Austin Contrarian

The media (elsewhere) discover zoning's impact on home prices

The Washington post had an article on Sunday that blamed the nation's so-called home affordability crisis partly on unnecessarily restrictive zoning:

[T]he scarcity of affordable housing is a deepening national crisis, and not just for inner-city families on welfare. The problem has climbed the income ladder and moved to the suburbs, where service workers cram their families into overcrowded apartments, college graduates have to crash with their parents, and firefighters, police officers and teachers can't afford to live in the communities they serve.

. . .

The root of the problem is the striking mismatch between the demand for and the supply of affordable housing -- or, more accurately, affordable housing near jobs. Fifteen million families now spend at least half their income on housing, according to Harvard's Joint Center for Housing Studies; many skimp on health care, child care and food to do so. Others reduce their rents by overcrowding, which studies link to higher crime rates, poorer academic performance and poorer health; Los Angeles alone has 620,000 homes with more than one person per room.

. . .

Moderate-income families aren't able to buy Lamborghinis or Armani, but they can buy cars and clothes. So while it's obvious why they can't afford McMansions, it's not so obvious why they can't afford decent housing. They demand it. Shouldn't the market supply it?

The answer is yes. But in many communities, local regulations have stifled multifamily housing and even modest single-family housing. Minimum lot requirements, minimum parking requirements, density restrictions and other controls go well beyond the traditional mission of the building code and end up artificially reducing the development of safe, affordable housing.

The unfashionable but accurate term for these restrictions is "snob zoning." Suburbanites use them to boost property values by keeping out riffraff -- even the riffraff who teach their kids, police their streets and extinguish their fires. Urbanites are susceptible to the same NIMBY impulses, often couched as opposition to "traffic congestion" or "overdevelopment" or protection of the neighborhood's "character." It's easy to support affordable housing in someone else's neighborhood. But when developers propose high-density projects, neighborhoods object.

It's refreshing to see the national media identify the real culprit.

(I think the claim that there is a "national" affordability crisis is hyperbole, though.  There are plenty of places even in or near Austin where housing is cheap, including southeastern Austin (MLS area 11), and suburbs like Hutto, Manor, and Pflugerville.  I suppose if you view the world from the Beltway or the middle of San Francisco or Orange County, then all you see in any direction is expensive housing.)

Interestingly, the Columbus (Ohio) Dispatch had a similar article last week.  Columbus is similar to Austin in many ways:  It's about the same size; has been experiencing rapid growth; and, of course, is dominated by a giant university.  From the article it looks like there's one significant difference.  In Columbus it is the suburbs that are jacking up home values; in Austin, it is the inner city neighborhoods. 

Useful information and links

City of Austin - Demographics Data

Census - Characteristics of New Housing

City of Austin - Downtown Redevelopment

Census - 2004 American Community Survey - Austin/San Marcos

City of Austin - Neighborhood planning and zoning homepage

National Association of Home Builders - Construction Statistics

Travis Central Appraisal District

Austin Skyscraper Forum

Brookings Institution, A Review of the Land Use Regulations of the Nation's 50 Larges Metropolitan Areas

Downloads

Download traffic5counties.xls (traffic count data)

Why South Lamar neighborhood groups prefer used car lots to office space

The South Austin neighborhoods are agitating for a new zoning classification:  "Mixed use -- retail and residential only."  (See the SLNA minutes.)  Apparently, they're worried that South Lamar will be overdeveloped with commercial and office space.

Why?

AustinContrarian

This blog is devoted to things Austin, mainly zoning and land use issues, but perhaps other topics from time to time.

I'm a lawyer, but my viewpoint (I hope) will be relentlessly economic.  I'm just an amateur economist, which means I'll mainly borrow my ideas from others.  I'll try to provide references.  (The side bar has links to academic papers on the economic impact of zoning regulations.)

I'm a 40-ish lawyer who likes living in an urban environment.  I live in an "urban home" near Oltorf and South Lamar.  I like density because it attracts lots of amenities.  Not just more restaurants, bookstores, theaters, and Starbucks.  Intangible amenities, too, like less crime, more interesting architecture, arts, and a more lively mix of people.

Austin is not a dense town, though, and not likely to get denser any time soon.

According to 2000 census figures (see here), Austin had a density of just 2,610 per square mile, a little less than Phoenix.  Houston (3,372/square mile) and Dallas (3,470/square mile) were much denser, not to mention San Francisco (16,633/square mile), Seattle (6,717/square mile) and Portland (3,939/square mile).

These figures are calculated by dividing city population by land area.  That's a pretty crude measure of density (e.g., a city might have an unusually large amount of parkland per capita).  But even using more precise measurements, Austin is not very dense.  You can  check out data compiled by Austin's demographer.  (Download NPA_Comparative_Data.pdf)   For example, the Bouldin neighborhood, just across Town Lake from downtown, is an "inner city" neighborhood.  In 2005, the Bouldin neighborhood had just 8.1 people per acre (or 5,184/square mile).  This density is typical of a suburb, not an inner city neighborhood of a large American city.  This shouldn't be surprising.  The Bouldin neighborhood was just a suburb when it was developed in the '40s and '50s.

Although rapidily rising home prices prove the demand for housing in inner city neighborhoods, I don't expect Austin (except for downtown) to get significantly denser any time soon.  Austin's zoning regulations are stacked against dense development.  And Austin's neighborhood associations implacably oppose any liberalization of zoning.  (The McMansion ordinance they just pushed through actually tightened zoning.)

Austin's neighborhood associations are well organized.  The activists who run them have endless amounts of time to campaign against development.  The City Council cannot ignore them. 

Among other things, I'll talk about why Austin's neighborhood activists are such enemies of increased density.  The short answer, IMHO:  they want to maximize home value.  I don't know that you can expect anything else, really -- people generally will act to maintain or increase their net worth.  But we should be spared the moral posturing.  There's nothing noble about asking the city council to crimp the housing supply for your economic benefit.  These same neighborhood activists who do their best to limit the supply of housing and drive up home values are also the most vocal advocates of affordable (i.e., subsidized) housing, environmental protection, and the preservation of inner city schools -- all goals perfectly incompatible with their agitation for less density. 

These inconsistencies will be one of the main themes of this blog.