Affordable housing

[00:00:25]

RICK WEISS: Hello, and welcome everyone to this SciLine media briefing on affordable housing, a topic that’s got a lot of attention in this election season, and is relevant to communities all across the country, inside and outside of election season, but also something that we found has a lot of confusion to it, and we hope to clear a lot of that up today for you. My name is Rick Weiss. I’m the director of SciLine. And for those of you not familiar with SciLine, we are a philanthropically-funded, editorially independent, entirely free service for reporters and scientists based at the American Association for the Advancement of Science. We—our mission is pretty straightforward, is to make it as easy as possible for you, as reporters, to include scientifically-validated information in your news stories, whether those stories are about a science topic, like climate change or public health, or is—or on a topic like this one today that you might not normally think of as being a science topic, but it’s a topic that scientists, social scientists, and economists and others, do study. And we are in the firm belief that if you include data and research-backed information from those kinds of researchers, they can make your stories better and stronger. Among other things, SciLine offers a free expert matching service. We encourage you to check out our website: sciline.org. Click on the blue button, “I need an expert”, and we will find you someone who is doing research in the area that you’re writing about, and who is also vetted as a good communicator to help you get that research-backed information into your stories.

A few quick logistical details. We’re going to have three panelists today, each talking at a different aspect of the affordable housing issue. To enter a question, during or after their presentations of about 5 to 7 minutes each, you can go down to the bottom of your Zoom screen, hover over that Q&A icon, tell us your name, your news outlet and your question, and let us know if you want that question directed to one specific speaker. A full video of this briefing should be available by the end of the day today, and we’ll have a transcript up a day or 2 later for those of you who want to pull from that for your stories.

I don’t want to take the time to do deep biographies of all three of our speakers. Their bios are on the Sciline website. I’ll just tell you that we will hear first from Dr. Edward Glaeser, a professor of economics at Harvard University, who will describe the prime drivers of cost increases for home buyers and renters, with special attention to the role of housing-related regulations on housing supply. Second, we’re going to hear from Dr. Anthony Orlando, an associate professor in the department of finance, real estate and law at Cal Poly Pomona, who’s going to speak about some of the surprising impacts of new housing developments on the affordability of existing housing, and some related issues. And third, we’re going to hear from Dr Minjee Kim, an assistant professor of urban planning at UCLA, who’s going to share some potential solutions for housing affordability, with a focus on zoning policies and regulatory approaches for influencing land use and construction incentives. So let’s get started. Over to you, Dr. Glaeser.

[00:03:41]

ED GLAESER: Thank you, Rick, and thank you all for being here today. This issue is one that I’ve been deeply involved with for a quarter century, and it’s, it’s exciting that it is now a national topic. Of course, it’s now a national topic because things aren’t going so well, but it’s—it is exciting that’s become a national topic.

So this is one way to see the growth in housing prices, and the spread of unaffordability throughout America. This is the Case-Shiller Repeat Sales House Index for 5 different metropolitan areas, 6 different metropolitan areas. This index has been corrected for inflation. And the whole beauty of the repeat sales index is you look at the same house at 2 different points in time, and you look at how much that house has gone up or down in value. In that way, it corrects for changing housing quality, whereas, if you use a data series like the National Association of Realtors’ median sales price, that series will be influenced by whether or not there are a lot of big houses or small houses, or luxury houses, or non-luxury houses. So for a long time period of comparison, you’re really better off using these repeat sales indices. Now what this shows you is a series of undulations. There was an undulation that occurs in the late 1980s, early 1990s, but that undulation is really just by 2 series. That’s New York and Los Angeles. Then you have the undulation of the aughts, right, the great housing boom and bust that led on the global financial crisis. That was New York and Los Angeles, but it’s also Phoenix. And now you see the growth in housing prices over the last 10 years. And there, you see more cities have joined in. L.A., Phoenix and New York, certainly, but Atlanta and Dallas are joining it, and Houston is even going up a little bit. And so what you should take away from this is that unaffordability used to be a largely-coastal phenomenon. Now, it’s one that’s spread across the US. Now, the primary driver of this rising unaffordability in the last decade is the drying up of housing supply in America. This shows housing permits, and I’ve separated them out using into single-family units. That’s the blue series. The red series, which is 5 or more units, and the sort of anemic green series is 2 to 4 units, which used to be a larger share of our building stock than it is now. And you can see, really, the massive run-up, close to 2 million units permitted in 2005, 2006, followed by the great dearth. And we really haven’t gotten back there. And that, in some sense, is the, is the backdrop for this. And I’m going to try to make the case with my next graph, that you really can’t understand America, if you don’t understand housing supply.

So in this graph there, there is a horizontal axis that determines how much building there was. It’s measured as the permits issued between 2000 2013, so it’s 13 years of building divided by the 2000 housing stock. Along the vertical axis, along the y-axis is the difference between how much it costs to buy a house and how much it costs to build a house. So in San Francisco, the number is about 3. This is actually old. It’s about 2013, but it would be even higher today, 3 times as much as it costs to buy than it costs to build. And that gap between buying and building is sort of what you think you could imagine eradicating if you had enough new supply. Now the important point of this graph is that the cities that build a lot aren’t expensive, and the places that are expensive don’t build a lot. There’s no repealing the laws of supply and demand. People want to live in Austin, in Raleigh, in Las Vegas. But because the builders are relatively unleashed, all of that demand shows up in growth rather than in higher prices. People also want to live in San Francisco, or Washington, or Boston, but there, because there’s so little growth, that shows up in higher prices.

Now, I’m not going to make the case to you that this—these limitations, are primarily about regulation relative to other things. From this graph, it could just be that it’s the, it’s the hills outside of San Francisco that makes it difficult. There has been, now, roughly a quarter century that has really taken this on, and I think overwhelmingly shown that this is driven not by land availability, but by manmade shortages, by the fact that we make it much different—much too difficult to add density, much too difficult to build up. We have very large minimum lot sizes. And all of this, in some sense, is a world in which insiders, the people who bought their single-family detached houses a generation ago, basically exclude outsiders by having rules that make all change impossible. Now, what are the costs of this? The costs of this are highly productive places to become affordable. The whole country has become less productive because people can’t move to places where firm’s more productive. Right? The most productive part, part of the U.S. is Silicon Valley, and yet you can’t remain there. You can’t move there because it’s too expensive. People remain trapped in dysfunctional areas because that’s where they have housing, often with their parents. Opportunity for the children of the poor is reduced. Right? The areas that offer the most upward mobility for poor children are the ones that are the most tightly regulated. Insiders become wealthier. Outsiders lose out. In 1983, the median, 35 to 44 year old, had $56,000 of housing wealth. In 2013 the median, 35 to 54 year old, had $6,000 of housing wealth. In 1983 however, the 90th percentile, 65 to 74 year old, had $280,000 of housing wealth, and that had gone up to $445,000 30 years later. Insiders win, outsiders lose. The housing bubble becomes more extreme. And you saw that with those undulations. Building becomes less efficient. And we actually harm the environment because we don’t build in the most naturally green parts of America. Let me just remind you of what a picture of sort of American joblessness looks like. Over the past 15 years, typically, about 15% of prime-aged males in the U.S. have been jobless. But that is not uniformly distributed across space. Joblessness is focused particularly in the eastern heartland of the US, right? This is a swath that starts down in Louisiana, Mississippi, runs up through Appalachia and ends in the cities of the Rust Belt. Why do people stay there when there’s plenty of jobs in other places? Partially because that’s where the housing is cheap. And it’s not just that they’re renting housing, it’s there a third of prime-aged males, who are jobless, are living on their parents’ couches, and those couches aren’t moving to California.

Last point I want to make, and this is a little difficult. Together with Matthew Kahn, USC environmental economist, I measured what the carbon emissions are associated with living in different parts of the country. We standardized for income. We standardized for family size, and you can see the total cost of a marginal home going across the horizontal axis here. Along the vertical axis is how difficult it is to build. And what I want you to take away from this is in San Francisco, in coastal California, it is just far greener than any other part of the country. This is not the result of regulation. This is actually just because of very mild winters and very mild summers. There’s just much less energy use due to either of those things, plus these are actually relatively compact for American cities, so there’s less driving. Now, if you wanted to reduce American carbon emissions, you would build like crazy in San Francisco Bay. You build like crazy in coastal California, because this is the area that lowers carbon emissions. But of course, we don’t, and we don’t partially, precisely because of environmental regulations, because of rulings like the Friends of Mammoth case, that require a whole lot of extra environmental supervision there. Now, when you stop building in California, it doesn’t stop building overall. It moves to other places. It moves to Houston. It moves to Oklahoma City. It moves to places that are intrinsically much browner. And that, in some sense, it’s the larger environmental cost of local environmental regulations. And so the point that I’m trying to make is supply matters. Supply is what drives up prices. The bulk of supply is not that we don’t have a lot of land. You could put basically the whole world on tenth-acre lots in the states of Texas and Oklahoma together. Right? What we don’t have is land that’s been permitted for building, that is a man-made choice, and is a choice that imposes costs, particularly on the youngest and least fortunate Americans. Thank you.

[00:11:36]

RICK WEISS: Fantastic overview to get us started. Thank you, Dr. Glaeser. Let’s go over to Dr. Anthony Orlando.

[00:11:47]

ANTHONY ORLANDO: Thank you very much. So building on what Ed’s talking about, here’s the part of the results of the problems that he’s described. You hear talk about a housing affordability crisis, when you report about it, you might wonder, how do we define the crisis? Why do we call it a crisis? Is the word “crisis” overused? I don’t think the word “crisis” is overused. When you look at statistics like this. The median home price relative to the median income across the United States is at an all-time high. And as Ed showed you, that’s not just in places like San Francisco and Los Angeles. That’s starting to show up in places that have historically been more affordable, places like Atlanta, places like all throughout the country. The share of the median income that is required to afford a home purchase is the highest that we’ve seen since that bubble period in the early aughts that Ed was talking about, 42%, a very high amount of income that people have to devote if they want to buy a house, and that means that’s less money that’s available for them to pay for other things. Research has shown that when people spend more than 30% of their housing on—more than 30% of their income on housing, they start to have to cut back on basic necessities. That, in itself, is part of the crisis. Now, a record number of renters, literally half of them throughout the country, are spending that, and relatedly, a record number of Americans are experiencing homelessness. And if you look at what correlates with homelessness across the United States, it is primarily housing costs.

Now, what is the market trying to do about this in the face of the regulations and the other obstacles that Ed was talking about? Historically, the way that we built our cities was we built out in the suburbs and the exurbs, where there was what we call “greenfield land”, where it was easy to throw up cheap structures. If you look at the blue and the purple dots here, you can see in a map of Los Angeles County, that most of those dots are on the outside, in the periphery, where it was easy to build.

In the 1970s, that’s how places like Los Angeles built. They sprawled outwards. Now, not so much. Because we’ve built out a lot of the suburbs in the exurbs, we’re having to try to find land back in the core, doing what we call “infill development”, finding plots of land that you can squeeze in between other plots of land. That’s much more difficult and much more expensive to do, partly because you run into those NIMBYs that Ed was referring to, people who don’t want construction in their backyards, and partly because you can’t build single-family structures as easily. This is—on the left, we have cities Los Angeles, Sacramento, San Diego and San Francisco, all in California. And over time, all of them are trending downward, mostly the bigger cities. You can see less and less single-family construction happening. More and more, they’re building taller structures. But it’s not just California. It’s not just the highly-regulated areas. It’s also places like Texas, cities like Austin, Dallas, Houston and San Antonio. You can see this downward trend in those places. Yes, they build more single family structures, relatively speaking, but they’re building less and less over time. If they’re not building as much single family as they used to, what are they building? They’re building multi-family. They’re building apartment buildings. They’re building buildings that are five units or larger. And you don’t just see those trends in California. You also see them in Texas. Why do you see them in both places? Well, it’s partly because it’s not just the fact that California has different regulations than Texas. Ed is absolutely right about that. It’s also the fact that it’s becoming harder and harder to build in bigger, denser cities, where it’s harder to find ways to add units.

The problem with this is that when you build that tall, it’s more expensive. Of course, taller buildings are more expensive because they’re builder—bigger. That’s not what I’m talking about here. What I’m saying is the average cost per square foot is higher for taller buildings than for shorter buildings. And that’s why, when you see new tall buildings being—popping up, people complain that they are luxury building. They are high-end buildings. Who can possibly afford these apartments? They have to charge those rents because the costs are higher. So if that’s the case, why should we build them? We should build them because we now have copious evidence that when you build these new market rate structures, it actually lowers rents for everybody in the neighborhood around it, that the laws of supply and demand, as Ed said, really, really matter. We have evidence from Germany, where people looked at a kind of quasi experimental setting where, what if weather conditions alter the construction timing? Well, we find that when that construction is built, rents come down. These quasi experiments are very valuable, because they tell us this isn’t just a correlation. This is causation. When you throw a new structure into the area that isn’t expected, a new apartment building, it has an actual effect on the apartments around it.

Here’s another example. In San Francisco, some researchers found that when there are building fires, you kind of randomly free up development land. And developers come in and build a new apartment building in that newly vacant lot, rents fall, evictions fall. Yes, richer households move in, but that doesn’t stop rents from falling. We find, in New York City, the same thing. And another study that went looked at 11 cities across the United States found the same thing. You might be wondering how. If you build such expensive new units, how is it possible with richer people moving into the neighborhood, that it’s lowering rents for everybody around? Part of the answer is what’s called “the migration effect”. There’s wonderful work by Evan Mast at Notre Dame, where he actually tracks people over time, and he comes to a fundamental finding. You need to put the rich people somewhere. If they don’t live in a new constructed building, they’re going to live in the existing housing stock, and that takes up units that everybody else could live in. When there’s a newly-constructed unit, yes, rich people move in, but that creates a vacancy in the building that they were living in, which Evan has found is typically a less expensive building. Now that less expensive building has a vacant unit, that someone who doesn’t have as much money can move into. And when that person moves into that building, it creates a vacancy in an even less expensive building, which someone else can move into, and so on down the line. Now, this may sound a little like trickle-down economics. It’s not at all related to what you might think of as trickle-down economics, but in housing studies, this concept of filtering down is a long-established fact, and now we have the quantitative evidence to show that building, luxury new buildings actually does benefit everybody. But it’s not just luxury buildings.

You know that we also have big A affordable housing, which is housing that comes with government subsidies, subsidies like the Low-Income Housing Tax Credit, where the units that are in those buildings are restricted to low-income families, and the rents are restricted to not be market rate, to be lower than market rate. Of course, that creates affordable units for the people who live in them. But what does it do for the surrounding community? One of the biggest concerns is that it’s going to lower property values because there’s a stigma attached to them. That’s not the case. Brand new research shows that sometimes it actually raises property values. But then you might worry, if it raises property values, will it raise rents for all the people around it? No. As it turns out, brand new research that hasn’t even been released yet, but I should be releasing very, very soon, we find that new low-income housing does not raise rents, and often lowers rents in the surrounding area, which means it’s a double whammy. It lowers rents for everyone around it, and it creates lower rents in the, in the building itself. Thanks so much.

[00:19:06]

RICK WEISS: Some fascinating, fascinating data there. And I want to remind reporters that these slides will go up very quickly after the briefing today. So if you want to examine them more closely, you can do that. Let’s go over to Dr. Minjee Kim.

[00:19:25]

RICK WEISS: You’re on mute.

[00:19:35]

MINJEE KIM: All right. Can you hear me?

[00:19:36]

RICK WEISS: Yes.

[00:19:37]

MINJEE KIM: OK. All right. Well, thank you, Rick. And it’s great to be following two excellent presentations. I was charged with the task of drilling into zoning as a force of problem and a possible solution for tackling housing affordability challenge. So I’ll do my best to share the state-of-the-art research and thinking on this topic. But before we can get even started on that, what is zoning? So zoning is a set of local government regulations that divide the city into quote, unquote, “different zones”, and regulate what can and cannot be built on each zone. So why are we talking about zoning in the context of housing affordability? And zoning is related to housing affordability in two major ways. It can first limit the construction of multifamily housing structures. Two: zoning can add significant additional costs to new housing construction. And we’re going to unpack each—unpack of these mechanisms in a little bit. But to truly understand zoning impact, I argue that we have to go all the way back to its origin.

So in 1926, in Euclid v. Ambler, this is the U.S. Supreme Court case that upheld the very constitutionality of zoning. The Supreme Court essentially upheld that this land use regulation tool can be used to exclude multifamily apartments from single-family neighborhoods. In fact, here’s what the actual opinion read. Quote: “The apartment house is a mere parasite constructed in order to take advantage of the open space and attractive surrounding created by the residential character of the single-family district.” So such a perspective has essentially set the nation on a trajectory that makes it extremely difficult to build denser forms of housing, such as the one you see here, particularly, as Ed mentioned, and as Anthony mentioned, in wealthier places in community. OK. The zoning limits the development of denser forms of housing, but there’s a lot more tools under its belt. And communities across the nation, particularly that are the least affordable, have used many of these tools to prevent the construction of affordable homes. These include dimensional restrictions, such as minimum lot size and setbacks, density and use restriction, having discretionary review process, which adds time and uncertainty, and of course, parking requirements. And not every community is using these tools with the intent to block affordable housing, but these regulations exist everywhere, and their cumulative impact on housing production and affordability is backed by rigorous academic research.

So Dr. Glaeser, on this panel, has a 2009 paper, which clearly demonstrated that larger minimum lot size is associated with reduced housing construction. A 2014 paper found that cities that require more permits have simply higher land prices. My own paper from 2020 showed how a discretionary review process can add significant uncertainty to the development process. So for example, in 2016 in Boston, a project can take as little as 32 days to secure the—go through the review process, whereas the most controversial one took 5 years to get that through the process. This uncertainty adds significant cost to the total development and then on parking, there’s a trope of academic paper that demonstrated how minimum parking requirements drive up the cost of housing. And what’s more is that I’m just talking about zoning. I’m not even talking about additional regulatory barriers, such as environmental impact reviews and growth management policies.

All right, so now that we know zoning hurts housing affordability, the question is what can we do about it? And here’s where the zoning reform come into the picture. States and local governments across the nation have been taking up this challenge, and have been removing zoning barriers to housing construction in recent years. There are just too many examples to share, but I’ll just share some of the most well-known ones. So for example, in California, the Senate Bill 9 signed into law in 2021 allows for up to 4 plexuses to be built in what—on land that was exclusively reserved for 4 single-family detached homes. In Florida, the Live Local Act signed into law in 2023 allows developers of affordable and missing middle housing to build on any land that is zoned for either commercial, industrial or mixed use, and also override zoning restrictions on density and height. Local-level Minneapolis was the first major city to allow for denser development in single family districts, although the implementation has been deterred by lawsuits against it. Portland’s residential infill product—residential infill project, has been, has been in effect since 2021. It allows for up to 6 plexuses to be built on single-family lots. The efficacy and impact of these interventions are yet to be determined, but I’m optimistic of the effect of what I would call quote, unquote, [inaudible 00:24:44] “zoning”, which allowing, which is allowing greater forms of housing in single-family neighborhoods. Early evidence from Portland suggests that the Residential Infill Project has led to substantial increase in missing middle housing. And a study on New Zealand’s map of zoning, published in 2023, also found that allowing multifamily housing and single family neighborhoods led to greater housing construction.

So now that we’ve covered zoning, I’m going to switch gears a little bit and talk about additional housing policies, because zoning reform should be just one component of a comprehensive set of solutions for tackling housing affordability issues, I will set aside policies directly tackling the construction-related challenges if there’s supply chain policies or legal policies, which is probably the most important piece of the puzzle, and also most aptly addressed at the federal level. But even at the local and state level, policymakers can still pull a lot of levers to move the needle. This includes supporting alternative home ownership models, such as community land trusts, creating a dedicated source of funding for affordable housing. So for example, in 1992 the Florida Legislature created the Sadowski Fund to support home ownership and rental affordability. And the dedicated revenue source for this fund is the documentary stamp tax, or otherwise known as the real estate transfer tax. Selling or leasing publicly-owned land at a below market price, or even for free, can be a great way to subsidize more housing construction.

And another important, but less obvious piece of the housing affordability level, is how to deal with building stock that has deteriorated. It’s not just about building shiny new buildings, but how can we use existing properties to increase housing supply? So in the interest of time, I will conclude this presentation by emphasizing that the state and local level solutions, along with those at the federal level, should be considered comprehensively to be able to tackle the massive challenge we face today. Thank you.

[00:26:50]

RICK WEISS: Thank you, Dr. Kim. Great introduction to some of the possible solutions there, and a reference slide at the end for people to look at when we get those posted after the briefing. I want to remind reporters that this is a good time to send in some of your questions through the Q&A icon at the bottom of your screen. And I do like to start off these briefings with a question from SciLine that I want to ask each of our panelists to start off with, and that asks each of you to sort of put yourself, not just as experts in affordable housing, but as news consumers yourself, and speaking directly to the reporters on the line here today, give us a sense of either something that you think is going well with how this topic is being covered in the media, and/or something that you think has been a little bit off track in the way you see reporters covering this topic, or something that’s missing. And give a quick bit of advice to reporters along those lines. So if I could ask you, Ed, to get started on that.

[00:27:54]

ED GLAESER: On how, on how housing is being, is being covered well and poorly by the media. It’s a great question. I think explaining supply and demand people is—tends to be something that doesn’t get done enough, and helping people to think through supply and demand is really important. I think the other thing is, so that’s—that’s certainly one element of this. Thinking through indirect impacts of different policies. So for example, in response to one of the housing proposals put forward in the presidential election was to—it was to have a home buyer’s tax credit of $25,000, right? The normal economist response to that is that if you do some form of a subsidy like that, in a restricted market, what that does primarily is to push up prices. OK? And that requires sort of thinking through both the direct and indirect effects of that. So I think it’s those two things, really. It’s sort of thinking about how supply and demand work together to explain what we’re looking at, and then at the same time being focused on what are the indirect effects of various policy solutions?

[00:28:58]

RICK WEISS: Interesting. Great. Thank you. Anthony?

[00:29:02]

ANTHONY ORLANDO: Yeah, I think one thing what I’ve seen in the last 5 to 10 years is that there, I think there’s been a real improvement in how reporters have covered the lack of housing and the difficulty of development that’s gotten a lot of press, and I want to call that out as a really positive thing. I think the two things that don’t get explained well, in addition to what Ed said, is one, why does it cost so much? A lot of people complain about that all the time. They see new properties going up, especially when they’re government subsidized. Why does it cost so much? That’s something you can break down, especially with good infographics, and explain that most of the costs are valuable things, but a lot of them are going towards regulations, like the things that Minjee and Ed have talked about. And so if you can break it down, you can explain what are things we could try to take out of this cost stack? The second thing is what I would call, and those of us who are social scientists would call, the counterfactual. And this is really hard for people to try to think through. People see something happen in their neighborhood. They see an outcome. They think the two things are related. You built a luxury apartment next to me, and the place is unaffordable to live in this neighborhood. OK. But the counterfactual is what would have happened to that neighborhood if that building didn’t get built? Where would those people have lived? Maybe prices would have gone up even more. It’s a hypothetical, so it’s hard to explain, but it’s a way to actually correctly think through these issues.

[00:30:17]

RICK WEISS: Great. Trying to bring some scientific, methodical thinking to a topic that’s not usually thought of as a science topic. It makes sense. And Minjee?

[00:30:27]

MINJEE KIM: Great. Absolutely agree with Anthony that it’s great to see greater attention given to housing, and building specifically. And so I think that having greater—setting greater attention to those topics is a positive thing, and but I would—and one thing that I have seen in the press is that zoning is sometimes not distinguished clearly with other additional, like other regulatory barriers, and it’s sometimes used as like a casual term to anything related to regulating land use, which is not the case. And I want to point out that making zoning like a strawman of all regulatory barriers creates confusion—can create confusion among the public and the policy making perspective. So clearly distinguishing what zoning is, and what zoning is not, is something that could be improved, improved in current reporting. And then, if I may add one other thing for me, and this was alluded to in both Ed and Anthony’s presentation, but zoning does have clear implications for housing supply, but we must also not forget the equity implications of zoning. And that really does not get covered as much in the media, which I think should deserve, deserves a lot more greater attention by the press.

[00:31:47]

RICK WEISS: You might want to unpack that a little bit in the Q&A here, but—what that equity part of the equation is. But let’s get to a few questions here that were coming in from reporters. I’ll start with this one from Noah Alcala Bach at the Albuquerque Journal, who says, “Here in Albuquerque, we have a progressive mayor who has aimed, and successfully in a couple of instances, changed NIMBY zoning laws. However, the city is still seeing a record number of people experiencing homelessness. How long does it take to see an increased housing supply and zoning changes that allow higher density housing, how long does it take for all that to make a dent in the unhoused population?” Is anyone familiar with data or sense of that?

[00:32:30]

ED GLAESER: So homelessness is related to housing, but it’s not just related to housing. So it is true that by lowering the price of housing, you will, you will see slightly less homelessness in—as an ultimate phenomenon. But it’s also true that homelessness is related to mental health. Homelessness is related to a number of issues, and you don’t necessarily fix it entirely by having more affordable housing. Second point that’s really important is that the homeless are astonishingly mobile. OK? And they respond to good weather, and relatively good treatment. And so Albuquerque has a progressive mayor, who is relatively nice to homeless people, and the weather is pretty nice, and poor people will—and homeless people will show up. So that’s a difficult thing to deal with. And I would say, I think about all of the thorny problems facing American cities, homelessness is way up there among the ones that I actually don’t really feel like I fully understand how to fix at a cost-effective situation. I did an event with the mayor of San Jose last year, where he had managed to get the price of the units that they were making to house homeless people come down from 1.3 million per unit to 300,000 per unit, and I considered that progress. But I don’t think that necessarily solves the problem.

[00:33:39]

RICK WEISS: Right. Any other thoughts about the links between housing affordability and homelessness?

[00:33:45]

ANTHONY ORLANDO: Yeah, I have to ask Ed offline to—I want to see evidence of how many people are actually moving. But the—there’s a new study for out of USC, where they gave people $750. It’s called “Miracle Money California”, if you want to look it up, where they gave people $750, people who were on the verge of homelessness, and it has significant reduction in homelessness. In other words, there are multiple ways to solve the problem that aren’t as expensive as just building units. Some people who are homeless, as Ed is saying, need units because they need permanent, supportive housing that comes with mental health care to go with it, and we would just need more units in the city. So it’s good to build housing for the homeless. But a lot of people just need a little extra money to keep them out of homelessness in the first place. Sometimes, the most cost-effective method is to prevent homelessness, and sometimes it’s an astonishingly low amount of money per person that can do that.

[00:34:39]

RICK WEISS: Hmm. Great. OK, let’s take this question from Yvette Fernandez from the Mountain West News Bureau. “Can you give some examples of states that are doing creative things to improve the housing crisis?” It always helps to have some examples and news stories. You folks have mentioned a few. Do you want to either expand on any of those or mention some others?

[00:35:01]

ED GLAESER: So I think the number one, examples of the places that are doing the best, that are just places that didn’t regulate. I mean, there was one city that wasn’t experiencing rising prices in the past 8 years, or was experiencing much less, and that was Houston, Texas. And Houston has been famous for its relative lack of land use regulation. And I want to agree with Minjee, it’s actually not just reporters who are sloppy about zoning versus land use regulation more generally, or the approval process. Economists are sloppy all the time on this. And I have been sloppy, too. And she’s absolutely right, of course. But I wrote a piece for a journal called City Journal, maybe 16 years ago, but it also appears in—the same calculations appear in my book, “Triumph of the City” from 2011, which is I just added up what it was like to live as a middle-income person in Houston and New York City. And just their lives were totally different. And their lives were totally different not because of taxes. Their lives were totally different because of housing costs. Because in Houston, they were able to actually find an affordable unit, in a reasonably good school district, even though they, as a couple, were earning $90,000 a year. If you gave them another 20 or $30,000 a year in New York City, they were still living lives of enormous difficulty because of those housing costs. So I think you just look at the places in America that still become—that still make it easy to build. The front line, to me, of the land use regulation battles are in the Sun Belt. They’re in the higher priced areas of the Sun Belt. They’re in areas that, at one point in time, they made it easy to build, but now they don’t. And so that, that, to me, is the really—where the really interesting stories are, and the story—the stories that I’m trying to understand, and this the stories I hope that some of you decide to investigate.

[00:36:40]

RICK WEISS: Other favorite examples of some place that’s really doing it right, perhaps, that people might want to focus on in their stories?

[00:36:47]

MINJEE KIM: Well, I think I love the fact that I pointed out that it’s the places that aren’t in the headlines, it’s probably the places that have been having the best practices, in terms of supporting housing production. With that being said, some of the most recent zoning reforms, like a lot of the examples that have actually been successful, can be found in California with single-family zoning districts, as well as supporting accessory dwelling units, and then also streamlining approvals process, or have all been legislative built, that have been passed. I mentioned Florida as one example. And then one other thing that Florida has done with that Live Local Act is actually increasing the pool for the low-interest loan that state awards to for affordable housing development. So just increasing that part of public subsidy for the production of housing construction is another clear intervention that will lead to more housing production.

[00:37:55]

RICK WEISS: All right. Question here from Sandra Strieby, a freelance reporter based in Washington. “Do you have any thoughts on whether the effects of changes in the prevalence of natural disasters and related changes in homeowner’s insurance market are affecting housing affordability?” That’s kind of a climate change-related phenomenon.

[00:38:17]

ANTHONY ORLANDO: This one I know because I have a new paper on it, so—actually, a few papers on it. So we’ve been looking at the effect of natural disasters on rental affordability, and we find that after most—most types of natural disasters, especially wildfires and winter storms, rents go up faster in those areas compared to areas that didn’t get hit. And it’s not surprising, because the rental housing stock is destroyed for a while, and it takes a while to rebuild. But even after the rebuilding, those areas wind up staying a little bit more affordable. The caveat to that is that we find when there are government policies in place that encourage faster rebuilding, and give more money to rebuilding rental stocks, specifically, that the long-term effects on rental appreciation aren’t quite as bad.

[00:39:02]

ED GLAESER: I just want to chime in on that. There are certain types of affordability that are actually bad. And we actually do want it to be more expensive to live in areas that are prone to various forms of disaster than it actually is right now. So right now, we’ve done too much to sort of let people to move into flood plains, and build in areas, which are almost assuredly going to involve huge amounts of FEMA bailouts over the, over the years, if not, you know, multibillion dollar infrastructure, like seawalls. And we’ve done too little to get the people built there to internalize, we would say in economics, to get them to recognize the cost they’re going to impose on society of those kinds of buildings. So I totally agree with Anthony’s comment, which is a very important thing, but I do think we—like the goal is not to make it incredibly free and easy to build in places, where you’re going to have fires all the time, or where you’re going to have flooding all the time.

[00:39:49]

MINJEE KIM: Let’s throw in a perspective from Florida, because insurance has become a huge issue with developers and builders here. And it has absolutely skyrocketed over the past couple of years. Insurance has become a huge component of the housing price inflation in Florida. So, like, for example, with the tax credit developer, state is—the financing agency is having to spend more subsidy per unit or per project, because of—to mitigate the increases in insurance. So it’s absolutely making a direct impact on housing construction costs. Whether or not these projects should be built in those places, is a different question.

[00:40:36]

RICK WEISS: Right. OK, and I think that should help answer the question we had from Brad Tuttle at Money Magazine, who was asking about the impact of insurance on housing. Let’s—I see that Yvette Fernandez at Mountain West News, similar as I did, has picked up on a desired, Minjee, for you to unpack a little bit about what you broached about equity implications of zoning. Do you want to, do you want to talk about that for a minute?

[00:41:00]

MINJEE KIM: Yeah, absolutely. And again, like going back to, and thank you for asking that question, because going back to the very origin of zoning, and when the Supreme Court first said that the zoning is illegal—it’s legal to zone, the very underlying rationale is to really protect single-family neighborhoods from multifamily apartments. And from the get-go, zoning has this inequitable implication, and it has been used this way, either intentionally or unintentionally. And there’s a reason why the term “exclusionary zoning” has become so popular, and has become a target of public policies in recent years. And you also have to look at zoning in the context of broader racially discriminatory housing policies, including redlining, including blockbusting, including institutionalized. like lending criteria. that was racially discriminatory. Zoning goes hand-in-hand with those practices to be—and has been used, and go hand-in-hand with those practices to be able to protect communities from lower income population, from people of color. And this—there is a wealth of research, academic research that has proven this segregate—the effect of zoning on segregating neighborhoods. And this often does not get mentioned when we’re talking about zoning reform. Zoning reform, one of the main impacts, or importance of zoning reform, is also enhancing and—enhancing the equitable access to housing and opportunity neighborhoods. And that really is what I wanted to point out to, and I’d be more than happy to share resources, point to research in this area as a follow-up.

[00:42:52]

ANTHONY ORLANDO: Just I’ll add to that. I agree with everything Minjee said. Since Ed touted his one of his books, my latest book is called “Keeping Races in Their Places”. And it echoes a lot of the things that Minjee is saying. And one of the things in terms of solutions to all of this that I think is important to think about is Ed mentioned the research that we now have, a lot of it coming from his colleague, Raj Chetty, about how opportunity in America is tied to place. Right? Inequality is tied to place. So much evidence shows that where a child grows up determines a lot of their opportunities in life. And so if you have policies that segregate Americans, you are segregating opportunity. And so in terms of creating solutions to this, you have to do one of two things. You either have to invest in the low opportunity areas to help them have more opportunities, which would require new development, or you have to help people move into the high opportunity areas, which means you have to create—you have to develop new housing in those areas, which typically have the single—family zoning That prevents it.

[00:44:00]

RICK WEISS: Hmm.

[00:44:00]

ED GLAESER: So just following up on Anthony’s excellent, excellent response, this is Raj’s data. So 1 through 5 shows the most—goes from 1 is the least upward mobility for kids, 5 is the most. Along the size of the bar is how regulated this place is, as measured by the Wharton Regulatory Land Use [Regulation] Index. And what you can see is that the places, that are by far the best at promoting upward mobility for kids, are also the places that make it by far the hardest to build. And so we’re sort of directly doing what we—the opposite of what we’d want to do, which is to enable lots of housing for middle and low-income people in these high opportunity places. Zoning is achieving exactly the opposite.

[00:44:40]

RICK WEISS: So I’m going to insert a question from the moderator here, because I hope it reflects some questions others would have. But I have to admit, in my naivete, perhaps, I’ve always thought of zoning as being protective because you don’t want a lot of shoddy building. You don’t want a lot of ugly buildings. You don’t a lot of things that don’t fit into the sort of tone or the atmosphere of the existing community. Is that just nimbyism, or is it just that there are other regulatory issues in place that keep you from having lousy construction and all the things you don’t want in a neighborhood, and zoning is not really the right way to handle that question?

[00:45:23]

ANTHONY ORLANDO: Let me make a legal point, and then I’ll turn it over to Ed and Minjee to add, but I’m sure they have a lot more to say. Which is in the Euclid Supreme Court case that legalized zoning, essentially, that sanctioned zoning in the United States, it argued—they—the Supreme Court argued that what makes it legal to put zoning in place, and regulate people’s private property in this way, and essentially take away their ability to use their property in certain ways, which is a regulatory taking, is that it has to support the health, safety and general welfare of the population. So in Euclid, they were trying to keep industrial properties away from residential properties, which, by the way, we still don’t do very well in environmental justice communities throughout the United States. That was historically the prime reason why the Supreme Court said this should be allowed, was to protect health and safety. But you can make a reasonable case that a lot of zoning nowadays doesn’t do that.

[00:46:19]

RICK WEISS: Hmm.

[00:46:21]

ED GLAESER: And just think about what you talked about, like character, what it looks like, that feels like NIMBY code to me. That doesn’t, that doesn’t feel like—and the example that I always have is the—before zoning, the brew-ha-ha, that the millionaires on Fifth Avenue made, who used to live in their palazzi, think the Frick Museum perhaps, did when they started building high-rise housing on that, that this was an outrageous piece of neighborhood change. You know, Fifth Avenue still functions, and it still houses rich people. It’s still up.

[00:46:51]

RICK WEISS: Great point. OK. Now that I’ve been busted as a total, total single-family home nimbyist, let’s continue with the questions from reporters. This is from Claire Keenan-Kurgan from Interlochen Public Radio. “I’m covering a situation in northern Michigan, where residents/homeowners are trying to repeal zoning reforms that had allowed duplexes and ADUs. It’s up for a vote this election, and the repeal has a good chance of passing. Is this a trend? Have you seen this happening elsewhere? Does this kind of referendum get in the way of loosening up zoning regulations across the country?”

[00:47:25]

MINJEE KIM: Yeah, absolutely. This is certainly a trend that I see in practice. So like I mentioned Minneapolis is the first major city to get rid of single-family only districts, and but the implementation has been blocked by a lawsuit up until recently, and it’s still sort of in limbo. And same with Gainesville in Florida, they also did the same thing. They—the council voted to eliminate single-family zoning, but then legal challenges have made the implementation impossible. And so, and it is certainly a trend. So the American Planning Association recently issued a what’s called a “zoning practice”. It’s a policy sort of report for practitioners, that talks exactly about how to protect your zoning reform from legal challenges, so that it—you’re not essentially wasting your time trying to get this through, and then not being able to see the impact of it. So I believe the publication is called “Protecting [Zoning Reform Gains]”.

[00:48:27]

ED GLAESER: So I want to make a point on this, which is the majority of American households are homeowners. OK? And for most homeowners, housing affordability is not a good thing. It’s a bad thing. It means that the value of their largest asset has gone down. Okay? Or it has not gone up as much as it possibly could have. Consequently, the fight for affordability is always going to be an uphill battle. The amazing thing is when I started working on this stuff a quarter century ago, there were, like, three libertarian economists who thought this could possibly be important. Right? And everyone else thought this was just a silly thing that I was wasting my time on. Over the last 25 years, there’s become a movement, and it’s incredibly exciting. And you know, it’s they’re going to lose some, and it’s going to be hard to win what they do. I think they’re going to be more successful in larger communities, in big cities, where you have people other than homeowners, who will potentially win from zoning. There’s nice work by Clemence Tricaud of UCLA that shows that when little French communities are merged into big French communities, they tend to build more housing when they, when they get there. But it’s always going to be an uphill battle. And I think the important point is, you know, appealing to their better angels, reminding everyone that when a locality passes zoning reform, there are losers who aren’t there yet. There are people who would love to move into that community, who don’t currently live there, who are being zoned out. And I think always keeping in mind the fact that, you know, everyone has a stake in new housing that’s being built, not just the neighbors. And while the neighbors should certainly have a voice, they shouldn’t necessarily have a veto.

[00:49:55]

ANTHONY ORLANDO: As a note for a reporter, I would love to hear in an area like that, who’s showing up to the neighborhood council meetings to talk about this? Who’s voting? Who’s politically involved? Not only are homeowners, the majority of the voters in these cases—the majority of the, of the residents in a lot of these cities, they’re also the ones who primarily are the ones who are politically involved, and so they’re the voices that are heard. And so that would be a fascinating aspect of the story to pull out, whose voices are heard and whose voices aren’t.

[00:50:30]

RICK WEISS: Let’s take a moment on that, if we could. I’m going to take a break from a few more reporter questions. But let’s talk about the politics for a minute, because we’re on this in part because of the election coming up, without necessarily asking any of you to weigh in on your, you know, personal political preferences, but I’m curious what you can say about what is at stake with regard to affordable housing, in your view, given the policies that you see being bandied about as part of this, you know, electoral decision coming up. Are there two different paths that people are describing, that candidates are describing, that really have very different outcomes? Or, you know, is there any way to link the political philosophies of what’s going on in this election to clear differentiated outcomes on the housing market? Or is it more confusing than that? What can you say about what’s at stake here?

[00:51:21]

ED GLAESER: I don’t know that very much is at stake, in the sense that, like, the federal government, I’ve been in conversations with people since the Clinton Administration, in the federal government who wanted to impact local, local land use decisions. It is very hard for Washington to make a difference. They can throw money at the problem, but as I discussed beforehand, more subsidies often just push up prices. And so you want to be sort of careful about that. I’m confident that you get, you know, one of the parties is more subsidy friendly than the other party. But, and some subsidies aren’t terrible. I think, the Low-Income Housing Tax Credit, which subsidizes building to the extent to which that’s focused on the high-demand parts of America, that’s not a terrible policy at all. My problem with the Low-Income Housing Tax Credit is it goes everywhere, and it doesn’t make sense to subsidize extra housing in Houston, and it doesn’t make sense to subsidize it in places where housing prices are really low. The one clear policy that the Harris campaign has endorsed is the Neighborhood Homes Improvement Act, which is, is an act that’s live in Congress. It is a spectacularly silly piece of legislation, because what it does is it offers to fill in the gap between price and construction cost in those communities where prices are below construction costs. Well, those are the one sets of places where you don’t need to have more housing in the U.S., where housing is already affordable, are the places where prices are below construction costs. So the last thing you want to do is be throwing money at that, and getting building where there’s neither high demand, nor high productivity, nor particularly high amenities. So it’s very hard to know what either of them will do. Neither of them been very, very fleshed out on this. And the ability the federal government to impact things isn’t really terrific. I mean, my own preferred policy, which is to tie federal transportation spending to what the States do, and to use that as a nudge to get states to make more decisions. It’s not clear that that will pass constitutional muster, although there is at least an argument that transportation, the benefits of transportation spending, are closely tied to how much new housing you have to build. But the front lines of this battle are in the state legislatures. They’re not on the—they’re not in the federal—not on the federal government. And I would say, I frequently get frustrated by having too much economics, believe it or not, in electoral—elections, given the president’s actually relatively weak controls over the economy, relative to the thing that presidents have total control over, which is foreign affairs and wars. So I would say that this is likely to be a much more consequential election for what happens in Ukraine, what happens in Israel, than it is for how much housing gets built in suburban Los Angeles.

[00:53:41]

RICK WEISS: Interesting. Either of the other two of you would like to weigh in on this?

[00:53:45]

MINJEE KIM: Right. So I guess I have a slightly different perspective on the role of the federal government in this, in the sense that the federal government was the main source of the housing construction boom post-war period. And so they have been able to significantly influence how homes are built, how cities grow in the United States. The federal government has certainly stepped back from that position. But that is not to say that that’s not an option on the table, and especially in terms of subsidizing builders, subsidizing developers, subsidizing construction. That’s where I think the federal government can really make a difference, not on the land use regulation side of things.

[00:54:29]

RICK WEISS: OK. Anthony, anything to add there?

[00:54:34]

ANTHONY ORLANDO: Oh, I think one of the things that Ed is right about is that this is just not something that gets as much press as other things. I’ve never seen a presidential campaign where housing is a primary issue, so I’m just not holding my breath.

[00:54:47]

RICK WEISS: OK, let’s try to get in one or two more questions. I want to remind reporters that the video of this will be available very soon after we close today, and the slides will be there for your examination as well. I also want to remind reporters that at the end of the briefing today, you will get a prompt for a very short survey. It’s just three questions or so. It’ll take you literally a half minute. We’re all tired of surveys, but it really helps us develop these briefings in a way that can help you as reporters. So I hope you’ll take that half a minute, and give us a couple of answers. I wonder if I can squeeze in one more question. I know some of our guests today have a hard stop at the top of the hour. Why don’t we look at this question from Zach Winn, a reporter based in Massachusetts. “Will demographic changes, like decreases in Boomer populations over the next 15 years lead to more inventory or falling prices?” Anyone want to address the demographic question here?

[00:55:47]

ED GLAESER: So demographics do matter. My colleague, Greg Mankiw, about 30 years ago, wrote a paper about how the coming baby bust would cause housing prices to tumble rapidly. And he was right for about two years in the early 1990s, and then everything got reversed. This is not nothing, as you say, but it’s relatively small relative to –if you just go back to the sort of colossal decline in the supply of new housing that we’ve seen since 2012, I think it’s relatively small potatoes relative to that. So it’s not that it doesn’t, not that it doesn’t matter. I just, I just would. I don’t think that’s going to free our problem. Our problem is fundamentally too many people chasing too few homes, particularly in the most productive parts of the planet.

[00:56:30]

ANTHONY ORLANDO: I just want to emphasize that last part of what Ed said, because I think there’s sometimes what we call a fallacy of composition here, which is you look at the aggregate numbers changing, but what often matters is how those numbers are distributed across space and across the population. And the fact is that the high-demand places are going to continue to be high demand because they’re high productivity places, and they have high amenities, and they’re good places to live. And the fact that we’re not building in those places is a negative for the productivity growth of the United States as a whole.

[00:57:01]

RICK WEISS: Okay. We’ve got a few questions left that we’re not going to have time to get to. For those of you who are on that list, please get in touch with us. We may be able to help you get connected to some of these experts, and at PBS Cincinnati and others. Let’s stay in touch. But I do want to take the last minute or two to ask our experts to answer a fairly generic question that we like to ask at the end of these briefings, which is basically just to take a half a minute or less, and give us a take-home message that each of you would like to have reporters walk away from. If they’re going to come away with one overarching idea, one theme that really sticks with them at the end of this briefing. What would you have that be? And Ed, I’ll start with you.

[00:57:42]

ED GLAESER: I think it’s the mismatch between the desire to do something at the federal level and the fact that these decisions are really controlled at the local level. And that there’s, there’s really, I mean, I disagree with what Dr. Kim said in terms of the role the federal government creating the post-war housing boom. It wasn’t irrelevant, but the technology of cars enable just vast amounts of land to get developed. And so it’s very hard and just an enormous amount of building. And of course, you have the unleashing of things like the Levitz and mass production of housing, which has made things much cheaper. And so I would give much more credit to the combination of changing technologies for building and for transportation than I would to any particular public policy, even including the rise of the 30-year mortgage, which was an important addition, but hardly the only or the primary determinant. So it’s just this mismatch, and it’s always going to be an uphill battle, because local homeowners are not going to like change, and they certainly don’t want something that makes their housing cheaper.

[00:58:37]

RICK WEISS: OK. And Anthony Orlando?

[00:58:40]

ANTHONY ORLANDO: I would say for me, one of the big things, especially as a reporter, to think about, is disentangling the motives of the players involved from the outcomes that we care about. I think one of the reasons why these issues get conflated is because people on the left do not like rich developers building things, and getting rich off of that, and people on the right do not like subsidies going to build low-income housing, or they may be suspicious of certain residents moving into their neighborhood. When in reality, the motives of what those people are doing is not as important as the outcomes. Both of those things, by creating development, can be very good for communities and very good for America, regardless of whether you like the players who were involved.

[00:59:23]

RICK WEISS: Great advice. And Dr. Minjee Kim?

[00:59:26]

MINJEE KIM: Great. Well, thank you. And I guess my one key takeaway for the reporter, is that zoning is just one piece for solving the housing affordability puzzle, that it has to be considered in conjunction with all other housing and supply chain and labor policies. And to add to that, zoning relative importance, or land use regulations relative importance will vary significantly by geography, depending on housing supply—demand. So in parts of—many parts of the country, zoning may reform may do very little to even solve the housing—make a dent in the housing crisis, which again, further points to the importance of having a holistic approach.

[01:00:09]

RICK WEISS: Great. Great advice from all of you. And I so appreciate all the wisdom and information you’ve all shared with us today. Thank you to our guests for contributing today. Thanks to all of you reporters who are tackling this complicated problem. It’s tough to do economics, and but it’s important to everyone. It is supposedly the number one issue that people care about walking into this election, even if they have trouble linking quite what their political decision is going to have to do with economics at all. But we really appreciate the three of you contributing to our discussion today, and thanks for all of you who are doing the work of bringing scientific evidence and research-backed evidence into your reporting. We’ll see you at the next SciLine media briefing. So long!