housing policy

Will California Housing Policy Destroy Los Angeles' Secret Forests?

New Geography — Sun, 26 Sep 2021 12:38:24 -0400

Recent California housing policies may result in the decimation of forests in both urban and suburban single-family neighborhoods of Los Angeles. L.A.-based policy analyst and writer Chris LeGras shows us drone footage of LA's "secret" forests that may be affected by the state's recent changes in housing policy.

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Feudal Future Podcast — Examining China's Urban Growth, with Austin Williams

New Geography — Mon, 01 Mar 2021 13:55:17 -0500

On today's episode of Feudal Future hosts Joel Kotkin and Marshall Toplansky are joined by Austin Williams. Austin Rhys Williams is course leader/senior lecturer in PG Dip Professional Practice in Architecture at Kingston School of Art; and honorary research fellow at XJTLU University in China.

He is the director of the Future Cities Project, China correspondent for the Architectural Review and has written for a range of publications; from the Times Literary Supplement to Top Gear; from Dezeen to The Economist.

His latest books are "China's Urban Revolution: Understanding Chinese Eco-cities" (Bloomsbury, 2017) and "New Chinese Architecture: Twenty Women Building the Future" (Thames & Hudson, forthcoming, 2019). His previous books include: "The Enemies of Progress", "The Future of Community" and "The Lure of the City". He co-founded the mantownhuman manifesto (featured in Penguin Classics "100 Artists' Manifestos") and the New Narratives initiative. (Kingston)

[2:30] Austin and Joel discuss the differences in urbanism between the West and China.

[13:30] Austin explains China’s vision for the future with artificial intelligence.

[15:30] Marshall, Austin and Joel discuss Jack Ma and independent thought.

[27:04] The episode ends with a discussion of economics, population control and China’s demographics.

This show is presented by the Chapman Center for Demographics and Policy, which focuses on research and analysis of global, national and regional demographic trends and explores policies that might produce favorable demographic results over time.

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More podcast episodes & show notes at JoelKotkin.com

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Learn more about the Feudal Future podcast.

Learn more about Marshall Toplansky.

Learn more about Joel Kotkin.

Learn more about Austin Williams.

Join the Beyond Feudalism Facebook group.

Read the Beyond Feudalism report.
Learn about Joel's book, The Coming of Neo-Feudalism.

Recap of the Post-Pandemic Housing Reality Webinar

New Geography — Mon, 07 Dec 2020 18:11:00 -0500

Over 200 attendees joined our panelist for a webinar hosted by Urban Reform Institute on December 4. If you missed the event, you can watch the video below:

Read the 2020 Report on Ownership and Opportunity.

Bertaud Book Suggested for Australian PM Scott Morrison's Reading List

Wendell Cox — Wed, 04 Dec 2019 20:36:25 -0500

Australia’s Grattan Institute has included former World Bank principal planner’s Order Without Design: How Markets Shape Cities on its annual “Prime Minister’s Summer Reading List” (Summer starts in just a couple of weeks there). It is a good recommendation. We reviewed the book earlier this year.

Some excerpts from that review follow:

“Alain Bertaud’s new book, Order without Design: How Markets Shape Cities (MIT Press), is particularly timely, because of the rising concern about the challenges facing middle-income households. The broad based affluence that followed World War II brought unprecedented affluence to many millions of people, principally in the high income nations. This also raised the standard of living for people living in or near poverty. The progress has been well documented by economists, such as Diedre McClosky and Robert Gordon.”

Bertaud says that “current planning practices place “constraints put on the supply of urban land and floor space by restrictive regulations” that “are causing severe urban dysfunctions.” According to Bertaud, urban planners pay insufficient heed to urban economics:

‘I think that, worldwide, the unfamiliarity with basic urban economic concepts by those in charge of managing cities is one of the major problems of our time.’”

And that:

“Poorly conceived urban strategies are not just innocent utopias. They misdirect scarce urban investments toward locations where they are the least needed and, in doing so, greatly reduce the welfare of urban households. These failed strategies make housing less affordable and increase the time spent commuting.”

Finally, Bertaud offers advice that is “spot on” for leaders interested in preserving the middle class:

“The main objective of the planner should be to maintain mobility and housing affordability as a city’s population increases and it diversifies its activities (emphasis added).”

Many more state and provincial leaders need to read this volume than Prime Minister Morrison.

10 Questions on Public Corruption for LA’s “Progressive” Mayor

Jerry Sullivan — Sun, 24 Nov 2019 14:33:06 -0500

Anyone who needed a poll by the LA Times and LA Business Council Institute to tell them that overwhelming numbers of Angelenos consider homelessness the city’s biggest problem hasn’t been paying attention for quite a while.

And anyone who thinks homelessness in LA can be addressed without confronting public corruption overlooks a problem that tears the fabric of the city.

The odor of corruption hangs over a deal at a warehouse at 1426 S.Paloma Street on the industrial edge of Downtown LA. The City Council and Mayor Eric Garcetti approved a lease that requires $35,000 a month in rent for space to be converted into a 115-bed homeless shelter there. They’ve also agreed to pay a nonprofit $4 million a year to run the shelter.

The numbers involved are relatively small compared to the $1.2 billion voters approved under Prop HHH three years ago to address the crisis.

You can look here to see why they nevertheless indicate the potential for much bigger problems.

And you can consider these 10 questions, which Garcetti has been unable or unwilling to answer for weeks and months while the shelter has yet to open even as the city pays $35,000 a month to the landlord:

Why isn't there a homeless shelter in operation at 1426 S. Paloma Street?
What sort of market analysis was done on the lease
Do plans still call for the development of a shelter at the property
If so, when is it expected to open?
Are there any concerns that the landlord of the property has been involved in cases of money laundering and counterfeiting in the past?
How was Home at Last CDC chosen as the operator of the homeless shelter?
How was the $4 million annual value of Home at Last CDC’s services determined?
Are there any concerns that Home at Last CDC has recently demonstrated a lack of organizational capacity and transparency about its operations?
Are there concerns that city documents indicate plans for 60 fulltime employees to staff a 115-bed facility?
Has the city surveyed industry standards on staffing levels for emergency shelters?

These shouldn’t be tough questions for a mayor with hundreds of public employees on his staff, including dozens dedicated to communications and homelessness programs.

They are offered without apology because the people of anyrepresentative democracy has a right to know – and because LA will never meet the challenge of homelessness unless we start to talk about public corruption.

Jerry Sullivan is founder and chief columnist for SullivanSaysSoCal.com @SullivanSaysSC

The ABC of Making Housing Unaffordable

John Muscat — Wed, 21 Dec 2016 12:53:08 -0500

On 12 December, ABC Radio National’s Breakfast Program aired another group discussion on “Australia’s housing market”. Presenter Hamish Macdonald was joined by an “expert panel” made up of Ken Morrison, CEO of the Property Council, John Daley, CEO of progressive think tank the Grattan Institute, and Tom Whitty, managing editor of The Project, a television show pitched to the youth demographic. The conversation ran along predictable lines.

All three panelists agreed that housing affordability was a real problem, especially in Sydney. But they took up positions on various sides of the issue. Generally speaking, Morrison argued for a supply-solution and dismissed demand-management or tax reform. Daley supported a supply-solution, but insisted that some demand-management and tax reform was essential. Whitty rejected a supply-solution altogether, and thought it was all about demand-management in the form of abolishing the tax concessions for negative gearing and capital gains. "We're manipuating demand", he said.

Neither Morrison nor Daley acknowledged that greenfield development offered any advantages relative to inner-ring infill. Daley repeated his blinkered point that jobs growth is all in the centre. There was no mention of the land value impacts of limiting peripheral supply, a near universal policy across the country. Daley seemed to think all new housing should be concentrated within a few kilometres of the CBD. Bizarrely, he held up Vancouver and Portland (Oregon) as cities that got their housing location right, failing to mention that they are amongst the least affordable places on earth. Morrison made no objection to any of this.

In terms of the system of interests set out in our last article, “Sydney lurches to housing affordability disaster”, Morrison expressed the position commonly held by the Big Projects coalition, while Daley and Whitty repeated views popular with the knowledge-welfare elite. Typically for the ABC, nobody argued for suburbanisation and greenfield expansion, policies of particular benefit to the worker-trader class of industrial and routine service workers and small traders.

A striking feature of the discussion was how the demand-management crowd are utterly impervious to evidence. Morrison cited estimates by Grattan and the McKell Institute that abolishing the tax concessions would lower prices a puny 0.49 or 2 percent. Despite failing to offer any counter-evidence, Daley and Whitty were unmoved. Daley shifted onto the different point of whether the cost to the federal budget is equitable, and then started talking about the rental market. Whitty just fell back on anecdotes about the type of bidders succeeding at auction sales. Macdonald’s sympathies were clear all along, at one point becoming testy with Morrison for refusing to concede that the concessions are central.

This feeds into the false narrative being built up by the ABC and other media outlets, particularly catering to a younger audience. It’s all the fault of greedy oldies or wealthy investors with their snouts in the trough. The impulse is to slap taxes on the scapegoats. In the meantime, the real causes go undiscussed and the problem keeps getting worse.

This piece originally appeared at The New City Journal.

Center for Opportunity Urbanism: America’s Housing Crisis

Newgeography — Fri, 09 Sep 2016 09:23:25 -0400

This video from Center for Opportunity Urbanism (COU) explores America’s housing crisis --- focusing on the new generation. COU is a non-profit dedicated to preserving the American dream and promoting upward mobility for all Americans. Check out the video and let us know what you think.

LSE/Netherlands Research Documents Price Effects of Tight Housing Regulation

Wendell Cox — Tue, 12 Apr 2016 12:19:33 -0400

New research by London school of economics Professor Christian Hilber and Wouter Vermeulen of the Netherlands Bureau for Economic Policy Analysis provides strength and evidence of the connection between high housing prices and strong regulatory constraints. The paper advances the science by estimating the share of house price increases attributable to regulatory constraints. Hilbur and Vermeulen show that supply constraints are considerably more important in driving up house prices than the physical constraints (such as lack of land or topography) and lending conditions or interest rates:

"In a nutshell, in our paper we use this unique data to test our prediction that house prices respond more strongly to changes in local demand in places with tight supply constraints. In doing so, we carefully disentangle the causal effect of regulatory constraints from the effects of physical constraints (degree of development and topography) on local house prices, holding other local factors constant and accounting for macroeconomic fluctuations induced, for example, by changing lending conditions or interest rates."

Their conclusions are based on analysis of housing markets in the United Kingdom since 1979. Unlike the United States, Canada, Australia or New Zealand, the United Kingdom was fully engulfed by urban containment regulatory policy by that time.

Perhaps the most important advance of the research was the author’s quantification of developable land. This is a relatively new direction in research, with perhaps the most important early contribution from Alberto Saiz of Harvard University, whose estimates relied on the assumption of a 50 mile radius of land from the cores of US metropolitan areas. My response doubted the usefulness of measuring housing markets with a fixed radius, not least because since some metropolitan areas (and even built-up urban areas) extend beyond that distance. Hilbur and Vermuelen avoid this problem by estimating developed land by local authority area, which allows for analysis at the housing market level (which is usually larger than the local authority area).

The authors also note recent research on the consequences of land use regulation to economic growth and stability. These include Hseih and Moretti, who found that without tight housing regulation, the gross product in the median city might be nearly 10 percent higher, and Glaeser et al research showing the greater volatility of prices in a tightly regulated environment.

The authors summarize the problem:

"Absent regulation, house prices would be lower by over a third and considerably less volatile. Young households are the obvious losers, yet macroeconomic stability is also impaired and productivity may suffer from constrained labour supply to the thriving cities where demand is highest."

This is important research in a world struggling to restart healthy economic growth and reverse the decline of the middle-income standard of living.

Australian Treasurer Given Primer on Housing Economics

Wendell Cox — Sun, 14 Jun 2015 22:53:45 -0400

Wodonga (Victoria) mother of two Mel Wilson has made headlines across Australia with an open letter to Federal Treasurer Joe Hockey on housing affordability. In commenting on Australia's housing affordability crisis, the Treasurer has told a press conference "The starting point for a first home buyer is to get a good job that pays good money."

Australia has a severe housing affordability problem. As the Demographia International Housing Affordability Survey showed in January, Sydney median house prices had reached 9.8 times median household incomes of by the third quarter of 2014. In the intervening months house prices have escalated so much that some say the median price will soon pass $1 million.

It was not that long ago that house prices were far more reasonable in Australia. Nationally, in the early 1990s, house prices averaged around three times incomes. Since that time, house prices have more than doubled relative to incomes. This is placed a considerable burden on purchasing households, especially first home buyers.

Ms. Wilson incredulously took Treasurer Hockey through the economics of buying a first house in Sydney. She reminded him that it would take all of the average wage earner's take home pay for four years to save the down-payment on the median house, now priced at A$915,000 (approximately US$700,000. The entire letter is published below.

In a later statement, the Treasurer, to his credit, indicated the need for strong lobbying of the states to make more land available to increase supply. The problem in Sydney and Australia is not unique. Similar house cost crises have developed from London to Toronto and San Francisco, where governments have severely limited the land that can be used for new residences, with the wholly predictable result that prices escalate out of control.

Ms. Wilson, and other concerned (or baffled, as Ms. Wilson puts it) Australians should hope that Treasurer Hockey's "strong lobbying" is successful. The economic reality is that until there is liberalization of the land use restrictions responsible for much of the housing cost escalation, there will be no relief, other things being equal. Indeed, house prices are likely to just keep going skyward. This requires a mid-course correction toward policies that place improving the standards of living and reducing poverty at a higher priority than urban design.

---

Letter from Ms. Mel Wilson to Treasurer Joe Hockey:

Dear Joe,

I just wanted to touch base with you regarding your comment that young people are able to enter the property market if they just “get a good job that pays good money.”

I just wanted to ask you how one might go about this?

Are you going to be reviewing all the current Awards that are in place to ensure that most jobs pay “good money”?

Are you going to be creating hundreds of thousands of new jobs that, under your Awards, pay over $100,000 per year?

Apologies if I have missed this fantastic news, but as someone working in 2 senior HR roles, I believe I would have known about this so that I could pass the message on to some very tired, over qualified employees who currently fall under various Federal and State awards and are being paid between $18 to $25 per hour.

Are you aware of what the average Australian wage is?

Are you aware of what the average Australian mortgage in Sydney is?

Are you aware of the first-home buying process?

Just in case these facts and figures aren’t available to you, I thought you might be interested.

The average weekly wage according to the Australian Bureau of Statistics on 1st January 2015 was $1,128.70, or $58,692.40 before tax. This means a take home amount of about $904.00 per week.

The median house price in Sydney, according to the Domain Group Housing Price Report, as of March 2015, was $914,056.

Not sure if you know how first home buying works at the moment, but you normally need a deposit of about 20%. This is to pay for the Stamp Duty (which is a State Tax you must pay every time you buy a property), and also to assist in the approval process so that you don’t need to pay Lenders Mortgage Insurance.

So in this instance, the first home buyer would need about $182,811.00 saved to purchase a house that is the average price in Sydney.

So to go out and get one of these “good jobs that pay good money” I assume these young people you speak of would need to go to university first.

On average, it takes about 3 -4 years to get a degree, so if a young person goes to University straight out of school, they can expect to finish their course and be ready for the workforce at about 21, with a HECS-HELP debt of over $20,000. To make this a bit easier for you to understand, let's say there is a young person named Joe Junior who has done just this.

If Joe Junior is extremely lucky, and is up there with the best of the graduates from that course and that year, he will get a job straight out of University paying usually under the average wage.

However, lets just be extremely generous here and say that Joe Junior got a job and was on the national weekly take home wage of $904 per week.

Joe Junior needs to only save every single dollar worked for about 4 years to save his $182,811 deposit for their first home. Thank you, Mr Hockey, for throwing in that $7,000 first home owner grant too – that meant Joe Junior could get into his first home 8 weeks earlier!

Just a quick side note, this example does not take into consideration the rising house prices, or Joe Junior’s HECS-HELP debt that he obtained from getting his degree to get one of your so-called “good jobs”.

Joe Junior is now 25 (not so junior anymore), has been living at home with his parents this entire time and has not been able to spend a single dollar on any bills, board or holidays or public transportation. He also can’t afford a car or petrol for a car but then again “poor people don’t drive cars”. Oh wait, Joe Junior isn’t a poor person – he has a “good job that pays good money.”

Luckily Joe Junior’s parents have been happy to drive their little Joe Junior to and from work every day and provide free housing, clothing, medical expenses and also provide the food for his breakfast, lunch and dinner each day.

So finally Joe Junior has saved his $182,811 deposit (of which only about half will go towards his mortgage due to the stamp duty cost), and can now purchase his first home, with a mortgage of about $822,650.00.

According to the Commonwealth Bank’s online mortgage estimator, the repayments for a mortgage of this amount are $1,073.00 per week over 30 years.

So hopefully Joe Junior’s average weekly wage of $904.00 has gone up enough to cover the cost of the mortgage.

Joe Junior has been applying for these “good jobs hat pay good money" that you speak of (I assume by "good money" you mean more than the average wage as you have just seen it is not even enough to cover the cost of the average house prices' mortgage in Sydney), but hasn’t had any luck as yet. He needed to stay in the same job post university to demonstrate to the bank job stability so that he could purchase his first home. So he only has a degree, and experience in the one job, one industry, and there are just not that many jobs out there paying “good money.”

Joe Junior now also can’t wash his clothes, eat food, or get to and from work as he no longer lives with his parents, so getting one of these “good jobs” is even more difficult.

So Joe Senior, are you really aware of all the facts and figures when you says things like buying your first home is “readily affordable” to young people?

Just slightly confused as to what you were thinking when you said these words at the media conference in Sydney.

Looking forward to another one of your politically correct, direct and well thought out responses.

Regards,

Another baffled Australian

IMF's Lagarde: Build on Greenfield Land

Wendell Cox — Mon, 09 Jun 2014 17:57:54 -0400

Christine Lagarde, the Managing Director of the International Monetary Fund cited the need for housing market reform at the conclusion of discussions with the government of the United Kingdom on Friday, June 6.

The housing market in the United Kingdom has experienced a long and continuing escalation in prices relative to incomes, largely due to the nation's strict urban containment policies that date from the 1947 Town and Country Planning Act, and significant further restrictions put in place during the Blair government.

According to Ms. Lagarde:

"But rising house prices fundamentally reflect demand that greatly exceeds supply. Addressing imbalances in the housing market by alleviating supply-side constraints will require further measures to increase the availability of land for development and to remove unnecessary constraints on land use."

The Daily Mail further reported that Ms. Lagarde "called for ‘unnecessary’ restrictions on building on greenfield sites to be lifted, so the supply of houses can be increased. This, she said, would help stabilise prices.

The United Kingdom's restrictive land use regulations have been a model for restrictive land use regimes from Sydney to Vancouver, Auckland, Portland and California. They have been responsible for driving up house prices relative to incomes, which reduces household discretionary incomes. The result is lower standards of living and higher rates of poverty. London School of Economics professor Paul Cheshire has concluded that urban containment policy is irreconcilable with housing affordability.