Friday, September 17, 2021

The cage match goes wild

This is Joseph

Mark had a thoughtful reply to me here. In response I am going to make a strong argument that there is a very simple way to find places to increase density. Build where the prices are high. Not just the cities where the prices are high. I mean the residential neighborhoods with the highest underlying cost per square foot of residential land.

Housing tends to be a ladder. If there is a great new apartment building in Georgetown then people will move there (with its proximity to all sorts of great things) and that will ease pressure from gentrification in Anacostia. It is close to a lot of amenities and people want to live there -- the median house price exceeds a million dollars. This is more than double that of Anacostia

Georgetown lacks a metro station, it is true, but that could be remedied with political will and how better to generate than than the residents of a high resource area? If you try an experiment in Watts (a Los Angeles neighborhood) that doesn't work so well, there is a lot less pressure to implement fixes. 

That said, the environmental issues do matter. It is unclear whether we need more density in New York city, for example, given rising sea levels and already high levels of density. It is probably a good case for stewardship of the infrastructure that is there and some tough thinking about sea walls. This is a good argument for the "every case is different' and the reason why a national conversation is so hard. Seattle has a completely different risk from climate change than New York City or Miami, due to geography alone. Denver can probably ignore any plausible amount of rising sea levels, but might care a lot more about drought. 

This issue is not just a US issue -- look at the changes in London Ontario housing prices

This is a mid-sized city with a mid-ranked university and a 9-10% unemployment rate. Rents are also spiking, so it isn't just houses that are becoming expensive. Unsurprisingly, London now has a growing homelessness problem. And really, that is the entire game. The real reasons that you have had the rise of the density movement is not that crowded is good, it is that there are a limited number of ways to combat the escalating cost of housing that is slowly crushing young people and generating housing problems for people on the margin. 

I remain open to alternative proposals that would drop the cost of housing, I am just worried that car commuting is hitting structural limitations, cars are getting a lot more expensive, and that dense housing is the best shot to drop prices. Very happy to lose in the next round of the epic cage match! 

EDIT: Mark pushed back hard on the September 16th post on using neighborhood examples, which were in this post before I had a chance to read his second post. I think that this exclusion of examples puts one in a hard spot. Real estate is unusual in that every case is always different in some details (no two pieces of land have the same geometry, for example). 

So one can argue that my Georgetown example is one small parcel of land. But DC is extremely expensive (see million dollar median home prices cited above) and has a huge height limit. There are buses, metros and all-season walkability, with many employers in walking distance from NW DC. 

I think the crux of NIMBY versus YIMBY is the question of whether people living in an expensive neighborhood have the ability to increase housing costs, via scarcity, at the cost of limiting the rights of others to develop property that they own. Obviously YIMBY have daft ideas, but the London, Ontario example is a great case of an entire city tripling housing costs and seeing rents go up by as much as 15% per year. The city has 380K inhabitants (and is surrounded by farmland not other developments), so it seems unlikely that the city has simply hit the carrying capacity of a city, beyond which cars cannot work, while simultaneously being unable to develop transit alternatives. 

Los Angeles is a terrible example because Los Angeles county is a complex metro area with non-trivial geography issues and ten million inhabitants. Similar issues are true for New York City and San Francisco. The real canary in the coal mine is the huge cost increases (and consequent rise in homelessness) in cities that are small, have plenty of road capacity, no geographical constraints (London is on a plain, surrounded by farms), and that did not suffer any of these issues 20 years ago.

Now it is true that one apartment building in Santa Monica isn't going to change things. But something is going very wrong if even small cities are seeing these huge increases in housing costs. 


  1. Not to be snarky (that comes in the next post), and I don't know anything about LO that you can't get from Wikipedia, but it would not seem to be one of those cases where "people living in an expensive neighborhood have the ability to increase housing costs, via scarcity, at the cost of limiting the rights of others to develop property that they own."

    • Land 420.57 km2 (162.38 sq mi)
    • Urban 232.48 km2 (89.76 sq mi)
    • Metro 2,662.40 km2 (1,027.96 sq mi)
    Elevation 251 m (823 ft)
    Population (2016)[3]
    • City (single-tier) 383,822 (15th)
    • Density 913.1/km2 (2,365/sq mi)
    • Metro 494,069 (11th)

    1. I always have mixed feelings about converting land from agricultural to residential but normally that's where market forces would go. (Not so long ago, a lot of LA was orange groves.)

      Not sure if I see where the scarcity comes from.