0:00

Hey, this is Ezra. I am

0:02

still out sick. I'll be back on Tuesday.

0:05

I am thankfully and finally on

0:07

the mend. Until then, we're re airing

0:09

one of my favorites from last year, this

0:11

episode on the cost and

0:14

crisis of housing with urban economist,

0:16

Jenny Schuetz. Enjoy. I'm

0:24

as time. This is the Azercon show.

0:42

If you've been listening to the show or

0:44

reading my columns lately, you know, I'm

0:46

circling this question of why

0:48

liberalism so often fails to

0:50

build. Most of all, the places Liberals

0:53

hold the most power. And

0:55

there's no more damning or central

0:57

example of this failure than housing.

1:01

The five states in the US with the highest

1:03

rates homelessness are New York,

1:05

Hawaii, California, Oregon,

1:07

and Washington. Some

1:09

of the bluish states in the country, not one

1:11

red state on that list. And

1:14

they are consistently unable

1:16

to build enough homes prices people

1:18

can actually afford. And at

1:20

the core of that failure is the failure

1:22

to build enough homes full stop. And

1:25

that means working class people can't live

1:27

where the wages are highest. They can't

1:29

live where the opportunities for them are most

1:31

promising. Where the safety nets are

1:33

most expansive. That means people

1:35

who might want to live in say state

1:38

sit guarantee abortion rights can't

1:40

afford to. That means

1:42

a state like California that prides

1:44

itself on all of the green energy infrastructure

1:47

it's building is pricing people who

1:49

would want to live in that infrastructure. Into

1:52

states where they use more fossil fuels or

1:54

it's pricing people into parts of California

1:56

itself where they have to drive much

1:58

further into work. Housing

2:00

is fundamental. When you fail to

2:02

provide it that failure reverberates throughout

2:05

society, it lays waste to

2:07

all your other carefully laid policy

2:09

plans and ideals. Few

2:12

understand the ins and outs of America's

2:14

housing system or systems. Like

2:17

Jenny Schuetz. She is a senior

2:19

fellow at the Bookings Institute and she's

2:21

the author of the new book, Fixer

2:23

Upper. How to repair America's

2:25

broken housing systems, which

2:27

is one of the clearest overviews of

2:30

America's housing policy failures

2:32

and just its housing policies that you'll

2:34

find. But reading it,

2:36

a much deeper argument struck

2:39

me throughout. This is very much

2:41

a book about when democracy works

2:43

and when it fails. It's almost a

2:45

cliche to say that

2:47

the government that is closest to the people

2:50

is the government the government's best. That

2:53

a strong Democratic culture is

2:55

one where the people most affected by a

2:57

decision have the most immediate power

2:59

over it. And what she's saying

3:02

is that this system, what we often

3:04

imagine to be the essence of democracy it

3:07

is failing and it is failing worst

3:09

in the places where it often looks to be operating

3:12

best. It's a pretty profound

3:14

set of questions, not just for Liberals, but for

3:16

anybody who thinks about political systems

3:19

to grapple with. As always,

3:21

my email as recline show at nytimes

3:23

dot com. Jenny

3:27

Shuts, welcome to the podcast. Good to

3:29

be here, Ezra. So you argue

3:32

that the very phrase housing

3:35

crisis is a bit of a misnomer that

3:37

we're actually facing overlapping problems,

3:39

overlapping crises with very different

3:41

solutions. Tell me how you break

3:44

it down.

3:45

Sure. So The easiest way to think

3:47

about it is that there are two housing affordability

3:50

problems. One is that

3:52

in high cost metros, places

3:54

with great job markets, like San Francisco,

3:56

New York and D. C. We haven't been

3:58

building enough housing to accommodate population

4:01

growth and job growth for something like

4:03

the last thirty years. So this is just

4:05

a classic case of we haven't allowed housing

4:07

supply to keep up with demand. There are

4:09

a bunch of high paid workers who want to live there.

4:11

They've driven up the cost of housing. And we've

4:13

created a bunch of rules that make it impossible

4:15

for supply to respond to

4:17

that. So that's in some sense a localized

4:19

problem. But in places that are really important

4:21

to the national economy and to the media specifically.

4:26

Very important to the media, to to policymakers,

4:29

to people who go on podcasts. Get

4:31

a lot of attention to this. Exactly.

4:33

Exactly. The other problem

4:35

is nationwide end scope,

4:37

but it's focused on the bottom twenty,

4:39

twenty five percent of households by

4:41

income. The poorest households

4:43

everywhere in the country spend more than half of

4:46

their income on housing costs, and

4:48

that leaves them too little money left over

4:50

to pay for things like food and transportation and

4:52

healthcare. That's not because

4:55

of a lack of housing. That's because

4:57

incomes are very low. And

4:59

specifically, incomes are too low to pay for

5:01

what we can think of as the operating cost

5:04

for minimum quality housing. So

5:06

landlords have to collect some amount of rent to

5:08

pay the mortgage and property taxes and keep

5:10

the lights on, there are bunch of people who simply

5:12

don't have enough income to pay that. And

5:14

so they are stretched trying to afford decent

5:16

quality housing everywhere in the country.

5:19

So we're gonna dig into both of these

5:22

problems. But I wanna touch

5:24

on some of the ways that the housing

5:26

issues we have defy some of

5:28

our political intuitions. So

5:30

think in the thirty thousand foot view of American

5:32

politics, you have Democrats who care

5:35

lot about the homeless who care a lot about homelessness.

5:38

Any Republicans who, you know, think you

5:40

should pull yourself up by bootstraps. If

5:43

you look at the five states with the highest homelessness

5:45

rates, it's New York, Hawaii, California,

5:48

Oregon, Washington. Why

5:50

are they all blue? Well, I

5:52

don't think we'd want to say that the causation runs

5:54

from Democratic places have high homelessness

5:57

necessarily. Part of this

5:59

is that those are all places that have

6:02

very strong demand for housing,

6:04

and so they would have a lot of

6:06

high income people who want to bid up housing,

6:09

you know, that's true in some of the red leaning states

6:11

as well, but it's particularly true in those high

6:13

cost coastal states. But

6:15

it's also true that many of the

6:17

democratic administrations at the state

6:19

and local level have imposed

6:21

a lot of rules on the construction process

6:24

that make it difficult to build housing. And

6:26

they've done this in some cases based on

6:28

sort of, you know, progressive things like we want

6:30

to protect the environment, or we want

6:32

to give voice to people in the community and

6:35

let them weigh in on what happens to their neighborhood.

6:37

But the downside has been it

6:39

makes it really hard to build and especially for

6:41

supply to respond to the sort of increase

6:44

in demand. So blue places

6:46

have chosen to make their housing supply in

6:48

the last stick to use econ speak.

6:50

And red places by and large have allowed

6:53

housing markets to continue functioning and

6:55

for supply to respond when there's an increase in

6:57

demand. Can you say another word

6:59

on that point you made about voice?

7:01

Because I think it's very important here.

7:03

You suggested we don't want to think that the correlation

7:06

is directly Democratic governance

7:08

to to bad housing policy, and I I agree with

7:10

that. But I do think there are

7:12

subtle connections here, and one of them might

7:14

be the way different

7:16

places and different governing coalitions think

7:19

about voice and think about local

7:21

control.

7:23

Yeah, there's a pretty strong belief

7:25

really since about the nineteen sixties that

7:28

people should be able to weigh in on what

7:30

happens to their neighborhoods and their communities. And

7:32

lot of this does come from a progressive reaction

7:35

to sort of overreaching federal government.

7:37

Things like the highways that went into

7:39

big cities in tore down black and Latino

7:42

neighborhoods, replace them with highways, and the

7:44

people who lived there before didn't get a chance to

7:46

stand up and say, this isn't fair. We want keep our

7:48

homes. This is gonna be very polluting. We're gonna be displaced.

7:51

So there, you know, there's a reaction to that saying

7:53

communities, particularly low income

7:56

and non white communities, should

7:58

have more of a say before there is

8:00

some sort of big project that comes into

8:02

their neighborhood, they should have a chance to

8:04

stand up and give an explanation

8:06

about why they want to keep their community and they

8:08

should be heard. Right? And so that comes

8:10

from a good impulse. But in

8:12

some senses, it's now been sort

8:14

of the impulse to give communities control

8:17

has been weaponized by wealthy white communities,

8:20

which then used us to say, you can't build

8:22

apartments and low income housing in

8:24

our wealthy

8:25

neighborhoods, which doesn't wind up

8:27

benefiting the people we were worried about in the first

8:29

place. So

8:31

I want then to circle back to

8:33

the second crisis you talked about. I'm gonna

8:35

I'm gonna hold off on on the question of housing

8:37

supply for a little bit. That for low income

8:40

Americans housing is unaffordable,

8:43

almost no matter where you

8:45

live. So tell me

8:47

first a bit about how we make

8:49

that calculation. How do we just think about

8:51

the question and measure the question of housing

8:53

affordability?

8:55

The standard way that Hud, the US

8:57

Department of Housing and Urban Development, measures

8:59

this, is by looking at how much

9:01

of your income you spend on housing

9:03

And so the standard benchmark is that people

9:05

should spend about thirty percent of their

9:08

monthly income on housing. So that's

9:10

the rent or the mortgage utilities or

9:12

all in housing costs. If you spend

9:14

more than thirty percent HUD says that you are

9:16

cost burden and if you spend more than fifty

9:18

percent they say you are severely cost burden.

9:21

So the thirty percent economists quibble

9:23

over a little bit, but it's really hard to imagine

9:25

that most people want to spend more than

9:27

half of their income on rent. And especially

9:30

for low income household, this leaves them

9:32

like about four hundred dollars a month to pay

9:34

for everything else. So if we use

9:36

something like the Census Bureau's supplemental coffee

9:38

measure, it tells us four hundred dollars a month is

9:40

not enough to buy groceries and put

9:42

gas in the car and put clothes on your kids'

9:45

back. So these are families that are deprived

9:47

of basic needs because so much of their

9:49

income is devoted to housing costs,

9:51

you know, and that the choices that they're making

9:54

If they don't pay the rent, then they get evicted

9:56

and become homeless. So they pay the

9:58

rent first and then fall behind on other things

10:00

or wind up going without other things

10:02

that they need. And what percentage

10:05

of people fall into that category? So

10:08

for the poorest twenty percent of households,

10:11

they're spending over half of their income and rent.

10:13

So most poor households are cost

10:15

burdened, if not severely cost burdened.

10:17

Once you get into sort of the next twenty

10:20

percent up. It's much smaller. And once

10:22

you get into middle income households, very

10:24

few people are cost burdened. And

10:26

the ones who are we essentially think of this

10:28

as a matter of choice. So maybe you choose

10:30

to live really close to work, so you don't have to own

10:32

a car. But this is basically an endemic

10:34

problem for the poorest twenty percent and

10:37

almost non existent for middle and high income

10:39

households. And what do we do to

10:41

help them? People have probably heard there's

10:43

a a program called section eight housing vouchers.

10:46

If they've not been on them themselves, they they

10:48

may know they're out there. Why

10:51

haven't they simply solved the

10:52

problem? Because Congress doesn't

10:54

spend enough money on them. Housing

10:56

vouchers actually one of the most effect of

10:59

anti poverty programs we have, it's

11:01

essentially a federal voucher that

11:03

households receive and they can

11:05

rent an apartment on the private market. They

11:07

spend thirty percent of their income, whatever

11:10

dollar value that is, and the federal government

11:12

picks up the tab for rest of this. So that's

11:14

actually very effective way for poor

11:16

families to be able to rent a place to live

11:18

that's decent quality without having

11:21

to spend more than we think they should on

11:23

housing costs. The problem is

11:25

housing vouchers are not an entitlement, meaning

11:28

that not everybody who is eligible

11:30

for it receives it And in fact, only about

11:32

one in four or one in five poor households

11:34

gets any kind of federal housing assistance

11:37

that's very different than something like food stamps

11:39

or Medicaid where everybody who is eligible

11:41

automatically gets it. Congress just

11:43

has chosen not to put aside enough money in

11:45

the budget to give housing assistance to

11:48

most poor people.

11:49

So let me voice the critique here from my conservative

11:52

friends, which is oh,

11:54

things like this don't solve the problem

11:56

anyway. If it if you just

11:58

give everybody a voucher or a check

12:00

or a subsidy, all that's gonna

12:02

happen? Is it landlords or other

12:04

kinds of housing suppliers? They're gonna

12:07

pocket that? They're gonna increase prices

12:09

to take on the subsidy? Or the

12:11

subsidy won't do much at all because people

12:13

don't want the folks who would use a subsidy

12:15

living in their

12:16

housing. How do you think about that?

12:19

It's almost certainly true that if we

12:21

gave every household in California housing

12:23

voucher that it would not solve the problem,

12:26

because there aren't enough apartments to go around.

12:28

And so lots of people either wouldn't be able

12:30

to find an apartment or landlords

12:32

would just raise the rent accordingly. So

12:34

if you have twenty people applying for an apartment,

12:37

nineteen of them aren't gonna get it, even if they

12:39

all have vouchers and can pay for it. But

12:41

if we think about places like Baltimore

12:43

and St. Louis, where there are lots of

12:45

homes. In fact, there are more homes than they need

12:47

because they've lost so many people over the last

12:49

fifty years. There are places

12:51

to house people people just don't have

12:54

money to pay for it. So in some parts

12:56

of the country, giving people vouchers or

12:58

just giving them cash would actually

13:00

solve the problem for poor people, In

13:02

the supply constrained places, we have to

13:04

do both. We have to give poor people money.

13:06

We also have to build more homes so that

13:08

there are places for people to

13:10

go. Let me ask a

13:12

naive question here. There

13:14

is a lot of the country

13:17

where we have functionally depopulation

13:20

problems. We built a

13:22

lot of infrastructure, built a lot of housing

13:25

at times when these places

13:27

were vibrant, Think of a Detroit, think

13:29

of a Baltimore, think of a Cleveland. And

13:32

over time, because of the industrialization, because

13:34

of white flight, because of all kinds of things that

13:36

happened, we now have too few

13:38

people to support the kind of city that we've

13:40

built for. And so you could imagine

13:43

pretty simple and

13:45

it seems win win solutions. You got a lot

13:47

of homeless people in California, help

13:49

them get a home in Detroit. You hear

13:51

this argued for immigrants in particular.

13:53

Right? You know, you should just be able to get a green card if you're

13:55

gonna come and buy a home in a place where we

13:58

actually need people buying homes, so we build

14:00

up a tax and population base.

14:03

Is there anything off in

14:05

that line of

14:05

thinking? Do we just have a like a

14:07

like a distribution of people problem?

14:10

Well, there are a couple of problems with trying to

14:12

just pick up all the homeless people in California

14:14

and move them to Detroit and

14:15

St. Louis. One is that a lot

14:17

of I don't

14:18

mean we should pick them up. It's more of a

14:20

option, a voucher, a possibility if

14:22

you want. Buy buy them a bus I

14:24

think Ed Glaser's recommendation after

14:27

after Katrina was we should give everybody a

14:29

New Orleans of us to get to Houston and let them

14:31

go.

14:31

Right. That's the kind of thinking I'm referring here

14:33

too.

14:33

Yeah. So one problem is that a lot of

14:35

the homeless people in California are

14:38

employed. You know, they have a

14:40

job, they have family, they have networks,

14:42

So if they have a life there, but they're

14:44

living in their car because they can't afford to

14:46

pay for an apartment. So we could give

14:48

them the opportunity to move someplace like

14:50

Detroit or St. Louis, where housing is cheap and

14:52

give them a voucher, but they would have to go

14:54

find a job and rebuild their networks. Right?

14:56

And social networks are really important for everybody.

14:59

You've got family and friends and, you know,

15:02

people with kids rely on siblings

15:04

and parents to provide child care. So

15:06

if you move a person away from their

15:08

social network, they're gonna have a hard

15:10

time rebuilding all of that. Right? And

15:12

I think we could give people money and

15:14

tell them there are places in the country

15:16

where housing is cheaper that also

15:18

have jobs, and we can help you find

15:21

a job if you want to move there. But it

15:23

feels really uncomfortable to suggest that all

15:25

of the poor people who are homeless in California

15:27

should have to break off their family ties and

15:29

move someplace when we don't require that

15:31

of anybody else.

15:33

So this to me is a very important

15:35

place where where the two crisis connect.

15:38

Because something you'll hear if you're around

15:40

housing politics in California, and if you're

15:42

around people who are

15:44

opposed to some of

15:46

the more sharp increases in

15:49

supply that the people like me want

15:51

is that, look, not everybody is guaranteed

15:54

the opportunity to to live in California. But

15:57

the point you're making here, which I'd like you to draw

15:59

out a bit, is that there is a genuine

16:02

issue when you restrict

16:04

supply in the places

16:07

in the country that have the

16:09

most jobs, that have the highest pay, that have most

16:11

opportunity. That that's where this

16:13

becomes not just a a housing problem,

16:16

but also an inequality problem,

16:19

adjust this problem, an opportunity problem.

16:22

Can you talk a bit about that interaction effect

16:24

between

16:26

housing supply and the most

16:28

dynamic spots in the international

16:30

economy? Sure. And we can

16:32

start with kind of the most macro and abstract

16:34

version of this, which is that

16:36

not building enough homes in the parts

16:39

of the country that have really strong job markets

16:41

that very creative and productive

16:43

companies actually hurts the GDP

16:45

of the entire country. So there are couple

16:47

of economists who have estimated that

16:49

GDP is about thirty six percent

16:51

less than it should be over the last several decades.

16:54

This is nationally because we

16:56

haven't allowed people who say grow

16:58

up in Cleveland and want to work for a software

17:00

company. Right? They should have a chance to go to

17:03

the Bay Area, work for a Google or a Face

17:05

book and then go start up another company. So

17:07

if you think of all of sort of the new jobs that would

17:09

be created, the new knowledge, the gains

17:11

to the whole look economy from that happening,

17:13

some of those people weren't able to move to the

17:15

Bay Area and get in on the ground floor

17:18

because housing was so expensive. Right? So

17:20

we've effectively lost a bunch of innovation,

17:22

a bunch of creativity, a bunch of jobs

17:24

that would benefit all of us because

17:26

these very productive places refused

17:28

build enough housing. Right? And if we think

17:30

about the opportunity level, go

17:32

down to kind of the metro area within

17:36

metros like San Francisco, but

17:38

even places like Dallas that build enough

17:40

housing in general, the highest opportunity

17:43

neighborhoods tend not to build that

17:45

much housing. So if you live in the Dallas metro

17:47

area and you want your kids to go to

17:49

one of the great suburban school districts to some

17:51

place like Highland Park, you have to

17:53

be able to afford to buy a house or rent a

17:55

house in Highland Park. Right? And so

17:57

the high opportunity places both

17:59

metro is across the country and neighborhoods

18:02

within metros aren't building enough

18:04

housing. And that means they're essentially gatekeeping

18:07

access to things like public schools, jobs,

18:10

transit, all of the amenities that people

18:12

want, they simply won't allow you to move

18:14

there if you don't have enough

18:15

money. I want to hold on that point about

18:18

the fractal nature of this dynamic. So

18:20

we started it at one level. Nationally,

18:23

if you look at a lot of the very high growth,

18:25

very high opportunity places, they seem

18:27

to have a housing supply problem that other

18:29

places don't. But then, you're

18:32

saying something also here which

18:35

is if you look within that very place,

18:37

right, within a San Francisco, within a Washington

18:39

DC, within a New York City, you

18:41

find that the richer neighborhoods

18:44

are not allowing building.

18:46

And to the extent building is allowed,

18:48

it is in the poor neighborhoods. I lived

18:50

in Washington, DBC. For about fourteen

18:52

years. And there's a lot

18:54

demand to live in that area. And

18:57

it is very very, very,

18:59

very, very hard to build in Georgetown, but

19:02

you could build in Trinidad. Can you talk a bit

19:04

about that dynamic within cities

19:07

or metropolitan areas? Yeah,

19:09

so the controls over housing production

19:12

are set by local government. They have things

19:14

like zoning rules and building codes and

19:16

environmental reviews, but it's actually

19:18

even more hyper local than that individual

19:20

neighborhoods get a lot of power over

19:22

what gets built or not built in the neighborhood.

19:25

And that's particularly true for affluent

19:27

college educated neighbor coulds because people

19:30

know all of the right political levers to push

19:32

and the legal levers to stop development

19:34

that they don't want. So Georgetown is a great

19:36

example. You know, it's a very affluent neighborhood.

19:39

Has some of the oldest housing in the city.

19:41

They have layers of protection. Right? So

19:43

first of all, they outlaw apartments on

19:45

most of the land They also have used

19:47

historic preservation so that you can't

19:49

tear down the stuff that's there and replace it with

19:51

taller bigger buildings. And, you

19:53

know, the resins are very politically connected did,

19:56

and they will, you know, sue developers

19:58

who try to build there. Those developers

20:00

don't even bother because they know it's just

20:02

gonna be a nightmare process gonna spend a ton

20:05

of money and never get permitted. So

20:07

rather than try to fight the neighbors in Georgetown,

20:09

developers go to some place like YouStreet

20:12

or Waterfront where either

20:14

there aren't that many neighbors so far or

20:16

where neighbors aren't as engaged and

20:18

are willing to allow them to build. So we

20:20

get really uneven development patterns

20:22

should say that developers aren't building in the poorest

20:24

neighborhoods. So in Washington DC,

20:27

east of the river has only recently started

20:29

getting more activity and lot of that is subsidized

20:32

housing, but they go to middle

20:34

income neighborhoods that are close to the rich

20:36

neighborhoods where they want to build but aren't allowed

20:38

to. And this interacts with

20:40

the gentrification question, which

20:43

is a a really, I think, difficult

20:45

part of the politics of all this.

20:47

So so can you explain what people are talking about

20:49

when they talk about gentrification

20:51

and how you understand it within the

20:54

the context of this dynamic?

20:56

Yeah, gender verification is a really loaded term,

20:59

not everybody uses it to mean the same thing,

21:01

but sort of the probably the standard understanding

21:03

is that it's a change in the neighborhood

21:06

where it's getting more affluent. Usually,

21:08

an influx of, say, college

21:10

educated households Often,

21:13

it's used to describe specifically racial change,

21:15

although we've seen neighborhoods like Harlem

21:17

that see an increase in income but stay

21:20

majority black, for instance. But,

21:22

you know, a change in the people who live in the neighborhood

21:24

usually accompanied also by visible

21:27

changes in the housing. So this

21:29

may be rehab of the existing homes

21:31

that become more expensive and nicer to

21:33

look at, new construction, new

21:36

kinds of stores and restaurants moving in

21:38

So gentrification is sort of, you know, used as a catch

21:40

all for all of these different things, but

21:42

the neighborhood changing and becoming more

21:44

upscale.

21:46

Well, think it's also more than that though. Within

21:48

the politics of gentrification is I understand

21:51

them and and you see them everywhere

21:53

I have lived. Where I have

21:55

watched housing politics. I've seen this play

21:57

out, which is you'll have people stand

21:59

up and say, we should build more housing we

22:01

should allow more development. We should bring in, you

22:04

know, a big mixed use development

22:06

right here. And other people say, part of getting

22:08

these mixed income neighborhoods, you're

22:11

gonna do that and you're going to price me

22:13

out that I think if you've been

22:15

listening to our conversation so far,

22:18

You might hear this as a traditional issue

22:21

of rich versus poor or

22:23

rich versus middle class politics. But

22:26

it doesn't read that way to many people in

22:28

these actual neighborhoods. A

22:30

lot of the blocking coalitions

22:32

for new development actually include poor

22:35

people actually include middle income people because

22:37

they feel that what's gonna get billed

22:39

are these luxury condos, which are gonna

22:41

increase property values. And then the

22:43

person to say that they're renting from

22:46

is gonna jack up the rent beyond what they

22:48

can pay and they're gonna be kicked out of the neighborhood.

22:50

And so instead of an increase in both supply

22:53

and quality of housing, helping them,

22:55

an increase in supply and quality of housing

22:58

is going to kick them out into

23:00

another further out jurisdiction. And

23:03

they're not even wrong. I mean, this definitely

23:06

has happened to

23:06

people. So can you talk a bit about it

23:08

from that perspective, from that set of concerns?

23:11

Yeah. And I should say that this is a tough area

23:14

to kind of reconcile people's

23:16

lived experience, if you've been in neighborhood

23:18

that's going through this process with what

23:20

we know from the academic research, particularly

23:22

by economists, So should say, first

23:25

of all, that the sort of perception of developer

23:27

coming in, tearing down some old

23:29

buildings, maybe some old apartments that are relatively

23:31

cheap and replacing them with big fancy new

23:34

sensor condos that are expensive, that's

23:36

actually pretty late stage gentrification. By

23:38

the time the developer wants to do new construction

23:40

in your neighborhood, property values and rents

23:42

have probably already been going up for a decade,

23:45

and you've already started to see a change

23:47

in who lives in the neighborhood before

23:49

it gets to that point. Right? So the early stage

23:51

gentrifiers tend to be somebody who

23:53

buys an older poor quality

23:56

house, moves in and renovates the

23:58

house and lives in it. But that's

24:00

not nearly as visible as a giant

24:02

new apartment building going up. Right? And developers

24:04

don't come in until after you've had a bunch of

24:07

this sort of rehab So the forces

24:09

are already there before people

24:12

see something and start protesting. What

24:14

we've seen some of the recent academic

24:16

literature is that in neighborhoods where

24:18

you get big new construction projects,

24:22

that actually helps keeps the rents down.

24:24

So the new construction comes in, that building

24:26

is expensive, but the existing buildings

24:29

in the neighborhood are cheaper because

24:31

there's now additional supply. Right?

24:33

So this is, you know, and and we have a number of

24:35

studies in different cities that look at this,

24:37

but that's a very hard sort of counterintuitive

24:40

thing to say to somebody who lives in neighborhood

24:42

where there's seeing a big new property

24:44

go up, and they see that it's more expensive

24:46

than their home. And, you know, some of them will have

24:48

their rents go up. Right? So it's not that

24:51

all rents in the neighborhood fall immediately

24:53

with new construction, but on average rents

24:55

are slower or fall by more because

24:57

there's new construction relative to that

24:59

same neighborhood if you didn't allow any development

25:01

to happen.

25:02

Even if you believe pretty big

25:04

increases in supply are good, and

25:06

I tend to do so, it is a case

25:09

that they create disruption. They

25:11

do create dislocation. Things do

25:13

change. And this is a

25:15

a connection I wanted to draw to

25:17

to our earlier part of the conversation on the

25:19

fractal nature of these

25:22

development restrictions, which

25:24

is that if you take a given city and

25:26

it's basically in possible to build

25:29

anything, to get past the blocking coalitions

25:31

and the political power in

25:33

the richer neighborhoods. But

25:35

it's not impossible to do that in the

25:37

middle income neighborhoods and ultimately in

25:39

the poorer neighborhoods. You can have real

25:41

concentration of change dislocation

25:45

of political conflict

25:47

even in those neighborhoods

25:50

in a way that I think is very frustrating

25:52

to

25:53

people. Can you discuss that

25:55

a bit? Yeah, that's exactly right. And

25:57

and DC is a great example. So,

25:59

you know, something like eighty percent of our

26:01

new development in the twenty tens happen in

26:03

a handful of neighborhoods, many

26:05

of them that weren't residential before. So

26:07

they were sort of, you know, big industrial parcels

26:09

are land owned by the federal government. So there

26:12

are these neighborhoods that are completely transformed

26:14

where you have, you know, practically a new city,

26:16

housing, and retail, you know, public

26:18

space, but they look completely different than they

26:20

did. And then large swaths of

26:22

the city have not changed at all. They've

26:24

built no new housing. You know, the

26:26

existing housing is more expensive and maybe

26:29

occupied by richer people. But physically, they

26:31

haven't changed very much. So your perception

26:33

of whether there's growth and what that does to

26:35

rents depend lot on where you live.

26:37

You know, one way to think about this is The

26:40

best way to prevent gentrification and

26:42

displacement in poor black and brown

26:44

neighborhoods is to build a ton

26:46

of expensive new housing in the

26:48

neighborhoods that are already wealthy and white,

26:51

except we can almost never do that. Right?

26:53

And so you'd want to kind of have people who

26:55

want to prevent gentrification should be lobbying

26:57

to upzone Georgetown in ward

26:59

three or rich parts of San

27:01

Francisco. But the cross city

27:04

politics doesn't really work that way.

27:06

I wanna talk about I've been

27:08

trying to think about what part of the conversation to

27:10

bring this in on. And I'm gonna do it here.

27:12

And weave in and out of it. I

27:15

think the argument you're making here is

27:17

a pretty profound argument about

27:20

small day democratic politics posing as

27:22

an argument about housing. And

27:24

what I mean by that is this.

27:27

It is almost cliche to say,

27:30

the government that is closest to the people,

27:32

governs best. It is cliché

27:35

to say. Government should be responsive to the

27:37

people who live there, to the constituents.

27:39

It is cliché to say. That

27:42

the way a strong

27:44

Democratic culture should work

27:47

is that the people most affected by decision

27:49

should have the most power over it. What

27:52

you're saying is that that is failing at

27:54

very deep level. And it is failing

27:56

worse in the

27:59

parts where it is most deployed.

28:02

So you have in

28:04

in in this respect. Right? You have more

28:07

small Democratic cultures where

28:09

the constituents have more power and access

28:12

to the representatives in these richer neighborhoods.

28:14

They have time. They have the knowledge base

28:16

to to navigate the system. They

28:18

have connections, they can they can actually

28:20

be heard. And what you're saying there is you're getting

28:22

the worst outcomes. So

28:25

how do you think about that? How do you think

28:27

about the tension

28:30

between some of what you're saying has happened here?

28:32

And what you might think of as classical

28:35

theory of and

28:37

what you might think of as classical Democratic

28:39

theory. So I'd say there are two ways

28:41

to think about this. One is that what

28:43

looks on the face of it

28:45

like small d Democratic process

28:47

that people get to engage in their local government

28:50

and make their voice heard is not

28:52

actually that democratic. It's

28:54

not representative. And

28:57

we know this in part from the work of political

28:59

scientists who have looked at the characteristics of

29:01

people who show up to a neighborhood meeting.

29:03

So think of a neighborhood where there's a specific

29:06

proposal on the table to build some

29:08

new apartments. You have a neighborhood meeting

29:10

and people show up and they say, yes, I like this

29:12

or no, I don't. The people who show

29:14

up to that neighborhood meeting for, you know, five

29:16

or six hours on a Tuesday night tend

29:19

to be older, wealthier, whiter,

29:21

more likely to be homeowners. Than

29:23

people who live in neighborhood overall. Right?

29:25

So we know from observing this that this is not

29:28

in fact representative and small Democratic

29:30

There are some people who live in the community

29:33

who have more free time, especially

29:35

older retirees, who have more comfort

29:37

with political process and are highly

29:39

invested because they own homes in the neighborhood,

29:42

they will push back against this. Whereas a lot

29:44

of people who are directly affected by that in

29:46

the neighborhood they have jobs, they have kids,

29:48

they can't come to the meeting or they feel uncomfortable

29:51

doing it. Right? So it looks like small

29:53

d democracy isn't, and we have kind

29:55

of kitted ourselves into thinking it is.

29:57

The other way to think about this is making

30:00

decisions at a hyper local level

30:02

at the neighborhood level or even at the city

30:04

and town level doesn't take

30:06

into account the spillover effects of

30:08

where we build and don't build housing.

30:11

You know, the people who live in the neighborhood are gonna

30:13

be affected by construction and potentially by

30:15

placement or changes to their property values, but

30:18

the whole city is also going to be affected

30:20

by weather housing gets billed and

30:22

where it gets billed The whole region

30:24

is affected by whether or not there's

30:26

housing for people at different income levels.

30:28

Right? So if region doesn't build enough housing,

30:31

to accommodate, you know, people who are baristas

30:33

and firefighters and child

30:35

care workers, the region's economy doesn't

30:38

work well. Right? And then we have climate spillovers

30:40

as well. So If the only people who were affected

30:42

were the people who lived in that neighborhood, it

30:45

would make more sense that they could have veto power,

30:47

but there are a ton of people who were impacted

30:49

by our development patterns who don't

30:51

get a voice at all because they don't live

30:54

there and don't get to show up and voice their

30:56

opinions.

30:57

So I think all that is true. And

31:00

on some fundamental level, I

31:02

also don't know that it solves

31:04

the tension of a problem that is emerging

31:07

here. And so I'm still working

31:09

on these ideas myself. So so let me try this on

31:11

you. I've been reading this book called The Paradox of Democracy

31:13

by Zach Gersburg and Sean Illing.

31:16

And it's about democracy and

31:18

communication and media, but but there's something

31:20

they say about democracy that I think is very relevant

31:23

here, which is that quote, It's

31:25

better to think of democracy, less as

31:27

a government type and more

31:29

as an open communicative culture.

31:32

Democracies can be liberal or ill liberal,

31:34

populist, or consensus based, but

31:36

those are potential outcomes that emerge

31:39

from this open culture. I

31:41

think this idea of thinking about democracy

31:43

as a culture of communication

31:46

is really powerful because The move

31:48

I often hear in this conversation, a move

31:50

you're making, and that again, I think it's

31:52

true on some level, is to say that

31:55

what is happening in these local democracies

31:58

is nonrepresentative. Then if you

32:00

took a poll, the poll would

32:02

not show up the same way as the people

32:04

who show up in the meetings. That

32:06

if you, you know, certainly were

32:09

able to do a poll that people who didn't live there yet,

32:11

it would be even more different still. But

32:13

democracies aren't polls. They're

32:15

not surveys. They're they're cultures

32:18

and their systems. And

32:21

I think in some theoretical way,

32:23

the way we believe they are supposed to work

32:26

is almost the way they work in Georgetown, where

32:29

people really do have access they really can when

32:31

they feel strongly go. And

32:33

the more advanced the culture gets, the richer

32:35

it gets, the more we build

32:37

systems for voice for that

32:39

kind of representation that

32:41

are and then the analysis of me and

32:43

you very vulnerable to capture. Right?

32:46

Very vulnerable to to loud voices

32:48

that wanna protect the status quo. But

32:50

think that's a way of saying at some level

32:52

that there's something very wrong. With

32:55

what happens in democracies as they

32:57

develop to certain point that there's a real

32:59

deep, dark downside to

33:02

that culture a voice that

33:05

we can justify with

33:08

very high minded ideals. But

33:10

at some point, instead of pushing

33:13

forward these ideas of pluralism, inequality,

33:15

and so on, it actually becomes

33:17

tools used to protect one's own I

33:20

don't wanna say privilege, but but but but one's

33:22

own position

33:23

in society or things are comfortable

33:25

with? Yeah. I mean, I

33:28

think there there's some places where

33:31

democracy looks more like direct democracy,

33:33

and that's really what we're talking about. Is

33:35

citizens or residents showing up

33:37

expressing their view on individual

33:40

kind of development choices, policy choices,

33:42

essentially, as they happen in real time.

33:44

But of course, most of our country

33:46

operates as a representative democracy.

33:49

We elect people like mayors and city council

33:51

members and county supervisors who

33:54

get to set the policy decision for

33:56

some level of government and they appoint ahead

33:58

of the Department of City Planning who comes up with

34:00

the zoning and implements this. And so

34:02

in a sense, you know, we don't we don't in fact have

34:04

polling on a lot of individual projects. That's

34:07

something that I think maybe would actually help

34:09

with some of those to show if there's a majority

34:11

of people who want there to be more apartments and

34:13

the apartments don't get built, then that's somehow

34:15

a failure of the larger democracy, but

34:18

also people have made decisions to elect

34:20

officials. Right? In California is a great

34:22

example, the state has

34:24

elected a bunch of people to the state legislature

34:27

and argue employee, the governor, who

34:29

have said that they want to build more housing

34:31

and expand supply, and this is important to deal

34:33

with things like homelessness, which have big spillover

34:36

effects And so if a majority of

34:38

voters have chosen pro housing

34:40

elected officials and then they get

34:42

to the state house and they try to adopt

34:45

a bunch of legislation that in fact makes

34:47

wealthy places build more housing, that

34:49

seems like that's democracy working

34:52

in the sense of, you know, voters have made

34:54

their preferences known, and then the

34:56

holdouts, the people who have really deep

34:58

personal and financial interests in protecting

35:01

their neighborhoods who show up and push

35:03

back against this that is anti democratic.

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36:50

Another place where I think there's an interesting pension

36:53

here is there's a view that

36:55

democracy is

36:57

the handmade end of experimentation, particularly

37:00

when you have highly federalized, highly localized

37:02

decision making as we do. That

37:05

what democracy allows compared to other systems

37:08

is a lot of different kinds

37:10

of systems to flourish, and we

37:12

can see what works best. But

37:14

what is really striking, reading your

37:16

work, and and looking at housing is

37:18

actually how little experimentation is possible.

37:21

And and this estimate you make really,

37:23

really is wild,

37:25

that it is illegal to build anything except

37:28

single family detached houses on

37:30

roughly seventy five percent of land

37:32

in most cities today. Can you

37:34

talk a bit about what it was legal to build from

37:37

housing perspective,

37:38

seventy five years ago, routinely, And

37:41

what it is legal to build now? Yeah.

37:44

We used to build a lot more different kinds of

37:46

structures in a lot more places, and it

37:48

wasn't a big deal. So zoning

37:50

became aim widespread in cities starting in

37:53

about the teens and twenties and then sort of growing

37:55

covering most of the country by about the nineteen forties

37:57

and fifties. If you go to any

37:59

city that has neighborhoods built in

38:01

the nineteen early nineteen hundreds to

38:03

about nineteen ten, you'll see

38:06

much more diverse housing stock in those

38:08

older neighborhoods. You'll see single family

38:10

detached homes, row homes,

38:12

apartment buildings, various sizes,

38:14

you'll also see a lot more commercial

38:16

activity mixed in. So, you know, having a neighborhood

38:19

grocery store and a neighborhood coffee shop

38:21

in virtually every neighborhood was just typical.

38:23

So we used to build, you know, very diverse

38:25

neighborhoods in terms of physical structures

38:28

and uses, which then accommodates a

38:30

diverse set of incomes and residents

38:33

And then zoning came along, and we essentially

38:35

said, yeah, all of that stuff is illegal. So in

38:37

fact, a lot of cities that have these diverse

38:39

neighborhoods The housing that lives there

38:41

now, the apartments and townhouses

38:44

that are in mostly single family neighborhoods, if

38:46

that burned down, it would be illegal to

38:48

rebuild it. Right? We've essentially outlawed the

38:50

stuff that already exists in a lot of homes.

38:52

Some places like Cambridge, Massachusetts is

38:55

perfect example. The vast majority

38:57

of parcels in Cambridge, Massachusetts have

39:00

what are called non conforming uses. So

39:02

the structure there is in violation of current

39:04

zoning laws either it's

39:06

too tall or too close to the street

39:09

or a structure that's illegal. If most

39:11

of the houses that already exist in your city

39:13

are currently illegal under zoning, it

39:15

sort of raises questions

39:17

about, you know, what the zoning is trying to do.

39:19

It's such a good point. But I wanna

39:21

go even further with it because I think the

39:23

the way you frame that it is also the way it

39:25

is often framed in our conversation, which

39:27

is, you know, single family houses

39:30

versus duplexes or four plexes

39:32

or a home with an in line

39:34

unit. But a point you make and a

39:36

point many other people make is that housing

39:38

was also much more diverse even than that.

39:41

You write that The expectation that each

39:43

person or nuclear family must have

39:45

a completely equipped kitchen and bath

39:47

is relatively recent in human history. When

39:49

I was in college, I looked in a dormitory. There

39:52

was one bathroom for a lot of people.

39:55

It was a little gross, but it was also totally

39:57

fine. If you read, you know, nineteenth

40:00

century or eighteenth century American

40:02

history, you constantly have even fairly

40:04

rich people or or or people who become

40:07

rich in that era. They're living in boarding

40:09

houses, they're going around, staying in

40:11

these weird, you know, multi living

40:13

situations. And

40:16

You can see a lot of things about, I know somebody works on

40:18

commuions. It's very, very hard to build commuions

40:20

now. We used to have

40:22

ways that you could put a lot of people

40:25

in a smaller amount

40:28

of space. And we

40:30

have made that illegal in

40:32

a lot of places, and we say that it's for

40:34

people's own good, but what we have is

40:36

a lot of pending capments.

40:38

So so what about those kinds of housing

40:40

possibilities? Yeah. We were

40:42

a lot more flexible with how people lived,

40:45

not just on things like zoning, but on things

40:47

like building code. You know, so

40:49

sort of the the boarding house that had

40:51

one communal kitchen and meals got

40:53

cooked and everybody had essentially a bedroom,

40:55

but you all ate your meals together or ate, you know, out

40:57

of the restaurant all the time. You know, that was

40:59

that was very typical. And certainly, you know,

41:01

early cities, workers moved from farms to

41:04

cities, and they all just rented a room in a boarding house,

41:06

and that was, you pretty much the option. It

41:08

was much, much cheaper. I think

41:10

there's a question about how many middle class people

41:12

would like to live in an equivalent

41:14

kind of set up today. But what we've essentially

41:17

done is say middle class preferences for

41:19

having nuclear families and having

41:21

your own kitchen and bath. That's the only

41:23

housing culture that's allowed, and poor

41:25

people who are currently living in their cars

41:27

or living in a homeless encounter on the streets

41:30

aren't allowed to live in a smaller

41:32

unit that we consider not

41:35

up to standards. So we've imposed this

41:37

minimum quality and minimum size

41:39

on all housing which really

41:41

hurts people with, you know, these very low incomes

41:43

who can't afford that. We don't give them the

41:46

option to live in lesser kind

41:48

of conditions than middle class families would

41:50

want. One of my favorite examples of this

41:52

is, there's a proposal to build

41:54

some apartments in DC, underground

41:57

apartments, and so they would dig down. These would be,

41:59

you know, below great apartments, and they

42:01

might have an air shaft or something. But the

42:03

the neighbors around and say, well, that's terrible. You can't

42:05

possibly allow people to live in underground

42:07

apartments that don't have natural light. It's like,

42:09

if you were living in a car or on the street,

42:11

an underground apartment with no might

42:14

sound like a pretty good

42:15

deal. Why shouldn't we let people choose that?

42:17

And why did we move

42:19

away from that? So Matthew

42:21

Glasius, who's a writer and my friend who focuses

42:24

lot on housing issues, recently did

42:26

a newsletter on some of these ideas. And

42:28

and his argument looking at some documents

42:30

from the mid twentieth century is

42:33

that this was really a way

42:35

that middle class or even richer

42:37

homeowners and homeowner associations

42:41

were trying to get people

42:43

they didn't want out of their communities. That

42:46

is fundamentally exclusionary. Is

42:49

that your view of the causal mechanism

42:51

here?

42:52

It's mostly about exclusion.

42:54

And, you know, we can't talk about exclusion based

42:56

on income without also talking about exclusion

42:58

based on race. So all of the restrictions

43:01

that limit housing for very poor people

43:03

wind up being hardest for black

43:05

and Latino households who have lowest incomes

43:08

So some of this is just blatantly about

43:10

exclusion. We don't want -- particularly,

43:12

we don't want things like single room occupancy hotels

43:15

and boarding houses because they attract

43:17

concentrations of poor people and middle

43:19

class voters and homeowners don't want that

43:21

in their neighborhood. You know, we shouldn't sort

43:23

of discount. There are there certainly

43:25

are some health and safety reasons for some of

43:27

the regulations that we have. You know,

43:29

things like not wanting to have

43:31

a lots of people living in a shared space

43:34

you know, overcrowded spaces as we saw

43:36

with COVID are not great ways

43:38

for people to stay healthy when they're communicable

43:40

diseases. You can overload a

43:42

house relative to things like the electrical

43:44

capacity and you wind up having higher risk

43:47

of fires. So there are some reasons

43:49

why we have some of these rules but an awful

43:51

lot of it comes back to we don't want to

43:53

provide housing for very poor people

43:55

in places where non poor people live

43:58

or work or spend their

43:59

time. I wanna draw out an argument that

44:01

you make in your book that I think is really valuable

44:03

and that people don't talk about that much, which

44:06

is that there's a connection between

44:09

our housing crises and

44:11

the decline in investment in

44:13

social infrastructure. And

44:16

I'll give it an example. There was recently

44:19

a fight in New York over a big development

44:21

that is getting blocked. And

44:23

one of the local politicians who's

44:25

against the development made this argument that,

44:27

well, if we put all these people in there,

44:30

we don't have the parking, we don't have the streets

44:32

we don't have the subway capacity, and

44:34

so it's gonna create a lot of congestion. And

44:38

not really my view that that is a good argument,

44:41

But I think it is true that

44:43

over time, if you haven't

44:46

invested in non housing

44:48

infrastructure, then people

44:50

do have a more reasonable fear

44:52

that if you suddenly increase the amount of housing,

44:55

the infrastructure can get overloaded. So

44:57

can you talk about the role of non housing infrastructure

45:00

in housing politics?

45:02

Yeah. More homes means more people

45:04

and they use public services of all kinds.

45:07

So parking and space for cars is

45:09

one of the classic examples. But of course, the

45:11

other big one is schools. If you build a

45:13

bunch of apartments occupied by families

45:15

with kids, they're gonna go to school and you need to

45:18

have spaces in schools and potentially more teachers

45:20

and so forth. And, you know, local

45:22

governments pay for all of this infrastructure So

45:24

local governments have to sort of figure out

45:27

if we allow more housing in a particular

45:29

location, how much more do we have

45:31

to invest in public services, Will

45:33

we have enough new revenues coming in from

45:35

the development to pay for that? Or do we have

45:37

to kind of come up with the money elsewhere to

45:39

distribute this? We

45:41

we sort of use this as an argument to say

45:43

no to a lot of housing in places

45:45

that people maybe don't want it. But

45:47

we don't have particularly good systems as sort of

45:49

planning like city wider region wide.

45:52

So New York City, you know, has the best

45:54

public transportation system in the country.

45:57

There are a lot of subway stations surrounded

45:59

by pretty low density development where

46:02

you could easily add a bunch of apartments

46:04

and nobody would need to have a car because they're literally

46:06

on top of a subway station. But

46:09

we're not making the decision aha. Here's a

46:11

subway station that has extra capacity. We're

46:13

gonna build a bunch of housing here. We're

46:15

not going to build housing way out in the Long Island

46:17

suburbs where you'd have to put in new

46:20

streets and roads and infrastructure. You

46:22

know, in fact, most of our new housing gets added

46:24

at the urban fringe where there's literally no infrastructure

46:27

and you have to build all of it from scratch

46:29

and it's much worse for the climate to putting

46:31

in new infrastructure And we've got

46:33

areas in the urban core that have underused

46:36

infrastructure, often that could benefit

46:38

from having more people using it. Right? Transportation

46:40

is a great example. We've got low

46:42

ridership on lot of commuter rail lines because

46:44

nobody lives in walking distance of the commuter

46:46

rail station. So we're we're

46:48

not making this sort of rash shoulder informed decision

46:51

about where to build based on the

46:52

costs, that's largely an excuse

46:54

to say no when the current residents

46:56

don't want more housing. So I wanna

46:58

drill in on that point about where it's good

47:00

to build environmentally and where you can

47:02

build. So a lot of building now happens

47:05

further out in the French. This something gets called,

47:07

at least in California, the the wildland

47:09

urban interface. It's these outer areas

47:12

where people are moving because they can't afford

47:14

to live in the cities. But you have much

47:16

more wildfire risk there. They have to

47:18

commute further so they're using their cars more.

47:21

So it's pretty bad for the environment on a lot

47:23

of levels. And at the same time,

47:26

you have all these environmental laws being weaponized

47:28

against development in denser areas.

47:31

And I just saw the most amazing example

47:33

of this Minneapolis had

47:35

passed this really important, very progressive

47:37

law ending single family zoning across

47:39

the city, and a judge just

47:41

brought down an injunction against it

47:43

based on a lawsuit and sorry,

47:45

I really can't believe this one. Based on a lawsuit

47:48

brought in part by the Ottoman Society out

47:50

there, saying that the law didn't

47:52

go through enough environmental review. So

47:55

can you talk about the tensions

47:57

between building environmentally,

48:01

but then also getting over

48:04

environmental reviews when

48:05

building. Yeah. And this is actually it's

48:08

kind of similar to the way we put

48:10

citizen voice into the development process

48:12

because there were a bunch of examples where

48:15

low income neighborhoods got bulldozed for

48:17

big projects. At about the same

48:19

time, there was push by the environmental movement

48:22

that you should think about the environmental consequences

48:25

of building new projects. And so we should look

48:27

at things like, are you building in

48:30

areas with protected wildlife? Is this going

48:32

to have problems with storm water runoff? Is

48:34

this going to somehow pollute the drinking water?

48:36

So we should do an assessment of the environmental

48:38

impacts of development. Right? That is a very

48:41

reasonable thing to expect, and so we now

48:43

have a national law and state

48:45

laws requiring some sort of environmental impact

48:47

review. But what's happened over

48:50

time is that they have become very broad.

48:52

So, you know, the environmental impact is

48:54

not just on the physical environment, it's things

48:57

like noise and traffic and

48:59

congestion, which are really quality

49:01

of life issues for people who live there.

49:03

And again, what we do is we analyze a

49:06

proposal to build an a place. Are there gonna

49:08

be any negative consequences to anybody

49:10

from building here without thinking about

49:12

sort of the flip side, if we don't build here,

49:14

what are the negative consequences? So

49:16

if we don't build in places in the urban

49:19

core and the development happens, in

49:21

these very wild prior prone areas in,

49:23

you know, California and Colorado and so forth.

49:25

What happens when we build in places that are closer

49:27

to wildfires? That's actually much

49:30

worse But our environmental review

49:32

laws aren't set up to do sort of a cost

49:34

benefit of building in one location versus

49:36

another. It's just if you can prove

49:39

any kind of damage of the project

49:41

that's proposed in a particular

49:42

location, you can use these laws to

49:44

shut it down. We seem

49:46

very well set up. To ask

49:49

what are the costs and consequences

49:51

of action and very poorly set

49:53

up to ask what are the costs and consequences

49:56

of inaction. If you propose

49:58

to make some big infrastructure

50:01

change or build large development,

50:04

you know, you can spend a lot of years fighting

50:06

out and simply analyzing what that

50:08

will mean. At the same time,

50:10

there's no law that can be brought.

50:13

That forces a similar difficulty

50:17

for the status quo. I mean, the

50:19

status quo is untenable

50:22

or worse, there is

50:24

nothing that forces it

50:26

to change. And so you have

50:28

a pretty profound. It seems me

50:31

in the way we've developed our laws asymmetry between

50:34

the scrutiny we bring to changing

50:36

anything and the scrutiny we bring to

50:38

not changing anything.

50:40

Yes, we have stacked the system entirely

50:42

in favor of the status quo, and

50:44

that's not a coincidence. People

50:47

who benefit from the status quote,

50:49

want to keep it that way. And so

50:51

they and to a large extent, they have

50:53

political power and have written laws that

50:55

protect things as they are.

50:57

The people who would benefit most from changes,

51:00

particularly sort of large scale changes,

51:02

like making it really easy to build

51:04

apartments and transit projects in

51:06

high demand locations, the people who would benefit

51:08

from that don't have that much political

51:10

power and voice and haven't been

51:12

organized, and so they get shut out.

51:14

There's also a question here

51:16

that is in the background, I think, of a lot of housing

51:19

politics, which is we've

51:22

really through policy. And I like to you'd

51:24

talk a bit about which policies, but we've really

51:27

pushed housing

51:29

as the engine of middle class wealth.

51:32

We have really pushed people to

51:35

stock a ton of their money

51:38

and and and wealth and long term

51:40

financial security or intergenerational financial

51:43

security in homes. And

51:45

so that also creates a politics where

51:48

people are very, very nervous about

51:50

anything that might negatively affect

51:53

their home values.

51:54

How does that play into all this? That's

51:56

a huge part of it. The federal

51:59

government has made a bunch of deliberate

52:01

policy choices to encourage

52:03

homeownership as a form of wealth building

52:06

at the exclusion of other kinds of wealth

52:08

building. Right? So when you buy a house

52:10

and you take out a mortgage, you can deduct the

52:12

mortgage interest you pay from your federal income

52:14

taxes. When you sell your

52:16

house, the value of the house has gone up,

52:18

you don't have to pay capital gains on the increased

52:21

value of the house. That's not true for

52:23

something like putting money into, you know, stock

52:25

portfolio. So we've created, particularly

52:27

through the federal tax code, a bunch of incentives

52:30

to encourage people to use homeownership and

52:32

home equity as their primary engine

52:34

of wealth. This is particularly true for middle income

52:36

families who don't tend to have big stock portfolios,

52:39

and then people become very protective of this.

52:42

So there's an economist called Bill Fishall who

52:44

wrote a very influential book called The HomeVoter

52:46

Hypothesis, which essentially says

52:48

that homeowners become

52:51

single issue voters based on protecting

52:53

the value of their property because it's such a major

52:55

investment you know, and you sort of bundle

52:57

with that, people care about the characteristics

53:00

of their neighborhood, but that incentivizes in

53:02

the same way to resist change

53:05

that could lower their property values and

53:07

or change their daily quality of

53:09

life. Right? And this becomes an enormous political

53:11

block at every level of government

53:14

they don't even have to have an organized

53:16

pack because they're all just aligned on their

53:18

incentives. They show up. They vote.

53:20

They write letters to their city council members

53:22

and their state legislators. And they drive

53:24

a lot of the policy decisions and make it very difficult

53:27

to change any of the policies that have locked

53:29

in the system.

53:30

Work talking about a lot of

53:33

policies at every level here from our,

53:35

you know, the mortgage deduction to our Federal

53:37

Reserve policy to the

53:39

way locals zoning decisions are made in in

53:41

this country that are

53:44

American. And so also

53:46

think it's good as a reality check to ask Well,

53:48

is this a distinctively American problem?

53:50

So if I were to look at peer countries, if I were

53:52

to look at Canada and the UK and Germany

53:54

and France, how much would I find

53:57

that the housing problems we're having

53:59

here are mirrored

54:00

there. And how much would I find America

54:02

looking like an outlier? Some pieces

54:05

are definitely mirrored in the other

54:07

kind of Anglo countries. So Canada,

54:09

the UK, Australia, look fairly

54:11

similar to the US. They have some similar kinds

54:14

of policies we see some big

54:16

differences. So Germany is

54:18

one of the very few majority renter

54:21

rich nations. So more than half

54:23

of German households rent their home

54:25

And if you look at their federal tax policy,

54:27

they have exactly flipped the mortgage

54:29

interest deduction. If you own a

54:32

piece of property and you rent it out, you don't

54:34

live in it yourself, but you rent it to somebody else,

54:36

then you can deduct the interest from your federal

54:38

income taxes but you can't do that

54:41

if you live in a house that you own yourself. Right?

54:43

So that's a really nice little sort of trick.

54:45

You flip the income tax code and it turns

54:48

out you create an incentive for a bunch of people who

54:50

own a house to create essentially

54:52

an in law apartment, an accessory dwelling unit

54:54

live in the rental unit and rent

54:56

out the main space to somebody

54:59

else for rental income. France

55:01

is an example of country that has invested

55:03

much more in social housing,

55:06

not just for poor households, but for

55:08

middle income households. So they have

55:10

spent a lot more money. They guarantee housing

55:13

assistance to all poor people. They

55:15

have funding companies, private

55:17

companies pay into this social housing

55:19

fund so that there's a continued stream of

55:21

money to pay for this. They have worked very

55:23

hard to build more social housing in

55:25

high opportunity neighborhoods and to have

55:27

mixed income social housing that's not so

55:29

segregated. So these are all policy

55:32

decisions by countries with similar

55:34

kinds of income and similar rule of law

55:36

systems, but they've chosen to set

55:38

up some of their policies to be were

55:40

renter friendly, more friendly to

55:42

low income households and less

55:44

dependent on this sort of traditional owner

55:46

occupied

55:47

model. So that's really interesting on

55:49

a couple levels. Let me let me start with Germany

55:51

here. Because in

55:53

addition, just being a fascinatingly different

55:56

policy equilibrium, it

55:58

strikes at something in our

56:00

culture around housing, which is

56:03

we really make the argument that we should encourage

56:06

homeownership. Because homeownership creates

56:08

a better citizenry. It creates people who are invested

56:10

in their communities, who and

56:12

in fact, it does seem to do this, who show up and

56:15

and talk to community meetings. But

56:17

it stabilizes people, stabilizes families

56:20

that you will have a better polity,

56:22

a better social culture. If

56:24

you have more homeownership. Now,

56:26

Germany doesn't seem to me to be a terrible

56:29

social culture, at least not modern

56:32

Germany. So does

56:34

that suggest that we've gotten something

56:36

wrong in in the idea that you're gonna

56:38

have a, like, a better macro citizenry

56:41

if you have very, very, very high rates of homeownership?

56:44

Yeah,

56:44

we've very much been brainwashed into

56:46

thinking that homeownership provides

56:48

stability that rentership can't

56:50

But it depends on how you structure rental

56:53

markets. So we think

56:55

of renters as being very transient people

56:57

who move it and out younger households,

56:59

they're not engaged in their community, you know, they

57:01

don't put down roots, but that's not

57:03

true of all renters. So, you

57:05

know, lots of people will rent an apartment and

57:08

stay in the same apartment for long periods of time,

57:10

you can have very stable long term renters

57:12

who are engaged in their community and committed.

57:15

It's not question of being an owner renter

57:17

a lot of it is about the predictability of

57:20

your housing costs over the long run.

57:22

Right? What homeownership does is give you

57:24

Predictability over what your monthly payments

57:27

will be for a very long time, which most

57:29

renters don't have, but we could

57:31

create that sort of long term stability

57:33

of payment for renters, which would allow them

57:35

to stay in neighborhoods for longer and to

57:37

put down roots and be part of the community without

57:40

being pushed out by financial circumstances.

57:43

And then something you were getting out on France,

57:45

which is interesting to me. France is a lot

57:47

of public housing. Forty percent

57:49

of renters in live in public housing. Singapore

57:52

nearly eighty percent of housing is built by the federal

57:54

government. Public housing in

57:56

this country has a terrible reputation.

57:59

Is that Is that reputation deserved

58:02

first? And is it inevitable?

58:04

Could public housing be part of

58:07

the answer here? So a lot of

58:09

our bad reputation of public housing dates

58:11

back to sort of the the seventies through

58:13

the nineties. There were there were some very bad periods

58:16

of public housing, where a lot of the housing

58:18

was in poor quality, had very high crime

58:20

rates, not in good neighborhoods,

58:22

so public housing was intentionally located

58:24

when it was built. In poor

58:26

neighborhoods that were not close to areas

58:28

of opportunity. Right? So we chose to build

58:31

it in the worst possible neighborhoods. We

58:33

chose to make public housing available only

58:35

to the horst people, so you

58:37

segregate poverty in, you know, often

58:39

very very large properties and

58:41

that turned out not to be great. For

58:43

the people who lived in it or for the surrounding neighborhoods.

58:46

In the nineties, we went through a period of tearing

58:49

down a lot of the really bad public

58:51

housing very dangerous places,

58:53

you know, and dispersing them. That's still a controversial

58:56

decision. But, you know, as a country, we

58:58

have not provided public housing well.

59:01

We made decisions like Congress gets

59:03

to vote on the amount of funding every year

59:05

for the maintenance and capital upgrades.

59:08

We built public housing and didn't provide

59:10

enough money to keep it in good working

59:12

operation for the life of the properties or

59:15

provide money to sort of build new housing when

59:17

the buildings got old. So

59:19

my view is the US has done

59:21

public housing poorly. Other

59:23

countries have done it well. But

59:26

the fact that we chose to do it badly

59:28

reflects some political decisions,

59:30

some kind of social contacts, and

59:32

I'm not convinced that the US could

59:35

do social housing the way France or

59:37

Vienna or Singapore does. If we

59:39

could, I would be a lot more enthusiastic about

59:41

it, but I just don't think that we're going to get there

59:44

I don't think that we have the infrastructure. I

59:46

don't think that we have the social buy in.

59:48

We definitely don't have the federal funding

59:50

commitment to make this work properly. And

59:52

I think given our history with it, that's

59:55

not the most kind of optimistic way

59:57

to go.

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1:00:58

Housing is a place in America where

1:01:01

I think you've seen some of the fastest

1:01:03

political change, at least on

1:01:05

the ideological level over the past decade

1:01:07

or two. So what

1:01:10

people have begun to believe in housing, certainly

1:01:12

in Washington, suddenly in even

1:01:14

in the Democratic Party is really different. I mean,

1:01:16

the focus on supply, the rise

1:01:19

of the yes in my backyard, the MB movement,

1:01:21

where where people are actively organizing to

1:01:23

say build, more housing, the Biden

1:01:25

administration has both had in its policies

1:01:27

and then recently in an in an executive order,

1:01:30

a lot of efforts to increase housing supply.

1:01:33

You can see places like Minnesota pushing back

1:01:35

again single family zoning in Fornia,

1:01:37

there was an effort to make almost everything

1:01:39

possible to build a duplex on. Do

1:01:41

you think the trend here is gonna turn around? I

1:01:43

mean, has enough been done put that now we're just

1:01:45

in lag period between understanding

1:01:48

we have a problem and solving

1:01:50

it? Or are we still pretty far from making

1:01:52

progress here? So I think the

1:01:54

policy changes we've done so far are

1:01:57

moving in the right direction, but still

1:01:59

mostly pretty incremental Right?

1:02:01

So even in California, which has pushed

1:02:03

more statewide reformers than any place else,

1:02:06

California has legalized ADUs and

1:02:08

duplexes and lot splits. All

1:02:10

of those are good things, but they're

1:02:12

not gonna produce millions of units

1:02:14

of housing that the state needs. Right? So I

1:02:16

think on the policy side, we still

1:02:19

need to move forward and probably need to have some

1:02:21

more aggressive policies. So it needs to be legal

1:02:23

to build big apartments on top

1:02:25

of subway stations and commuter rail stations.

1:02:28

Which, you know, it's kind of crazy that that's illegal

1:02:30

in most places. But the incremental

1:02:32

policy changes think are helpful

1:02:34

to build some political support First

1:02:36

of all, that there there wins for the Yimbi movement,

1:02:39

that people pushing for these can point to

1:02:41

legislative victories, and also that

1:02:43

when you legalize Duplex's statewide, the world

1:02:45

doesn't end. Right? That you have

1:02:47

sort of gradual adjustment of neighborhoods

1:02:50

without there being plummeting property

1:02:52

values and neighborhoods turning into

1:02:54

slums overnight. And I think it is probably

1:02:56

important to show that these changes are

1:02:59

not as scary as the opponents want.

1:03:01

On the political side, This

1:03:03

is a very young movement. It's really only

1:03:05

been active for maybe about five years.

1:03:07

It's gaining traction quickly

1:03:09

and it's gaining traction in more places.

1:03:12

Not just in the blue expensive places.

1:03:14

We're seeing, you know, active reforms in

1:03:16

places like Utah. There's an active group

1:03:18

in North Carolina pushing for statewide zoning

1:03:21

reform. So it's gaining traction

1:03:23

in war places. It's pushed

1:03:25

a lot by younger generations who really

1:03:27

see home ownership as almost an unattainable

1:03:29

goal. I think as long as housing

1:03:31

continues to be very expensive, there

1:03:33

are going to be more people who find this an appealing

1:03:36

way to go. It's gaining a lot of traction

1:03:38

in political establishments on

1:03:41

both sides of the aisle actually. So

1:03:43

I think that we're probably going to see continued

1:03:45

movement but I don't see the policies

1:03:48

getting us to solutions in the

1:03:50

next few years even really in

1:03:52

the next decade. Right? And one way to think about this

1:03:54

is California hasn't built enough homes for forty

1:03:56

years, even if we got rid of all of

1:03:58

the bad policies, including prop thirteen

1:04:00

and secret tomorrow, it would take

1:04:02

decades of very high level building

1:04:05

in order to close gap and bring housing back

1:04:07

into the range of affordability for normal

1:04:09

people. I want to pick up on something

1:04:11

you just alluded to there, which is there's a

1:04:13

a deep generational dimension to the politics

1:04:16

of housing. And I've already say elsewhere

1:04:18

that if you look at survey data, if

1:04:20

you look at the politics of it, there's almost

1:04:23

no deeper divide here. Can you talk about how you

1:04:25

see the difference in how young people

1:04:27

understand housing in America right now

1:04:29

and how older people

1:04:30

do? Yeah, people under probably

1:04:32

the age of forty are really pessimistic about

1:04:35

their ability to buy a home

1:04:37

in the kinds of neighborhoods they want

1:04:39

to live in that fits within their budget.

1:04:42

And younger generations have been dealt

1:04:44

a bad hand on the labor market side

1:04:46

They came out of school in the great recession. They had

1:04:48

a much harder time getting jobs.

1:04:50

They have much higher rates of student loan

1:04:52

debt. So sort of all of the chips are

1:04:54

stacked against them financially. Which

1:04:56

means that homeownership is a harder

1:04:58

goal for them to reach. It's taking them longer to

1:05:00

save up money for down payments. In the meantime,

1:05:02

housing costs have gone up faster. You know,

1:05:04

this is generation sort of facing the worst of

1:05:06

all of that. I'm a gen xer. I

1:05:09

came out of college in a great labor

1:05:11

market where English majors could go work

1:05:13

for Goldman and make eighty thousand dollars

1:05:15

a year. And five years out of college,

1:05:17

if you wanted to buy a house, you could. That's

1:05:20

really impossible for younger households,

1:05:22

younger workers today. And, yeah, I

1:05:24

think part of the problem on the political side

1:05:26

is older households just

1:05:28

don't understand how expensive housing

1:05:30

has gotten a especially in

1:05:33

high opportunity communities. And

1:05:35

they think that this is sort of, you know, the the millennials

1:05:37

are eating too many avocado toast and not

1:05:39

saving up for a down payment without realizing

1:05:41

they'd have to eat no avocados and,

1:05:43

you know, nothing else and save up

1:05:45

for fifteen years for a down payment, whereas,

1:05:48

you know, for earlier

1:05:49

generations, it just wasn't that hard. I've

1:05:51

heard economists say, look,

1:05:54

there's nothing that will as obviously solve

1:05:57

itself. As intergenerational

1:06:00

wealth, that if you believe older people have hoarded

1:06:02

all the wealth, well, that is definitely

1:06:05

going to change because older

1:06:07

people transition out

1:06:09

of holding their wealth to put it delicately.

1:06:13

What's wrong with just

1:06:13

saying, well, don't worry about it. These houses

1:06:15

are all gonna get passed down.

1:06:18

The inter generational transmission of wealth

1:06:20

that's gonna happen as the silent generation

1:06:22

and baby boomers die is going to

1:06:24

exacerbate income and

1:06:26

wealth inequality and particularly along

1:06:28

racial lines in ways that I think we're

1:06:30

just not ready for So if your

1:06:33

parents owned a house in California,

1:06:35

if they bought in Palo Alto in nineteen seventies

1:06:37

or eighties, you are going to inherit

1:06:40

millions of dollars in property or

1:06:42

cash. If your family

1:06:44

owned a house in St. Louis,

1:06:47

you're not going to inherit much If you

1:06:49

look at how homeownership breaks down along

1:06:51

racial lines, seventy percent of white

1:06:53

households on their home, forty percent of black

1:06:55

households on their home. The home equity

1:06:57

held by white homeowners is roughly double

1:06:59

that of home equity for black homeowners.

1:07:02

So rich white boomers

1:07:04

dying off and leaving cash to their

1:07:06

kids is not gonna is gonna

1:07:08

exacerbate the already large racial

1:07:10

wealth gap. And then you add on

1:07:12

to that sort of all of the stock market wealth and

1:07:14

so forth, we are going to have much much bigger

1:07:17

wealth gaps twenty years from now than we do

1:07:19

today. It's just going to do really uncomfortable

1:07:21

things to our politics and social society.

1:07:23

So one thing I really appreciate about

1:07:25

your book is that it's very solutions

1:07:27

oriented. But

1:07:30

I wonder if that's the right level in which

1:07:32

to think about this policy by policy.

1:07:34

Because you're also making this argument behind

1:07:36

it that the politics of this are a

1:07:39

skew in a way that prevents

1:07:41

good policy from from happening. So

1:07:44

let me ask a question this way. What

1:07:46

do you think could be done? What is most

1:07:48

effective? At changing the

1:07:50

political context in which

1:07:52

solutions can be

1:07:54

attempted, experimented

1:07:57

with, and then scaled up. So

1:07:59

it's kind of an unfair question to ask me because

1:08:01

I'm an economist, not a political scientist. So

1:08:04

I think in terms of policy solutions

1:08:06

that make sense from the economics. But

1:08:09

I will say one of the reasons why I

1:08:11

wrote the book is that it feels to me

1:08:13

like, this is not a

1:08:16

political conversation that gets had

1:08:18

in the right places by the right people.

1:08:21

We have dedicated NIM views

1:08:23

who will fight against anything there's

1:08:26

essentially just no outreach to them. We're never

1:08:28

going to persuade them. There's a small band

1:08:30

of dedicated YYMVUS, but then

1:08:32

they're an off a lot of kind of more typical

1:08:34

households and voters in between for

1:08:37

whom this is not a primary issue.

1:08:39

Right? So if you think of kind of the median

1:08:41

voter middle income, middle

1:08:43

age, suburban homeowners. Most

1:08:46

of them don't think of this as a

1:08:48

problem they have to get up every day and deal with.

1:08:50

Right? You own your house. It's pretty nice. You

1:08:52

live in nice neighborhood. Why should

1:08:54

you care about this? And so one of

1:08:56

the reasons I wrote the book is to try to make the

1:08:58

case to, you know, that median voter

1:09:00

that in fact, these broken systems have

1:09:03

really big consequences for all of us.

1:09:05

Right? Climate is a very hard one to

1:09:07

ignore. Right? Our our current building patterns

1:09:09

are making climate change worse. We are already

1:09:12

paying financial costs. This disrupts our quality

1:09:14

of life. The underinvestment in

1:09:17

safe living environments for kids

1:09:19

has repercussions for, you know, the next

1:09:21

generation of workers and citizens we

1:09:24

are massively under investing in

1:09:26

good quality housing, good quality neighborhoods,

1:09:28

access to good quality public schools for

1:09:31

millions of poor kids. Right? And that's

1:09:33

not gonna be good for the country at all.

1:09:35

So I I think there's an argument to be made that

1:09:37

sort of the I don't know if it's the silent majority,

1:09:39

but the people who are not Yumbis

1:09:41

or Nimbis should care about this

1:09:44

and they should be engaged. And

1:09:46

I think that they should be aligned with the Yumbis

1:09:48

and actions even if they're not showing

1:09:50

up to meetings on

1:09:51

this. I don't know if we are breaking through

1:09:53

to that audience or not, but that's certainly the

1:09:55

hope. Is there anything here

1:09:57

that you just, like, feel we didn't

1:09:59

cover that we really should that

1:10:01

is, like, a big hole in either your theory or

1:10:03

in just, like, the connective tissue of the argument?

1:10:05

So one thing that I I

1:10:07

would like to see more of in housing policy

1:10:09

is more experimentation. This

1:10:12

is a really conservative space. We

1:10:14

adopt policies and we stick with them

1:10:16

for very long periods of time. That's certainly

1:10:18

true on the land use side. But even kind of the, you

1:10:20

know, the outlines of our federal tax policy

1:10:23

and the way we pay for public services, because

1:10:25

all of these things are interconnected, right

1:10:27

now they're reinforcing bad outcomes.

1:10:30

It's hard to persuade people to try something

1:10:32

radically different if we haven't tried it

1:10:35

to see whether it will work. And

1:10:37

homelessness is a good example. We

1:10:39

are at a crisis point and the current

1:10:41

approaches are not working. They are

1:10:43

not scaling up, but we haven't

1:10:45

tried something that's radically different. So,

1:10:47

you

1:10:47

know, I almost feel like there isn't enough urgency

1:10:50

on some of these to see What

1:10:51

is something that would be radically different? We

1:10:55

could potentially throw out all of those sort

1:10:57

of building code regulations around not

1:10:59

letting homeless people live in, say, vacant

1:11:01

commercial buildings. Right? We have a bunch of vacant office

1:11:03

buildings. You can't just put homeless people

1:11:05

in them because they don't have bathrooms and bedrooms

1:11:07

and things like that. We could just say, you know, for the

1:11:09

short term, that doesn't matter. They need to have some place

1:11:12

to live and let them use them. Right? And that's not

1:11:14

even a huge change in policy. Right?

1:11:16

That's something that local governments could do,

1:11:18

but they are very, very risk of errors and not

1:11:20

willing to try that.

1:11:22

Is it legal for them to do that? Because

1:11:24

one of the things I mean, in California, it's so

1:11:26

wild to watch this. Right?

1:11:28

One thing that I have seen again and again

1:11:30

is that because local

1:11:32

politicians really are here on fire about these issues. They

1:11:34

really do wanna solve them. They try things. They get

1:11:36

sued. The advocate communities

1:11:39

come down on them or they they do

1:11:41

something that doesn't seem that hard and then the amount

1:11:43

of money it costs is astronomical.

1:11:46

So, you know, you take Los Angeles. They they

1:11:48

passed a measure a couple of years ago.

1:11:50

Under Eric Arcetti, voters voted for

1:11:52

it to tax themselves quite a bit more,

1:11:54

right, to to to put a bunch of money into a

1:11:57

fund to actually build shelter.

1:11:59

And then the problem is they've

1:12:02

built very very little because

1:12:04

the the individual communities organize

1:12:07

against it. So, you know, if you look

1:12:09

at both the the platforms now for Caruso

1:12:11

and and and Karen Bass, who are the two front runners

1:12:14

for for the Bay Royalty out there, they

1:12:16

both talk about how this measure has

1:12:18

functionally failed and how it's cost, if

1:12:20

I remember the number correctly, more than

1:12:22

seven hundred thousand dollars

1:12:24

per bed But when I

1:12:26

read their platforms, they don't really have

1:12:29

a way to solve it because

1:12:31

you're you're going back to the same issue. Of,

1:12:34

you know, the people in that

1:12:36

area will organize. And and just hearing

1:12:38

that solution, thinking about any of them, you

1:12:40

know, imagining the business owners coming to

1:12:42

say they don't want almost people living

1:12:44

in this relatively vacant commercial area

1:12:46

right next to them or the

1:12:49

homeowners coming into the community

1:12:51

meetings to say, they don't want

1:12:53

these tiny house facilities built

1:12:56

near them. That seems to be the recurrent

1:12:58

problem. I wonder how you think about

1:13:00

making it less possible for those

1:13:02

blocking coalitions to form.

1:13:05

It's too easy for people to

1:13:07

sue to stop stuff. So

1:13:09

the legal obstacles to trying new

1:13:12

things and especially something that's gonna be a little

1:13:14

bit radical, that is one of the reasons why

1:13:16

we don't try it because elected officials are

1:13:18

worried about getting sued and they almost certainly

1:13:20

will get sued. You know, the blocking coalitions,

1:13:23

it's not just the business owners and

1:13:25

the homeowners who are pushing back against

1:13:27

this, it's also advocates for

1:13:29

the homeless who say, you can't put

1:13:31

people into buildings that aren't up

1:13:33

to code that it's going to be dangerous for

1:13:35

them. A lot of the affordable housing

1:13:37

advocates are

1:13:39

reluctant to try halfway solutions

1:13:42

because they want to get all the way to where they

1:13:44

want. So the argument, for instance,

1:13:46

over whether we should push to put more homeless

1:13:49

people, unshelltered homeless people into shelters,

1:13:51

There are bunch of advocates who don't want to do

1:13:53

that because it takes away the

1:13:56

political pressure to create long term

1:13:58

permanent supportive housing, which is better.

1:14:00

Right? So, you know, the the political collisions

1:14:03

are It's it's really frustrating because you

1:14:05

have people who have very good intentions

1:14:08

but I think are asking for the impossible with

1:14:10

no way to get there and people

1:14:12

with bad intentions who were sort of

1:14:14

coming together to block halfway

1:14:16

measures that are incrementally better than what

1:14:19

we

1:14:19

have, but are not perfect. So

1:14:21

right now, we're at a moment of

1:14:24

real tumbled, I think, in the housing market,

1:14:26

more broadly. So the Fed has begun

1:14:28

tapping on. The breaks in the economy, interest

1:14:30

rates are rising really, really,

1:14:33

really very quickly now. I think over

1:14:35

the next couple years, you're going to see much higher

1:14:37

interest rates for somebody trying to take out a mortgage?

1:14:39

I've seen a lot of analysts who think housing

1:14:41

market has peaked. Do

1:14:44

you think this will be a big change? Do you

1:14:46

think this will change either the politics

1:14:48

of housing or the price of housing

1:14:50

in some of these places? How do you

1:14:52

assess what this moment in

1:14:55

the the actual housing market will

1:14:57

do. So one thing we should keep in mind

1:14:59

is that the mortgage market and the housing

1:15:01

market are not the same thing. So

1:15:04

increasing interest rates makes it more expensive

1:15:06

to get a mortgage. That will mean some people

1:15:08

don't take out a mortgage, including some people

1:15:11

who currently live in a home aren't going to move

1:15:13

to another home because they're locked into low rates.

1:15:15

So that's a market for mortgages. That

1:15:17

doesn't diminish the need for people to live

1:15:19

someplace. And I was actually I I've not

1:15:21

gone back to look and see. We know

1:15:24

from prior incidences that when interest

1:15:26

rates go up, housing prices go

1:15:28

down or at least moderate growth.

1:15:31

People can't buy the same amount of house for

1:15:33

the same amount of money. I don't actually

1:15:35

know what the evidence is on rents.

1:15:37

And that's my concern that a bunch of

1:15:40

would be first time homeowners don't buy.

1:15:42

They stay on rental market that puts

1:15:44

more pressure on rents. And so

1:15:46

I worry more about renters because they tend

1:15:48

to be poorer. If what we have

1:15:50

is a moderation of housing prices in the

1:15:53

owner occupied market, and rents

1:15:55

stay high, that's not a net

1:15:57

gain. And the sort of headline

1:15:59

statistics about interest rates aren't paying

1:16:01

that much attention to the well-being of

1:16:03

people who live in rental

1:16:04

apartment. So I worry that we're not going to pay that much

1:16:06

attention to them. I think that as

1:16:09

a generalizable worry is a good place

1:16:11

to end. Always a final question.

1:16:13

What are three books you'd recommend to the audience?

1:16:16

So there is a book called Crombreast Frontier,

1:16:18

the suburbanization of the United States, which

1:16:20

is an absolute classic is by an

1:16:22

historian and tells her the long term history

1:16:24

of housing development, mortgage

1:16:27

markets housing policy, the real estate industry

1:16:29

in the US, It's great because you realize

1:16:31

that suburbanization is not a post

1:16:33

world war two phenomenon. It goes back much further

1:16:36

than that. On housing politics,

1:16:38

they're three political scientists, Katie

1:16:41

Einstein, David Glick, and Maxwell Palmer,

1:16:43

written a book called Neighborhood Defenders, and

1:16:45

a bunch of papers since then which are just

1:16:47

a fantastic insight into the nitty

1:16:49

gritty politics, who shows up and participates,

1:16:52

the sort of idea that it looks like it's multi

1:16:54

democracy, but isn't And then the last

1:16:56

one I'm gonna cheat a little bit, it's the Netflix

1:16:58

of a book. So Made, which is

1:17:00

Netflix series based on Stephanie Land's memoir,

1:17:03

You could teach an entire housing policy

1:17:05

class around this series, so

1:17:07

it shows you how broken the social safety

1:17:09

net is, how hard it is to get federal housing

1:17:12

assistance, There's a whole episode where she

1:17:14

rents an illegal ADU and doesn't have

1:17:16

a lease because it's kind of off market. So

1:17:18

it's just it's a fascinating idea of sort

1:17:20

of the bottom end of the housing market that

1:17:22

really doesn't work and is kind of a shadow market

1:17:24

in many ways. Jenny

1:17:27

Shuts, Thank you very much. Thanks, Ezra.

1:17:40

The

1:17:40

Azercon show is produced by Annie Galvin

1:17:42

and Rosier Karma, fact checking by Michelle

1:17:44

Harris, Mary Marsh Locker, Kate Sinclair

1:17:46

and Roland Hughes, original music by Isaac

1:17:48

Jones, mixing by Isaac Jones and Sonya

1:17:50

Herrera, audience strategy by Shannon

1:17:52

Buster, our executive producer are reading

1:17:55

Naguchi. Special thanks to Kristen

1:17:57

Lynn and Christina Simuloski.