An excellent primer on land us, government incentives, and why the next crash will likely happen soon
Your Government at Work | The Antiplanner
"The city of Portland, which likes to call itself “the city that works,” subsidized the renovation of a 50-unit downtown apartment building. The apartments will now be made available to people who earn less than $15,400 a year.
“In Portland, we strongly believe that downtown should be a place where people of all incomes can live,” said city commissioner Dan Saltzman. One problem with that philosophy, as Willamette Week‘s Nigel Jaquiss points out, is that the city spent $514 per square foot renovating those apartments. For a lot less money, it could have built twice as many brand new apartments elsewhere in the city."
Do they want affordable housing, or do they want to appear to be addressing affordable housing? The problem is not that difficult to solve, much of the country still has housing prices at or below 3 time average earning, which means homes are affordable.
So, what does this mean over the long haul?
"In many ways, Portland is the model for nearly all of the policies advocated in the White House policy paper described here yesterday: minimum-density zoning, streamlined permitting for developers who want to build high densities; all single-family neighborhoods put in zones allowing accessory dwellings; lots of neighborhoods zoned for high-densities and multifamily housing; tax-increment financing and property tax abatements to subsidize density; and elimination of off-street parking requirements (which is the only policy discussed in detail by a Washington Post article about the White House paper). Yet, despite doing all of the things that the White House recommends to make housing affordable, Portland politicians claim that the city is suffering from a terrible housing crisis. Of course, most of the ideas proposed to solve the crisis, such as rent control and inclusionary zoning, will just make it worse."
And making it worse will have other, unintended consequences.
"Low or negative central bank interest rates, banking crises in Italy and China, devaluation of Japanese currency, and the pending bankruptcy of the Social Security and PERS systems all point to another recession soon, and that means housing prices will fall. Since rising prices today predicated on further rises tomorrow, a small decline will quickly turn into a huge crash in those places where prices are volatile, which means the coastal states that regulate regional land use. Though they are a minority of states, they contain about 40 percent of the nation’s homes.
Rather than worry about these macro issues, politicians in Portland, San Francisco, Seattle, and other heavily regulated regions are more concerned about micro issues like the effects of AirBnB on rents and locating housing by mass transit. While it seems appropriate for local officials to worry about local issues, in this case it means they are adopting all the wrong policies. The White House could have taken a macro view, but it did not, and the country will be worse for it."
This is all so obvious to those who are not true believers, and so opaque to those who are. The lessons cannot be learned because the true believer is closed to them.