
To end the affordable housing crisis, Washington needs to legalize Main Street - jseliger
https://www.washingtonpost.com/posteverything/wp/2016/10/04/to-end-the-affordable-housing-crisis-washington-needs-to-legalize-main-street/
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paulsutter
The culprit finally revealed:

> Ever since Herbert Hoover’s Commerce Department helped promote the spread of
> model zoning codes that physically separated people and their community
> institutions, the federal government has poured its energy and resources
> into encouraging the growth of widely dispersed single-family homes and
> large, centralized tower blocks. To this day, FHA standards for loans, which
> set the market for the entire private banking sector, prohibit any but the
> most minimal commercial property from being included in residential
> development. As a groundbreaking report by New York City’s Regional Plan
> Association found, these standards are “effectively disallowing most
> buildings with six stories or less.” And depending on the program, a
> building could have to reach to 17 stories before it is eligible for
> participation in the normal housing markets. Without the FHA’s blessing,
> projects are granted the “nonconforming” kiss of death unless their
> developers can persuade a local bank to write an entirely customized loan
> for them, one whose risk the bank would have to keep entirely on its own
> books.

~~~
api
Why have we done this? It seems to go back very far, at least to the 30s or
so. The two leading explanations I've heard are:

(1) It's a jobs program in the form of a subsidy for the construction and
automotive industries, both of whom are huge employers.

(2) It's to disperse the cities to make them less attractive bombing targets,
especially for nuclear weapons.

The latter seems less likely if it goes back to the 30s but more likely as an
explanation for Cold War era efforts to disperse cities.

Anyone have any other potential explanations?

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ghaff
The US has a lot of land and not everyone likes to be squeezed into a dense
city.

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MBlume
Sure, people who don't like cities shouldn't live in cities, but why restrict
density within cities?

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ghaff
It's not a binary choice of dense-area-of-Manhattan and Smallville.
Historically, for better or worse, a lot of people have decided/voted that
they want an urban environment that's dense but not "too" dense. You may
disagree--especially if you feel you have to live in the area of question--but
it's really not irrational from the perspective of current residents.

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davidw
Sure, agreed: I think the point is that "what is the right level of density
for which areas?" is probably not something that should come from federal
government loan regulations.

~~~
ghaff
No argument. It's a matter for local voters--although I suspect many here
don't agree with that either.

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EliRivers
It is a problem; people tend to vote in their own best interests (except in
Presidential elections - Zing!), and that generally means voting against new
housing nearby.

~~~
kofejnik
We let other people live in our apartment, is that a problem, too?

~~~
davidw
In places like Boulder, Colorado, it is. There are laws against N unrelated
people living together in the same place. NIMBY central.

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maerF0x0
This article more or less explains what I've been saying to people for years.
Part of the reason cost of living is cheaper in other countries
(developing/3rd world for example) is because most of the cheaper ways are
illegal in our country. Repeal the laws and we can live inexpensively and
similarly to other less developed nations.

~~~
davidw
There is tons of low-hanging fruit too - it's not like you have to axe safety
laws. Stop outlawing taller buildings, parking minimums, let businesses be
built near housing, and so on.

~~~
GFischer
I saw an article about Portland and how smaller houses and outbuildings are
forbidden in the U.S.

Also, people in the U.S. have ridiculously large houses (except in S.F. and
New York).

800 square foot is huge, the average 2-bedroom apartment here in Montevideo is
about 600 square feet, and serves a family of four more often than not.

[http://www.nytimes.com/2016/10/06/style/portland-
affordable-...](http://www.nytimes.com/2016/10/06/style/portland-affordable-
housing-solutions-tiny-homes.html?_r=0)

~~~
princeb
you don't even have to go that small.

in Singapore the typical hdb flat for a family is 2-3 br which is between 900
to 1100 sqft (but goes up to 4 brs at 1600 sqft). and on a habitable land
basis it is one of the densest cities in the world. so yes you can provide
liveable spaces to a lot of people and have them all in the same area at once.

but they also have a state admin that controls a large proportion of
residential land supply and is willing to sacrifice property prices as the
main method of wealth creation (which imo is a good thing, because firstly one
can never fully unlock that kind of equity in his life as long as he needs a
place to stay, and second because it pulls capital away from productive
sectors)

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r00fus
> one can never fully unlock that kind of equity in his life as long as he
> needs a place to stay

This is untrue. A reverse-mortgage or HELOC can easily unlock the equity while
keeping your ownership stake at a safe level and allowing you to continue
residing.

~~~
maerF0x0
Also dont forget selling and then using the money to pay rent.

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Animats
Space for housing is a problem for only a few cities in the US - mostly New
York, Washington, San Francisco, Portland, and Seattle, and Boston. The rest
of the country has lots of space. Most of the Midwest, from west of
Philadelphia to Kansas, is available. Those parts of the country are emptying
out.

The real problem is over-urbanization. People are moving to a few cities and
draining out the rest of the country. The US population isn't increasing by
much. The current rate of increase is 0.72%, and most of that is illegal
immigration.

The Internet was supposed to make it less important where you lived. What went
wrong?

~~~
djsumdog
The U.S. has terrible terrible rail systems. Lack of transport causes people
to cluster, especially if you're disabled or need public transport.

Jenna, Germany. 100k people. 4 trams. 3 intercity stations, one with an ICE
line.

Chattanooga, TN. 200k. The Chattanooga choo-choo from the song has no trains.
Not even an AmTrak. Even talk of a train to Atlanta got everyone angry because
they didn't want Atlanta commuters.

I don't understand why Americans love their cars so much and hate rail.

~~~
jschwartzi
It's not that we like cars, it's just that we don't see why anyone else should
benefit from our tax dollars. Rail seems to be a direct subsidy to the poor,
even though it removes drivers from the roads. The rail projects where I live
all seem to argue that it will make it more convenient for people to commute
by public transit, which is the wrong argument. They should actually be
arguing that it will remove other drivers from the road, making more room for
people who don't have access.

~~~
bmm6o
Building rail lines is a "subsidy for the poor", but building highways is
"investing in infrastructure". We Americans are crazy.

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pkulak
> Large new apartment buildings in the Shaw neighborhood in Washington have
> priced out longtime residents.

Really, now? Or has more demand priced out longtime residents?

EDIT: That said, the rest of the article is very good. My guess is, the author
didn't caption that photo.

~~~
TheCoelacanth
Large apartments buildings are more of a symptom than an actual problem. Large
apartments buildings are very expensive to build per unit, so they are only
worth building where housing is very expensive. If you were able to build six
story buildings instead, which have a much lower cost per unit, there would at
least be a chance of keeping up with the demand.

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jcriddle4
Parking requirements repeal? Ask the residents of Portland how that works.
What happens is a large apartment goes in without parking and suddenly home
owners nearby cannot park their cars anywhere and everyone is angry.

~~~
djsumdog
America needs an end to car culture. Other countries have massive train
systems that allow people to spread out and not dread commutes. Not everyone
needs a car. People can share zip cars or flexi cars.

There is an insane amount of rail opposition in the us that had less to us
being a massive energy consumer and polluter.

I sold my car 5 years ago.

~~~
Noos
other people like to be able to go places on their own timetable. No one likes
having to spend an hour to take a fifteen minute drive.

~~~
cauterized
Whereas a subway that runs frequently under a traffic-jam prone area can turn
a 50-minute sit-in-traffic to a 25 minute trip. Plus without the subway the
traffic would be worse because the subway riders would also be in surface
vehicles.

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matt_wulfeck
> Inappropriate parking requirements, in particular, can raise the expected
> rent in a new development by as much as 50 percent

Not only this, but why are houses required to keep a 30 foot lawn extending
from the sidewalk to their home? Not only does it require considerable
irrigation, but that land can be much better suited as increased living space.

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heisenbit
Recently read an article on Japan's housing market. While land is very
precious over there living space (on a much smaller footprint than in the US
of course) has remained affordable in Tokyo. The author pointed to the very
high flexibility of land use in Japan allowing land rights and property to
more flexibly serve demand from the commercial and residential sides.

Over the past two decades from what I observed the office space available to
software developers has decreased. Single offices and generous cubicles have
been replaced by denser setups. Full time staff has been complemented by
contracted staff often working in much more cramped conditions. Some have not
a fixed desk and in part working from home offices not alone to save commute
time.

On the wholesale side margins are getting compressed as differentiates are
missing and wholesale distributors like Amazon or directly distributed branded
products are eating away their share and need a lot less prime real estate.

There may be local markets where commercial real estate is tight. But secular
trends are not looking good.

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h4nkoslo
"Washington" evidently isn't the barrier, since there are many locales in
which there is no problem constructing affordable housing (hell, Houston has
no zoning whatsoever). Almost all of the problematic regulations are state or
local.

~~~
pash
Local regulations are a big problem, but so are federal ones. In particular,
the mortgage market in America is hugely distorted by the implicit subsidies
offered by Fannie Mae and Freddie Mac, the government-sponsored enterprises
that buy and securitize a large majority of all mortgage loans nationally.

Crucially, loans qualify for purchase by Fannie and Freddie (and therefore
have lower interest rates) only if they meet standards set by the Federal
Housing Administration. These standards have always been hugely biased towards
suburban single-family homes [0], and in some ways have become even more so
recently. For example, Dodd-Frank amended the FHA rules to stipulate that at
least half of the units in any new multi-family condo building must be sold
before any buyers can qualify for an FHA-approved mortgage on any unit in the
building. This rule alone has effectively killed the market for new-
construction condo buildings in most American cities, since only luxury
buildings in the hottest markets can expect to pre-sell half or more of their
units to cash buyers or buyers who can get spec mortgages.

0\. E.g., by specific practices such as "redlining", introduced by the
National Housing Act of 1934, which created the FHA (see
[https://en.m.wikipedia.org/wiki/Redlining](https://en.m.wikipedia.org/wiki/Redlining)),
but predominantly by lending standards which have always been far more lenient
for new single-family homes than for any other form of housing. Federal
housing and transportation policy have also promoted suburban over urban
development in myriad other ways; for a broad take, I recommend Kenneth
Jackson's book _Crabgrass Frontier: The Suburbanization of the United States_
(1985), [https://www.amazon.com/Crabgrass-Frontier-Suburbanization-
Un...](https://www.amazon.com/Crabgrass-Frontier-Suburbanization-United-
States/dp/0195049837/).

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jessaustin
Herbert Hoover! Did he do _anything_ right?

~~~
Ericson2314
He meant well....

~~~
Ericson2314
Also between austerity and suburban hype---man talk about mistakes we won't
stop repeating.

