Teacher Housing and the Rot
I recently saw that San Francisco is considering fast-tracking residential development dedicated to teacher housing. There are quibbles between the moderate mayor and the progressives on city council (“Board of Supervisors”) over the exact structure of the housing subsidies, but both sides agree at least in theory that it should be easier to build housing for teachers; for more background, see article here and Twitter back-and-forth here. I bring this up because it’s an example of bad governance at the local level in the US, one that sends everyone the message, “you should get more clout to bribe politicians.”
The basic problem is that market-rate housing in San Francisco is extremely expensive; in the Mission, a two-bedroom apartment rents for about $5,000 or $5,500 a month. There’s rent control, but it requires one to have lived in the city for a very long time – friends who have lived in the city since the mid-2000s pay around $2,700, which is borderline on a teacher’s salary. Usually the city’s local notables don’t have to care about whether housing is affordable to people in intermediate professions, since our rent is their property values, but “teachers can’t afford housing here” could be a rallying cry for more housing. Thus, they feel like making an exception.
Making an exception is the hallmark of populist governance. In a system with not much rule of law and no trust that there will ever be rule of law, people don’t ask for better rules but to benefit from exceptions. That various exporters threatened to leave Britain over Brexit did not faze Theresa May – every time a company people didn’t hate made such a threat, she offered special subsidies to stay no matter what would happen with the trade agreement with the rump-EU.
The problem with populism is that it sends the message, invest in political marketing and not in productivity. A company that sees that San Francisco is subsidizing housing for teachers in preference to other workers with similar pay and skill level – clerical workers, social workers, lab techs – gets a clear incentive to give its workers more political prestige through political contributions, sponsorships of events the local politicians are interested in, etc. It faces less pressure to invest in its productivity and pay its workers better, since housing is not allocated by market pricing but by political whims.
Under liberal governance, if San Francisco wishes to give its teachers perks, it can pay them better. Programmers get paid $110,000 a year plus benefits (stock options, good health insurance, free food), and the city can if it wants raise taxes and pay teachers similarly; if it can commit to maintaining such high pay indefinitely it can ensure the profession will get more prestige and attract people who otherwise would be writing code for how to sell user data to advertisers slightly more efficiently.
However, a tax hike might fall on the local homeowners and on other rich people who have invested a lot of time and money in obtaining political influence. To avoid burdening the powerful, the city can’t do this – it has to come up with some one-off bespoke deal for teacher housing, rather than permitting more housing across the board and also raising salaries to be competitive with those of the private sector.
Improving the quality of governance requires making it harder for politicians to create such deals. The original YIMBY praxis of state preemption laws is one way to do this: it completely takes local notables out of the loop. While the YIMBY groups on the ground in California don’t go further with this, their favorite state politician, Scott Wiener, who represents San Francisco in the State Senate, is consciously trying to form an informal state party with some ideological coherence based on relevant state issues, led by the question of housing.
It may be prudent to refine this preemption doctrine by interfering with local rules that favor some groups over others in housing. Thus the state should pass a preemption law that forbids dedicated housing for teachers, cops, or other charismatic professions, and requires all housing to be allocated by market pricing, or, failing that, by a clear process of rent control, such as waitlists or income limits. Private actors may continue to buy and sell housing based on their wishes, subject to the usual anti-discrimination law, but municipalities may not use incentives such as subsidies, tax breaks, access to public land, or special fast-tracking of approvals. Such a law may well succeed in the state legislature – unlike the SB 50 process preempting zoning restrictions, this law would not be nakedly offensive to the privileged group of suburban homeowners who managed to scuttle SB 50.
It is not really possible to develop rule of law in an environment in which powerful people can easily circumvent the rules. A city that can offer a way out of an onerous permitting regime to people who make it attractive offers – that is, bribery – has no incentive to make the permitting regime easier, and a powerful incentive to keep it as it is. If building housing becomes easier, politicians lose the ability to extort community benefits by threatening to withhold permits. And if there is a way out for socioeconomic classes that demagogues can’t dismiss as gentrifiers, transients, and rootless cosmopolitans, then politicians gain the ability to threaten everyone else, while employers as well as nonprofits get a powerful message that they should pay more bribes. It’s a win-win for everyone except the hapless residents governed by such corruption.
The question is whether area YIMBYs are willing to leverage the one point of power they do have – namely, their connection to nationwide ideological networks that the local notables of these cities pay lip service to. Out of four New York Times op-ed writers who online liberals like, two (Paul Krugman, Jamelle Bouie) have openly called for more housing in cities, and two (Charles Blow, Michelle Goldberg) have never opined on this issue; NIMBYs have ample local power but little national clout. YIMBYs have this advantage and need to press it to completely sideline machine politics and personality politics – that is, to form a coherent, identifiable political party in California (or New York, or Massachusetts) contesting state and local elections, and if winning local elections without assimilating to the local rot is not possible then work to delegitimize government below the state level as irredeemably corrupt.
Pedestrian Observations 
Housing is a big issue in America that is finally getting some political attention. I had a letter-to-the-editor in the Wall Street Journal on the issue printed on Wednesday — recommending as one solution that seems to be overlooked in the USA; having the public sector build rental housing that is open to all citizens like in Singapore and Sweden. Its not the only solution, but one that should be undertaken along with addressing zoning and building codes.
On Rent Subsidies and Affordable Housing (scroll down past rail article)
https://housingnews.org.ng/category/opinion/
Sure, let’s discuss how it works in Singapore and Sweden.
Singapore:
– HDB blocks have pretty low standards, like elevators stopping every other floor in the older buildings.
– Immigrants pay way more in rent than citizens.
– The state uses its control of who gets access to housing to engage in social engineering, e.g. forbidding single mothers to get family housing because the state prefers married couples with children.
Sweden:
– The Million Program was built at a time when overcrowding was common in the white working class.
– Housing is allocated by how long you’ve been in Sweden, so recent immigrants are sent to exurban ghettos with a surplus of housing and no jobs.
– Rent control increases segregation on every metric (education, immigration status, etc.) except income.
– Taxes are high to support rent subsidies and were historically extremely high to support the Million Program and other postwar Social Democrats-run programs.
So is this just an argument against the particular administration of Singapore and Sweden’s public housing programs, or are you sceptical of all publicly-provided housing?
The latter. As soon as you give the state the power to decide who gets priority for housing, it will abuse it. There’s no market failure in housing, so just pass some safety regulations and let private developers do the rest.
So are you saying *ZERO* state-provisioned housing? I think, at least in terms of housing for very low incomes, it has a role.
People with very low incomes need money, not government bureaucrats micromanaging their consumption based on middle-class standards of respectability: X for food (as in the American food stamps program, which lets you buy canned food but not can openers), Y for housing, whatever.
That’s a laugh — where is the incentive for private developers to build affordable housing when for about the same amount of money you can sell units for what ever the market will bear? I mean as a private developer why would you sell for a price less than what many people are willing to pay?
Lots of apartments and condos are being built where I live, but rents are mostly set above those of working class people. For service industry workers housing is a big issue. Where I live many commute great distances or shack up with friend or their parents. Some of the single-mothers get public assistance.
There is no one solution I think — reforming zoning laws for higher density and inclusionary zoning all are good ideas — but why not have the public sector also build units? This could be done in cooperation with private sector partners in a design-build-manage partnership; the government providing land and the upfront costs of construction with the private sector its expertise. Include a mix of affordable and market rate units to provide an incentive for the private partner to keep the property up. Include daycare facilities and ground floor retail. Build up mix-income buildings and neighborhoods. How is that a bad idea?
Because the public sector is incredibly politicized and faces no incentive to build for people who don’t have clout – including poor people. The bulk of the muh affordable housing NIMBYs are equally opposed to affordable housing on muh property values grounds, and you see this with the opposition of nominally left-wing community groups in California to SB 35 (which simplifies approvals for housing that’s at least 50% affordable) or that of nominally left-wing activists in New York to homeless shelters.
With infrastructure, dealing with the politicized crap is necessary because there’s no other way to build it this side of 1910. Housing isn’t like that – the private sector can build it and, given sufficient liberalization, do so at price points that are affordable to the working class. The US also has higher housing construction costs than Europe, not just infrastructure costs, but the premium is pretty small – it’s nothing like the mess of bad procurement, mismanagement, design by committee, and overbuilding that afflicts everything the public sector touches. (And for what it’s worth, in New York the biggest construction disaster, the new WTC, has had a lot of public involvement thanks to Port Authority.)
“China builds High Speed Rail and is a bad communist regium — so that is why we don’t need HSR in America. Passenger rail is social engineering.”
Mr. Levy sound like George Will — Your argument against public housing is the same used by Conservatives against public transport.
You realize the social engineering I’m accusing Singapore of is reactionary rather than progressive, right? I’m not saying public housing turns people into socialists (i.e. Will’s ridiculous argument), I’m saying that it gives the state the power to decide which households are worthier than others, and in Singapore this means traditional patriarchal families. This bullshit happens even with health care (as in Britain’s recent yanking of certain gender transitioning treatments under TERF pressure) and education (as in widespread pro-colonial education, e.g. in France), but in health and education, as in infrastructure, there’s no alternative to state provision, whereas in housing there is.
I’d have to say that that is slightly crazy, ie. counter-rational. One has to compare the alternatives, and we can see them graphically in Hong Kong, London, NYC and SF, even in Sydney. One can have all sorts of complaints about Singapore and its housing system, but nevertheless, like Churchill’s democracy, it’s almost certainly better than all the rest. If you have provided a viable alternative I haven’t perceived it.
Even if more housing was built in these places, if it was by the private sector it won’t satisfy the need by the bulk of the inadequately-paid. That’s the “free market”. There is no substitute for some public housing that caters for a significant sector of necessary workers that no one in the private sector is interested in. Indeed in London the developers will fight against even 5% of the units in any development being “affordable”; in high-value (over-valued) markets they always win. One can nitpick about the quality of the housing built, but the post-war building of massive social-housing everywhere, including the rich west and the NICs, did actually improve the living conditions of the lower stratas of society.
HK & Singapore were two of the most successful examples, and the reasons for their current problems are cessation of the program (HK stopped after the 1997 handover when vicious short-termism kicked in) and the excessive financialisation of property (both Singapore and HK). In the UK it was Thatcherism that stopped building social (council) housing, allowed councils to sell off, at knockdown prices, of same to the lucky tenants (a one-off lottery of time & place) but then made sure none of the proceeds were retained by councils so it could be recycled into new affordable housing (plus of course crazy financialisation of property).
I hesitate to use Paris as an example because it doesn’t fit most of the stress points we see in these other cases. For example, it hasn’t reached the same crazy prices and this is because it hasn’t gone for the nutty unsustainable financialisation model of the Anglosphere or its legacy in places like HK and Singapore. It has a large capacity to fill its needs outside the core, and the disadvantages of these locations are not so great as most big cities because it has spent the past 50 years building some of the best transit, which is going to be even better for the periphery quite soon (GPX).
But Paris’ version, or alternative, to building social housing–which it can’t do because it is pretty much out of land or building opportunities–is its current scheme, intended for essential workers (teachers, police, nurses etc):
Now, there are all sorts of issues with this scheme but they aren’t really the ones you are complaining about. The cost is not that high averaged over the timescales involved, and should reduce once it is established. I would say the main counter-argument is, as I gave, that in some ways it shouldn’t be necessary given the cheaper housing in the near-suburbs and good transit. Another argument is that the scheme is not that large (8,000 in a city of about one million households). Of course the counter-counterargument is the one Hidalgo and other socialists make: don’t let Paris turn into a rich ghetto because it will surely be the poorer (sic) for it.
The other model that we can’t assess yet, is what is happening in your current city Alon. I would just say that the notable commonality about these schemes is that none of them relying upon market mechanisms. For the simple reason that we know exactly where that leads.
Tokyo is a lot better at this than Singapore. More housing production per capita, at least in Tokyo-to, not sure about the suburban prefectures. And also no in-built discrimination mechanisms; there’s a bunch of private-sector discrimination but at least one element of it, key money, is in decline as rent-to-income ratios are falling over time thanks to new construction.
Yes, Paris is building social housing with less Singapore-style bullshit. Problem is, there isn’t enough housing in Paris – construction rates are low because it has Western norms of historic preservation (Jussieu is landmarked!) rather than Asian ones. Moreover, social housing is extremely stigmatized, as in the US and unlike in Singapore.
“affordable housing” is a perfect example of what Alon’s post rightly opposes. Rather than increased productivity (i.e. the market making all housing cheap like it did in Tokyo), “affordable housing” means a lot of effort is invested in obtaining patronage for a small number of people who will live in “affordable” units, while an equal amount of effort is invested in opposing this by builders who want to maximize their profits, negotiations drag on for years as each side tries to press its advantage, and in the end little housing of any type is built and the masses suffer from high rents and the only people who win are the lawyers.
Eric must be talking about American litigation culture. Elsewhere if the state, whether Singapore, HK (if they actually chose to), France or Germany etc decided to build it, they would just do it. It would be law and “resistance would be futile” –and it wouldn’t happen (ie. resistance). The only people who object are the developers not the builders/construction companies or the workers they employ. Of course the US has a property developer/speculator as prez so what you say may well be true. IIRC, the former mayor of San Francisco was a developer too.
I am not convinced by any arguments re Tokyo as it and Japan are just too exceptional. Japan has falling population while Singapore is still growing strongly, through controversial immigration; as in Australia, this creates a Ponzi scheme that the financial system gets addicted like it was fentanyl, and of course it drives up property prices. (And like fentanyl it just might kill the patient: Australia has the world’s second highest private debt as %GDP, almost entirely mortgage debt.) Tokyo grew via a very different mechanism–urbanisation–even as its national population fell. This means there would have been a lot of vacancies (empty homes or inherited) from natural death in Tokyo (combined with urbanisation it is leaving ghost towns in the rural areas). Japan is also the oldest nation. Even if their housing situation is considered a “success” (and I’m unconvinced) I am not in favour of their peculiar laissez-faire building regulation etc. Combined with this forever sprawl and its long commutes etc that Tokyo-ites are apparently willing to live with, it means there is no real pressure via demand. In fact, as I reported on this blog a while back, Tokyo is destroying perfectly good housing in their Danchi 14-storey apartments; apparently this is exactly because of owners dying and few buyers. The Japanese also have a slightly peculiar attitude to homes in that they are only designed to last 30 years, and are effectively valued at zero by 20 years old! The only change to this picture is that more recently the younger generation are placing more value on location and on living in “older” building, giving them a makeover rather than demolishing them.
Only post-war when the quality fell to crap. Earlier HLM or HBMs in Paris or NYC rough equivalents, like Stuyvesant Town-Peter Cooper Village where insurance companies/financial companies together with city assistance schemes built perfectly good housing that remains valued today. The low-rise but dense HLM/HBM of the interwar years, many on the land liberated from the Thiers wall, are perfectly acceptable and will outlive those post-war hi-rise concrete horrors (actually they already have outlived most of them). Those models should be revisited. Cut out the individual property developer/speculator.
It says a lot then that even though Japan’s population is falling (though immigration rates and birth rates are both rising – Japan will get you a visa if you get a job offer, unlike Canada or the UK with its hostile environment), Tokyo’s housing growth rate is faster than Singapore’s…
Also, Singapore has tons of litigation, you just can’t fight the government or any private actor who has the savvy to retain the services of the prime minister’s wife’s law firm. Beneath the top-level kleptocrats it’s your standard Thatcherist Anglo state.
More pithily, remember that when you say “the government”, right now the government is Literally Donald Trump. Do you really want Donald Trump in charge of who gets housing and who doesn’t, and where housing for various groups of people goes?
There is an argument to be made for low income housing. The argument is basically this: The middle class and upper class have enough housing, but the lower class doesn’t, and the best way to address that problem is with subsidies or additional housing. Alon makes a strong counter argument (just pay low income people so that they are middle class). We could debate that issue further, but it misses the point. There isn’t enough middle class housing in San Fransisco, or many other cities. Building or subsidizing the poorest residents doesn’t solve the problem. Neither does hand picking certain groups (teachers, cops, fire fighters, librarians, nurses) and granting them subsidized housing. There simply aren’t enough places to live. Expecting the government to build enough places to live while the private market is prevented from building middle class housing is silly. You can’t possibly solve the problem that way. At best a handful of people get nice places (and are the envy of others who didn’t win the lottery) while large numbers can’t afford to live there.
There is no question that income stratification is part of the problem. But when politicians feel that professionals who make 70 grand a year (and have the summer off) need a special housing voucher, the focus is on the wrong thing. Either high income earners are hoarding all the housing, or San Fransisco isn’t adding enough new units. Housing is different than food, in that hoarding is more common. A rich person isn’t likely to eat more apples, but he may decide to buy an entire floor (or even an entire building) in Manhattan. Compounding the problem is that there are plenty of people who are wealthy, but don’t have a large income. The reluctance of politicians to address either group — along with the reluctance to allow new buildings — compounds the problem.
You had to have a job to get into Stuy Town. Still do. Or the other developments Met Life and the other insurance companies built. Which was a good investment for the portfolio backing their insurance policies.
“People with very low incomes need money, not government bureaucrats micromanaging their consumption based on middle-class standards of respectability: X for food (as in the American food stamps program, which lets you buy canned food but not can openers), Y for housing, whatever.” – Alon Levy
I mean, absent *extremely generous* housing subsidy transfers to low income, in a high-demand concentric city I don’t see how low-income people with transfer income don’t still get out-bid for property close to the jobs. Unless you reserve a certain portion of land for the low income, which is what public housing does.
Dylon, the question is what “close” is. Most people consider a one hour commute acceptable. In NYC, one hour from Midtown by LIRR is about a 30 mile radius. The amount of people who can be housed by market forces without subsidies within 30 miles of Midtown is much larger than the population of the NYC metropolitan area. So there is no reason for low-income people to get outbid.
after you build the Cross Harbor Freight tunnel because until you do all the trucks have to use the Long Island Expressway which is a parking lot fairly often. The desalination plants will be expensive to build and run.
Right, but nothing wrong with that. This is about how even the middle-classes in some places are finding it impossible to find affordable accommodation. The indigent or severely impoverished are another matter (not saying it is not important). Stuyvesant Town-Peter Cooper Village has 11,0250 apartments for 25,000 residents, on 32 hectare, so that is not a huge amount of space for a city to find (or even, as I have suggested, San Francisco to create via land-reclamation from the bay). One would have to reserve set fractions of the development for different household income maximums etc.
Of course that NYC housing complex has got into trouble by being subject to “market forces”, ie. buy-out by giant financial (Blackstone) who then tries to hike rents by a huge amount, etc etc. .. which is a version of what Thatcher allowed to council housing. Anything facilitated by the state (meaning almost anything, via tax concessions etc) needs to be protected against that kind of rapaciousness .. and forever.
Also, as I have said many times here, I am not a fan of that kind of medium-to-high rise. It’s only 15 floors but a Haussmannian development and within normal street structure (with normal ground level retail etc) would perhaps be slightly less dense but much better kind of urbanism.
See, easy! Make me mayor of SF and I’d solve it in a year 🙂 (It would have to be in about 12 months because all the vested interests would be trying to assassinate me … but the city needs a Harvey Milk hero for a property revolution).
I’ll have to take your word on that since I am too lazy to go and check*. If those rates are rising it is from a very low base. Given their propensity to tear down 20 to 30 year old housing and rebuild, plus demolition of those danchi, are we talking about net addition? Or another statistic courtesy of their peculiar housing habits?
Regardless, I don’t know if it means a whole lot since Tokyo is close to ten times the population of Singapore and 20 times the area, so again I say that comparisons based on Tokyo have limited application.
*I remain sceptical about both claims but especially on immigration. Japan is 98.5% ethnically Japanese and all attempts to encourage significant immigration have failed. Singapore has 1.64m foreign workers (29% of total population) and another 522,300 (9%) foreign but now permanent residents.
Wiki data always lag but if there really is an uptick, it is probably just a blip on the downward trends, and not obvious from this graph:
https://en.wikipedia.org/wiki/File:Bdrates_of_Japan_since_1950.svg
Stuyvesant Town-Peter Cooper Village has 11,0250 apartments for 25,000 residents, on 32 hectare, so that is not a huge amount of space for a city to find
It was when the gas company abandoned the storage tanks. And the government said they had a plan and no one fought city hall. . Parkchester was a “farm” for a orphanage, they moved up to Westchester. Co-op City was a garbage dump, using that has turned out to be regrettable. Where are these big chunks of land nobody seems to know about? Aqeueduct Race Track? Racing isn’t what it used to be but I don’t think that would go over well. Where are these big chunks of land?
Thirty-two hectares is not that much. It’s approx. 0.32% of those various cities I listed for you earlier (diff. article), remember? In SF, it could be easily reclaimed within its own city zone. Or look at the redevelopment zone of Mission Bay, at 123 hectares they could have devoted a fifth of it to such a thing and/or reclaimed some adjacent bay as part of the scheme. Instead it is filled with hi-end condos for techies. (Incidentally, low-rise but dense Haussmannian building makes a lot more sense in SF and on reclaimed land because it is a awful lot cheaper than hi-rise to construct, and of course safer in an earthquake zone–witness the Millenium Tower which is sinking into the mud, becoming the Leaning Tower of SF.) Speaking of Singapore, it has created almost a third of its territory by such reclamation. HK is active too: I can’t find the area of the West Kowloon Reclamation (which has the 14 hectare Union Square with a claimed 70,000 residents–ok, v. hi-rise and expensive) but reckon it has to 3 km2. In NYC, Battery Park City is 37 hectares and devoted almost half of it to open-space and parkland (too much IMO) and has about 10,000 residents: it appears to be close to what I am suggesting:
“The Battery Park City Authority, wishing to attract more middle-class residents, started providing subsidies in 1998 to households whose annual incomes were $108,000 or less.”
However, as I am sure you realize, the local government must retain both the freehold (to the land) and master-developer status because the moment it is sold, never mind what the contract says, to a private developer the pressure is intense and ultimately irresistible to turn it into luxury condos etc to maximise profits. It wouldn’t matter if you built 64-floors, Hong Kong style, or whatever, it would be unaffordable.
michaelrjames,
Alon is right. Japanese cities have *net* housing growth that is higher than most other big cities around the western world.
You can find statistics here:
https://www.e-stat.go.jp/en/stat-search/files?page=1&layout=datalist&toukei=00200522&tstat=000001063455&cycle=0&tclass1=000001080435&result_page=1
Michael: first, Japan is 98.5% *Japanese citizens*; in the statistics, any Japanese citizen counts as Japanese regardless of ethnic origins. If you look at naturalized citizens and at estimates for people of Korean descent, Japan turns out to be around 5% ethnic minorities. Second, the immigration liberalization is very recent – it’s an Abe policy for stopping population decline; foreign professionals get naturalized more easily in Japan than in Western countries (except maybe Sweden?) nowadays.
OK, maybe 5% ethnically non-Japanese. Approx. 2% non-citizen immigrants. But Tokyo is growing due to internal immigration, approx. 2.7% in 2018, even though Japan’s population fell by 0.5%. I assume this is why there may be a net increase in housing (though I cannot clearly see it in the link Jason provided: that lists 76 categories each with its own downloadable Excel file, and that page is 2013 data! someone wants to convince me of something they, not me, need to do the work). I’ll accept there is net home construction.
I can’t see the immigration rate but the naturalization in 2015 was a mere 8,000. I doubt Abe’s relaxation of requirements is going to make much difference. Perhaps they are expecting/hoping the Olympics will entice more migrants?
My points remain that I can’t see how anything happening in the Tokyo mega-region has lessons for elsewhere, particularly Singapore. Unless one considers the Chinese-built Forest City artificial islands in Malaysia just near the bridge across to Singapore? Feasibly it could take overflow, especially of foreign workers, from Singapore? Seems a bit unlikely but I suppose there are precedents; apparently a lot of the foreign scientists who work at CERN inside Switzerland (the giant electromagnetic loop actually spans the two territories underground) live in France, because it is cheaper and perhaps “easier”. I think some people who work in Basel live in Germany for the same reasons.
You’re saying a lot of things about Japan all of which suggest that it should be harder for it to build more housing rather than easier, and yet Tokyo builds more than Singapore per capita as well as more than any European city, even net of demolitions. Only Stockholm comes close among cities for which I have data, and Stockholm builds a lot in the contexts of a very high migration rate and extremely high market rents incentivizing all sorts of private-sector construction despite onerous regulations.
We don’t dump stuff in the rivers or swamps any more. They filled what is now Battery Park City before we started calling them environmentally sensitive valuable wetlands. There was a plan to sink the West Side Highway into a tunnel and use the stuff they dug out for… Battery Park City on a grander scale.. which was stopped because it might interfere with the stripped bass. We don’t dump stuff in the rivers or swamps any more.
A really quick surf of WIkipedia there are 140 apartments per acre or 350 per hectare, in Stuyvesant Town/Peter Cooper village. Hudson Yards, the accounting is really fuzzy with Hudson Yards, is costing 750 million an acre or 2 billion a hectare. At a quarter of million for an “affordable” apartment it’s 3000 an acre. How tall are those buildings and how close together? Again. really round numbers without breaking out the calculator, I come up with 400 stories tall to keep the same foot print as the buildings in Stuy Town. Some where around 100 stories tall it’s a solid block of building with windows only on the street side.
But I don’t know what you are saying or what lessons Tokyo gives other cities. Singapore is building what it needs and its main downside is cost though it still manages 90% home ownership. It is close to achieving a 45 minutes city which is pretty good for a city of approaching 6 million. Can’t say the same thing about Tokyo. Indeed, I am sure I told you that when I worked there, in Otsuka on the northern part of the Yamanote Line, some people in the lab were commuting for several hours, both ways; and because of this about half a dozen were sleeping in the lab 4 nights a week. There are additional reasons but for this alone I couldn’t live in Tokyo.
Being water-blocked on three sides San Francisco doesn’t have the option of Tokyo; except that of course it is doing it by default: people forced to live 60-90 minutes away and killing themselves with the commute. The actual solution to SF’s problem is SB50 or something similar. It would even allow retention of the things people love about that city. So it comes back to the Ed Glaeser “solution” of allowing anyone to build anything, anywhere which is roughly the Tokyo “solution”.
I’ve clearly failed at my previous attempts to make you numerate (big hint: junk all non-metric, I think your brain must be doing a NASA with your conversions).
Hudson Yards:
27-acre site = 11.33 hectares (0.113km2)
planned 4,000 apartments: ≈8,800 residents* = 77,669 /km2
Stuyvesant Town-Peter Cooper Village:
11,0250 apartments for 25,000 residents, on 32 hectare = 78,000/km2
*assume same density as Stuy-Town, which is v. unlikely.
And no, I didn’t “fix” that at all and was surprised they came out essentially identical! There might be some fundamental urban principle at work here? One could note that it will certainly never have as many residents because of the empty-apartment phenom with these kind of developments. Note too, that I am not a fan of Stuy Town, and its high density (almost double Paris’ average, and still much higher than its densest arrondissement, the 11th at ≈44,000/km2) because it is artificial in the sense that it is a parasite on the rest of the city; ie. it doesn’t contain any of all the other utility a city needs like retail, entertainment, educational, governmental (police, emergency etc), hospitals etc. That is, it is by itself quite unsustainable. In fact it doesn’t benefit by being so insular and while it reputedly is liked by its residents it is not a viable urban model as you cannot build a city without all those things. Paris-11 does have all those things like Lycées & tertiary institutes & ecoles maternelles, churches & synagogues, government, public parks, theatres (eg. the now notorious Bataclan music venue, and the Cirque d’Hiver) public parks (including the one used for the weekend marché biologique (organic)) and 3 giant places (Bastille, Republique, Nation) etc etc.
Re your economic case, such as it was coherent (I don’t know, TL;DR), the most important thing to know about Hudson Yards is the government $5.7bn in tax breaks including at least $1.4bn in property tax exemptions to the developer. For something that won’t relieve, but actually exacerbate, the housing crisis and result in permanently-empty hi-end apartments that don’t even contribute to consumer demand (thus retail, educational, etc). One wonders if the commercial aspects of the site will work medium- or long-term; of course the developers will have made their money well before that might become obvious so what do they care?
So, yes, they should have used that money to build a Haussmannian “estate” instead of this pink elephant in how not to do urbanism. How should one do ‘proper’ urbanism? I thought you’d never ask:
…………………………………………
In many ways this is comparable to Hudson Yards as it is built on former rail marshalling yards and partly built over the tracks (that lead to Gare St Lazare). Remember too, from your previous lesson (gratis, you’re welcome), that intramuros-Paris is quite comparable in size and population to Manhattan.
https://en.wikipedia.org/wiki/Batignolles
https://en.wikipedia.org/wiki/Parc_Clichy-Batignolles_%E2%80%93_Martin-Luther-King
Batignolles was supposed to be the Olympic village for the Paris Olympic Games in 2012, but Paris lost its bid to London. In its place, ancient SNCF rail fallows are redeveloped into a new 4.3-hectare district centered around new Martin Luther King garden. By 2015, it is foreseen that 3,400 apartments, 30,000 square meters of shops, 140,000 square meters of office buildings and many public facilities (school, nursery…). will be completed. Moreover the Palais de Justice court, along with the Police judiciaire (Quai des Orfèvres), currently located in the Île de la Cité in central Paris, will move to the new Cité judiciaire de Paris in a new building north of the garden.
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Points: (1). I think there is an error in this summary as it would produce a density of 174,00 residents/km2; the development is not 4.3 Ha but probably 43 (other sites talk about overall 54 Ha), thus: 17,400/km2. (2) I am less enthused about this development and reserve judgement until it is complete and I see it with my own eyes; I think they have adopted too many tropes from less-successful cases, such as allowing 50m buildings (which nevertheless but inevitably, don’t occupy all the space, ie. are spaced apart), giving free reign to starchitects, and perhaps giving too much of it over to a single big park (at 10 Ha the 8th largest in Paris). Oh well, a little experimentation on the very edge of Paris is ok. But still it is clearly superior to the Hudson Yards example, ne c’est pas?
Story isn’t an SI unit or well defined. Has something to do with floors and being able to comfortably stand up. 150-ish apartments versus 3000 apartments doesn’t really matter what unit was used to derive that. It’s 20 times more.
The question isn’t how many apartments they are going to build, it’s how many apartments you have to build to make them affordable. At 2 billion a hectare how many apartments do you have put on a hectare to make them affordable is the question. 2 billion divided by a quarter of million is 8,000. You squeeze all of StuyTown into a hectare and half. 12 ( 11 sumptin rounded) divided 8.
Infrastructure I understand, but I’m curious why you feel there is no alternative to state provision of health and education. It would seem that they could be even more responsive to market conditions, since you can convert a school to a clinic, or an unused department store to a school, but San Francisco can’t make an extra 50 km2 of land and tearing down a four story apartment building to make a five story is difficult to justify economically.
You can easily find examples of state failures/private successes in health and education as you can with housing (see DC/NYC public school test scores vs say KIPP academy, or the availability of Zytiga to treat prostate cancer in Scotland). As with housing, isn’t the solution to helping the poor unburdened cash transfers, which could be used for doctor visits or tuition as well as food or housing, as individual requirements dictiate?
I agree Sweden’s solutions aren’t much better than SF’s for the reasons you mentioned (in particular I’ve heard Stockholm is pretty infamous for housing shortages), but what about, say, Vienna?
Vienna isn’t building a lot of housing nowadays. The reason it doesn’t have a giant housing crisis is that it’s not particularly rich, and unlike Berlin is not seeing unusually rapid income growth. And even then Austria has serious problems with how the extent of social housing has politicized housing – for the longest time immigrants were ineligible for benefits, and when the EU required Austria to let immigrants into social housing last decade, the extreme right vote surged especially in areas with a lot of public housing (link).
@michaelrjames
You dismissed Alon’s point about Tokyo because you doubted some of his facts without looking anything up, then when I provided statistics, you didn’t even try to look at them before dismissing them for being 5 years old. At this point I don’t think we can have a honest discussion because you are simply unwilling to consider that there may be data out there supporting other view points.
The Japan housing survey is done every 5 years. 2018 data is here, but is not as comprehensive yet:
https://www.e-stat.go.jp/en/stat-search/files?page=1&layout=datalist&toukei=00200522&tstat=000001127155&cycle=0&tclass1=000001127156&cycle_facet=cycle
As an example, from these excel files you can easily find the total number of dwellings in Tokyo Prefecture over the years:
1988 4,817,600
1993 5,299,500
1998 5,669,500
2003 6,186,000
2008 6,780,500
2013 7,359,400
2018 7,666,900
You can also find the ones for other cities as well, like Sapporo, Hokkaido (city of 2M)
1988 653,640
1993 748,200
1998 821,700
2003 879,900
2008 985,400
2013 1,009,600
You can also compare these to the population growth, see census data here:
https://www.e-stat.go.jp/en/stat-search/files?page=1&toukei=00200521&tstat=000001080615&result_page=1
The point is, Japan’s housing growth, as a whole, and in major cities is at or sometimes much higher than population growth. This is enabled by the ease of construction in Japan, even in its densest cities like Tokyo. As a result, housing in Japan is plentiful and inexpensive compared to many other major cities in the world.
As for people in your lab commuting for hours. It is quite possible that they have reasons to do so (for example, a common reason is to live with their parents in order to care for them). If we are talking about purely housing price, it is not difficult to rent or buy housing within one hour of Otsuka station. For example, you could choose to live near Saitama rather than Yokohama.
Isn’t this at least as true for private landlords, real estate companies, and lenders as it is for the government?
adirondacker12800, 2019/06/24 – 23:08
Quoi? (or QTF 🙂
I guess you mean “storey”.
And your “20 times more” is a fantasy figure. Mine were real-life figures. You’re just buying into (or being duped into) the developer way of calculating.
You are completely ignoring that $5.8 billion NYC taxpayers are giving to those developers and therefore indirectly to those wealthy types who will buy the apartments!
And by zoning and other tricks/powers a city has, it can choose to force a development in whatever direction –unless you want to tell those 25,000 happy residents of Stuy-Cooper their homes should never have been built? It still could–and who knows (an opportunity for Di Blasio if he wanted to grab it)–as there remains plenty of railtrack air-rights available next to HY (even if it is privately owned? I assume; of course in my Paris example it is state-owned.)
Silly me being in the States where we use American spellings, having my spellchecker set to American English. Wikipedia says that is 64 percent of the native speakers. The Empire State Building is 103 stories tall not 103 storeys. One World Trade Center, not Centre, is 104. Get over it.
Those rapacious real estate brokers in Manhattan have all sorts of computerized real estate listings that are very web friendly. They have a somewhat different concept of Hudson Yards than the developers but I can figure out in less than a minute that cheap apartments with a lousy view in the new buildings start at five million. Not very affordable if you ask me. And even if you want to stretch that to making half a million affordable you have to put ten times as many apartments on that chunk of land. The apartments are reallllllly small or the building has to be much higher. That’s the way it works.
It’s real fuzzy how much the city, state and federal government are going to spend on all the different incentives, rebates and deductions. Neiman Marcus doesn’t have another location in Manhattan. Rich women who are buying a 1,000 dollar handbag instead of the 3,000 or 4,000 dollar handbag aren’t going to have it sent so they can avoid a piddling amount of sales tax. They’ll make it back in sales tax in a few years. And even faster, with the additional income tax, if the sales people are getting a commission.
There may be 103 stories about the Empire State but it does indeed have 103 storeys!
The thing is you knew what I was talking about, whereas the reverse is not always true …
Another story is yours about getting that $6bn back in a few years. You know that same logic could apply to putting the same money towards partly-subsidised affordable apartments? But like the HK-MTRC case, the state/city needs to be a co-equal co-developer otherwise the developers will just wreck any plans to make anything, even a minimal fraction, affordable. Of course Union Square is premium being in such a terrific location, but they also co-developed Tung Chung newtown which is at the literal end of the same metro line that passes under Union Square; though it too has its own premium being next to the airport and on Lantau island (mostly national park). Being HK, nothing is a bargain and MTRC has never been charged by the government to solve HK’s housing crisis, so is more focussed on funding the MTR. But at least a significant fraction of property profits goes back to the public good. (One could also note that, like in Singapore, some of this is stealth taxes in a so-called very low tax environment, because these places need to find the money to fund first-world pubic utilities.) The model could be adapted to do both: provide some income to NYC-MTA and some affordable housing.
I wonder why you and most New Yorkers think that what was done in the past for Stuy Town, can’t be done today? What’s the story, morning glory?
Are you taking commercial into account? The Hudson Yards development is mostly commercial and not residential, no?
Yes. But there are supposed to be 4,000 apartments when it is finished. (Unless that is some sort of scam by the developer?) All of the MTRC developments are mixed-use as you would expect when they are based around a Metro station (the exception might be the IFC Mall in Central where commercial would dominate).
I’m not sure why the HK model (which is an evolution of the Japanese model) isn’t used more elsewhere.
Yeah, but the point is that Hudson Yards is an attempt at growing the CBD to the west rather than at residential development with some retail as at outlying stations in Japan, Singapore, HK, etc.
Sure, but the (or my) whole point is that NYC doesn’t need more fancy retail and hi-end apartments (cheapest is $5m). Does it even need more office space? What it needs is more affordable housing. It could have a proper mixed development and have it all, well maybe except forget the hi-end apartments which serve no one in the city except a tiny, tiny number of property speculators. Bloomberg did this because he wanted a fancy physical legacy and this is it after the stadium idea fell over. I think he could have done better.
Interesting that HK not only does public transit better (than the Anglosphere), and funds it in novel sustainable ways, but is showing us lazy, complacent slobs in the west how to stand up for rights too. They may have Carrie Lam but at least she wasn’t elected (except by Beijing) whereas Trump, Brexit, May, soon Boris and Merkel ….
There’s nothing wrong with high-end apartments, even super-high-end vacant ones owned by billionaires. They contribute property tax while using little in the way of services.
Of course they are not what is needed (which is mass housing construction for the masses), but restricting them doesn’t do anything to help what is needed.
I wonder why you and most New Yorkers think that what was done in the past for Stuy Town, can’t be done today?
When they built StuyTown there were big chunks of industrial land with obsolete gas storage tanks on it, that the gas company was desperate to get rid, interspersed with slums. When they built the UN it was obsolete slaughterhouses and other gritty industrial. Or the World Trade Center with cheap bankrupt-railroad building on it. They dug that out, made it bigger and dumped it in the river. We don’t dump things in the river anymore. There are no big chunks of cheap land to build on anymore. What part of that is hard to understand?
Hudson Yards is on surplus railway yards and some is built over tracks. They have only begun to touch this sort potential. It’s exactly like the Batignolles re-devo in Paris. If you helicoptered over Manhattan, never mind Brooklyn or Queens, you’d see a surprising amount of semi-derelict land or disused wharehousing etc. A bit of imagination might be needed, say like the way the High Line begins at Hudson Yards? It’s always surprising to European eyes because it doesn’t seem the case for most Euro-cities (exception is London). I reckon it must be real estate barons land-banking, to both wait for much better prices in the future and of course to maintain the squeeze on the current market. It is an anomaly typically produced by completely “free” markets, ie. when the biggest players dictate the market.
They are not surplus railroad yards. The LIRR has been using them quite actively for 32 years. When they got the land cheap from the Penn Central bankruptcy. And will continue to do so. If they were surplus they would have just called it their subbasement or filled it in. Instead of building very expensive structures.
The stuff that didn’t need the pollution remediated got scooped up 30 or 40 years ago. Point out some of these big chunks of land that the locals apparently don’t know about.
First, I “doubted” Alon’s point on several grounds, only one of which was the underlying claim of housing builds. second, I reserve my right to be sceptical about claims; I’m a professional sceptic, a research scientist. So I did try to look up what you “provided” but got instantly irritated because it was a general webpage that may or may not have provided relevant data but would have required me to search around for maybe hours to find it; no, as I said it is your responsibility to do that if you are say there is data to back the claim. Third, not only was I willing to consider Alon’s claim but I said that I accepted it (exact words: I’ll accept there is net home construction. What I still don’t accept is that Tokyo is an appropriate model for anything else, which is not to say there aren’t some lesson we can learn.
So, re my second point, I congratulate you on providing clear data and link (which I am going to accept is genuine source as I am too lazy to follow up). It is what you should have done the first time you posted with your claim! However, while I may accept Tokyo has a lot of new housing being built, it remains true that it is somewhat peculiar in that, as Benjamin Turon wrote: ““Over 8 million properties across Japan are unoccupied, according to a 2013 government report. Nearly a fourth have been deserted indefinitely, neither for sale nor rent. In Tokyo — where 70 percent of the people live in apartments — more than 1 in 10 homes are empty …, and as I wrote: Given their propensity to tear down 20 to 30 year old housing and rebuild, plus demolition of those danchi, are we talking about net addition?, while there may well be net new housing, it is not as great as first meets the eye. This really emphasises the peculiarity of Japan and Tokyo, and as others here have pointed out, this could not possibly occur in western cities (or Singapore or HK) under housing stress.
Absolutely, and I explained several cases I knew of, in a much earlier post (different AL article years ago). One was a woman who lived with her parents way out beyond Chiba (I detected a certain resignation but also resentment; she had a 90 minute commute, both ways); but equally it was clear these socio-geographic factors, largely peculiar to Japan, have created great stresses. In China the geographic separation can be thousands of km such that they leave their children in the care of grandparents (and given the scale, has produced a problem of actually abandoned children as grandparents die or become senile and/or parents never return). Other reasons for tolerating this incredible stress of commuting or sleeping in the lab were that it was probably a short-term thing for many (the lab director was a famous hot-shot and would have been a career boost on one’s CV; during my visit, a photo appeared on the front page of a major daily newspaper of him shaking hands with G.H.W. Bush). Whatever the reasons, rationalised or not, another peculiar Japanese habit (though possibly shared with Chinese and Koreans) was that most people stayed beyond the working day, waiting for the boss to go home first, sitting at their desks “working” on their computers; but in reality: many snoozed in their chairs. I don’t think this system is very efficient and is very stressful, often needlessly. Mostly we westerners simply wouldn’t accept it (says I as someone who has also slept overnight in labs all around the world!).
Again, it is my contention that overall Tokyo is difficult to argue as an example to follow for us in the west. The social mores, the work habits and the commuting habits, the housing preferences are just too …outré, and largely unacceptable, to make such conclusions.
Your comment basically boils down to “Japan exceptionalism” which is no more valid than “American exceptionalism”.
Maybe so.
But the difference is that Alon is saying that Tokyo provides the solution to the world’s housing crisis while no one pretends the American way is any solution. But, even without the social-cultural things, a falling population and millions of empty homes, is not happening in these other places (though at some point this century …) so it is not applicable anyway. Besides, the Tokyo “solution” more or less applies to the likes of the Bay Area: it is “affordable” if you are willing to commute 90+ minutes! Maybe the coming housing market collapse will mimic the Japanese mega-collapse and that too will bring “affordability”.
I would say both extremes have failed as extremes are wont to. Anglosphere extreme financialisation of housing. Extreme laissez-faire in Japan (after their own version of extreme financialisation of housing failed spectacularly; multigenerational mortgages!). It may be that we have reached a point in advanced economies that there really is no solution to some problems but I’d argue a middle way, as we see in some Euro countries, does the best; ie. limits to financialisation of housing (macroprudential rules to keep bounds on personal borrowing, capital gains tax on property profits rising for second homes etc), and state involvement in creating affordable housing.
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In recent history all of Asia (and Australia) were subject to Japanese exceptionalism, and a few Asian countries (Vietnam, Cambodia & Laos) were subject to American exceptionalism.
I don’t believe any exceptionalism offers much and usually results in disaster.
The Bay Area is 1/5 in population of the Tokyo area, so commutes should naturally be much much shorter. That isn’t really the case now, because of zoning, but that’s a political decision not a market result.
Indeed but that just shows how awful overall transport planning is in the Bay Area/USA. The fact is that many commutes do take as long as Tokyo commutes. (Let’s admit that being spread around a big bay doesn’t help.) Because there is no efficient mass transit; we’ll see what happens when BART reaches San Jose but even then the problem is the dispersed nature of the employment centres. The Apple Spaceship built 5,000 parking spaces assuming the worst.
Last time I was in Mountain View visiting one of those (bio-)tech companies I got talking with one of the staff and he was nervously looking at his watch because he had to leave (for the commute home to Oakland) before 3pm (or something like that) otherwise he would get caught in the “evening” crush on the freeway. In the mornings he got up at something like 5.30am and had to leave before … something like 6.30 …. because if he left it another 15 minutes he risked getting caught up in the morning crush. He explained his wife worked on the east bay and schools, rental etc was why he chose to live there. Plenty do this.
Re zoning, obviously I agree. But that doesn’t mean a Tokyo laissez-faire approach, more of a SB50 approach, which is pockets of hi-density (not hi-rise) around transit stations. And in a place like the Bay Area it is going to need some kind of state-funded and -enforced system to ensure a certain fraction of affordable homes amongst this new build. It doesn’t mean giveaways to freeloaders. I endorse France’s law that restricts rents to no more than 30% of household income. I forget if Berlin has something similar. 30% is already pretty high. On a similar issue I read an article yesterday about relative cost of childcare: no surprises that the USA was highest at 36% of household income with all the Anglosphere towards the top while Germany and France were at 5% and the EU average at 11% (though with the UK in the 30s%, Brexit will bring down that average!). In the past few decades Australia has gone thru the exact same neo-liberal free-market bullshit on childcare that has seen billion-dollar scams (because there is a big government subsidy but it goes to private operators) and escalation of costs way above inflation such that it has now reached crisis point. No one does it on economic grounds but to preserve the woman’s job/career/continuity/sanity.
The point is that none of this stuff helps the economy. (Elizabeth Warren for Prez.)
You recommend “having the public sector build rental housing that is open to all citizens” but non-citizens need housing too! I don’t believe the any government will ever build sufficient housing for undocumented immigrants, and they’d be much worse off in a system like Sweden or Singapore where the access to most housing is controlled by government bureuacracies. (Even building enough housing for documented immigrants seems unlikely to me, since politicians have little incentive to serve nonvoters, and experience in Sweden and Singapore bears this out.) The only way to improve the housing situation of undocumented immigrants is to drive down the market rent of privately-owned housing.
Doesn’t this depend also on what tier of government controls housing? In US border and coastal cities, municipal governments are usually much more willing than the Feds to provide services regardless of immigration status, and indeed to actively push back on conservative immigration policy (see e.g. sanctuary cities).
We tried that. It didn’t go well.
On Tokyo and Japan – its relative affordability is based on several factors that do include government intervention. Overall the lack of restrictions makes Tokyo much like Houston compare to San Francisco or New York. In fact however New York and Massachusetts as states have actually added more housing units then either California or Texas over the last decade according to a recent news report. There are also those new towns of the 1960s in Japan, and the subsidies that when to private railway companies to extend lines to them. Shinkansen construction also opened up new far-flung lands for suburban growth. This is part of the epic commutes from far flung suburbs to city center.
There is the small house and lot size, or the size of the apartments. I had a professor from Japan that talked about living in a closet size apartment. There is now a movement in America to legalize and encourage micro-apartments to increase the number of affordable housing units. NPR had a recent story on accessory units in Silicon Valley being built in backyards of single-family homes. Residential dormitories and boarding houses are also be promoted. I would support all the above.
NHK World also has recently run a number of stories on the great number of abandon houses in Japan, even in Tokyo. According to the Japan Times: “Over 8 million properties across Japan are unoccupied, according to a 2013 government report. Nearly a fourth have been deserted indefinitely, neither for sale nor rent. In Tokyo — where 70 percent of the people live in apartments — more than 1 in 10 homes are empty, a ratio higher than in cities like London, New York and Paris.”
Japan Times – Japan’s glut of abandoned homes: Hard to sell but bargains when opportunity knocks… https://www.japantimes.co.jp/news/2017/12/26/national/japans-glut-abandoned-homes-hard-sell-bargains-opportunity-knocks/#.XRECkuhKjIW
My guess is that if there was a million abandon homes and apartments in the Bay Area – that housing costs and rents in San Francisco and the rest of Silicon Valley would be much lower!
I also don’t think that discrimination by the private sector (as in Japan) is less bad, or less of a problem then by the public sector (as in Singapore). A segregated lunch counter is just as much of an issue as segregated public schools and public buses. Having a clause in a property deed against Negros, Catholics, and Jews is just as wrong, and just as much of a problem as the New York City Housing Authority segregating Blacks and Whites in their 1930 projects. If given a choice between that Jim Crow “social engineering” and that of Singapore doing the direct opposite – I’ll rather go with the racial inclusiveness of Singapore.
And if either public housing or private landlords the USA were to discriminate against single-parent households – there be a lot of openings. Not only are many of my fellow co-workers single-parents, my college educated middle-class boss is now one too, after divorcing his wife, a partner in a law firm that left him for another partner – in her firm.
Just because Sweden and Singapore discriminate against immigrants doesn’t mean that we need to do so too in the USA. In fact, despite being lampooned in a recent Simpsons episode along with the rest of Upstate NY for its declining economy and population – with a public population counter counting down – in fact Utica NY has seen a population increase due to the large number of immigrants – including many refuges – it has taken in over the past decade. Along with other post-industrial cities in Upstate NY, Utica as actively sought out these immigrants and accommodated their needs with various social services from language instruction to workplace training. It as been according to news reports very successful, these immigrants being very productive in building new communities, finding jobs, opening new businesses, and driving economic growth. Thus it seems unlikely that Utica would discriminate against what they see as the life blood of their mid-size city. In fact, they are now upset that the Trump Administration has stem the flow of new refugees.
Just because authoritarian and socially conservative Singapore (and the rest of East Asia) have unfair policies, doesn’t mean that in the USA can’t still learn from them what works, what doesn’t, and perhaps what we could do differently with our own public housing and affordable housing crisis; as well as public transportation. Are we to reject congestion pricing in New York City because Singapore practices “social engineering”? Social engineering is someone doing something you don’t like – and when you do like it, you call it “progressive” and “enlighten” or “commonsense”.
And yes, paying higher wages is a solution, some part of the housing issue can be trace to how unequal of a society we have become in this winner-takes-all economy. When more and more of wealth is concentrated in fewer and fewer hands you get more have-nots, and more angry people. Our “Gilded Age” level of inequality needs to address – but until than we can do other things to mediate the issue in terms of housing, healthcare, and education.
The biggest issue I see with “public housing” in the USA is mismanagement; including a lack of funding for both short-term and long-term repairs. Many are aware of the troubles of the NYC Housing Authority with its almost $20B in needed repairs to its buildings.
Locally in my area the local housing authority in Saratoga Springs for example a few years ago had a scandal were the units became over run by bed bugs while the agency’s director did nothing – but hire a relative to “spray” here and there – all the while enjoying an annual salary for higher than those of the housing heads in nearby Schenectady and Albany (which have far more units) and going on expensive junkets to housing conferences in Las Vegas. The tenants protested, newspapers investigated, the politicians made statements, and then the apparently sleeping housing board of prominent local individuals woke up and fired the director. Since then under new management the bedbug issue was solved by hiring professional exterminators.
What is need is a new model of management and financing for “non-profit social housing” that will curtail the abuses of the past while placing this social housing on a self-sufficient and sustainable financial footing where external subsidies will need to be minimal. Same could be said for public transit; heavy reliance on federal and state funding seems to lead to many problems from inefficient operations to sudden curtailing of service when funding is cut at the state or federal level. Capital funding from the Feds or state government for big projects in my mind is great; but the costs of annual operations should be able to be cover from funding at the local level, through cross-subsidies from profitable operations and/or a dedicated sales or other local tax.
The other big issue with public housing in America is that its has been seen and basically is warehousing for the poorest members of society. That stigma effects everything from the public funding – or lack thereof – for it, to the ability to build it in new locations. Building large and monolithic complexes of single-use low-income housing creates a “ghetto mentality” that may help fuel social problems.
That is what attracted me “public housing” to Singapore and Sweden. In Singapore the “public housing” is mix-income and mix-use with various services – schools and retail – included in the building complexes and new towns. You’re not just building housing but a whole new community, a neighborhood. Also by including retail, office space, and higher-income residents you also create new revenue streams that can cross-subsidize the below-market rates of affordable income-based units.
I wrote in my letter to the Wall Street Journal that while public housing in Sweden, Singapore, and Hong Kong have issues; just as the MTR runs trains better than the MTA in New York, they also seem to do public housing much better than the USA – including the New York City Housing Authority. It would seem that we could learn from their example ways to reform and improve our existing public housing authorities in the USA, and/or embark on other forms of publicly sponsored affordable housing.
I’m all for an “all-of-the-above” solution to the housing crisis. Obviously reforming and streamlining zoning laws, building codes, and construction permitting to enable and encourage more private sector construction of housing should be the primary focus – especially in California.
Where I live in Upstate NY affordable housing is still an issue for working class folks in Saratoga County were private developers seem to few problems with building either single-family housing or multi-story apartments/condos given the large number recently built or currently under construction. Yet most of these rental units are being rented at monthly rates higher than what can be afforded by service industry and some industry workers. A rent of $1200 a month may seem like a steal to many, but on an income of $30,000 per year that would come to 48% of income. There are some lower rents that can be found in older buildings, but they are ill-maintained with failing plumbing, no heat, and dodgy electrical systems. Either they end up on the night news when they burn down (space heaters) or they get sold and rehabilitated by gentrification. The amount of “affordable” housing is likely being reduced as landlords sell or renovate their property for higher income renters or homeowners. An old Victorian house subdivided into two or three apartments becomes the single-family home of a lawyer or a tech worker.
You see this both in Saratoga Springs and Ballston Spa, the village where I live. If you’re a single mother you can get rent vouchers, but for single people you’re a bit out-of-luck. Some new “income base housing” is now being built – but that is thanks to government programs and not the private sector solely acting on its own. Even then rents for working class people can be higher than the 30% federal standard, the mayor of Saratoga Springs bragged about how a new workforce building of about two dozen apartments would have rents set at a level for school teachers, firemen, and police officers, with some units set aside for homeless vets. Gee, I didn’t know unionized policemen are so poorly paid!
Meanwhile local businesses have begun complaining to the newspapers about the lack of housing for their dish washers, line cooks, table staff, cashiers, salesclerks, housekeepers, bellmen, front desk clerks, and all the other jobs that drive the area’s tourist and service economy. Multi-unit housing is being built at a rapid pace for tech workers and vacationers, but not for service industry workers.
At the hotel where I work many of my fellow employees have long drives from neighboring counties, or are shacked up with multiple roommates, or like me and my sister still living at home with their parents. My sister’s friend is a public librarian and still lives with her parents too. My sister said among her amateur theatre group that this is a common story. And my parents actually need their children’s income to help make the property tax and mortgage payments.
Some NIMBYism is a problem concerning housing in Saratoga County, a attempt to convert an old Skidmore college dorm into affordable units was successfully opposed by local land owners, and in the Town of Ballston there is an insurgency to defeat the current town council by those who complain about “the loss of farmland to all the new development”, including multiple apartment complexes along the main state highway connecting Ballston Spa with Schenectady. They are proposing a construction moratorium and oppose the extension of new water and sewer lines, even as runoff from septic tanks is ecologically harming Ballston Lake.
Yet overall developers in Saratoga, as well as Schenectady and Albany County seem to be chugging along just fine in converting empty land into apartments from farm fields to industrial brownfields; but so given that demand remains high they don’t have an incentive to build affordable housing for those making $20,000-40,000 annually when they can quickly sell the same units at a much higher price to those making $60,000 and higher. Thus, it seems that some form of “non-profit” housing is needed. Yes, increasing wages is a great idea, but my wages have gone up considerably over the past decade, put still lag increasing rents. If I was a politician, based on the issues I suffer and my co-workers and their friends – I would focus on affordable childcare, affordable housing, affordable healthcare, and affordable higher education.
It is heartening that these issues of the young and the working class are getting more play in the media, NPR has run a series of radio stories on affordable housing recently. Some of the Democrats running for president are also addressing the issue. I’m however skeptical of the lawyerly paperwork “tax credits”, “rent subsidies”, and “rent control” solutions – I support direct action – construction by both the public and private sectors – including the public sector preferably working in partnership with the private sector to insure that of all the new units being built, that some are price for the working class. The company I work for builds and manages hotels, they started out as a construction company and branch out to areas like facility management. There just the type of private sector company a town or city could partner with to finance, build, and manage new affordable residential units.
The city could provide the land while the private firm provides the expertise to build and manage the project. Perhaps half the units could have rents set to cover the annual operating costs, while the other half could be sold at market rates, with the money above the basic flat rent of the affordable units being pocketed by the managing private form as a bonus on top of an annual fee for managing the project. If the location is suitable, retail space could provide cross-subsidies to the affordable units. If large enough, the project could include a day care center. Locations in walking distance of public transit would be sought out. Overall you could increase the amount of affordable housing with the long-term annual subsidy of traditional public housing.
If I was in local or state politics, along with broadly making sure that zoning ordinances were friendly to mix-use, multi-unit housing – I would also work to develop non-profit housing projects as I have described above.
Direct government sponsorship of housing construction here in Upstate NY or in California is not going to solve their housing crisis (yes – regulatory reform needed), but there seems to be plenty of opportunity for the state and local government to work with the private sector to add more units from individual buildings on small lots to big mega-projects on Treasure Island, Hunters Point, and the Alameda Naval Base that could add tens of thousands of new units. The electrification of Caltrain also opens up airspace that could be developed for mix-use/mix-income, either at the current 4th and King Street Station, or dirtectly over the mainline all the way to San Jose.
In college I had a friend who lived with is mother in one of the four Bridge Apartments built over the Trans-Manhattan Expressway approach to the George Washington Bridge. Those four 32-story buildings hold 240 units apiece for a total of 4000 residences. The project is also mix-use with retail and office space. And according to a 2004 NY Times story despite issues with the traffic, overall, they were pleased with their units. Some lived and worked in the same complex. On my trips to NYC on the train you see plenty of other high-rise apartment towers build over the Metro-North and Amtrak tracks. So why not do the same at Caltrain stations?
My point isalso instead of making them all “market-rate”, why should the government not require in its partnership with private developers that let’s say 25 to 40% of these units be priced as affordable to lower income folks in the service industry? Government also actively finding locations, providing land, and financing for development is far from the laissez-faire approach of deregulating land use and then hoping while trusting to the market that in the rush to build that private developers through competition or oversupply will lead to a dropping of home prices and rents.
Yes, reform of land-use and the permitting process should be font and center, but the public sector can also pro-actively look for places and then work with developers to build new units, with many of those being offered at below-market rates – based on income – to families and individuals.
Good points in your various posts (don’t take my following points as anything but constructive).
No, I wouldn’t support many of those measures (as in above extract). Especially as none of them are real or lasting solutions. I support SB50 which is the solution, and, contrary to what the NIMBYs fear, would retain the essential character of SF. Indeed it would rejuvenate the city which is rapidly becoming a rich ghetto, because it would bring back more non-tech working households that are now priced out. There is ample justification for some state action (subsidy) in helping this. It doesn’t mean old-style social-housing but more likely in ensuring a certain fraction of apartments in such developments being truly affordable. Contrary to Alon or any number of econocrats, this has worked in the past, and it is its discontinuation from the 70s on that has led to the current crazy situation where the people who make a city function cannot afford to live in the city. Or even within reasonable commuting distance.
Re Japan/Tokyo, yes those are some of the points I made earlier. It is a very atypical situation born of demographic and social mores. But “70% of Tokyo live in apartments” is referring to 23-ku or Tokyo-to which together have only one third of greater Tokyo population. Tokyo has grown to engulf all surrounding towns etc and while I’m sure a lot of SFH is being converted to apartment blocks, a fair bit remains. The million empty homes are mostly apartments, including those 15-storey Danchi I discussed earlier, as tastes change, or reassert themselves. But as I said earlier, Tokyo is not a place of choice to live for most of us, because it doesn’t satisfy one thing or the other: tiny closets anywhere convenient but still expensive, or more space somewhere it will take hours of commuting. Paris and some other Euro-cities are a better model (not London!) where it is perfectly affordable, either in a quite small central apartment or in nearby suburb with more space (and most of the suburbs are “nearby” by virtue of the rapid transit; I’ve checked out cheap places in the burbs that are a mere few stations (minutes) on the RER, nothing remotely like Tokyo.) Paris is an example for SF, LA, NYC, Houston etc because it is already a mega-city and shows in real-life how it can work (despite what one may read in the Anglosphere).
Re Singapore and immigrants, there are two very different types of discrimination. At the low end (Filippino domestics etc) undoubted abuses occur however not as bad as in the past. For example their employees must now ensure they are properly medically insured. At the other end, which actually is the biggest sector, it is simple financial “equalisation” a bit like a wealth tax; these are highly-paid foreign workers who pay more for most things like accommodation and health insurance (all official, not under-the-counter). Because there are millions of these, they do make things cheaper for everyone else. Incidentally these and the recent increase in GST makes a bit of nonsense of claims of super-low taxation; it’s just stealth tax and it’s growing as Singapore grapples with first-world issues provoked by its first-world population.
Housing units added per state, per HUD, in 2011-17:
California: 583,725
Massachusetts: 99,331
New York: 263,990
Texas: 1,074,466
That Sweden discriminates against immigrants is a strong indication the US will. In fact, we see the US practice more discrimination than Sweden in access to other government benefits: the US specifically excludes illegal immigrants from Obamacare, whereas Sweden does not de facto exclude immigrants in any status from its health care system. We similarly see a discourse on the local level in the US that is not explicitly nativist but does rank people by how long they’ve lived in the city, which is closed to recent immigrants, esp. from countries that didn’t send many immigrants to the US decades ago, as immigrants from countries that did may be able to take advantage of established ethnic networks.
Congestion pricing in Singapore is a different matter. I’m not saying “Singapore is authoritarian and therefore its public housing shouldn’t be emulated.” I’m pointing out specific ways it politicizes eligibility for housing based on homophobic and sexist criteria (and contrary to your picture of inclusiveness, Singapore is also extremely racist, just not in housing). Its congestion pricing system is not so politicized.
One really needs to normalise to population size, thus:
Popn………State…………..Ho. Built……norm. to CA
39.6m……..California:……..583,725……583,725
6.9m……….Mass:……………99,331……568,173
19.5m………New York:……263,990…….536,102
28.7m……..Texas:……….1,074,466….1,482,538
Three of these states have pretty much identical new house building rates while Texas is the standout.
Of course it may be more relevant to normalise to the population growth rate but I am too lazy to do that. (Would Texas look less exceptional?) On that basis one imagines CA is underbuilt though haven’t there been recent years where there has been a lot of outward migration (to other states)? Ugh, I’m still too lazy to search for that data …
Incidentally, one should also adjust those Tokyo versus Singapore comparisons because a 1.2% growth in land-constrained Singapore is more significant than 2.7% in essentially unconstrained Tokyo of at least 50 (fifty) fold greater land area.
Which reminds me, in a recent post I noted the cross-border living/working arrangements in Switz-France and Switz-Germany, but neglected the mother of all such cases: over 250,000 workers daily cross from Tijuana into San Diego and back. Biggest international land border flux in the world.
The problem with normalizing to population growth is that growth depends on housing production. New York, California, and Massachusetts are all high-income and high-rent, with rents rising quickly, indicating there’s a lot of demand that isn’t met as housing production is lackluster, around 2 annual housing units per 1,000 people over the 2011-7 period. (Ile-de-France built 2.5/1,000 in the 1990s and 2000s, creating today’s shortage, leading the state and the region to get more involved to speed this up to 6/1,000.) Demand for new housing in Texas is expressed in population growth, esp. in tech-infused Austin; demand for new housing in California, New York, and Massachusetts is expressed in rising rents, since there’s very little housing production so people bid up existing properties.
MJ, I agree that SB50 seems commonsense. I would support it if I lived in Kellyfornia. On the opposition to it in California, has I wrote previously I see the same thing in my local town where today there is a Republican Primary and insurgent candidates are running on “preserving our rural character” in response to pretty rapid apartment and commercial construction on one side of town. The rural part is a bit of a joke, while large parts to the west are farms, forest, and scattered homes; the eastern part where the construction is occurring along the main highways (one with a transit bus route) is at least exurban with housing developments, warehouses, and gas stations.
One issue in America with housing construction is new homes being built in the suburbs while older homes are abandon in the inner cities. New York State is actually pretty big, so building new exurban homes outside Buffalo NY does nothing the relieve housing costs in metro New York City several hundred miles away. And of course in Buffalo those new homes growing like mushrooms in farmer fields are being built while older homes are being demolished on the Eastside of Buffalo, which looks a lot like Detroit — complete with abandon (its being restored bit by bit by a non-profit) rail station — with broad expanses of green fields. Also you do see new apartments, condos, and lofts being built in the downtowns of Upstate cities, at the same time the housingstook is reduced in other neighborhoods. Thus overall home construction in a big state can be misleading, since it doesn’t take in account homes that are being abandon or demolished.
Mr Levy… Not everyone and everyplace is anti-immigrant in America…
The Cities Refugees Saved: In the cities where the most refugees per capita were settled since 2005, the newcomers helped stem or reverse population loss.
https://www.citylab.com/equity/2019/01/refugee-admissions-resettlement-trump-immigration/580318/
A country of 330,000,000 can have lots of refugees in absolute numbers while still being stingy – in the last 15 years it’s averaged around 70,000 asylum seekers per year, peaking around 120,000 in 2015. But on one quarter the population Germany took in 700,000 in 2015 and still took in 120,000 last year, France on one fifth the population took in 110,000 last year, and Sweden on 1/30 the population far and away has the most asylum seekers per capita in the first world, peaking at 170,000 in 2015 (I think it’s down to around 25,000 annually now?). It’s like construction in New York: you can see cranes go up but overall housing production is extremely low relative to population.
Alon Levy, 2019/06/25 – 06:51
Yes, but again it is comparing very different cities. Texas is hardly noted for its urbanism ….. except for Austin which is relatively small (≈2m) and not the undefined sprawling mess of Houston or Dallas. That’s why the techies are there and I presume not living in exurbia and in any case suburbia is not as poorly accessible in a city of 2m. Like the Bay Area was many decades ago.
……………………
FYI, in the most recent year, 2017-18, Australia took 24,000 refugees. In the same year there were 225,941 permanent immigrants. Like most places it is causing some political stress because it is associated with housing unaffordability.
…Australia took 24,000 refugees in one year? Did someone abduct the children of the entire Liberal Party or something? That’s still not great but it’s surprisingly not-terrible for a country that has concentration camps in Nauru for refugees.
Austin’s urbanism is terrible, and the reason it has a lot of housing growth nowadays is explosive demand due to tech. Houston and Dallas built almost as much as Austin does now back when oil prices were high – they just don’t rely on the same mix of industry as Austin. And yeah, Austin is small, but so what? Literally the largest city in the world builds around 11 units per year per 1,000 residents and has net growth of 9, intra muros. In Europe too, Ile-de-France builds more housing per capita than nearly every other metro area. Absolute size really doesn’t matter here.
We’ve always taken plenty of refugees. Even Fraser in the late 70s took lots of Vietnamese boat people. Hawke did his famous emotional thing granting immigrant status for all the Chinese students when Tiananmen happened (and they form the backbone of the Chinese community today). Most of our large Lebanese community came as refugees. Howard actually increased immigration, including “official” refugees, to unprecedented levels but distracted everyone by demonising “illegal” boat people; he won the 2001 election with shocking politics known as the Tampa election, and it continued from there, purely as a partisan political thing. We are in fact the biggest immigrant nation today with one third foreign-born and something like 50% with at least one foreign-born parent. (Hah, even Russell Crowe–a kiwi turned aussie–who I see is playing Roger Ailes though funny enough an English actor is playing the dirty-digger himself.)
Isn’t Austin much better than the rest of (urban) Texas?
Austin is politically more liberal, but in terms of urbanism, it’s the same dreck.
MJ,
I read in I think the NY Times (or perhaps The Economist) that the opposition against immigration is highest were there are the fewest immigrants, in rural areas and not the urban areas where people are upset about the rising cost of property, housing; and increasing congestion of transport. You see — with a few exceptions — the same thing in the USA. Some of this is obviously racial, more monolithic white a region the higher is fear of immigrants. I see this even in my own family — people living in the sticks are anti-immigrant while those living in the city are pro-immigration.
If you count suburban sprawl as “urban” — Texas from what I understand is well on its way of having a majority of its citizens living in urban centers as opposed to the rural countryside.
As for immigration and refuges — we’ll have to see how policies in the USA will change should Mr. Trump and his minion Steve Miller get the boot in 2020. The US throughout its history as swung back and forth between exception a large amount of immigration to slamming the door shut. And racism and xenophobia has always gone in hand with “give me your poor, your tired, yearning to breath free”. Its sadly human nature to fear outsiders, and for leaders to fan such fears for increasing their power. Benjamin Franklin apparently was upset with German immigration (largest ethnic group in the USA), the Catholic Irish, Italians, and Eastern Europeans all faced big discrimination. Asians and Hispanic face violence and discrimination equaling that of African-Americans.
So yes, Anglo-Saxon nations may not be perfect in the past or today — both Australia and the USA putting immigrants in cages in concentration camps. Yet however Australia along with Canada and the United States have according to news reports in the last half century taken in a lot of immigrants, including non-Europeans. Reportedly In 2018, 29% of the Australian resident population was born overseas. Foreign born immigrants are 20.6% of the total population in Canada. In the USA its 13.5% (little less than Sweden), but this represents 19.1% of all the 244 million international migrants worldwide for a total of 47 million. New York City has 3 million foreign born immigrants making up 37% of total population, and if memory serves the majority of school children are immigrants. Immigration in the USA is at its highest levels since the 1910s.
Its not surprising that this migration has triggered a backlash based on history. Yet in the long run these immigrants should do well and successfully folded in with the rest of society. One recent newspaper article pointed out that while “whites” may be a minority in the future in the USA… that racial term as always been flexible with the exception of African-Americans, taking in formerly non-white groups like the Irish, Italians, and Russians. The article question on whatever Hispanics will still be seen as “non-white” in 2050. I have seen a lot of folks with Spanish names supporting Trump, so I think the article may be correct. Look at all the anti-immigrant folks working for Trump… with Irish names! Like Steve Miller…
“And of course in Buffalo those new homes growing like mushrooms in farmer fields are being built while older homes are being demolished on the Eastside of Buffalo, which looks a lot like Detroit”
This exurban building is an attempt to escape the crime and bad schools that are associated with older neighborhoods. Meanwhile, the metro area is small enough that one can build on the fringe and still have an easy commute to jobs in the center. Since nobody wants to live in the old neighborhoods, and the new neighborhoods can be cheaply built on farmland, all housing is cheap.
The situation is different in NYC, where the housing supply within reasonable commuting distance of the center is essentially fixed and much lower than the demand for said housing. So a bidding war causes all housing to become expensive.
In short, you can’t really learn lessons from one place to the other.
Well, he spent a decade in France 🙂 Apparently he was recalled home after (was it Jefferson or Adams?) visited Paris and thought Benjamin had become thoroughly corrupted …
Definitely should have tamped down the German immigration because they have brought a too dour Calvinistic protestantism, not to mention too many Drumpfs.
Some of this is obviously racial, more monolithic white a region the higher is fear of immigrants. I see this even in my own family — people living in the sticks are anti-immigrant while those living in the city are pro-immigration.
It’s not. It seems that way but it’s not. At least in my experience. I know people who are …. wary… of lily white Glens Falls. They’ll run into people who live on city-people-time not mountain-people-time. The traffic is bad and the parking is awful. There is no traffic in Glens Falls and it’s never hard to park. They go to Saratoga Springs but only when they have no other choice. And have been to Albany once and never want to go back. It’s too busy. It’s not just immigrants. Obama is going to take away their guns, Agenda 21 is going to make them upgrade their septic, chemtrails are mind control. Except for the ones who think the chemtrails are birth control. They are just scared. About almost everything.
If you count suburban sprawl as “urban” — Texas from what I understand is well on its way of having a majority of its citizens living in urban centers as opposed to the rural countryside.
Two acre zoning isn’t very urban but it’s not rural either. Texas was majority urban in the 1950 Census. In the worksheet with a link on this page.
https://www.icip.iastate.edu/tables/population/urban-pct-states
And if I counted right there are only seven states that are majority rural in 1970 and it’s dropped since then. I don’t know what is up with Maine. Snowbirds in places with 20 acre zoning?
Hording, second homes, and rental/income property are a particular problem in California.
California has Props 13 and 58. Property taxes can only go up 2% in a year, even if the appraised value goes up +10%, and this reduced property tax rate can be passed to kids and grandkids. A recent public example is the celebrity Bridges family in Hollywood [dad Lloyd did “Sea Hunt” in the black and white 1950’s TV days, kids Jeff and Beau inherited the Malibu beachfront place dad bought. $5700/YEAR in property taxes, available for rent for $15000/MONTH.] In Malibu, Hollywood Hills and Playa del Rey, more than 80% of owners report their inherited property is not their primary residence. Families who have owned property the longest are also more likely to rent the houses out or use them as second residences. In L.A. County, three-fourths of heirs whose parents owned homes at the time of Proposition 13’s 1978 passage don’t report the property as their primary home. To receive the benefit, it isn’t even necessary to live in California. An attorney in Boca Raton, Fla., has advertised the two-bedroom Santa Monica home he inherited from his parents near the Brentwood Country Club for $5,900 a month, which would pay his annual property taxes in a little more than two weeks. In other words — identical homes next door to each other can have property tax bills that differ by a factor of 20.
Doesn’t sound like “hoarding” is the problem; that tax policy is completely bonkers and should be replaced by an LVT.
So rich people don’t get taxed on their five bedroom house with seven bathrooms, four car garage, pool, sauna and hot tub. Sounds great. If you are rich.
I wonder if there is political will from the progressive wing to limit Prop 58 (and maybe 13) to properties valued under some value, let’s say $2 million. Tax the rich, remove inequality etc.
You wrote that in San Francisco, rent control “requires one to have lived in the city for a very long time”. This is not incorrect, but may be a bit misleading, so I wanted to try to clarify how it works here.
First: anyone in San Francisco is eligible to benefit from rent control, as it is applied to specific buildings, not to specific renters. You can move to SF and if you are “lucky” enough to find one, you can rent a rent-controlled apartment from day one.
This is my first and primary objection to our rent control system, which is that it provides benefits to many people who simply don’t need it. It is very much not needs-based.
Second: Rent control is *not* applied during tenant turnovers, so when that new person moves in, the rent “snaps” up to market levels. This is probably what you were referring to, because the *benefit* of rent control is only realized after one has lived in the same unit for multiple years, and one’s rent has remained fairly stable while rates around are rising.
This structure is the cause of most of my remaining problems with our system:
* Because new renters receive no benefits at all – they are subject to market rates – there is effectively no rent control at all for anybody who needs to move.
* Landlords are incentivized to capture the highest rent possible at each turnover, rather than selecting the best long-term resident.
* Likewise, landlords are *not* incentivized to keep good, long-term tenants, because over time they represent significant “lost” income. Because of this, rent-controlled apartments tend to be very poorly maintained (and in some cases dangerous).
* Just as with Prop 13 and its effect on homeowners, SF rent control rewards long-term tenancy over all else, and makes it very difficult for families to move when circumstances dictate it.
Alon,I agree with you that rule of law is preferred to special exceptions, but as a resident of San Francisco I believe you are misreading the situation. The teacher housing measure is not a result of power politics (lower taxes over teacher salaries) but of virtue signaling. Property value increases (= tax increases) mean that San Francisco is overflowing with funds. The city budget was $8.3B in 2014 but $11.1B for 2018. $110k salary? The increase above inflation could give every school employee (including substitutes) a $110k RAISE – and then do it a second time.
Neither is the city afraid to pass tax increases; in 2018 alone voters approved six measures to increase taxes by a collective $565M/yr through bonds, business taxes and parcel taxes – including a measure dedicated to education.
The money is there, SF politicians just choose to spend it differently. They propose exceptions like this one in order to look progressive, while not making actual changes to zoning and planning regulations (which would upset NIMBY voters). The vast money in the budget goes to corrupt vanity projects (cf. Central Subway serving Rose Pak’s base in Chinatown vs Geary St.) and employee salaries across the board, due to the influence of public sector unions (population grew 6.5% from 2012-2018, while city employees grew 15% and compensation 30%). But the money is there.
“Don’t tell me what you value, show me your budget.”