Gimme Shelter – The Problem of Housing in New Urbanism

In Economic Planning, Economics, Housing, Inequality, Liberalism, Political Ideology, Politics, Politics of Policy, Poverty, Progressivism, Public Policy, Regulation, Social Democracy, Social Policy, Urbanism, Welfare State on November 9, 2009 at 5:38 pm

Introduction:

In my previous segment on working-class new urbanism, I focused on the non-housing aspects of the urban squeeze-out effect that the working and middle classes face in gentrifying cities. However, it is true that housing is the leading factor that causes cities to shift from a “bell curve” socioeconomic distribution, where the city is anchored by a broad middle class and a prosperous and mobile working class, to a “barbell” distribution, where a megawealthy elite perch on top of a vast number of poverty-wage workers.

However, the new urbanist emphasis on expanding supply through higher density, while necessary, is not sufficient to make the city safe for the working and middle classes.

Housing as Class:

Make no mistake, the politics of housing are the politics of class (and race). To give one example, today the city of Santa Barbara where I live recently voted on Measure B, an ordinance designed to lower building heights from a maximum of 60 feet to a maximum of 45 – effectively lopping off two stories of potential development, in an attempt to prevent “canyonization” of downtown Santa Barbara. While on first glance, this would seem to be one of those “non-ideological” issues of good governance, the campaign over Measure B quickly became a struggle about wealth and who controls it.

The Yes on B coalition named itself “Protect El Pueblo Viejo,” framing the contest as one between Santa Barbara’s supposedly golden past and its uncertain future. In its literature, the group emphasized “the unique small town charm” and argued that “high buildings are inimical to the basic residential and historical character of the City.” In policy terms, the group made the patently false argument that reducing the height limitation would make it easier to build affordable housing without any impact on urban sprawl, and that smaller buildings are more sustainable than larger buildings – which of course ignores the fact that reducing the potential supply of housing close to a city center when demand for housing is high will push affordable housing outwards and that smaller buildings are only more sustainable if you ignore the people inside the buildings (the more people you can put into a building, the less energy they use individually; if fewer people can live in a building, they require more buildings to live in).

However, the policy argument was never the main point – the emotional thrust of the Yes on B campaign was to identify a particular group of voters – namely, older residents who are homeowners of single-family detached residences – and raise fears that their way of life is under threat. While never spelled out (and it never is), the threat is that denser development would make Santa Barbara a big city with big buildings – which means a lot more (working class) people living in Santa Barbara who presumably don’t get the “historical character” of the City. It’s not an accident that the major funder of the Yes on B side, a Texan subdivision developer named Rudy von Wolfswinkel (not a joke), funneled his money (eventually $750,000) through a PAC titled “Preserve Our Santa Barbara.” The inference here is that by keeping Santa Barbara small, the people already established would hang onto theirs, without any thought to what would happen to people who weren’t able to buy a house back before the median home price wasn’t over a million dollars.

After an enormous amount of work, Measure B was defeated on Tuesday 54% to 46%. But while we should deservedly take pride in having preserved Santa Barbara’s ability to create affordable housing, we shouldn’t forget that we still need to find new solutions to turn capacity into reality.

The Problem of Supply in the Metropolis:

The Measure B campaign points out one of my problems with the new urbanist approach to affordable housing – namely that it concentrates almost exclusively on the supply side of the equation. Building up more affordable housing through higher density is all to the good, but as someone who grew up in New York, there is a basic problem with a supply-only approach. Namely, it’s extremely difficult to build faster than demand will grow, especially in larger cities. Demand for housing in New York City and similar large cities is frequently (but not always) inelastic – the sheer numbers of people who want to live in the city can easily outstrip the potential supply of housing, especially housing at the city’s core. Moreover, given the current systemic bias to private market construction as opposed to public housing (an area of social policy which America has always had an enormous difficulty with), more construction doesn’t necessarily mean more affordable housing, as new construction can cluster at the higher (and more profitable) end of the market. Set asides can militate against that, but a supply-side approach can easily become a Sisyphusian task. Finally, there is the issue of spatial limitations – you can only build on the space that exists, you can only build so far up, and you can only sub-divide so much, before you have to build outwards.

So how then do we deal with housing costs? I believe that new urbanism needs to balance supply expansion methods with demand management.

Going the Full Henry George:

In the past, rent control was the major tool that the left used to try to moderate the effects of demand. By limiting the rate rate of growth of rents to a certain figure, the hope was to keep rents from growing faster than incomes, allowing people to find and keep housing within their means. However, rent control has long since passed out of the realm of the possible.

I do think that there are more ways than rent control for making housing more affordable. In an earlier post, I discussed expanding the Section 8 housing program to what Lyndon Johnson intended it to be – a national rental assistance program that provided assistance to the poor, the working class, and the middle class. By creating a program wherein renters and homeowners who make less than 250% of poverty pay 25% of their income in rent/mortgage, and the difference between that and market rate is made up by the government, the government could dramatically shift the affordability of housing in cities.

The problem then becomes one of how to finance the program (although given that the national median is about 20% of income in housing, which should limit the cost of the program), and and how to landlords from ripping off the government.  Here, I think a Henry George tax on land would help –  it would generate quite a bit of revenue, economists agree that it doesn’t have any negative behavior-altering shifts like rent control is supposed to have, and especially if the rate was tied to the rate of increase in rents, it would essentially recover cost growths as they happened, since rising rents increase land values.

Why This is Necessary:

The reason why we need to do something so dramatic is that, in the face of constant demand for housing in the city, I can’t see a sustainable alternative for working class urbanism to work, unless we take some really drastic steps that I outlined last time. In short, people need to be able to live where they work, and that becomes extremely difficult for the non-affluent to do, and I’m highly skeptical that you can build faster than people can move.

Moreover, for the “new urbanism” to succeed as a social model, I believe that cities need to be places where the young, the new (immigrants and migrants), and the struggling can survive and thrive. Without tackling the crippling cost of housing, and especially the phenomenon that makes precisely those neighborhoods that are the most “new urbanist” to gentrify and push out the working class, cities where people want to live turn into playgrounds for the affluent and the people who serve them.

Conclusion:

In the end, it comes down to the choice between a democratic city and an aristocratic city. In the latter, housing can be treated primarily as a source of wealth-generating property. In the former, however, we must treat housing as shelter, as a means to the end of bringing together a great seething mass of equal citizens engaging in the process of civilization.

  1. […] the racial and class distribution of housing and education – and this can call into being a powerful politics of defending property values against a dangerous other, but often disguised by public professions of conservative beliefs in decentralization of […]

  2. […] is tight, wages are rising, and increased consumption fuels a thriving economy. Enormous amounts of affordable housing have been built, despite the unending flow of people into the city. Does this city work? Does it […]

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