Saturday, May 28, 2016

The Housing Crisis- or is it a Transportation Crisis?

Bustling areas of the US are in the grips of a housing, transportation, and homelessness crisis.

While tracts of empty houses remain from the recent near-depression in areas like Florida, Nevada, and Detroit, other areas suffer from the opposite problem. Average detached house prices are at a million dollars in the San Francisco Bay Area. While this number is proudly trumpeted by the local papers for their satisfied home-owning constituents, the news for others is not so good. Houses are priced far above construction cost, clearly unaffordable for average workers, and rents are rising to unaffordable levels as well. How did we get here?

One of the great ironies is that environmentalism has allied with other status quo forces to stall development for decades. Existing homeowners have little interest in transforming their sprawly neighborhoods into denser, more efficient urban centers. Then they pat themselves on the back for preserving open space and small-town ambiance, along with inflated property values. Public officials have been stymied by proposition 13 and other low-tax movements from funding infrastructure to keep up with population growth. Local roads are now frequently at a standstill, making zoning for more housing essentially unthinkable. Add in a drought, and the policy response to growth is to hide one's head in the sand.

Then ... a scene from Dark Passage.

There is a basic public policy failure to connect population and business growth with the necessary supporting structures- a failure of planning. No new highway has been built for decades, even as the population of the Bay Area has increased by 10% since just 2000, the number of cars increased even more, and the population of the state has doubled since 1970. How was that supposed to work?

Now ... at the bay bridge.

An alternative approach would have been to limit population growth directly, perhaps via national immigration restrictions or encouragement for industry to move elsewhere. But that doesn't seem attractive to our public officials either, nor is it very practical. In a tragedy of common action, people flock to an attractive area, but eventually end up being driven away based on how crowded and unbearable the area becomes. A Malthusian situatuion, not from lack of food, but of other necessities. But with modern urban design & planning, it doesn't have to be that way- just look at Singapore, Hong Kong, New York, and other metropolises.

In the post-war era, the US, and California in particular, built infrastructure ahead of growth, inviting businesses to a beautiful and well maintained state. But once one set of roads was built, and a great deal of settled activity accumulated around them, expansion became inceasingly difficult. Now that a critical mass of talent and commercial energy is entrenched and growing by network forces, the contribution from the state has descended to negligible, even negative levels, as maintenance is given short shrift, let alone construction of new capacity, for roads, housing development, water, and sewer infrastructure. Prop 13 was, in retrospect, the turning point.

It is in miniature the story of the rise, decline, and fall of civilization. For all the tech innovation, the Bay Area is showing sclerosis at the level of public policy- an inability to deal with its most basic problems. The major reason is that the status quo has all the power. Homeowners have a direct financial interest in preventing further development, at least until the difficulties become so extreme as to result in mass exodus. One hears frequently of trends of people getting out of the area, but it never seems to have much effect, due to the area's basic attractiveness. Those who can afford to be here are also the ones investing in and founding businesses that keep others coming in their wake.

The post-war era was characterized by far more business influence on government, (especially by developers, the ultimate bogey-men for the environmentalists and other suburban status-quo activists), even while the government taxed businesses and the wealthy at far higher levels. Would returning to that system be desirable? Only if our government bodies can't get their own policy acts together. The various bodies that plan our infrastructure (given that the price signal has been cancelled by public controls on development) have been far too underfunded and hemmed in by short-sighted status quo interests- to whom the business class, which is typically interested in growth and labor availability more than holding on to their precious property values, are important counter-weights.

The problem is that we desperately need more housing to keep up with population, to keep housing affordable, and ultimately also resolve the large fraction of homelessness that can be addressed by basic housing affordability. But housing alone, without a full package of more transportion and other services, makes no sense on its own. So local planning in areas like the Bay Area needs a fundamental reset, offering residents better services first (more transit, cleared up roads) before allowing more housing. Can we build more roads? Or a new transit system? We desperately need another bridge across the bay, for example, and a vastly expanded BART system, itself a child of the post-war building boom, now fifty years old.

BART system map, stuck in time.

Incidentally, one can wonder why telecommuting hasn't become more popular, but the fact that a region like the Bay Area has built up a concentration of talent that is so enduring and growing despite all the problems of cost, housing, and transportation speaks directly to the benefits of (or at least the corporate desire for) corporeal commuting. Indeed, it is common for multinational companies to set up branches in the area to take advantage of the labor pool willing to appear in person, rather than trying to lure talent to less-connected areas cybernetically or otherwise.

One countervailing argument to more transit and road development is that the housing crisis and existing road network has motivated commuters to live in ever farther-flung outlying areas, even to Stockton. Thus building more housing first, in dense, central areas, might actually reduce traffic, by bringing those commuters back to their work places. This does not seem realistic, unfortunately. One has to assume that any housing increment will lead to more people, cars, and traffic, not less. There is no way to channel housing units to only those people who will walk to work, or take transit, etc., especially in light of the poor options currently available. The only way to relieve the transportation gridlock is to make using it dramatically more costly, or to provide more transportation- especially, more attractive transit options.

Another argument is that building more roads just leads to more usage and sprawl. This is true to some extent, but the solution is not to make the entire system dysfunctional in hopes of pushing marginal drivers off the road or out of the area in dispair. A better solution, if building more capacity is out of the question, is to take aim directly at driving by raising its price. The gas tax is far too low, and the California carbon tax (we have one, thankfully!) is also too low. There is already talk of making electric vehicle drivers pay some kind of higher registration or per-mile fee to offset their lack of gas purchases, but that seems rather premature and counter-productive from a global warming perspective. To address local problems, tolls could be instituted, not just at bridges as they are now, but at other areas where congestion is a problem, to impose costs across the board on users, as well as to fund improvements. This would also address the coming wave of driverless cars, which threatens to multiply road usage yet further.

In the end, housing and transportation are clearly interlinked, on every level. Each of us lives on a street, after all. Solving one problem, such as homelessness and the stratospheric cost of housing, requires taking a step back, looking at the whole system, and addressing root causes, which come down to zoning, transportation, money, and the quality and ambition of our planning.



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  • The Fed is getting ready to make another mistake.
  • For the umpteenth time, we need more fiscal policy.
  • Cheating on taxes, the Trump way.
  • Yes, Trump is this stupid, and horrible.
  • Another disaster from Hillary Clinton's career.
  • Corporations are doing well the old-fashioned way, though corruption.
  • What happens when labor is too cheap, and how trade is not so peaceful after all.

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