The Chart That Says (Almost) Everything You Need to Know About Housing Affordability

Tech hubs across the country have had a lot of success with job creation and productivity growth over the past few decades, but they've seen a pretty striking divergence of fates when it comes to housing affordability. Those that allowed more residential construction (relative to current housing stock), like Austin and Raleigh, NC, tended to fare pretty well. Those that allowed less, like San Francisco and San Jose, have done much more poorly. This chart, from Jed Kolko at Trulia, says it all:

This chart shows is the median sale price per foot compared to the amount of construction relative to existing housing stock since 1990. Source: Trulia.

Raleigh, NC, has seen its population nearly double from 222,000 in 1990 to 423,000 today, and as the chart shows, it's more than doubled its housing stock in order to keep up. Austin, likewise, has grown about 70 percent since 1990 and allowed its housing stock to increase by more than 90 percent over that same time frame. As booming tech hubs (and successful, popular places in general), these cities have stayed shockingly affordable.

Contrast that with Middlesex county, where the population has grown by 22 percent but the housing stock only grew by 14 percent. Or San Francisco, where the population increased by 14 percent but only 11 percent more units were built. By square foot, San Francisco is almost five times more expensive than Austin. Housing affordability is an extremely complex issue, but if you want to make the point in the simplest possible terms you can't do much better than this chart: build more, pay less.

But that's not the whole story. What this doesn't address is the impact of price on overall (or latent) demand, a subtle but incredibly important concept. Cities where the housing stock grew faster than the population managed to keep their prices relatively low, but they were successful not because they kept ahead of population growth, but because their housing stock kept ahead of latent demand. The important question isn't "how many people moved there?" but "how many people would like to move there?"

The more successful you are at keeping prices low, the larger that number's going to be, and, in turn, the more you must build. That may sound like a catch-22, but most cities have some finite level of demand even at fairly low prices, and cities can aid each other by serving as reasonable substitutes — I may prefer to live in San Francisco, but I might consider San Diego if the price is right. If San Diego is expensive too, I might as well bite the bullet and go with the city I'll enjoy more.

The key, and what so many cities have sadly failed to do, is to stay ahead of the market, wherever the market is for your specific city, and thereby maintain some reasonable level of rental vacancy. Once you fall behind on those measures, things start to spiral out of control as low vacancies drive up rents, and high rents drive up land prices. Those land prices then require developers to ask higher rents to recoup their investment, and you end up in a situation where it may be nearly impossible to bring rents and home prices back down. To stay with the market requires constant reassessment, and it's why development goals like "we will build 5,000 new units this year" are basically meaningless. The absolute number of units you build is far less important than whether it's actually enough to satisfy demand.

Tech hubs aren't the only places in the country struggling with affordability problems, and this general relationship of "build more, pay less" is likely to hold true for virtually any growing city. Even Houston, with its horrible sprawl-dependent growth patterns, has at least managed to stay affordable by building enough units to house anyone that wants to live there. They've captured a lot of talented but price-sensitive residents by providing a good value, even if it means putting up with sweltering heat for half the year and blowing tons of money on car dependency. If a lot of those people had been able to afford San Francisco, San Jose, or San Diego instead, they'd be making more money, doing much less harm to the environment, and enjoying much more pleasant weather. But density's a dirty word, so that didn't happen.

(Hat tip to The Atlantic Cities for bringing this chart to my attention.)

Sometimes Transit Isn't the (Only) Solution(!)

A classmate mentioned this article today, about Atlanta's snowpocalypse and the role that poor regional governance and an over-reliance on cars played in the fiasco. Give it a read, it's interesting. Don't worry, I'll wait.

Done?

Okay, so it kind of seemed like the problem wasn't so much a lack of buses that caused the Atlanta metro's problems, but rather poor coordination between the region's incredible number of municipalities, right? The author even says in the opening paragraph that some children had to spend the night in buses, and I can tell you from experience in Seattle that buses don't do any better in snow than most cars. It just seemed like a stretch to try to place the bulk of the blame on a lack of transit -- most of which would have been stuck on the road like everyone else.

Here's what I had to say on Facebook:
I'm as anti-sprawl as they come, and generally consider Atlanta an embarrassment to smart transportation, but this article makes a much stronger case for regional cooperation/consolidation than transportation alternatives. I suspect MARTA's rail services were running just fine, but the backbone of just about any transit system is its buses, and as the author noted, buses were stranded just like cars. No doubt this highlights how fragile the apparent robustness of a car-based system can actually be, but this looks like much more a problem of poor governance overall than poor transportation policy specifically.
I do think it has implications for the LA region though, which is also a constellation of local governments that don't always cooperate very well (read: Beverly Hills).
Not that a better transportation system couldn't have made the situation more bearable. An article on Streetsblog yesterday notes that, for a downtown Atlanta resident, snowpocalypse wasn't so bad when you weren't dependent on getting around by car. But lots of cities deal with snow all the time, cars and all, and don't have much trouble at all. Atlanta's transit system sucks, but their fragmented governmental structure seems to be what really failed them over the past several days.

Seattle Transit Service Hasn't Gotten Worse, It's Just Different (And Probably Better)

Photo from The Northwest Urbanist.

UPDATE:

 I found out just before publishing this that Sightline had already written a similar post this morning, but there's a little divergence in our conclusions and our focus, so hopefully this adds something to the discussion.

ORIGINAL:

A new report from Transit Score is out (they also run Walk Score), and the news isn't good in Seattle. Since 2012, Seattle's Transit Score dropped from 59 to 57, the largest drop of any city in the top 25 (Seattle's #7 rank was unchanged). One of the biggest changes to service over past two years has been the rollout of the sorta-BRT RapidRide service, so naturally, the Seattle Times is asking: Has RapidRide helped or hurt Seattle bus service?

It depends on what you value. If you've read anything from Jarrett Walker's blog Human Transit (and if you're reading this, you probably have), you're aware that transit agencies have many choices about how they serve the public, and that they have to balance coverage with ridership. (Walker has a good summary of the issue here.) At the extremes, you can provide infrequent service to the entire regional area (maximum coverage), or you can focus 100% of your resources into the highest-ridership routes available (maximum ridership/efficiency). In practice, all transit agencies fall somewhere between these extremes, and Seattle is no different.

In the case of RapidRide, the goal was to emulate some of the characteristics of bus rapid transit, i.e., greater stop spacing, off-board fare payment, dedicated bus lanes, and increased frequency. RapidRide was implemented in high-(bus)-traffic corridors to get the most bang for the buck, both in terms of ridership and congestion mitigation. Investing in the buses and physical infrastructure of these routes costs money, so some low-usage routes were eliminated to pay for it (hailed by some, scorned by others). In other words, King County Metro made a decision to increase efficiency at the expense of some coverage.

Was this the right decision? I would argue yes; I'm sure quite a few people would argue no. In a city where a growing share of residents are living in a relatively small geographical area—and those residents are far less likely to own cars—the case for consolidated, high-frequency transit service grows stronger and the benefits of coverage decline. That doesn't mean that we should move to the extreme of maximum efficiency, minimum coverage service, or that coverage has no value. It just means that in a world of scarce resources we have to make value judgments, and we've chosen to emphasize service where more people will benefit from it.

TransitScore's methodology isn't explicit, but two of its measures seem to pretty clearly put a premium on coverage: first, the score itself is a sum of all routes, and each score is modified vehicle type (rail, ferry, bus, etc.), frequency, and how far away the nearest stop is. Notice that this doesn't take into account ridership, and although they don't say exactly what the distance penalty or frequency bonuses are, it seems likely that having a bunch of low-frequency bus routes nearby probably gets you a better score than one or two high-frequency routes. 

Second, and more simply, Transit Score penalizes bus stops that are further away from people's homes, and stop consolidation inevitably increases the average distance to a bus stop. If I remove half the stops along a route, some people will have to walk further to get to or from their nearest stop, and no one has a shorter walk:

So yeah, maybe it kind of sucks for that guy. But while Transit Score considers this a purely negative change, stop consolidation serves a purpose: it reduces the amount of time the bus sits at stops loading or unloading passengers. It's especially beneficial to people riding long distances and can significantly speed up commute times, bringing them closer to parity with cars. This isn't to say that stop consolidation is always good, or that there aren't benefits to having frequent stops. Stop spacing really is just a derivative of the coverage issue, so once again, it's about values. 

Transit Score's algorithm seems to value coverage above speed or efficiency, but that's just one way to balance these two competing concerns, and there are as many alternatives as there are people. If you're one of the relatively few who lost out in the recent restructurings, you're likely to agree with the decline in Seattle's score, and I can't really fault you for that. But while some people will win and others will lose any time these types of changes occur, I'm pretty confident that the winners significantly outnumber the losers here, and I think that's a change for the better.

UPDATE 2:

 In advance of any accusations of racial insensitivity, I did want to recognize that many of the routes eliminated were in lower-income areas disproportionately represented by racial and ethnic minorities. I think that's worth looking into, but I also want to make the point that a lot of the route reduction occurred because the opening of the Central Link light rail system made many of those routes duplicative and redundant. It may be more accurate to look at the neighborhood scores in Central and Southeast Seattle prior to 2014 as artificially inflated by these duplicative services, and to view their new, lower scores as a more accurate reflection of the actual quality of service that's prevailed since Central Link opened.

Tax Repatriation-Financed Infrastructure Plan Still a Horrible Idea

John Delaney's terrible plan to pay for infrastructure by giving corporate giants a hundreds-of-billions-of-dollars tax break is rearing its ugly head once again, and I just wanted to remind everyone: this is a very, very bad idea, and would validate these companies' tax avoidance strategies entirely. It'll make the problem worse than it already is. It's no solution. Please, someone, kill it.

Quote: Why We Need More Growth In Cities

Roger Valdez from Smart Growth Seattle was at a community meeting yesterday, the topic of which (sadly) was downzoning one of the most booming and popular neighborhoods in Seattle, Capitol Hill. Via Facebook, he passed along this quote from a young person who sees the true value in new construction, and why places like Capitol Hill need to be epicenters for continued growth. It was so well said, and personal, that I wanted to share it here as well: 
"I also want to bring something else in that I think a lot of us are losing track of.

I think many of you feel that your values are slipping away, that the community is changing and that there is nothing you can do. But I actually see that happening in a different way.

I think that we need to stop and ask ourselves a question: why do you want to live in Capitol Hill? Why do people who are my age move here to Capitol Hill? Why do we move to Seattle when we could live in other cities – the weather is dreadful! So there are other things about here that are bringing us here. And the main thing that I think it is, what it all boils down to, is our spirit of inclusiveness.

That was my story. I moved here from my small town that I grew up in. I wouldn’t dare get caught dead walking down the street holding hands with another man. And Capitol Hill was the neighborhood that really called out to me – “that’s where I want to live!” And I think there a bunch of other people out there like me.

I just want to talk about the trade offs inherent in what we’re doing and what this process is . . . there are trade offs. There are multiple sides to what we’re doing here.

To restrict growth whether either because of fear of change of fear of losing our parking spot, really, I think, goes against our culture of inclusiveness, against what makes Seattle what it is, what makes Capitol Hill what it is.

By restricting growth we’re essentially telling people you can only live here if you have enough income to get a mortgage on a single family home or pay crazy high rents because there are just so many more people looking for apartments here than there are apartments in the market.

If inclusiveness is our competitive advantage as a city, which I believe it is, then we should be doing everything we can to accommodate growth here, in the right form, in both this neighborhood and other neighborhoods around Seattle with similar characteristics. We should be welcoming growth not pushing people away, not condemning them to live across the lake or places that are less awesome than this.

…that’s who we are as a city.

Keep my face in your mind. We’re the people who want to move into the apartments in neighborhoods like this, to make it a better place. We can all change together.

Thank you."

Is Bicycling More Emotionally Fraught Than Other Transportation Modes?

Critical Mass in Baltimore, from the Baltimore Sun.

This is more directed at my fellow urbanists and multi-modal advocates (not that anyone else reads this, of course!), but do you ever get the impression that people just connect more easily to articles and news about bicycling?

In my case, I write about land use and transportation, and while I've written specifically about bicycling in the past it's a pretty small minority of what I've done. I'm pro-bike, but I'm no more a bike advocate than I am a transit, pedestrian, or density advocate. Despite that, when friends who are less involved in the multi-modal movement send me links about urban issues, it's usually things like inflatable helmets or electric bike wheels. Almost exclusively. And when someone wants to be snarky, they always ask me "how's the bike?" never "how's the bus?" or "how's the sidewalk?" (Admittedly, those just don't seem to have the same ring to them.) I've also noticed that many bicycle advocates really love bikes—not just getting around by bike but the bikes themselves. In comparison, I think transit's great but I couldn't name a train or bus model to save my life.

And while some of my posts over the last year and a half have been fairly popular, nothing was shared so immediately and widely on Twitter and elsewhere as my article asserting that bicyclists still don't have their fair share of road space in New York City. Something about bicycling just seems to grab people's attention, and sometimes polarize, in a way that other transportation modes rarely replicate. This probably helps explain the success of the bike movement over the past decade or so, and the rapid expansion of bike share programs across the country and throughout the world.

Assuming this is a real phenomenon, I wonder where it comes from. I think part of it may be that many people have absolutely no experience bicycling—at least not as a transportation mode in their adult life—whereas everyone walks and most people seem to recognize the value of transit even if they don't use or need it personally. This may make it easier to develop an us-versus-them dynamic that, while not always productive, does encourage more loyalty to your own in-group. 

Even more, it might be that the experience of bicycling is often so emotionally thrilling, both in terms of excitement and fear—anyone who's commuted by bike on a semi-regular basis is well-acquainted with each, the balance between them mostly dependent on the safety of bike infrastructure in your neighborhood. Transit and walking are both fairly mundane in this regard, and I'd argue that driving is the second-most emotionally-charged transportation mode, so that could be why the battle lines seem to usually be drawn between bikes and cars, not cars and buses, bikes and pedestrians, etc.

I'd be curious to know if any readers have also felt this way, and if so, what you think might be behind it. And if any of this came across as critical of bike advocates it wasn't my intent. If anything, I'd like to know more about why bikes seem so much more emotionally charged in order to bring that same passion to transit and walking.

Stop Charging Me For Other People's Free Gas

I do my grocery shopping just a few blocks down the road from my apartment, at Ralph's. When I buy things from Ralph's, I get Ralph's Rewards points, which are redeemable for a discount on gasoline at Ralph's fuel stations and participating Shell locations. I don't own a car, however, so I don't typically consume much gas, and my Rewards points are pretty useless. That's kind of frustrating to me, since Ralph's (and any other grocery stores offering fuel discounts) probably isn't selling discounted gasoline out of the goodness of its heart.

The more likely scenario is that they're charging a marginally higher price on their goods in order to subsidize the losses/reduced profit from gas sales, and people like myself end up spending more on their groceries for exactly zero benefit. This obviously isn't a huge cost to me and other shoppers, but it's more than zero. And it's not going to subsidize education or toothpaste or a gym membership, it's going to subsidize gasoline—a commodity that, while essential, is objectively bad for the environment and public health and probably not something we should be encouraging people to over-consume.

The extent to which this fuel reward trend has passed the point of reason is well illustrated by this green-minded promotion found on Ralph's website:

Convert your non-biodegradable plastic bag directly into carbon dioxide and particulate matter!

Unfortunately, this seems to be good business for Ralph's and their parent company Kroger, because their stores with fuel stations apparently do considerably better than those without. So while I can't blame them for offering this perk, it's nonetheless a pretty perverse outcome from a societal perspective. Along with the free-with-validation parking garage and its parking attendant employees (the costs of which are also baked into the sale price of my cereal and bananas), this is just another example of drivers being subsidized by those who choose not to drive, or can't.

Deficit-Decreasing New Markets Tax Credit Under Threat

A former North Carolina textile converted into an office and research facility with the help of New Markets Tax Credit funds. Photo from WNC & Associates, Inc.

Imagine your government had a program that created jobs, helped develop economically depressed neighborhoods, and managed to earn money for the treasury year in and year out. That sounds like the type of program you'd want them to continue, especially in the middle of a weak recovery, doesn't it? Well, as Bill Bradley at Next City writes, we do have such a program: New Market Tax Credits, or NMTC for short. And after consistent success for the past 13 years, it's on Congress' chopping block for next year's budget. Because why not, right?

The NMTC program works by subsidizing development in areas where private capital is generally unavailable, and is estimated to have created 550,000 jobs and leveraged $60 billion in private capital since its inception in the year 2000. And it's accomplished this all while making the government additional revenue. (Bradley has a more detailed description of the program in his article.)

As the New Market Tax Credit Coalition notes, in 2010 the program cost the federal government $720 million in bypassed revenue, but projects built with NMTC funds generated $1.1 billion in federal taxes alone, to say nothing of state and local taxes or the inherent benefit of additional jobs. In other words, the government is getting $1.50 back for every $1 it chips in, and we're considering pulling back on these investments. The rational (i.e., profit maximizing) approach would be to increase funding to at least the level where an additional dollar of investment yields exactly a dollar of returns, and that's assuming we put zero value on state and local tax revenues, job creation, or the human costs of unemployment and under-investment. Instead of considering eliminating its funding, we should be spending far more on this program than we currently do.

Those who believe this tax credit is some form of corporate welfare misunderstand its purpose: the NMTC exists to fund projects that wouldn't go forward without government assistance, so eliminating it will only lead to reduced federal revenue and further disinvestment in distressed areas. My boss has a saying for these types of programs and the tax revenue they generate: 50% of something is better than 100% of nothing. Congress is setting us up to get 100% of nothing, and many of our nation's most neglected neighborhoods are going to pay the consequences.