Monday, December 5, 2016

Colorado - keepin' the riff raff out and bein' heroes.

There is a pretty good correlation between party affiliation and dysfunctional housing policies.  For each Clinton or Obama voter that a state gains, they will lose a resident to out-migration over the next decade.  I say this half-jokingly, but clearly these migration patterns are connected to certain policy frameworks that arise out of the "blue" metro areas.  The causes of this problem are complicated, and it could be that cities with housing problems become more blue, or that blue cities create innovative labor markets that extract value from density - value that they are then unable to tap because of those housing policies.  But, maybe Dallas would have trouble achieving the level of density that is demanded in San Francisco and New York City, too.  Maybe the difference between Dallas and San Francisco isn't that San Francisco won't allow enough density.  Maybe it's that San Francisco is the city that made density so valuable that any 21st century Western city would run into supply problems because of the demand for housing that value would create.

But, here comes Colorado, to put the causality back to policy.  Here is a new proposed Constitutional amendment that literally is the problem.  On the one hand, at this point, it would be unfair to claim this proposal represents broad support from Coloradoans.  On the other hand, it is such a nicely packaged example of the problem at the heart of the progressive policy framework, that it is worth looking at.
From the article:
It’s quite the long shot, but one of the first constitutional amendments that will try to get on the 2018 ballot aims to limit residential growth in Colorado’s highest-populated counties.Filed by a Golden man and a woman from Wheat Ridge, the so-called “Proposition 4” will aim to limit new residential building permits in Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, El Paso, Jefferson, Larimer and Weld counties to 1 percent of the current number of existing units in both 2019 and 2020.
The proposition would also require 30 percent of new developments be affordable housing or affordable senior housing.

This is just classic.  The limit on the number of new units is literally THE cause of unaffordable housing.  No city that limits housing in the face of demand has broadly affordable housing and no city that allows housing supply to grow to meet demand has unaffordable housing.  The correlation is practically 1:1, and the different outcomes in these cities are famously becoming more and more extreme.  This is not anywhere close to a subtle point.  This amendment is, at its base, the formulation of the one and only cause of unaffordable housing at an aggregate level.

But, then we have that precious second part.  Now that Colorado would make it illegal for affordable housing to be built, in practice, they would demand it by mandate.  Because that's just how much they care.

In Dallas, affordable housing just kind of shows up everywhere.  Across the distribution of incomes in cities like Dallas, household spending on rent settles at a comfortable portion of household budgets.  Most households adjust their real housing consumption to get to that comfort zone - by changing location, size, etc.

But, if Colorado can manage to pass this amendment, it will become like San Francisco and New York City.  There, households manage their housing costs by applying to the local "affordable housing" commissioners.  In those cities, affordable housing doesn't just show up.  The reason you have affordable housing is because people who vote the right way - the right-thinking, moral people who are on the right team, and who care more about you - are fighting for you.  They are out there doing the hard work for justice because that's how working class people win.  The way households get affordable housing in urban California and New York City is because those cities are filled with heroes, God bless 'em.  What would you do without them?

Of course, for many households, what you do with them is you move away from them to Dallas, where affordable homes just sort of appear.  I know.  It's weird.  But, they just sort of are there, even though Dallas is sorely lacking in heroes.  Go figure.

21 comments:

  1. Kevin, have you seen this?

    http://jedkolko.com/2016/03/30/urban-revival-not-for-most-americans/

    Also, Dallas is quite Democratic these days. Austin is very Democratic. Instead of Dallas, maybe you should be using Knoxville, which is more Republican than it was in 2000.

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    1. Good point. Maybe I should use Atlanta.

      Great article. He always has great graphs that really tell the story.

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    2. Atlanta is far more Democratic than Dallas, even in regards to the White vote. Probably the best example of a fast-growing, highly populated Republican area is Maricopa County.

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    3. Well, we don't need to be too picky. Every city has a range of political influences. And a lot of wrong headed ideas have to coalesce in a place that's vulnerable to dislocation for things to go horribly wrong. I mean, even Seattle manages to get by, and actually has allowed a decent amount of housing. There's no need for us to go looking for the perfect place. 85% of the country does ok.

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  2. I keep coming back to it: Property zoning and housing stipulations are the biggest economic structural impediment in the US today.

    It might as well be a secret however.

    The right wing much prefers bashing the minimum wage, and the left wing blubbers about "glass ceilings".

    The libertarian blogs will go into shrill hysterics about free trade…but fall mute on property zoning.

    And the decriminalization of push-cart or track vending (a nice antidote to the zoning of retail space)? Not a topic. Ever.

    What oddball-loser cares about push-cart vendors?

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  3. But doesn't the Dallas/Texas model rely on never-ending sprawl to keep prices down? Having grown up in Southern California...no thank you. I agree that supply is the problem, I'm just not sure what the answer is.

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    1. That may be true. We have a lot of support for single family homes, mostly through income tax policy. There are many possible solutions, and the best solutions probably include a reduction in subsidies so that there is less consumption of housing at the top end. But, putting a hard cap on new units and instituting broad non-market rent programs is a problem, not a solution.

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    2. And, thanks for the input! Always nice to hear from new commenters.

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    3. It's either density or sprawl. I prefer density.

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    4. Really isn't that the challenge of our time? On social grounds, most people prefer density, and there is clearly demand for it. Yet we can't seem to politically create it. There is a lot of potential here if we can manage the difficult process of getting out of our own way.

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    6. They could and should allow all building that increases density. Besides people need to live somewhere, you cannot wish them away. Sprawl is not so bad.

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  4. First, I want to say I am horrified by the proposal in Colorado. It would do great harm to people's freedom of movement within the USA.

    However, I wonder if you are being too kind to Dallas here. If you look at this PDF of Dallas zoning rules at http://dallascityhall.com/departments/sustainabledevelopment/planning/DCH%20Documents/ZoningDistrictStandards.pdf & then look at Dallas' zoning website at http://gis.dallascityhall.com/zoningweb/ . I do not see Dallas as being as positive an example as you make it out to be. It seems like most places I am clicking on for Identify Map Data is zoned R-7.5 (A) which means single-family housing only, 7,500 square foot minimum lot size, 20 foot minimum front setback, 5 foot side/rear setback, plus with 45% lot coverage.

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    1. Good point. I think there are some subtle issues here, though. Here is a Trulia article on zoning, etc.
      https://www.trulia.com/blog/trends/elasticity-2016/
      From the article:
      "In fact, we find that metros with longer administrative delays in rezoning and lot approvals are strongly correlated with lower long-run housing supply elasticity than metro with fewer delays, while restrictive zoning is not."

      There are many debates that could be had about what zoning is appropriate. I think this Colorado proposal is an example of the worse problem, which is areas that simply won't allow building, full stop. In Manhattan, San Francisco, etc., zoning is just the beginning of the problem.

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  5. Boulder is already really strict on new housing.

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  6. sprawl doesn´t have to b as bad, given a single-family housing paradigm, if lot size minimums shrink.]

    maybe we can package this idea as reregulation. for example I may have what might seem to ya´ll to b Stalinist/Naderian views about furnace standards, housing unit size and urban aesthetics (furnaces that r far more efficient and cost about 10k more should b mandatory in cold places, in my opinion, new single family homes should b much smaller outside of Utah, and cinque terra style pallate and style uniformity is awesome) but I find your arguments about supply very appealing. there is some political economy potential, too: D-favored groups like Hispanics r well represented in construction, urban building trades r often heavily unionized relative to the workforce in general, various public sector workers may b convinced to campaign for changes that enlarge tax bases and expand their clientele

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    1. Unfortunately, it seems that the trade unions easily fit into the "limited access order" political framework that creates the supply constraint. It seems like the cities with the problem tend to have housing policies that include requirements to pay above-market union rates, which is one of the many forms of control that are imposed on new units to keep costs high and supply low. In those cities, you don't succeed by producing and competing. You succeed by getting your claim on economic rents - rent control, restrictive zoning that pushes up property values, development fees, etc. High union wages are a claim on those rents. I think it would be hard to get unions to move outside that paradigm. They aren't in the business of expanding employment. They are in the business of trying to protect their existing claims on economic rents.

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    2. good point. thank you for the response

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  8. I wonder if the feds could step in say this equals an interference in interstate commerce, like a housing tariff between states.

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    1. It sure seems like that probably has to be the solution, on a broad scale. There is a sort of prisoners' dilemma in housing policy, and more power among broader jurisdictions might be needed to induce local jurisdictions toward the common good.

      Unfortunately, we've evolved to the point where the Commerce Clause means that growing your own plants for personal use can be regulated as interstate commerce but a de facto lock down on labor and capital mobility is not actionable.

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