were genuinely beneficial to middle class people, which is why "neoliberals" kept winning elections from the 80s until Great Recession.
I don't quite know what to do with this thought because to me like one of the core things that drives empathy is like no really truly everyone should have a home and food and so on. There's something that's both incredibly appealing in like no literally 100% even the guy pissing himself on the subway should be fine.
And it's also incredibly quixotic and turns a lot of people off and I never know what to do with those two facts.
I rather share your view and I think I know how to reconcile the tension.
Yes, when food and shelter are cheap to produce, everyone deserves them, even dysfunctional assholes. That does not mean everyone deserves an apartment in an expensive city.
Build CCC camps. Barracks can be built cheaply. Deliver enough rice and pasta and corn oil and powdered milk to keep the denizens alive. Maybe some meat on Christmas and the fourth of July.
Any asshole who wants to mooch off of society can go to a voluntary internment camp in the sticks. It’s voluntary. They can leave whenever they want. However, America’s cities should be for people who have something to contribute and we can make them gleam.
There's a plausible mechanism by which we would expect rent decreases to be non-uniform for market-rate housing builds, though. (Note: I have *not* looked into this and wouldn't be surprised if there are studies saying that this empirical supposition of mine is wrong, so take with a big heaping bowl of salt). AIUI the theory of market-rate housing decreasing general rents is a kind of "filtering up / trickling down" effect where at each level of the market people movie into nice housing vacated by the previous tenants or else not occupied by newcomers outbidding them.
As this "wave" goes down the income ladder, however, you would expect it to become dampened and attenuated because the slate of would-be new-population gets ever larger, while the number of new units added to supply for any given building is fixed. Say market rate is $30k / year for a standard 2 bedroom apartment and someone builds 100 new units at that rate, and assume people spend about 30% of their income or less on housing.
In response to the new units, up to 100 people at $100k+ yr in existing units can move into nicer housing, and they'll be competing with some set of new city entrants who are also a $100k+/yr.
Even if (unrealistically) every new unit were occupied by people who already live in the city, thus freeing up 100 apartments at, say, $25k / year, the set of outsiders who want to move to the city to occupy the vacated units now includes both the original set of everyone making $100k+ *and* the new set of people making $83,333+ (25k = 30% of 83.33k).
In view of this dynamic we would expect any city with external demand for housing that's supply-constrained to have fewer and fewer units vacated as you progress down the income scale just because the set of external bidders (rather than just exiting incumbent city dwellers) gets larger and larger. At some point you'll probably see countervailing dynamics based on market segmentation (bidders who can afford a $30k/year apartment probably don't want a $8k / year one) but it's still true that we might expect this filtering up / trickling down to be lossy as it goes down the income scale and thus wouldn't expect relative expansion in supply (assuming a uniform distribution of pre-existing supply, which is admittedly a big assumption) to be constant. Instead we might expect to see a 10% decrease at the top of the market and like a 2% decrease at the bottom.
Can I also suggest that attaching affordability requirements is also a poison pill on pure politics terms? What I mean is, in a state like Maryland, housing costs are so high that it means middle class people and heck upper middle class people struggle more than they need to to afford rent or buy a house. Attaching strict AMI and affordability requirements essentially restricts the benefits of more housing to only a small poorer segment of the electorate. And let’s be real, a segment of the electorate less likely to vote especially in non presidential elections. One lesson I would hope we’ve learned last 10 years is the public at large needs to feel on some level they are benefiting from a change in law or policy.
There is one piece of this Matt is leaving out which may lead to more housing construction than Matt thinks. The tax implications. I can tell you from working in this industry that the reason developers or sponsors invest in deals like this is almost entirely related to the possible tax benefits you can gain. In fact when underwriting these deals, sizing loans and business plans themselves are almost entirely dependent on the developer actually getting the tax benefit.
Re 'poison pill in political terms': well said, and close to the heart of the issue. These 'affordable' rules greatly reduce the part of the electorate that benefits. And there's no upside.
An angle that Matt understandably didn’t want to bring up: a development with these affordability lotteries is more odious to the median NIMBY than market rate housing. If you are deliberately targeting people with low incomes for your housing units, you are more likely to be bringing disorder and crime and poor-people culture or whatever euphemisms are currently in vogue. You strengthen opposition relative to just relaxing zoning.
This is my intuition, too. I have some neighbors in set-aside or quota housing, and they are really gross. Like, one didn’t wash her soiled clothing with detergent. (I bought her some.) Not infrequently, they keep pit bulls and do drugs. Yet, people are always talking about how we “don’t need housing, we need affordable housing.” I don’t hear anyone saying, “affordability mandates are bad because I don’t want to live near ghetto.” I can’t be the only one who’s noticed this. But maybe the doublethink is a feature of deep-blue politics.
Right. I think it’s trying to address a common criticism of developments in desirable suburbs, ex: “$4000 for a 2 bedroom, who can afford that?! We don’t need luxury apartments, we need affordable housing!”
But in my mind, people who can afford a $4000 2BR sound like nice neighbors to have.
There is real and substantial opposition to relaxing zoning. If YIMBYs want to pass upzoning legislation, they cannot ally with the large group of people who oppose upzoning, so they have to ally with the people who want to build subsidized housing.
I get a little impatient with people who say, "Why don't YIMBYs just push for upzoning with no strings attached" as if that were one of the options on the table. Generally, it is not, and we instead have to take baby steps.
That seems perfectly reasonable, although one could probably quibble about which electorates are best navigated in this way. The same play doesn’t work against every defense.
I just think as long as we’re saying “too high an affordability requirement means the housing won’t be feasible to build,” I might as well chime in with “higher affordability requirements also can lead to greater community opposition.” Does that make sense? Too obvious to be worth stating?
As an activist in the field and someone who is following this issue closely nationwide, I have not observed higher affordability requirements leading to more community opposition.
I’m not an activist in the field but my experience has been that, to a layperson, a 25% affordable apartment building is “low income housing” (strongly negative reaction) while a regular apartment building is just “a development” (mildly negative reaction).
The claim that it makes a difference whether a building is 10% vs 15% affordable is probably harder to make, but I don’t see why it wouldn’t be a conventional dose response relationship.
I live in California, and recently California cities were forced by law to allow more housing than they previously allowed. In my experience—and I have quite a bit of it now—if a city proposes to allow multifamily housing in an area where it is not now allowed, "mildly negative reaction" is not a good description of the result. "Hysteria" comes closer.
The people who already oppose a new apartment will oppose it more if it will have to contain poor people. But people who were neutral on the apartment might be willing to support it if it has to contain poor people. If the people who are opposed to the presence of poverty were supportive of upzoning in the abstract, then this would reduce support, but if the ones who are opposed to the presence of poverty are also opposed to upzoning in the abstract then you don’t lose any supporters.
Yeah, it seems to me that it's the usual political problem: votes don't count intensity of preference, so you choose to increase how much you annoy the people who oppose you (because they only get one vote each against you) and decrease how much your core supporters support you (because they're still going to vote for you) in exchange for bringing some people from a neutral or oppositional position into support.
Your policy change has made a large group of people less happy in exchange for making a small group of people more happy, but it's shifted the vote from against to in favour.
If there are NIMBYs who could be persuaded to accept new housing in their area as long as you kept the riff-raff out, then YIMBYs could ally with them to deliver luxury-only developments. But that constituency doesn't exist.
I don't think it's at all controversial to note that one of the ways income requirements work to prop up stasis (and sabotage housing abundance, and thus affordability itself) is that low income people are often feared or disliked. I don't see why Matt would "understandably not want to bring that up." I suspect he just didn't get it to it. Columns can't cover everything.
I think the reaction/discussion provoked by a piece that dedicated space to that issue would devolve into a largely unproductive discussion about 1) whether it’s okay to stigmatize poor people, or 2) whether it’s okay to make policy to accommodate people with aversions to poor people. Probably wise to avoid doing so, especially since Matt’s objective isn’t getting clicks/views.
>That said, even if your only interest is in maximizing the number of “affordable” units you ought to consider the possibility that a lower affordability ratio will actually generate more affordable units.<
The above question (optimal affordability requirements to actually maximize affordable units) would be a great question to get to the Odd Lots crew, especially after the super great episode where they had the Montgomery County MD housing guys on. I have to think the Montgomery guys have modeled this question and have some cool insights.
Do wonder where the 25% and 50% even come from (they are nice round numbers i guess). Would think it shouldn't be extremely difficult to analyze against construction/development costs for a given area.
There may be some area of the US where a 25% affordability requirement is financially feasible, but probably not many, and probably not in many situations. 25% is ridiculously high.
The next most common affordability level is "Moderate Income," 120% of area median income. This income requirement is more likely to be seen in a project with higher required percentage of affordable units, and also in an ownership project. Obviously, more than 25% of households make less than 120% of area median income.
This article implies that the way forward is for politicians to write better bills. But I think the way forward is to persuade the affordable housing activists that YIMBYism actually works, so they stop pressuring politicians to add these affordability mandates. We’re lucky that politicians are listening to a small and vocal YIMBY activist group. Why shouldn’t they also listen to the small and vocal affordable housing activist group?
People have tried talking to so-called affordable housing advocates for years. They think that profit, developers, private sector is definitionally bad, reinforces capitalism, excludes favored groups by raising prices. They have a causal theory, it just goes thru the revolution first.
I have watched a large number of NYC community board meetings. One thing that floors me, nay -- flabbergasts me, is the obsession with AMI. I have seen 30 minute discussions involving live calculations to determine if someone making $120K can live in a unit or only $115K, for a bulding with like 3 affordable units. The entire concept is absurd. There's not an income level where you deserve to live in a specific unit. And the idea that local, unelected boards spend so much time debating this for individual units is honestly enough to make you lose all faith in government at every level.
I know this isn't the main point, but I want to nitpick the Warren tweet, which neglects interest rates as well as average house size. Mortgage interest rates are at ~6.6% right now, whereas 40 years ago (Jan. 1984), they were 13.4%, almost exactly twice as much. Assuming a 20% down payment in both cases, the same mortgage payment buys a house 1.78x as expensive compared to 1984. This makes up over 70% of the difference in Warren's tweet. Note that if the mortgage interest rate were to drop back to 4%, it would completely wipe away her "11x vs. 4.5x" distinction.
Also, I don't know about Boston, but nationwide the average home size was ~1600 sqft in 1980, whereas it's ~2300 sqft now, almost 1.5x as much. And the finishes are usually better.
You've hit a nerve with the quote about new houses being bigger now than they were. People like to use that statistic to conclude that buyers demand bigger houses now than they did in 1980. That's the wrong analysis. Since 1980, we have not built enough new houses because of restrictive zoning. In a situation where developers are restricted as to how many homes they can build, they will naturally build the biggest, most expensive houses. That's not a fact about buyers; it's a fact about sellers. It's not that buyers want bigger houses. It's that the buyers who want bigger houses get their wish, and the buyers who would want smaller houses don't get theirs.
If instead builders were allowed to satisfy the full housing demand, they'd build both lavish houses and less lavish houses, just like Toyota builds Lexuses and less-expensive vehicles. But in the situation of restricted supply, builders go for the most lucrative houses, just like when Toyota was restricted during the pandemic they cut back on less expensive cars but not Lexuses.
I read the news about Moore’s housing plan and saw that 25% “affordable units” poison pill. It’s something that NIMBYs demand to handicap housing initiatives.
If we want housing to be affordable to low income persons, then expand housing voucher along with upzoning. Don’t demand developers take a loss.
SORRY FOR HIPPY-PUNCHING BUT it's important to remember that in non-negligible swaths of the left, Developers are coded as Bad People. They have capital or whatever. They are the, uh, uptrodden. Forcing them to take a loss in order to simply conduct their regular business is a feature, not a bug. For a lot of terminally online losers, it might even be more important than actually creating any fucking housing for anyone.
The move is to convince city councilors/mayors/state legislators that these people don't make up a meaningful part of the electorate and thus don't need to be catered to over every legislative priority.
The structure of state and local government is different. When you are part-time and have two meetings a month in front of your constituency voting on policy a loud and vocal minority moves the needle. This is what locals face. This is why states need to enact higher level policies that locals then can tell their residents they have to follow the state’s rules.
In the housing horseshoe, these parts of the Left go hand in hand with the conservative NIMBYs who also see developers as evil, money-grubbing scum. Power to the people!
“Uptrodden” is my new favorite word.
That may well be part of it but as a life long Marylander my read is that they believe this is what it will take to buy the Democratic delegation from PG County, possibly also the de facto left NIMBY contingent in Montgomery County too. There are a lot of great things about the state but despite being very blue the political culture is extremely parochial, and not particularly visionary. Wes Moore himself seems like a nice guy (I voted for him) but my read has always been that he is a lightweight who would prove incapable of getting much done beyond granting the wishes of the various entrenched interests in the legislature.
I am still annoyed by the transportation cuts. It’s so self inflicted. But at least we got crabs.
The transportation cuts will probably not actually happen in full. Moore just didn't want to be the guy to propose increases in taxes/MVA fees (so the legislature will have to do it over the next couple of weeks)
Developers take a loss or pass on the expense to the other buyers in the building, which is proxy-tax on "the rich". This cross subsidy is a scam and I hope more people see it for what it is. The government has a legitimate interest in making it affordable for poorer sections of society. That's alright. But the way to accomplish this goal is by directing tax revenue to this purpose. Unfortunately, it would require some transparency that's in short supply.
I've lived in a large new build with an affordable housing carve out and it's great. It's not just about subsidy - it's about actual socioeconomic integration across class, within buildings and within neighborhoods. But, as others have pointed out, the math still needs to work and at a certain threshold just doesn't.
I mean they could greatly reduce the fixed costs of permitting and regulatory compliance. That makes cheaper units more viable.
In a housing shortage, landlords don't need to take housing vouchers to fill their units, and so they will choose not to.
Cambridge MA recently passed an amendment to their affordable housing law. The premise is for "Affordable Housing Overlay" zones, where developers can build taller buildings (12-15 stories) if it is 100 percent affordable housing (affordable meaning rent no greater than 30 percent of Area Median Income, it seems).
I'm not familiar with Cambridge zoning, so take this with a grain of salt, but one example: it looks like the Mass Ave corridor (by Porter Square) is zoned BA-2, allowing for most residential and institutional uses and with a max height of 45 feet. It seems that the initial affordable housing law would have allowed a max height of 65 feet, and this amendment ups it to 12 stories. Again, I have not followed this closely so if someone has been please weigh in.
This seems to differ from IZ in that, rather than requiring x percent affordable in a development, it creates a different development option: 5 stories of market rate housing, or 12 of affordable. Seems promising, IMO
Affordable is not profitable without extensive tax benefits and only rarely and barely pencils out with them, so the real choice is 5 stories of market-rate housing or nothing.
That's the core point of this article and attendant discussion.
I am not a housing developer so I’ll take your word that affordable is not profitable, but I guess my point is, if an area is currently zoned single family, upzoning to allow 4 plexes is an improvement - and if the jurisdiction also says, you can build 8 units if they’re all affordable, then it at least creates the potential for more density. I agree that if no upzoning for market rate housing takes place, then “upzoning if units are affordable” will have a negligible impact
It’s simple. If it COULD be built profitably at an affordable rate, it WOULD get built at those rates.
I agree, and if one out of 10 developments can make an affordable project pencil, then I think it is great that they'll be allowed to build more units.
I guess the point I'm trying to make is that, so long as a jurisdiction is upzoning as a general baseline, I don't see anything wrong with allowing even more density if some units are affordable. I wholeheartedly agree that if upzoning is only permitted for "affordable" developments and not market-rate, then it won't really solve anything.
I think it also bears mentioning that as long as supply is restricted, the "market rate" will ALWAYS be unaffordable. And every new building that gets built will STILL be unaffordable UNTIL the market has enough supply.
[This is not directed at you, BUT] ... It's like someone turning on the shower and complaining that the water will NEVER get warm just because it came out icy cold and stays that way for a good 10-20 seconds.
I mean are they counting college students as residents in Cambridge salary statistics or not? Maybe they should do median wage + median trust fund allowance statistic?
The AHO has already created several hundred new housing units, whereas an equivalent market rate upzoning would have created zero (because it didn't have the votes). The advocates are perfectly aware of the economics!
It’s deeply self-defeating, because this is all posed as a way to help middle-class citizens. If it can’t do that then they will turn on it before we ever get there.
The AHO wasn't posed that way though. It's Cambridge MA, there is a very strong coalition for helping lower income people, and a less-strong coalition for making My Parking more contentious. The pro-housing fraction of the city council increased three times in a row, each time in an election defined by debates over the AHO. By now there's seemingly enough pro-housing councilors to do real market rate reforms
Its not clear if its a poison pill or if its targeted at large lot redevelopment. If the 25% affordable is just required to be part of the project, vs in the building, then it would direct redevelopment to large assemblages, which are easier in existing commercial areas. For example, to redevelop a mall parking lot, you could imagine proposing three market rate buildings and one 4% LIHTC building, and with Maryland's super high area median incomes that 4% LIHTC deal is probably feasible without additional subsidy. Some of the richest developers I know are LIHTC developers, and they're typically paying market price for land.
Much of the left of the Democratic party hates the idea of people making money and loathes capitalism. And those who don't hold such views are fearful of being canceled or primaried or attacked by those who do. News at 11. And so when housing abundance plans get hatched—which usually means Democrats these days given that the GOP has decided they need to defend the Constitutional Right to tell your neighbor they can't build stuff—there have to conspicuous and ludicrous nods to "affordability" (scare quotes very much intended). Profits are evil, after all.
It's tiresome and depressing. I guess we should all be happy at least the winds of change are finally blowing when it comes to housing. Baby steps.
I think people are *vastly* overestimating the proportion of folks who genuinely believe this as opposed to seizing on it as an excuse to oppose changes in their neighborhoods or towns.
"This greedy developer wants to build a massive apartment building that's going to totally ruin the view from the golf course."
-A quote I heard from a member of a country club I used to work at.
NIMBYism in my experience has long been a scene where, not only is the quiet part said out loud, there's never been much of a quiet part.
We've got our version of this in Boise with this awesome project:
https://boisedev.com/news/2023/01/09/residences-river-club/
So, so many NIMBYs that want to fight against the country club itself! And collateral damage from this was an HOA being a bunch of assholes by closing of a small but critical path that's going to put a lot of non-motorists at risk. Argh.
Color me skeptical that a country club member is worried about greed. The view I get. Greed is kind of the point tho.
"They're doing greed the wrong way!"
That was the vibe. Non tipping country club too, boo.
Well, what I do is valuable and virtuous, the other guys who want to take my view are greedy slimebags.
A private golf course in Newton was ready to sue if concessions weren't made on a development across the street from one of the holes on the course!
Those overpriced apartments are probably a hotbed of insider trading. Or maybe selling stolen antiquities.
lol
I agree that the biggest driver is status quo bias, but read any reddit thread about housing and the top comments will invariably be about how the problems are caused by greedy developers and landlords.
Pew recently released some good polling on the popularity of pro-housing policy: https://www.pewtrusts.org/en/research-and-analysis/articles/2023/11/30/survey-finds-large-majorities-favor-policies-to-enable-more-housing
In short, the housing affordability crisis has turned America pretty YIMBY. The trick is not listening to the top Reddit commenters or the loudest citizens at the local city council meeting (probably the same people). If you work in local government, trust that if you build new housing, rent will go down, the homeless population will gradually fall, and voters will re-elect you. Because in most cities rent and homeless are literally the top issues people want solved.
"The trick is not listening to the top Reddit commenters or the loudest citizens at the local city council meeting"
Sage advice for life in general.
"If you work in local government, trust that if you build new housing, rent will go down, the homeless population will gradually fall, and voters will re-elect you."
This is what Boise's elected officials did, and they all got re-elected!
Rudy got convicted of securities fraud.
I love this, but I think it's important to set realistic expectations: I can't think of any localities that have added housing fast enough to drive rents down. (And would love to be wrong.) Imo, it's better to promise stabilization.
Yeah, of course. Always a good rule to underpromise and overdeliver, rather than the opposite. The point mainly being that local politicians shouldn't be scared into inaction.
>I can't think of any localities that have added housing fast enough to drive rents down<
Pretty sure the rent went down in parts of the US circa 2008-2012. And before you say "but we had a recession" the fact is rents *didn't* decline in many metros that were already experiencing housing shortages by then (and that exacerbated recovery and reduced prosperity).
The point is, more supply relative to demand equals more affordability, full stop. In some cases that may mean absolute declines in the cost of housing. In some cases not. But in *all* cases it will mean "lower housing costs than we'd see without the increased supply." To put it another way, Manhattan is unlikely to ever be cheap, but, under Yglessian Yimbyism, an UWS studio in 2040 might "only" be $6,300, instead of the $8,100 it might be if NYC continues with mandatory supply restrictions. In either case that's an increase in absolute terms, but the smaller increase is better for most people, and for the economy.
I'm 100% on board - that's what I was gesturing at when I suggested that it's better to promise stabilization instead, but your longer explanation is better.
I responded because someone caught me out once when I was arguing for housing abundance. I carelessly said "rent will go down" and they asked, in front of a group of people, "oh really? Can you point to some places where rents have gone down because of building?" In that kind of situation it's hard to recover by reframing. I lost ground for YIMBYism that night.
I don’t think that ever WILL happen.
Too much of our economy is based on ever-growing real estate values. The best we can do is deliver slow and stable inflation, not housing deflation.
Status quo bias is the biggest driver of NIMBYism writ large, no question. I'm not sure it's the biggest driver of "using affordability set asides." I think savvy NIMBYists know damn well such policies impede new supply. But *most* overtly NIMBYist efforts are channeled into things like environmental lawsuits, or opposition to zoning changes, or what have you.
Affordability set asides from what I can see tend to mostly be used to plactate the anti-capitalist hard left, when a housing abunandance deal needs their support to get over the political hump. Cynical professional NIMBYists, of course, are the anti-capitalist Left's allies in all this, because they're well aware such policies protect stasis, and do the opposite of "increase affordability" (save for a tiny, lucky few).
That was rather my point, as I recapitulated in more detail above: the "buildings bad" crowd can't be placated by anything and should be ignored and the "profits bad" crowd is actually *vanishingly small* as a part of the electorate, so the politicians need to stop considering the former group's opportunistic anti-developer rhetoric as a sign that the latter has real throw weight.
Human nature wants to make policy into a morality play. This is useless until we can identify leavers for making people less greedy, and they are few and frail.
Or adjust incentives. You aren't going to make anyone less greedy.
Yes, because Reddit users are notoriously unwilling to pander for upvotes and to win arguments.
Sure but the greedflation narrative was also pretty widespread and espoused by some otherwise putatively serious people.
And if you can successfully pander by claiming greed is the problem, then that means that there is an audience that agrees with that narrative.
Post-coffee, let's see if my brain can unpack this logic better:
I see the "profits evil" view as having an analogous position on the liberal-to-leftist spectrum as the worst of the IDpol bullshit; for a long time no one was willing to say that the emperor's balls were out for all to see because everyone was afraid "the Emperor is fully clothed" was a majority view left of center.
It's slowly, painfully becoming apparent (perhaps a year or two behind the illiberal racialist left's implosion) that "profits bad" is also a tiny-but-loud minority view and we can mock the poor morons with impunity. The only thing that gives them any weight at all is their alliance with the "opportunistic rhetoric in service of building nothing" coalition, to whom no reforms are ever going to be acceptable and who must be ignored at the state level if anything is ever to be done.
Which is to say, the politicians need to stop pandering to the "profits bad" crowd because it's actually very, very tiny, and the "buildings bad" crowd cannot be placated by anything anyway.
>as opposed to seizing on it as an excuse to oppose changes in their neighborhoods or towns.<
Sure, there's plenty of that, too (see "Preston, Dean, Democratic Socialist from San Francisco").
But those folks would have a lot less ability to gum up the works if basic, irrational, economic illiteracy were not so common on the Left.
Just once before I give up the ghost I'd love to hear some prominent Democrat say "No, we're not making any special concessions based on income or race or proximity to trains or anything else. We aim to drown housing scarcity in a sea of production. If it's safe, fucking build it."
Ehh, I'll buy "trains" in Philadelphia, Chicago, New York, or Washington.
It's impossible to graft a larger highway system atop these cities.
But otherwise yes.
Though I'll note that Chicago's approach is basically "if it's safe, fucking build it," and that is still getting drowned by Illinois' shitshow clusterfuck of a state government making the entire state an uncompetitive, unattractive mess.
Outside the Loop, Chicago has hard zoning caps on building height. You can get a building in the West Loop approved up to 11 stories with alderman bribery but that area could easily support 75 story buildings right now.
I... am unconvinced that demand exists to drive that at any significant scale. The fixed costs of a structural and MEP system for a 75-story building, that need to be amortized across unit prices, are very large.
At the end of the day, in Chicago, like Philadelphia, public safety is the single most effective housing affordability measure we could take. Make all our neighborhoods safe and the housing stock will improve in quality everywhere, with moderate in-fill development and density increases everywhere to meet demand.
Well the West Loop is unique because (1) it was - maybe still is - the hottest RE market in the US and (2) they have Loop zoning east of Halsted between the highway so you can see 75+ story buildings going up on one side of the street and then 8-11 story buildings capped right across on the other side.
EDIT: Good news is it's changing! They got a 43 story building approved and have a 600 foot apartment tower up for City Council approval too.
https://www.costar.com/article/453457599/tallest-tower-in-chicagos-fast-growing-fulton-market-nears-opening
I certainly have no objection to slapping up as many units as possible near train stations. I object to a rule that says "they must be near a train station" or you can't build them.
I, despite mainly agreeing with the prevailing sentiments of this comment section, actually *don't* have an objection to stricter limits on high-density housing in urban centers in places poorly served by transit.
If and when Philadelphia has zoned, geofenced, universally enforced congestion pricing, then I don't care anymore, but in the meantime I need to.
Sure that makes sense in the abstract, but in the real world liberals want to help their poorer citizens and just saying, "Let's build like crazy and eventually rents will fall enough to help them" just won't cut it. Politically, that smells like "trickle down."
So you need to compromise. Build like crazy but set aside a reasonable percentage of units (like the 10% here in Los Angeles) for low income families.
I understand you meant that in an ideal sense, but it's still worth pointing out why doing some housing for the low income is a necessary part of the solution.
Sure, but you don't need to use income set asides to help poor people or avoid "trickle down" (nor *should* you use such self-defeating policies).
A far better way to go about is: A) build like crazy and B) help them with the rent, C) especially in light of the fact (and it's a fact!) that income set requirements actually *reduce* affordability for the many. Affordability set aside policies are basically analogous to saying "Ok, we're going to fuck you over but claim it's helping you."
If the goal is purely promotion of "help the poor optics" (and I get it, politics ain't beanbag), I suppose theoretically there's some number (3%? 5%?) that, if set aside for the non-affluent, wouldn't kill too many projects or impede supply. But it seems safer to just let builders build (and provide rent money for those who need it).
Just giving money is typically the best way to go. I'm a big fan of GiveWell.
But, as you note, that's not how politics works. Action at a distance doesn't get politicians reelected; they need to show a direct impact. But we agree that high set asides are crazy. I like our 10% set aside here in LA.
I think the problem is easier to see if you turn it inside out: politicians can't sell big changes unless those changes are subordinate to a moral crusade.
It's not just the far-left that believe this; the greedy developer has been a stock antagonist in movies and TV for decades - for example, the pilot episode of Dukes of Hazzard, and it was hackneyed then.
There are a lot of people who don't think about their opinions, and that stock plot is the first thing that comes to mind about developers.
The Goonies!
I earnestly don't. This attitude is prevalent not just in every progressive space I occupy but also just in normie-land.
To paraphrase H.L. Mencken, "“Progressivism: The haunting fear that someone, somewhere, may be making money.”
How come these out group representations so often exaggerate a claim without bring the receipts?
How much of the quote "left" actually believes this? Or have you found some college students or stray opinion piece from Jacobin that thinks the profit is inherently immoral?
Like why build up the potency and influence of these folks, except to justify your own beliefs? Or perhaps your reactionary politics?
You need a citation for the claim that the economic Left thinks profit-taking is immoral?
Can Rent Control Rein in Corporate Landlord Greed? - LA Progressive https://www.laprogressive.com/homelessness/corporate-landlord-greed
John Oliver Calls Out Greedy Landlords In Report On Skyrocketing Rents - HuffPost https://www.huffpost.com/entry/john-oliver-rent-last-week-tonight_n_62b0394fe4b0c77098b0b75d/amp
Portland rent control referendum, Question A, divides landlords and tenants - WMTW https://www.wmtw.com/amp/article/portland-rent-control-referendum-question-a-divides-landlords-and-tenants/44121616
While Davie is as usual grotesquely abusing words like "reactionary", the contention that the hard left is "loud but few" is accurate.
I don't think John Oliver is hard left 🤣🤣🤮
In a recent Rising piece about free speech Brianna Joy Taylor drove the point home that you can’t call universities leftists because they teach things like business and economics that are inherently free market and therefore conservative. She loves to grand stand on this stuff. But there are many on the left that haven’t accepted that free markets are the most efficient way you can allocate resources and produce the greatest amount of human flourishing. That’s not to say some amount of redistribution of wealth isn’t also needed for those that don’t benefit enough, for whatever reason, from free markets. Matt’s piece today seems to generally agree with this view.
It's not just on the left, a lot of people think like this. It's zero-sum thinking: "if someone is making a lot of money, someone else is getting ripped off." morehousing.ca/zero-sum
I’d go one further and claim that strict affordability requirements discredit the whole YIMBY project because they create the implication that local control preemption means central planning rather than market freedom. IMO the underlying tension around how to get affordable housing built has not been resolved satisfactorily by YIMBY advocates, and that is pretty fundamental to NIMBY support.
The choice between “build what the local planning board thinks should go here” and “build what Annapolis HUD thinks should go here” is not a flattering one for the YIMBY movement.
It almost inevitably does mean central planning to some extent.
We all know that Democratic voters and politicians won't be able to resist the lure once local control is severely curtailed.
That's an exaggeration, but even if it weren't I'd rather that than the city/state/federal govt completely preempting local control.
(And I realize that I'm in the minority here)
It hasn't happened to any appreciable degree in my small city or state.
And while I sympathize with those of you who have that problem in your local area, I really don't want a possible solution to your particular problem to negatively impact me and curtail our local control.
There's this weird default supposition that local governments are never going to do the right thing and state governments always will, when in my experience and in observing plenty of others it's the opposite.
I mean that is nice but I think it fair to say that the extremely intense ways land use can be policed in the US is antithetical to economic growth and personal freedom and we should be happy whenever someone claws some of that back, even if it is throw state or federal action. California has a tendency to everything-bagel proposals and isn't shy to overcomplicate regulation yet the state action on zoning has been the opposite of central planning. They have fought a hard series of battles to give people the freedom to scary things like build a granny flat.
Congratulations,you have your wish in most areas: local control, output set at 0.
Stupid question but why do we require affordable units and offer subsidized housing vouchers instead of just giving people money
You could ask that about every form of financial assistance we have in this country. Most people loathe the idea of direct cash assistance in case the "wrong" people benefit so we generate all these hoops to jump through to make sure there's no "waste" when in reality it's the hoops that generate the waste.
Real neoliberalism has never been tried
Dude, we helicopter dropped during Covid like Milton suggested.
So many dissertations will be written on that. It was an amazing experience.
I do know some folks back in Seattle that basically did not work most of 2020 and 2021, received basically their whole salaries anyway, did not pay rent, did not pay student loans, and received the stimulus checks. They are now back working and paying rent and are mad at Biden. Musta been nice
The most useless person in my office was just talking about how she got $250k in student loans waived...
That sounds like they committed fraud.
There was no fraud involved in collecting unemployment benefits that paid your full previous salary during 2020.
basically worked, didn't it?
We can quibble about the exact amount and whether too much money had an inflationary effect, but it really made me wish we had tried "give the people money" back in 2008/2009
We are still trying to work out what actually happened. It was just amazing to witness such social experimenting.
We probably subsidized crypto and GrubHub too much.
The forgiven loans part of the PPP does seem like it may have crossed over the threshold from enabling "honest graft" to affirmatively subsidizing the most corrupt and dishonest.
I think we should just shrug on the PPP people and focus on funding the IRS so they get caught later on and pay society back with nice fines added on top.
It didn't work at all for the auto market. The week after the first increased UI check went out - which gave some crazy high % of recipients a raise - low end vehicles (10 Model Years and older) started flying off the lot. Within 6 weeks weeks - so like by July 2020 - dealer's Days of Inventory dropped from 2-3 months normally to less than 1 week. That demand signal then started rippling up market (new model years) and back into the wholesale channel. This is all 15 months before supply chain issues.
Congress gave people money in spring 2008. In 2009 it tried a weird combination of immediate but temporary payroll tax cuts and spending on roads/bridges that didn't actually take place until mid-late 2010.
eh, a TINY bit of money in 2008. Not really comparable.
Pretty much.
Most people work, and most people also know people who don't work and find a way to scam and freeload off the government. A couple people are giving examples below and I have a few of my own that I've brought up many time here just from my own family.
Sure, but most people also know people who can't work and are getting nothing or much less than they need/deserve because the systems designed to stop the scammers are only stopping honest people.
If you talk to some of my colleagues, they'll tell you the only people who get disability payments are the scammers and the people who really need them never get a penny. That's not true, but it certainly feels true if you have any relatives who really need help.
My attitude has always been that the people who just want to freeload are also people who'd be terrible workers - the people who complain about a freeloader they know, I always ask "do you want to be that person's line manager?" and you get this visceral revulsion, which is one of the very few ways I've ever found of changing people's minds. I will honestly pay taxes to pay them welfare just to avoid having to manage that sort of work-avoider. Can't even call them lazy; they will work harder avoiding working than they would have to if they just did a job.
Also, direct cash assistance will make the total cost much more transparent to the public, and unless there is a country wide embrace of Nordic levels of taxation, people won't accept it.
Knowing that we're collectively trying to help those who are trying to help themselves probably leads to a higher-trust society. And building the habits of showing up on time, following directions, etc. are valuable skills than really do benefit people.
not sure I agree that the public thinks #1.
I think if someone is working very hard, very long hours but simply isn't making much, then most people I feel would be supportive of helping them out.
in their defense, especially at the lower end of the economy, there is a benefit in being able to just prove you are willing to work - to show up every day, do what your boss tells you to do, and not get into actual fights with your team. Heck, maybe learn SOME skill that you could leverage later.
The evidence of your working adds to your human capital.
We should “abolish” poverty because poverty is bad.
Separately, we should build a robust economy and encourage people to work because work is good.
But, the way to encourage work is not via the threat of starvation…
The work is productive too whomever is paying the employee, or the employee would not be getting paid to do it.
We were hiring and working all through the pandemic 🤷♂️
"Why not just give people money?" is not a stupid question. But the answer is, we need to give people money for housing, and we also need to build more housing.
Matt's interview of housing economist Jenny Schuetz deals with this issue, and is well worth a listen. https://www.vox.com/2019/5/17/18628267/jenny-schuetz-weeds-interview
I'll try to summarize. There are two different problems here.
1. In some areas of the country, there is not enough housing for everybody. People who reasonably ought to be able to afford housing cannot get it because there is not enough of it.
2. Some people at the lower end of the income scale will never be able to afford housing at a price a landlord is able to deliver it.
In a world of problem 2, where there is abundant housing, but some people with the lowest incomes can't afford it, then giving money or vouchers is the solution. But in a world of problem 1, lack of supply, giving people money doesn't solve the problem, and instead makes it worse, because housing becomes more expensive but not better or more abundant. The person with the money will just displace someone else.
If for example teachers can't afford housing and you give them money or housing vouchers, they'll just displace someone else, and then clerks or office workers or middle managers won't have housing. It's just not a solution. If you're playing musical chairs, and you give someone rocket boots so they're faster at getting to a chair, that doesn't change the fact that someone else will end up with no chair; if there are not enough chairs you need more chairs, not faster feet. The answer to lack of supply of housing is building more housing.
In a world of problem 2, where there is abundant housing, but some people with the lowest incomes can't afford it, then giving money or vouchers is the solution.
Simply giving people money without addressing the underlying supply constraints is inflationary and therefore counterproductive.
But trying to avoid giving people money by creating supply constraints is also inflationary. Easing supply constraints and giving people money is the proposal here, and it’s an open question what the net direction of that is.
I think we’re basically in agreement on this narrow point: I was responding to a comment asking why this program rather than, “instead of just giving people money.”
Affordability mandates imposed on developers is not removing supply constraints, it’s just trading one type of constraint for another.
The people who support these sorts of set asides want the developer, not the taxpayer, to front the bill. Housing with less profit for developers is their goal.
Obviously if you dig a level down you get a cross subsidy from other renters and/or subsidies via tax breaks etc for developers and it doesn’t actually come from developer bottom lines, but that is the logic to the policy.
Giving people money requires raising taxes and writing checks. It’s much more politically convenient to make rules that require other people to lose money in exchange for permission to operate (especially where their operations are unpopular to begin with) than to raise revenue yourself.
There tends to be this paternalistic fear that the people given money won't do the "correct" things with that money. I always appreciated the horseshoe opportunity Milton Friedman offered on this angle.
It's the political economy and bias towards doing something clear over doing something effective. Subsidies create costs on taxpayers. Affordable unit requirements create costs for developers. When the few developers who can build the affordable units, the politicians take the credit. When housing starts slow politicians raise their arms and say "we did what we could, it's the greedy developers!"
That's not a stupid question. You're right that we should give people money instead. But as a polity we're not very competent, and we love unfunded mandates.
I left this comment on your Heritage post: "In the case of leftists, my observation is that don't insist on [focusing exclusively on subsidized housing] merely because they believe filtering doesn't work. It's more that they believe that filtering is immoral *even if it does work* because with filtering, you're employing a process where the poor and working-class 'get table scraps.' In their minds, truly caring about the poor and working-class means delivering housing to them the same way you'd deliver a gift to a personal friend: you need to pick out the gift, and you need to deliver it in person or with a nice card, otherwise you're just 'treating them like numbers on a spreadsheet.' So no matter how many economics papers are published showing that filtering works, they're not going to be convinced."
Moore isn't a leftist, but I suspect that like some other progressives, he has a gentler version of the same beliefs. The idea of filtering is unappealing because all the nice new stuff goes to rich people, the companies that make money make money from the nice new stuff that goes to rich people, and working-class people get "leftovers" that can only indirectly rather than directly be traced to the governor's policy.
This is a crucial insight. I suspect the surest way to get the left fighting for YIMBYism is to persuade influential figures who fit this profile that housing abundance is the best way to accomplish their goals.
Yeah. It's tough because I understand where the impulse is coming from. We just have to somehow persuade people that the ethical obligations of the state differ from the ethical obligations of an individual. Like say you were a member of a church and one family was in need, you wouldn't say, "Let's make stuff available to the more affluent families in our congregation, who can then decide what they don't need and give that to the needy family." That would be offensive. But governments aren't people, and it's good and correct for them to be more utilitarian, consequentialist, whatever term you want to use. But that's a hard pill for conscientious people with sensitive personalities to swallow (setting aside the hardline leftist ideologues).
I think the way scale affects morality is actually a huge driver of extreme political positions. Like I used to be a Libertarian and man the number of Libertarian and Anarchocapitalist reddit posts I've seen that imagine the world as having a tiny number of people in it and then voting 2 to 1 on something and using force to do it is bad is too high to count.
A lot of left extremists do something similar and imagine th world as one big extended family to be taken care of.
I actually think (more controversially) that the core problem with modern libertarianism is that it has much too generous assumptions regarding the average person’s intelligence.
I’m not talking about Reddit here (any ideology seems inane and full of holes if you judge based on Reddit discourse); rather, I mean that the Caplan / Tabarrok / Friedman arguments for elaborate Coasian bargaining and smart contracts and conditional prediction markets as load-bearing elements of conflict resolution in a libertarian society rely on a hypothetical populace that is way smarter (and more rational) than our own.
It's a difficult thing though to try and thread the needle on defining affordable percentage to a specific market that cross subsidizes enough for a non public entity to want to build. Just pick a low number seems much easier and if you want to build public housing at cost or at a loss do that.
I do not understand why the yimby movement supports the "affordable housing" kludge at all. It distorts incentives, distributes the benefits randomly to a small number of people, and is susceptible to being gamed.
If your goal is to subsidize less affluent people, then why not just tax all new construction and use the income for some sort of voucher program?
Coalition politics
If only I could get all the policies I want without having to compromise with other people....
<this is meant mostly sarcastically, but with just enough honesty that it hurts>
It’s an attempt to assuage the anti gentrification crowd.
I doubt most folks who genuintely "support" the affordability set-aside kludge really are YIMBYists. When actualy YIMBYists sign on to something like that, it's because they don't have much choice, politically: it's either half a loaf (really a few crumbs) or nothing.
I belong to my local YIMBY group (meaning I participate in their discord) and it's eye-opening. I'm part of the group because I want more housing, and I don't really care how we get there, but think at bottom government needs to get out of the way in a lot of areas.
The group is filled with a lot of activists who are more focused on cheap than plentiful housing and others who come to their pro-housing position through urbanism. They're still pro-housing but seem much more in favour of over-designed solutions (read: government restrictions) to make buildings pretty and more like in Europe, bring them up to tighter green building standards, funnel new housing to the homeless, create way more bike lanes etc. These are people who are generally skeptical of markets but have made an exception for some housing regulation.
Not that I am against all their priorities, but I feel the way the left kills hosing is by treating it like any other priority, and trying to balance it against everything else. But a crisis demands setting other priorities aside and just building, which I don't think people on the left are capable of.
I'm in favor of pretty buildings meeting green building standards.
I mean, if you want really cheap abundance, those Soviet-style towering apartment buildings are waiting to be emulated.
And that's fine and your perogative. I just have a hard time taking governments and activists seriously when they (correctly) identify we are in a housing crisis but then stress the importance of other priorities (aesthetics, green building standards) that will objectively raise the cost of housing.
Soviet-style apartment blocks are better than homeless people, or are better than people not eating enough because their rent is too high, in my opinion. Let's build enough housing and then worry about other housing goals.
I don't support aesthetic requirements, and green building standards can go too far, but I think it's reasonable to be YIMBY and _also_ support green building standards/energy efficiency standards because climate change is also something worth considering.
But you'd want to impose the same standards on single family homes as well. If you strangely exempt them (especially since density is usually _already_ greener) then it feels more like NIMBY in disguise.
I feel confident that I speak for all the people that, when they see one Soviet-style monstrosity erected in their neighborhood because quantity uber alles, will make sure no more such things are ever built.
I live in a semi in front of a boxy, pedestrian 12-story apartment building and have no issues with it.
Look, if you oppose boring, simple and shabby-ish apartments, and are okay with the people who could otherwise live in them comfortably being poorer, hungrier, and maybe even homeless, then we should probably agree to disagree and move on.
If you check out the article I posted above the cost difference between Soviet and luxury is minimal. $600k/unit is Soviet and adding some architectural flourishes, a dog washing room, a few pelatons and upgrading to Bosch appliances might add $25k.
Aesthetics are almost always necessary to get normies on board with a program of building stuff, lol. It's a practical concession, not a principle, in most cases.
Developers almost always, in my experience, run up bad-looking initial renderings of oversized buildings specifically to have concessions in their back pocket when dealing with the public and civic organizations.
Likewise, while I don't agree with some of the green standards, good weatherization, glazing, and insulation are just not significant drivers of costs.
In the main, good double-glazed windows are barely more expensive than bad ones, weatherization is a question of competent installation and if done poorly will have far worse consequences than heating bills running high, and thicker insulation is an absolutely trivial expense. Even sprayed foams are not terribly expensive.
My ass-pull guess based on the budget I'm building for my own addition is that the difference between modern and 1990's standards for these three adds perhaps a single percent to construction costs.
Insulation, in particular, pays for itself astonishingly quickly. Glazing doesn't in a retrofit context but the marginal cost of better glazing at initial build does.
All the "Soviet-style" buildings were was early-generation precast/prestressed concrete panel buildings.
We use that technique pretty widely today, but it's only marginally competitive with podium construction with site-built cladding for high-rise buildings; erection costs are pretty limiting. It's also very logistics- and site-dependent for mid-rise (4-8 story) buildings, so only sometimes out-competes podium construction of wood-over-steel or concrete-over-wood.
Wealthy countries have no need for Soviet-style anything. E.g.,
https://www.bloomberg.com/news/features/2023-12-02/the-design-history-of-seoul-s-apatu-danji-apartment-complexes
>why not just tax all new construction and use the income for some sort of voucher program?
I'm sure restricting supply and subsidizing demand will work this time.
To be clear, I am not advocating for this policy. It just seems to be a more fair and less distorting mechanism for achieving the objectives of the affordable housing set aside.
I stopped most of my support (donations/volunteering) with SF Bay Area yimby causes for this reason. "Affordable housing" bills like SB-35 (streamlined approvals for >50% subsidized projects iirc) were extremely hard to pass, and have had fairly marginal effects. This report[1] puts them at 18,000 units in five years, some of which would have been built anyway. That's very good for the thousands of people who will have homes, but it's a pretty marginal in a state that is estimated to need millions of new units.
The underlying reason is that while many affordable housing advocates oppose market rate construction, but are one of the only other coalitions (along with construction unions) that supports building homes. And a lot of progressive groups in SF don't even want to form alliances with groups that only instrumentally favor housing subsidies. They need to talk the talk, not just walk the walk. So the choice for YIMBY organizations in California is to get nothing done or to ally with construction unions and affordable housing groups, yielding laws that upzone but have affordable unit requirement ("inclusionary zoning") and pro-union requirements ("prevailing wage"). I get the political calculus, but even to the extent i support housing subsidies, "affordable" units kinda suck. They are a bureaucratic solution requiring landlords to check tenants' incomes to make sure they qualify. The AMI percentage requirements mean that in well-off jurisdictions like SF, your housing subsidies may go to people who make pretty high incomes nationally. It's a very inefficient way to spend housing subsidy dollars. Direct subsidies or housing vouchers to poor people would be better.
It was frustrating since the reason i got involved in the YIMBY movement was that, despite having a high income, my personal rent was too high and increasing rapidly. I wanted to work on solutions that would stabilize or reduce rents, but the set of allies the YIMBY organizations ended up with thought concerns about market rate rents being too high were totally baseless. So i ended up spending my time/energy/money advocating for polices that would not help me at all, and would have marginal effects for people less well-off than me.
[1] https://ternercenter.berkeley.edu/blog/sb-35-evaluation/
Affordable housing set-asides, for which the technical term is "inclusionary zoning," are exactly that: making developers of new housing pay for housing subsidies. But my question is, why should the developers be on the hook for this, instead of everyone? Why shouldn't this tax be levied on everyone in the community, instead of developers of new housing?
It is fine to offer developers the opportunity to build something they otherwise could not, at the cost of paying for these housing subsidies. You just have to have your eyes open and be aware that you will get far less new buildings built, because of it.
You won't get any fewer buildings if you offer more density in exchange for some affordable units, because the developer doesn't have take you up on the offer. But you will get fewer buildings if you require affordable units as a condition of approval.
There's a weird thing going on in my city, where we have preposterously high affordability requirements. But the number of affordable units we require of developers also allows them to build extra market rate units, under the State Density Bonus. And then NIMBYs are mad about the increased density.
I'm not sure if you misunderstood me. I just meant that If you require developers to pay in order to build something they could not otherwise build, you may get more building than if you did nothing. However, you will get less building than if you allowed the new buildings without the added costs.
The same reason that pork helped bipartisan legislation pass for years.
I think it would be beneficial to analyse why people are NIMBYs and not YIMBYs. Not the pabulum about how people in local areas should have the right to determine the size of the neighbourhood, but the >real< reasons. The real reasons are that people want to live in a clean and orderly area with minimal crime. Abundant housing upsets the apple cart, and offers the potential for people with Challenging Behaviour to move into the area. Extortionate housing minimises the risk of this happening.
And in this respect, adding large numbers of "affordable" housing will have the effect of driving more people into the NIMBY camp.
Just stop trying to use every single government intervention to push a "help poor people" agenda. Push taxes and redistribution for that. For literally every other government activity, just serve and help everyone equally.
I don’t get why every government policy needs to have unrelated objectives tacked on as a condition of funding. It’s a much less efficient use than just pork barreling.
I would hesitantly guess that while it may be less efficient than pork barreling, it's also less legible, whereas it's harder to hide the combination of waste and parochialism implicit in "Bridges to Nowhere." Also as a state-level initiative there may just not be a lot of cross-subsidy that's realistically on the table here.
As Ezra Klein wrote: "everything bagels are the best bagels."
Salt bagels are the best bagels.
Just call that a dog whistle and those people racist, and you have the cover needed to ignore their concerns entirely.
It won't change their minds and preferences, of course...but at least you can pretend you don't have to address that thorny problem.
Yes. People tend to be risk-averse. Their neighborhood is great; why risk a change that could make it better but could also potentially make it worse?
Similarly, when people buy a house, they expect the value to increase over time. And while building more housing could increase the value of homes in a town, it could theoretically go the other way, so why risk it?
If people want YIMBYism to spread, then I think they need to convince people that the downside risk is minimal and/or nonexistent
Residents of expensive suburbs don't want crime, but allowing plexes (sixplexes, twelveplexes, modest three story apartment/condo complexes) in expensive neighborhoods would not bring those things and residents know it. The biggest concern I hear is about cars: traffic and, especially, parking. People believe, and are not shy about saying that they believe, that the street in front of their house ought to be available for them to park their cars in for free, and anything that allows people other than themselves to store their cars there is a terrible tragedy. They think they own that space and their city ought to enforce their ownership.
Height of buildings is also a huge concern to NIMBYs. That's why we see ridiculous rules requiring upper stories to be set back from lower stories, even (in my city) in three story buildings: so that new buildings won't cast shadows.
And the parking. People lose their shit over parking.
Yes. I think everyone is mostly aware the "real" reason for NIMBYism is that incumbent homeowners (in the main) like things as they are. You write as if this is controversial, or unknown.
But market rate housing is luxury housing occupied by rich well educated people. So your theory doesn’t work.
There’s a real tension between helping the poorest 15% and helping those closer to the median.
Pro market reforms won’t much help the poorest because their market incomes are simply too low. Housing abundance might reduce rents materially, but that doesn’t mean a single mom who makes $10 an hour and works part time will be able to make rent. However, housing abundance makes a huge difference for a family making $50-$100k a year, who can live much better if they go from spending 38% to 32% of their income on housing and might build equity if they can buy a starter home.
The same is true of professional licensure. Dental hygienists aren’t poor, they make about $70k. Letting them work independently would increase their incomes and the expense of dentists who make two or three times as much. It would help customers in the broad middle afford better dental care, but it wouldn’t do much for a dude who makes $12 an hour-- he probably needs a subsidy to keep his teeth from rotting.
Politically, helping the worst off is a loser. They are unlikely to vote and easily demonized. They are also very expensive to help. Helping the very worst off- the terminally ill-- is a huge money pit. Practical progressives will aim their policies at the 15th through 80th percentiles. There are a lot of votes in that group and a lot of workers with enough guile and discipline to take advantage of opportunities.
Helping the middle would be best politically, but I think the problem is a lot of advocate groups are advocating for the worst-off. No one advocates for the family of four making $70k a year. I think that's reflected in this proposal...do something minor that can pass but talk it up a lot to appease advocate groups to get them off your back. Why they don't tell the advocate groups "here's what we're doing, it's the best we can get now, we'll try more next year, but in the meantime we're keeping this quiet so as not to tick anyone off" I have no idea.
Housing policy is like paying for college at Harvard. If you're rich, no problem. If you're poor (and somehow we slip and admit you) then we'll give you a free ride. If you're between those, good luck, sucker.
Because advocate groups have to do advocacy. Keeping things quiet is a failure mode for advocate groups.
If you want a coalition with advocate groups in, you have to give them something to talk about. That means that coalition cannot do things quietly so as not to tick people off.
Is this true?
I would think in aggregate there is some supply of housing, and each person has some amount they are willing to spend on housing, and the market forces align the people with the housing while capturing all the available spend.
You might re-arrange where individuals live, but only true increases in supply can address the total cost issue, no? You want a world where units are competing for occupants, and that world requires many more units be built, right?
The middle class vastly outnumbers both the poor and the rich in America. Reagan-era policies like supply-side deregulation and indexing tax brackets to inflation were genuinely beneficial to middle class people, which is why "neoliberals" kept winning elections from the 80s until Great Recession.
I don't quite know what to do with this thought because to me like one of the core things that drives empathy is like no really truly everyone should have a home and food and so on. There's something that's both incredibly appealing in like no literally 100% even the guy pissing himself on the subway should be fine.
And it's also incredibly quixotic and turns a lot of people off and I never know what to do with those two facts.
I rather share your view and I think I know how to reconcile the tension.
Yes, when food and shelter are cheap to produce, everyone deserves them, even dysfunctional assholes. That does not mean everyone deserves an apartment in an expensive city.
Build CCC camps. Barracks can be built cheaply. Deliver enough rice and pasta and corn oil and powdered milk to keep the denizens alive. Maybe some meat on Christmas and the fourth of July.
Any asshole who wants to mooch off of society can go to a voluntary internment camp in the sticks. It’s voluntary. They can leave whenever they want. However, America’s cities should be for people who have something to contribute and we can make them gleam.
Section 8 vouchers would be so wonderful if they actually worked as intended
Before the ACÁ, 15% of the population didn’t have health insurance. The fact that the other 85% did kept anything from happening for decades.
There's a plausible mechanism by which we would expect rent decreases to be non-uniform for market-rate housing builds, though. (Note: I have *not* looked into this and wouldn't be surprised if there are studies saying that this empirical supposition of mine is wrong, so take with a big heaping bowl of salt). AIUI the theory of market-rate housing decreasing general rents is a kind of "filtering up / trickling down" effect where at each level of the market people movie into nice housing vacated by the previous tenants or else not occupied by newcomers outbidding them.
As this "wave" goes down the income ladder, however, you would expect it to become dampened and attenuated because the slate of would-be new-population gets ever larger, while the number of new units added to supply for any given building is fixed. Say market rate is $30k / year for a standard 2 bedroom apartment and someone builds 100 new units at that rate, and assume people spend about 30% of their income or less on housing.
In response to the new units, up to 100 people at $100k+ yr in existing units can move into nicer housing, and they'll be competing with some set of new city entrants who are also a $100k+/yr.
Even if (unrealistically) every new unit were occupied by people who already live in the city, thus freeing up 100 apartments at, say, $25k / year, the set of outsiders who want to move to the city to occupy the vacated units now includes both the original set of everyone making $100k+ *and* the new set of people making $83,333+ (25k = 30% of 83.33k).
In view of this dynamic we would expect any city with external demand for housing that's supply-constrained to have fewer and fewer units vacated as you progress down the income scale just because the set of external bidders (rather than just exiting incumbent city dwellers) gets larger and larger. At some point you'll probably see countervailing dynamics based on market segmentation (bidders who can afford a $30k/year apartment probably don't want a $8k / year one) but it's still true that we might expect this filtering up / trickling down to be lossy as it goes down the income scale and thus wouldn't expect relative expansion in supply (assuming a uniform distribution of pre-existing supply, which is admittedly a big assumption) to be constant. Instead we might expect to see a 10% decrease at the top of the market and like a 2% decrease at the bottom.
Can I also suggest that attaching affordability requirements is also a poison pill on pure politics terms? What I mean is, in a state like Maryland, housing costs are so high that it means middle class people and heck upper middle class people struggle more than they need to to afford rent or buy a house. Attaching strict AMI and affordability requirements essentially restricts the benefits of more housing to only a small poorer segment of the electorate. And let’s be real, a segment of the electorate less likely to vote especially in non presidential elections. One lesson I would hope we’ve learned last 10 years is the public at large needs to feel on some level they are benefiting from a change in law or policy.
There is one piece of this Matt is leaving out which may lead to more housing construction than Matt thinks. The tax implications. I can tell you from working in this industry that the reason developers or sponsors invest in deals like this is almost entirely related to the possible tax benefits you can gain. In fact when underwriting these deals, sizing loans and business plans themselves are almost entirely dependent on the developer actually getting the tax benefit.
Re 'poison pill in political terms': well said, and close to the heart of the issue. These 'affordable' rules greatly reduce the part of the electorate that benefits. And there's no upside.
Joseph Heath on the importance of appealing to the self-interest of the median voter, rather than their altruism: https://morehousing.ca/altruism
An angle that Matt understandably didn’t want to bring up: a development with these affordability lotteries is more odious to the median NIMBY than market rate housing. If you are deliberately targeting people with low incomes for your housing units, you are more likely to be bringing disorder and crime and poor-people culture or whatever euphemisms are currently in vogue. You strengthen opposition relative to just relaxing zoning.
This is my intuition, too. I have some neighbors in set-aside or quota housing, and they are really gross. Like, one didn’t wash her soiled clothing with detergent. (I bought her some.) Not infrequently, they keep pit bulls and do drugs. Yet, people are always talking about how we “don’t need housing, we need affordable housing.” I don’t hear anyone saying, “affordability mandates are bad because I don’t want to live near ghetto.” I can’t be the only one who’s noticed this. But maybe the doublethink is a feature of deep-blue politics.
Right. I think it’s trying to address a common criticism of developments in desirable suburbs, ex: “$4000 for a 2 bedroom, who can afford that?! We don’t need luxury apartments, we need affordable housing!”
But in my mind, people who can afford a $4000 2BR sound like nice neighbors to have.
There is real and substantial opposition to relaxing zoning. If YIMBYs want to pass upzoning legislation, they cannot ally with the large group of people who oppose upzoning, so they have to ally with the people who want to build subsidized housing.
I get a little impatient with people who say, "Why don't YIMBYs just push for upzoning with no strings attached" as if that were one of the options on the table. Generally, it is not, and we instead have to take baby steps.
That seems perfectly reasonable, although one could probably quibble about which electorates are best navigated in this way. The same play doesn’t work against every defense.
I just think as long as we’re saying “too high an affordability requirement means the housing won’t be feasible to build,” I might as well chime in with “higher affordability requirements also can lead to greater community opposition.” Does that make sense? Too obvious to be worth stating?
As an activist in the field and someone who is following this issue closely nationwide, I have not observed higher affordability requirements leading to more community opposition.
I’m not an activist in the field but my experience has been that, to a layperson, a 25% affordable apartment building is “low income housing” (strongly negative reaction) while a regular apartment building is just “a development” (mildly negative reaction).
The claim that it makes a difference whether a building is 10% vs 15% affordable is probably harder to make, but I don’t see why it wouldn’t be a conventional dose response relationship.
I live in California, and recently California cities were forced by law to allow more housing than they previously allowed. In my experience—and I have quite a bit of it now—if a city proposes to allow multifamily housing in an area where it is not now allowed, "mildly negative reaction" is not a good description of the result. "Hysteria" comes closer.
The people who already oppose a new apartment will oppose it more if it will have to contain poor people. But people who were neutral on the apartment might be willing to support it if it has to contain poor people. If the people who are opposed to the presence of poverty were supportive of upzoning in the abstract, then this would reduce support, but if the ones who are opposed to the presence of poverty are also opposed to upzoning in the abstract then you don’t lose any supporters.
Yeah, it seems to me that it's the usual political problem: votes don't count intensity of preference, so you choose to increase how much you annoy the people who oppose you (because they only get one vote each against you) and decrease how much your core supporters support you (because they're still going to vote for you) in exchange for bringing some people from a neutral or oppositional position into support.
Your policy change has made a large group of people less happy in exchange for making a small group of people more happy, but it's shifted the vote from against to in favour.
If there are NIMBYs who could be persuaded to accept new housing in their area as long as you kept the riff-raff out, then YIMBYs could ally with them to deliver luxury-only developments. But that constituency doesn't exist.
I don't think it's at all controversial to note that one of the ways income requirements work to prop up stasis (and sabotage housing abundance, and thus affordability itself) is that low income people are often feared or disliked. I don't see why Matt would "understandably not want to bring that up." I suspect he just didn't get it to it. Columns can't cover everything.
I think the reaction/discussion provoked by a piece that dedicated space to that issue would devolve into a largely unproductive discussion about 1) whether it’s okay to stigmatize poor people, or 2) whether it’s okay to make policy to accommodate people with aversions to poor people. Probably wise to avoid doing so, especially since Matt’s objective isn’t getting clicks/views.
>That said, even if your only interest is in maximizing the number of “affordable” units you ought to consider the possibility that a lower affordability ratio will actually generate more affordable units.<
The above question (optimal affordability requirements to actually maximize affordable units) would be a great question to get to the Odd Lots crew, especially after the super great episode where they had the Montgomery County MD housing guys on. I have to think the Montgomery guys have modeled this question and have some cool insights.
Do wonder where the 25% and 50% even come from (they are nice round numbers i guess). Would think it shouldn't be extremely difficult to analyze against construction/development costs for a given area.
There may be some area of the US where a 25% affordability requirement is financially feasible, but probably not many, and probably not in many situations. 25% is ridiculously high.
Are people eligible for affordable housing even 25% of households?
I'd have though that the absolute maximum affordability requirement should be the percentage of households eligible.
Yes. The most common affordability level, "Low Income," is 80% of the area median income. More than 25% of households count as low income, as you can see from this graph (with some inspection; the median income for 2022 is $75K) https://www.statista.com/statistics/203183/percentage-distribution-of-household-income-in-the-us/
The next most common affordability level is "Moderate Income," 120% of area median income. This income requirement is more likely to be seen in a project with higher required percentage of affordable units, and also in an ownership project. Obviously, more than 25% of households make less than 120% of area median income.
The affordable unit laffer curve
This article implies that the way forward is for politicians to write better bills. But I think the way forward is to persuade the affordable housing activists that YIMBYism actually works, so they stop pressuring politicians to add these affordability mandates. We’re lucky that politicians are listening to a small and vocal YIMBY activist group. Why shouldn’t they also listen to the small and vocal affordable housing activist group?
People have tried talking to so-called affordable housing advocates for years. They think that profit, developers, private sector is definitionally bad, reinforces capitalism, excludes favored groups by raising prices. They have a causal theory, it just goes thru the revolution first.
I have watched a large number of NYC community board meetings. One thing that floors me, nay -- flabbergasts me, is the obsession with AMI. I have seen 30 minute discussions involving live calculations to determine if someone making $120K can live in a unit or only $115K, for a bulding with like 3 affordable units. The entire concept is absurd. There's not an income level where you deserve to live in a specific unit. And the idea that local, unelected boards spend so much time debating this for individual units is honestly enough to make you lose all faith in government at every level.
I am once again asking Democrats not to act like a caricature of themselves
I know this isn't the main point, but I want to nitpick the Warren tweet, which neglects interest rates as well as average house size. Mortgage interest rates are at ~6.6% right now, whereas 40 years ago (Jan. 1984), they were 13.4%, almost exactly twice as much. Assuming a 20% down payment in both cases, the same mortgage payment buys a house 1.78x as expensive compared to 1984. This makes up over 70% of the difference in Warren's tweet. Note that if the mortgage interest rate were to drop back to 4%, it would completely wipe away her "11x vs. 4.5x" distinction.
Also, I don't know about Boston, but nationwide the average home size was ~1600 sqft in 1980, whereas it's ~2300 sqft now, almost 1.5x as much. And the finishes are usually better.
You've hit a nerve with the quote about new houses being bigger now than they were. People like to use that statistic to conclude that buyers demand bigger houses now than they did in 1980. That's the wrong analysis. Since 1980, we have not built enough new houses because of restrictive zoning. In a situation where developers are restricted as to how many homes they can build, they will naturally build the biggest, most expensive houses. That's not a fact about buyers; it's a fact about sellers. It's not that buyers want bigger houses. It's that the buyers who want bigger houses get their wish, and the buyers who would want smaller houses don't get theirs.
If instead builders were allowed to satisfy the full housing demand, they'd build both lavish houses and less lavish houses, just like Toyota builds Lexuses and less-expensive vehicles. But in the situation of restricted supply, builders go for the most lucrative houses, just like when Toyota was restricted during the pandemic they cut back on less expensive cars but not Lexuses.
That's a great point, although I think the average would still be growing, perhaps just not as much, as we become a richer society on net.