By David M. Greenwald
It seems like everyone has a theory about how to address the housing crisis. Right now, California seems to have made its bed with smaller, more dense housing near transit that can connect people to jobs.
While there is general but not universal consensus that we need more housing, there is a fierce (and very interesting) debate over how to produce it.
For his part, Joel Kotkin of Urban Reform Institute, in a column today in the Los Angeles Times, notes, “In a drive to promote density and transit use, the state has also disfavored the kind of housing, especially the single-family variety, that many aspire to own, particularly in the pandemic.”
He argues that “this trend works against upward mobility for the working class, because homeownership remains the predominant means by which the non-rich build assets.
“Urban planners are right to say that the solution lies in more housing production,” Kotkin writes. “But the kind of housing they favor — generally expensive, small and densely packed — does not necessarily reduce prices.”
For example, he cites the work of Patrick Condon, a professor at the University of British Columbia, who argues that upzoning in the city has not resulted in less expensive housing in Vancouver, which is one of the most expensive cities in North America.
Condon’s argument: “We have incrementally quadrupled the density of Vancouver, but we haven’t seen any decrease in per square foot costs. That evidence is indisputable. We can conclude there is a problem beyond restrictive zoning. … No amount of opening zoning or allowing for development will cause prices to go down. We’ve seen no evidence of that at all. It’s not the NIMBYs that are the problem – it’s the global increase in land value in urban areas that is the problem.”
Kotkin points out that the fast population growth was in areas like San Benito County (south of the Silicon Valley) and in San Joaquin County.
We were seeing this pattern before COVID hit, but since the pandemic, “this pattern has intensified, with San Francisco, Los Angeles, San Diego and Santa Clara counties all losing population while growth continued farther east in Riverside, Fresno, San Joaquin and San Benito counties.”
He further points out: “The only California metro area listed among the 10 most attractive to millennials, according to the National Assn. of Realtors, is, of all places, Bakersfield.”
From this data, he concludes: “Rather than push more people into the least affordable areas, perhaps it’s time to revisit suburban and even exurban housing.”
It is interesting stuff. The overall data suggests that the problem is the demand for housing—even though some higher density build out still far outstrips new supply.
But before you see Kotkin’s plan as a panacea, look at the next portion of his column.
After talking about potentially advantageous developments which “could help relieve housing pressures on urban and inner-ring suburban areas,” we run back into a familiar problem.
“But under current regulations, such developments, even after getting local approvals, can take decades to move forward,” he writes—sound familiar?
And then there is this: “The lack of affordable housing and policies that constrict housing development hit younger working- and middle-class people — including people of color — hardest.”
You don’t think of the new suburbanite population as being people of color—but they are. Kotkin writes, “95% of all new suburbanites over the last decade were people of color.”
However, this landscape is having a huge detrimental impact on people of color.
“Homeownership rates statewide are very low compared with other states and painfully low for minorities,” he writes. The numbers are stunning: “In metro San Francisco and metro Los Angeles, the African American homeownership rate is under 35% and for Latinos under 40%.”
Furthermore, “At the same time, housing policies and economics have resulted in increased racial segregation in the great majority of metro areas.”
There is also a downside to the suburbs as the hub of housing growth. Koktin notes that suburbs have historically been appealing due to their relative affordability, particularly for first-time homeowners, but there is a downside to this kind of growth.
Critics will counter that more suburban growth “is environmentally unsustainable.” Kotkin responds though, that “future developments need not be heavily auto-dependent, especially if employment patterns change.”
Here’s the thing: housing as Kotkin points out is a way for younger people and especially people of color to build assets and financial stability. What we have seen over the last several decades has been increased racial segregation in the great majority of metro areas which has resulted in the concentration of poverty.
That concentration of poverty has been fueled by white flight (and to some extent Black flight where middle class blacks have been able to flee the cities for suburbs, leaving behind inadvertently much worse conditions) and has created our highly segregated residential patterns and trapped many into a cycle of poverty, crime, and dependency.
Kotkin’s argument here is intriguing, but it runs into a similar problem we see with urban development—“regulatory hurdles”—and other challenges.
His argument is that “making it possible for families to live and work outside the most expensive urban areas will be key to upward mobility for a new generation of Californians. That goal is still attainable, but it will take new thinking to turn it into reality.”