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Posts from the Housing Category


The Feds’ Tentative Steps to Legalize Mixed-Use Housing Don’t Go Far Enough

Apartment-style housing with ground-floor retail used to be a staple from small towns to big cities. But strict federal lending rules have made them nearly impossible to build or renovate. Photo: Wikipedia

Small apartment buildings with ground-floor retail used to be a fixture of small towns and big cities. But federal lending rules have made this type of housing very difficult to build or renovate. Photo: Wikipedia

For a long time, apartment buildings with ground-floor retail were the building blocks of America’s cities and towns. Combining housing and commercial uses is also essential for walkability and affordability, enabling people to travel shorter distances for their daily routines and get around without driving. But in most of the country today, it’s practically impossible to build or reinvest in this type of housing.

The federal government is the biggest mortgage lender. And the vast majority of its loans support single-family, suburban-style housing. Graph: Regional Plan Association

The federal government’s support for suburban single-family housing dwarfs its support for urban, mixed-use housing. Chart: Regional Plan Association [PDF]

A major obstacle is federal lending standards. The Federal Housing Administration, HUD, Fannie Mae, and Freddie Mac all limit the share of commercial space in residential projects eligible for federal loans. These standards, in turn, dictate which projects are viable in the private real estate finance market.

The upshot is that it’s very difficult to build or rehab low- and mid-rise mixed-use housing projects. Federal standards not only limit the supply of new mixed-use housing, but also prevent lending in distressed neighborhoods suffering from disinvestment, many of which are in cities or inner suburbs filled with older building types that don’t conform to the single-use model the financial industry is accustomed to.

Last week, the Federal Housing Administration proposed new lending standards for mixed-use condominium development, but experts say they don’t go far enough. (You can comment on the proposed rule until November 28.)

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White House: Make Cities Affordable By Building for Walkability, Not Parking

The Obama administration is taking on the crisis of rising rents in American cities, releasing a series of recommendations today to spur the construction of more affordable housing. Among the many ideas the White House endorses: allowing more multi-family housing near transit and getting rid of parking minimums.

Rising rents are putting pressure on American families. Graph: White House

Rising rents and stagnant incomes are putting pressure on American families. Graph: White House

Since 1960, the share of renters paying more than 30 percent of their income for housing — the baseline for what is considered “affordable” — has risen from 24 percent to 49 percent, the White House reports in its new Housing Development Toolkit [PDF]. There are now 7.7 million severely rent-burdened households, defined as those paying more than 50 percent of their income for rent — an increase of about 2.5 million in just the past 10 years.

In the toolkit, the Obama administration acknowledges the links between housing and transportation, saying that “smart housing regulation optimizes transportation system use, reduces commute times, and increases use of public transit, biking and walking.”

The toolkit is full of policy recommendations to make it easier to build multi-family housing, incentivize the construction of subsidized housing, and shift away from the single-family/large lot development paradigm.

The document is merely advisory — federal officials don’t have the power to supersede most local zoning laws. But the White House does say that U.S. DOT will evaluate cities’ approaches to new housing development when it considers awarding major grants for new transit projects.

Here are a few of the highlights from the recommendations.

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McMansions Fading Away?

Just a few months ago we were being tolderroneously, in our view–that the McMansion was making a big comeback. Then, last week, there were a wave of stories lamenting the declining value of McMansions. Bloomberg published: “McMansions define ugly in a new way: They’re a bad investment –Shoddy construction, ostentatious design—and low resale values.”  The Chicago Tribune chimed in “The McMansion’s day has come and gone.” Whither are these monster homes headed?

Even “Downton Abbey” is past its heyday (Highclere Castle)

Even “Downton Abbey” is past its heyday (Highclere Castle)

First, as we’ve noted, its problematic to draw conclusions about the state of the McMansion business by looking at the share of newly built homes 4,000 feet or larger (one of the standard definitions of a McMansion). The problem is that in weak housing markets (such as what we’ve been experiencing for the better part of a decade in the wake of the collapse of the housing bubble) the demand for small homes falls far more than the demand for large, expensive ones. So the share of big homes increases (as does the measured median size of new homes). And indeed, that’s exactly what happened post–2007: the number of new smaller homes fell by 60 percent, while the number of new McMansions fell by only 43 percent, so the big homes were a bigger share (of a much smaller housing market).  Several otherwise quite numerate reports gullibly treated this increased market share as evidence of a rebound in the McMansion market; it isn’t.

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When Cities Force Developers to Widen Roads, Everyone Loses


At L.A.’s Vermont-Wilshire Towers, the city made the developer cede land and pay for 6,000 square feet of road widening. Photo: Google Maps

It’s a common practice for cities to make developers widen a street when they put up a new building. The thinking is that development creates car trips that must be accommodated with more asphalt.

But new research suggests these policies don’t help anyone. The main effect is to increase the cost of building, making housing less affordable.

“As traffic management exercises, many widenings appear unnecessary,” concludes UCLA researcher Michael Manville in a paper published in the Journal of Transport and Land Use [PDF].

Manville looked at how this policy is carried out in Los Angeles. In L.A., all multifamily housing projects (and some other types of construction) are assessed by city traffic engineers to determine whether the developer should widen nearby streets. This is like “blaming Disneyland for increased air travel, and forcing the theme park to expand runways whenever it adds attractions,” he argues.

Manville spoke to developers compelled by the city to pay for various road widenings. The costs varied. In one case, the street widening added an estimated $11,000 to the cost per unit of a multifamily housing development. In another case the figure was $50,000. In another, just $65 per unit. Where the costs of street widenings are substantial, the policy drives up costs for renters and buyers.

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Walkable Cities Are More Affordable Than You Think – We Need More of Them

People living in walkable cities may have high housing costs, but they also tend to have low transportation costs and better access to jobs, according to a new study from Smart Growth America [PDF].

The most walkable metro areas have better job access and lower transportation costs, helping cancel out the effects of high housing costs. Graph: Smart Growth America

The most walkable metro areas have better job access and lower transportation costs, lightening the burden of high housing costs. Table: Smart Growth America

SGA ranked the 30 largest American regions according to the share of rental housing, office space, and retail located in areas with high Walk Scores. Then, using data from the Center for Neighborhood Technology, each region was also assigned a “social equity index” score based on housing and transportation costs for moderate-income households, as well as the number of jobs residents can access.

SGA found a significant link between walkability and its equity index, even though housing costs tend to be higher in walkable places.

In the areas with the highest walkable urbanism score, housing costs per square foot are indeed quite a bit higher than in car-oriented places — 93 percent higher, according to SGA. But moderate-income households in those six regions also have lower transportation costs — about 19 percent of their income, on average, compared to 28 percent in the least walkable places. Residents of compact places likely pay for less square footage than residents of spread-out places.

All told, SGA found that moderate-income households in the six most walkable regions spend about the same share of their income on housing and transportation combined as moderate-income households across all 30 metros — about 42 percent and 41 percent, respectively.

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High Transportation Costs Make a Lot of HUD Housing Unaffordable

"Affordable" housing units with excessively high transportation costs shown in red, and affordable transportation costs in yellow in the Atlanta area (left) and Detroit area (right). Map: University of Texas

Maps of Atlanta (left) and Detroit (right) show HUD rental units with high transportation costs in red and those with affordable transportation costs in yellow. Maps: University of Texas

Rental assistance from HUD isn’t enough to make the cost of living affordable when the subsidies go toward housing in car-dependent areas, according to a new study by researchers from the University of Texas and the University of Utah. The study evaluated transportation costs for more than 18,000 households that receive HUD rental subsidies, estimating that nearly half of recipients have to spend more than 15 percent of their household budgets on transportation.

HUD generally considers housing to be “affordable” if it consumes less than 30 percent of a family’s income. But that calculation doesn’t factor in the transportation costs that come along with different housing locations. A family that lives in a walkable neighborhood with good transit options will be less burdened with transportation costs — car payments, insurance, gas — than a family with the same income living in an area where they have to drive for every trip.

A broader picture of affordability comes from the “H+T index” popularized by the Center for Neighborhood Technology, which holds that if housing accounts for 30 percent of a household’s budget, transportation should not account for more than 15 percent to keep total costs affordable.

In the new study, researchers developed a model to determine how much households receiving HUD rental assistance have to spend on transportation in several cities. They found a great deal of variation across metro areas. In San Antonio, for example, only 13.5 percent of the housing units were in locations where transportation costs would consume less than 15 percent of household income, while in Los Angeles the figure was 97 percent.

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Which Cities Are Adding Walkable Housing the Fastest?

Since 1970, most American metros have seen their share or walkable urban housing decline, according to this analysis by data guru Kasey Klimes.

Since 1970, most American metros have seen walkable housing decline as a share of total housing. Chart: Kasey Klimes

As more Americans look for walkable places to live, cities are struggling to deliver, and a lot of neighborhoods are becoming less affordable. A new analysis by Kasey Klimes of Copenhagen’s Gehl Studio illustrates how major metro areas have let their supply of walkable housing shrink over the years, contributing to today’s housing crunch.

In this chart, Klimes shows how much walkable neighborhoods, which he defines as places with 10 or more housing units per acre, have grown or declined as a share of total housing in the nation’s 51 largest regions, from 1970 through 2010.

In most places, Klimes writes, the trend since 1970 has left cities in bad shape to handle the increasing demand for walkable neighborhoods:

The percentage of housing in walkable neighborhoods has dropped from 19.4% to 12% since 1970. Overall, though the number of housing units in America has outpaced population at a ratio of 3:2 since 1970, the number of housing units in walkable neighborhoods has trailed behind population growth at a ratio of 3:1. Now that market preference has returned to dense housing, this mismatch has left us far behind in adequate supply.

The silver lining is an uptick in decade to decade construction of dense housing. The net gain of housing in walkable neighborhoods as a fraction of total net housing gain by decade has increased from just 0.3% in the 1970’s to 10.7% in the 2000’s.

Despite some recent progress, the mismatch between low supply and high demand is contributing to rising housing prices and burdening people with rents they can’t afford in many cities and neighborhoods. Zoning that outlaws walkable development and the disproportionate political power of development-averse property owners are two factors that have hindered housing development where it is most in demand.

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Seattle Policy Honchos Look to Parking Reform to Make Housing Affordable

They look like houses, but they're not for people -- just cars. Photo: ## VA/flickr##

They look like houses, but people can’t live in them. Photo: Brett VA/Flickr

Buried under headlines about Seattle Mayor Ed Murray’s plans to battle “economic apartheid” are little-noticed reforms that would reduce or do away with parking quotas that inflate the cost of housing.

Murray’s Housing Affordability and Livability Agenda (HALA) Committee released its recommendations yesterday. Noting that about “65 percent of Seattle’s land — not just its residential land but all its land — is zoned single family, severely constraining how much the City can increase housing supply,” the report calls for raising height limits in six percent of that area. The rest of the city currently zoned for single family would get “small tweaks” like allowances for mother-in-law units and duplexes to increase the housing supply within existing height limits.

Seeking to make more productive use of available land — even the land zoned for lower densities — HALA also recommends a number of reforms to parking mandates that “act as density limits” and “inflate the average size and price of housing units.”

Here are some of the major changes to off-street and on-street parking policy in the report:

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Are There Any Affordable Cities Left in America?

When you factor in both housing and transportation costs (H+T) as a percent of income, the car-dependent cities in the right column expensive. But are DC, SF, and NYC that much more affordable, even if you count the benefits of transit? Source: Citizens Budget Commission

When you factor in both housing and transportation costs (H+T) as a percent of income, the car-dependent cities in the right column are especially expensive. But are DC, SF, and NYC that much more affordable, even if you count the benefits of transit? Source: Citizens Budget Commission

Are Washington, San Francisco, and New York the most affordable American cities? A new report from the New York-based Citizen’s Budget Commission [PDF], which made the rounds at the Washington Post and CityLab, argues that if you consider the combined costs of housing and transportation, the answer is yes.

But a closer look at the data casts some doubt on that conclusion. Between the high cost of transportation in sprawling regions and the high demand for housing in compact cities with good transit, very few places in America are looking genuinely affordable these days.

The CBC report uses a better measure of affordability than housing costs alone. Transportation is the second biggest household expense for the average American family, and looking at what people spend on housing plus transportation (H+T) can upend common assumptions about which places are affordable and which are not. Regions with cheap housing but few alternatives to car commuting don’t end up scoring so well.

There are some problems with the CBC’s methodology, however. While abundant transit is absolutely essential to keeping household transportation costs down, and it provides a lifeline to low-income residents of major coastal cities, the report still tends to exaggerate overall affordability in these areas.

According to the report, for example, New York City ranks third in affordability among 22 large cities. A “typical household” in New York City, the CBC finds, spends 32 percent of its income on housing and transportation combined. Part of the reason New York comes out looking good, though, is that CBC used a regional measure of income but looked at typical rents only in the city itself. Because the region’s median income is higher than the median income in the city ($62,063 vs. $51,865, respectively, according to 2008-2012 Census data), NYC appears more affordable than it really is.

Another issue, flagged by Michael Lewyn at his CNU blog, is that by looking at average rents, which in some cities include many rent-stabilized units, the calculation doesn’t necessarily capture what someone searching for shelter is likely to pay. If you’re trying to find an apartment in New York now, getting a place for the average rent would probably be extremely difficult.

What really stands out in the CBC report isn’t that New York, San Francisco, and DC are affordable — it’s that car-dependent areas that may have cheap housing turn out to be so expensive once you factor in transportation.

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Talking Headways Podcast: A Butterfly Flaps Its Wings In the Metro

At around 800 people per square mile, places go from voting red to voting blue. Image: ##  Troy##

At around 800 people per square mile, places go from voting red to voting blue. Image: Dave Troy

The metro is coming to Loudon County, Virginia. Eventually.

The Silver Line expansion that opens this summer will only go as far as Reston, but by 2018 it’ll be in Loudon, one of the nation’s fastest-growing — and wealthiest — counties.

As the county’s population continues to grow — especially among communities of color — will its density hit 800 people per square mile, which is the threshold at which places magically turn from Republican to Democrat? And if it does, will it turn Virginia from purple to blue? And with such an important swing state shifting solidly to one camp, does that change the national political balance? And what is it with the number 800 anyway?

We try to figure it all out on this week’s Talking Headways. Plus, Stephen Miller, my colleague from Streetsblog New York, joins us to talk about what is — and what isn’tmoving forward as part of the city’s Vision Zero plan.

And: Detroit is tearing down more than 20 percent of its housing stock to reduce blight and still splurges on roads. Is that the way to revitalize a city? The comments section awaits you.

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