[Electronic-LAN] Vox.com: The pro-housing consensus that wasn’t
Gary Webber
gkwebber at gmail.com
Sat Dec 7 12:02:41 CST 2024
Kirk, thanks so much for this illuminating analysis, and for replying to
my shared Vox article. Lots to think about here! Your insight is very
helpful.
Gary
On 12/7/2024 8:18 AM, McClure, Kirk via Electronic-LAN wrote:
>
> Eric, Kyle, Bryan, Sheri and all,
>
> Let me try to address your questions as best I can.
>
> /Expansion of the Lawrence Budget/
>
> There is little doubt that the budget is growing. I follow Chad
> Lawhorn’s stories on the overestimation of expected sales tax
> revenues. But municipal budgets are not my expertise. Like all
> residents of Lawrence, we expect our property taxes to grow over time,
> but the growth should remain in sync with the growth in incomes.
>
> /Did Minneapolis add more units and lowered rents as a result/
>
> The numbers in this chart look suspect. I checked the American
> Community Survey (ACS) numbers for 2018 to 2023 for Minneapolis and
> Kansas City. The ACS is a 1% survey conducted by the Census Bureau
> each year. It is very reliable. The time period in the chart is a
> little doubtful because it contains the pandemic years which created
> turmoil for the housing industry. Volatile numbers make it possible
> to compare a non-normal peak with a non-normal valley to get a false
> reading. Ignoring that issue, rents in Minneapolis rose by 27.7% over
> this period while they rose 31.4% in Kansas City. Inflation rose by
> 31.8 percent. Thus, rents rose comparable the growth in prices in KC
> while Minneapolis rose about 4 percentage points below the pace of
> inflation. This is good for Minneapolis, but it is hardly a large
> difference, Rents remain 10% higher in Minneapolis. Thus, even with
> a small drop in rents, they remain high. On the growth in the stock
> of units, the KC metropolitan area expanded its stock of units at a
> pace that was 14% higher than the growth in households; Minneapolis
> grew a little _less rapidly_ at 12% faster than household growth.
> These numbers do not suggest to me that Minneapolis expanded its
> stock faster or caused its rents to fall significantly as a result. I
> recently read a study indicating that the revised zoning in
> Minneapolis resulted in a home price _increase_ due to the expanded
> development options in the formerly single-family zones. As I
> mentioned earlier, it will take years to assess the true effects of
> the Minneapolis upzoning program.
>
> /Has my work been critiqued?/
>
> Yes, the paper that Alex Schwartz and I wrote was published in
> /Housing Policy Debate/ as a forum piece which means 4 experts were
> asked to review the paper with their reviews published after the
> article. Alex and I were given the opportunity to respond. None of
> the reviews agreed with us, but none found fault. Each seemed to make
> arguments suggesting that multiple and varied definitions of a
> shortage exist. We agree that many definitions of a shortage can be
> devised, but the core of the concept of a shortage is too few units to
> house the population. Since at least 2000, the housing stock has
> grown faster than household formation which has grown faster than
> population. Households can form faster than population growth only
> where the housing supply is adequate. If the stock expands slower than
> population growth, households could not form, household size would
> increase, and overcrowding would worsen. None of these have happened.
> The affordability problems we face result from high prices and low
> incomes, not a scarcity of housing.
>
> /Would a better measure be the units available for sale?/
>
> The answer depends on the question being asked. If the question asks
> if we have enough units to house the population, the units for sale
> does not answer this question. If the question asks if we have enough
> units to permit those seeking to buy a home a large array of choices,
> then the units available for sale is the better measure. Since the
> pandemic, the pace of growth of new units has been slowed by high
> interest rates, labor shortages and supply chain issues. This is a
> problem for households seeking to buy a new home because they have
> fewer choices now than in the past. This problem is compounded by
> fewer existing homes offered for sale because of the recent spike in
> mortgage rates. If you have a 3% interest rate on your mortgage, it
> makes sense not to move because a new mortgage will cost 6.5%.
> However, that prospective homebuyers do not have as full an array of
> choices does not mean that they do not have a home. We do not have a
> shortage of homes, but we do have fewer homes on the market compared
> to the past. To a realtor, this is a shortage. To me, it is a
> short-term problem for which the Harris campaign proposed good
> solutions, and the Trump campaign did not.
>
> /What about Short-Term Rentals (STR) such as AirBnB?/
>
> The research on this issue is scant. There is no high-quality database
> on the STR stock. I have done a quick search on Google Scholar on the
> impact of STR units on prices and find little. Most of the research
> looks at the impact of STR units on hotels. I could find no research
> indicating that banning STR units lowers home prices or rents. Most of
> the research is conducted in tourist destinations with high demand.
> None seems to be very instructive for Lawrence.
>
> /Some may conclude from my work that government need not act./
>
> All researchers suffer from this problem. Any piece of research can be
> misinterpreted. My work is focused on designing the solutions to the
> affordability problems of our housing markets. Too many people
> conclude that affordability problems are fueled by high prices which
> are due to scarcity. They see the solution as building more units.
> My work says that affordability problems are fueled by high prices and
> low incomes but not by a scarcity of housing units. I see the
> solution as attacking high prices and raising wages with no need to
> build units any faster than we have over the last few decades.
>
> I hope this helps.
>
> All the best,
>
> Kirk
>
> **
>
> *Kirk McClure*, Ph.D.
>
> Professor Emeritus
>
> Urban Planning Program
>
> University of Kansas
>
> mcclure at ku.edu <mailto:mcclure at ku.edu>
>
> *From:*Eric Kirkendall <kirkendall1 at gmail.com>
> *Sent:* Friday, December 6, 2024 1:58 PM
> *To:* ELECTRONIC-LAN <electronic-lan at lists.ku.edu>; McClure, Kirk
> <mcclure at ku.edu>
> *Cc:* Kyle Thompson <kthompson at sunflower.com>; Bryan Mann
> <bmann4 at gmail.com>
> *Subject:* Re: [Electronic-LAN] Vox.com: The pro-housing consensus
> that wasn’t
>
> Kirk, thank you very much for sharing actual data about Lawrence
> housing. If the City Commission would make fact-based decisions, we
> would all be better off.
>
> Perhaps we could even slow the incredibly fast growth in the city
> budget (driven in part by foolish subsidies to apartment developers)
> but I won't hold my breath.
>
> Here's my swag at recent budget increases. The data is buried and very
> hard to find in City of Lawrence records, so I can't guarantee it's
> 100% correct and would appreciate better info if anybody has it.
>
> Regards, Eric
>
>
>
>
>
> On Thu, Dec 5, 2024, 4:39 PM Bryan Mann via Electronic-LAN
> <electronic-lan at lists.ku.edu> wrote:
>
> Hi Kirk,
>
> I have a few questions about your housing units vs. the population
> change numbers you shared.
>
> What if the units are not used for long-term housing but for other
> purposes, such as Airbnb? Wouldn't a better measure be the
> available supply for homeowner purchase? How do other forms of
> housing commodification (like short-term rentals) affect pricing?
> It must have an effect, but I have yet to do any research to learn
> what that effect might be. Can you point me in the right direction
> to find work like this? Does banning Airbnb in cities (it has
> happened around the world) ever put downward pressure on pricing?
>
> Thanks,
>
> Bryan Mann
>
> On Thu, Dec 5, 2024 at 4:18 PM kthompson--- via Electronic-LAN
> <electronic-lan at lists.ku.edu> wrote:
>
> HI,
>
> Let’s try attaching my chart!
>
> Thanks,
>
> Kyle Thompson
>
> kthompson at sunflower.com <mailto:kthompson at sunflower.com>
>
> 785-331-5783
>
> *From: *Electronic-LAN <electronic-lan-bounces at lists.ku.edu>
> on behalf of kthompson--- via Electronic-LAN
> <electronic-lan at lists.ku.edu>
> *Date: *Thursday, December 5, 2024 at 3:42 PM
> *To: *McClure, Kirk <mcclure at ku.edu>, Listserv of the Lawrence
> Association of Neighborhoods (LAN)
> <electronic-lan at lists.ku.edu>, Sheri Ellenbecker
> <sheriellenbeck at hotmail.com>
> *Subject: *Re: [Electronic-LAN] Vox.com: The pro-housing
> consensus that wasn’t
>
> HI Kirk,
>
> Has your work been critiqued by any groups like Strong Towns
> or any of the large coterie of urbanists?
>
> According to this chart, something is happening in
> Minneapolis. My understanding is that it is predominately
> Transit Oriented Development and not infill duplexes and
> triplexes. Note: Minneapolis is a college town.
>
> I think people will cite your work and say, “See we don’t need
> to build more housing”, without looking at your concerns about
> zoning and subsidizing certain forms. I do believe that only
> through more density, sprawl can be contained and more
> affordable housing can be built. Since LAN is concerned about
> the LDC, do you have criticisms of it or are you generally in
> favor of it.
>
> Thanks,
>
> Kyle Thompson
>
> kthompson at sunflower.com <mailto:kthompson at sunflower.com>
>
> 785-331-5783
>
> *From: *Electronic-LAN <electronic-lan-bounces at lists.ku.edu>
> on behalf of McClure, Kirk via Electronic-LAN
> <electronic-lan at lists.ku.edu>
> *Date: *Wednesday, December 4, 2024 at 10:39 PM
> *To: *Sheri Ellenbecker <sheriellenbeck at hotmail.com>,
> ELECTRONIC-LAN <electronic-lan at lists.ku.edu>
> *Subject: *Re: [Electronic-LAN] Vox.com: The pro-housing
> consensus that wasn’t
>
> Sheri and all,
>
> Good questions.
>
> Households versus families. Terminology is always tricky. In
> the housing field, we all stick with the definitions used by
> the Census Bureau. A household is one or more persons who
> occupy a single housing unit. A family is two or more persons
> related by blood or marriage. A family usually lives in a
> single housing unit, but a family can be spread across
> multiple units. A household may or may not be a family. A
> household can be a single individual living alone, or a
> household can be 2+ people who may not be related by blood or
> marriage.
>
> The “missing middle” and the “entry level home.” It is true
> that low-cost starter homes, duplexes and townhouses are not
> being built in great numbers. Some people blame zoning.
> Minneapolis recently eliminated single-family zoning in an
> attempt to promote greater mixing of housing types and price
> levels. It will take years to see how much, if any, effect
> the elimination of single-family zoning will have.
>
> NIMBY. The sad reality is that existing homeowners do not
> want low-cost housing built in their neighborhoods out of fear
> that the low-cost units will lower the value of the existing
> higher-priced units. Whether through zoning or other means,
> existing homeowners will fight to protect the value of their
> homes. This is a political roadblock that is hard to overcome.
>
> Subsidies for developers. It is very costly for the
> government to subsidize builders to construct lower cost
> housing units. It is nearly always less expensive for the
> government to help low-income households purchase units
> already in the market.
>
> New units versus existing units. New units are only a very
> small part of the total housing stock, and very few households
> ever own a new home. Existing units in good shape can meet the
> needs of the low-income at lower cost to the taxpayers. It is
> generally more cost effective and easier to overcome NIMBYism
> to subsidize low-income homebuyers purchase and renovate
> existing homes than it is to subsidize homebuilders to build
> new homes for low-income homebuyers.
>
> Raise wages. I have often said that nothing fixes a rooftop
> better than a paycheck. The single most effective housing
> program is raising the minimum wage. California recently
> adopted a $20 per hour minimum wage. Housing analysts will be
> watching because when a household earns $40,000 or more,
> affordability problems tend to go away.
>
> I hope that this helps.
>
> All the best,
>
> Kirk
>
> *Kirk McClure*
>
> Professor Emeritus
>
> Urban Planning Program
>
> University of Kansas
>
> mcclure at ku.edu
>
> ------------------------------------------------------------------------
>
> *From:*Sheri Ellenbecker <sheriellenbeck at hotmail.com>
> *Sent:* Wednesday, December 4, 2024 3:06:20 PM
> *To:* McClure, Kirk <mcclure at ku.edu>; ELECTRONIC-LAN
> <electronic-lan at lists.ku.edu>
> *Cc:* Gary Webber <gkwebber at gmail.com>
> *Subject:* Re: [Electronic-LAN] Vox.com: The pro-housing
> consensus that wasn’t
>
> Thanks. That is very enlightening data that you’ve shared.
> Some incomplete thoughts that I have had are that often a
> family has two houses because the family is not one unit. Does
> that count as two household then? Another thing that has been
> in the back of my mind is that there is no incentive for the
> builder to build a moderately priced home. They make a lot
> more money on more expensive homes I think. so the little slab
> ranchers that we rented when we were first married are no
> longer being built. The bedrooms were small. The bathrooms
> were small and they had an eaten kitchen. That served us
> nicely then it seems like those are not even being built now
> as single-family dwellings. And I do believe that most people
> want to have a single family dwelling as opposed to an
> apartment when they have a family. Maybe that is something
> that is no longer possible in America. But I think in small
> town America like Lawrence Kansas that is what people want. Am
> I right in that? I think that if there was a way for the city
> to offer an incentive to build these types of homes , maybe
> more people could afford them. Also, there’s another way to
> look at this and that would be to raise wages.
>
>
>
> On Dec 4, 2024, at 2:58 PM, McClure, Kirk via
> Electronic-LAN <electronic-lan at lists.ku.edu> wrote:
>
>
>
> LAN members,
>
> I just want to chime in on the affordable housing issue.
> As a former member of LAN from Old West Lawrence, I
> continue to follow the good work of the association. I
> also am a retired professor of urban planning who
> specializes in affordable housing.
>
> The books mentioned in the Vox.com article are all
> noteworthy, but they probably are not the best research
> available in the area of affordable housing. The authors
> of these books all come to the field of housing with
> limited knowledge of how housing markets behave, and these
> authors have a great many predispositions. All are
> predisposed to think that the price of housing is high
> because the supply is scarce. In many good and services,
> this may be true; it is not true in housing. Careful
> examination of the data show that there is no shortage of
> housing in nearly all of the 916 metropolitan areas of the
> nation, including Lawrence.
>
> Some quick facts from the Census, the most reliable source
> of population and housing data:
>
> /Item 2000 2020 Change Percent Change/
>
> Population 80,083 94,934 14,851 19%
>
> Housing Units 32,792 43,421 10,629 32%
>
> Households 31,435 39,688 8,253 26%
>
> Housing growth outpaced both population and household
> formation. Thus, there is no housing shortage in
> Lawrence. But prices are high here as they are throughout
> the nation.
>
> Prices are high for reasons other than scarcity. Our
> building codes demand that housing be built to high
> standards which increases prices. Our capital gains tax
> laws favor investment in owner-occupied homes making homes
> the single largest component of household net worth which
> contributes to upward pressure on prices. As a
> household’s largest investment, homeowners protect their
> investments with zoning codes that exclude lower-priced
> homes contributing to upward pressure on home prices.
> Supply chain problems, labor problems and high interest
> rates have contributed to recent increases in the costs of
> building new units which also contribute to upward
> pressure on prices. The upward trend in prices outpaces
> the growth of incomes, especially for poor households who
> tend to be renters.
>
> The housing affordability problems of Lawrence (and nearly
> all metropolitan markets in the nation) result from low
> incomes and a housing market that cannot produce housing
> affordably priced for the low-income households. What
> this means is that we cannot build our way out of the
> housing affordability problem. Adding large quantities of
> housing units will not lower housing prices.
>
> We can help to resolve housing affordability problems with
> rental assistance (Housing Choice Vouchers) and low-income
> homebuyer assistance (downpayment assistance and
> below-market interest rate loans).
>
> There are exceptions. Special needs households and the
> homeless have problems that are best addressed by building
> housing that fits their special needs. However, for the
> vast majority of the population, the market has already
> built the housing that is needed; we need to help the poor
> pay for the housing that already exists.
>
> I hope that this helps.
>
> All the best,
>
> Kirk
>
> **
>
> *Kirk McClure*, Ph.D.
>
> Professor Emeritus
>
> Urban Planning Program
>
> University of Kansas
>
> mcclure at ku.edu <mailto:mcclure at ku.edu>
>
> *From:*Electronic-LAN
> <electronic-lan-bounces at lists.ku.edu> *On Behalf Of *Gary
> Webber via Electronic-LAN
> *Sent:* Wednesday, December 4, 2024 12:23 PM
> *To:* ELECTRONIC-LAN <electronic-lan at lists.ku.edu>
> *Subject:* [Electronic-LAN] Vox.com: The pro-housing
> consensus that wasn’t
>
> https://nam10.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.vox.com%2Fpolicy%2F389431%2Fhousing-affordable-homes-yimby-nimby-shortage-construction&data=05%7C02%7Celectronic-lan%40lists.ku.edu%7C99dfda0d096243856b2c08dd16e95a33%7C3c176536afe643f5b96636feabbe3c1a%7C0%7C0%7C638691913695677839%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=3goG%2FjjYjtdFhvOqdCeJ2t9muafpCWaY%2FcmsqsKRThE%3D&reserved=0
>
>
> I suggest reading this article from Vox (link above),
> which summarizes 3 new books on housing trends in the U.S.
> It provides an excellent review of the history of housing
> that got us where we are today, and the possible paths
> proposed to improve the situation.
>
> Gary Webber
>
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