0:01

You're listening to the Strong Towns

0:03

Podcast. Hey everybody,

0:05

this is Chuck Marone with

0:07

Strong Towns. Welcome

0:25

back to the Strong Towns Podcast. Tomorrow,

0:29

so this is coming out on April 22nd. I'm

0:33

actually in Boise, Idaho

0:35

at the moment, speaking at a housing conference,

0:37

which is great timing because tomorrow, April 23rd,

0:40

2024, escaping the housing trap, the Strong Towns

0:46

response to the housing crisis

0:49

is coming out. It's the brand

0:51

new book that we are releasing through

0:54

Wiley Publishing. It's the third book

0:56

in the Strong Towns series. This

0:58

one is focusing exclusively on

1:00

housing and housing issues. I wrote

1:02

this along with my colleague, Daniel

1:04

Hergis. I'm out

1:06

on book tour now, hopefully

1:09

coming to a city near you at some point,

1:11

but it's very exciting. You can go get

1:13

it at your local bookstore. Hopefully

1:16

you can get it at your local library. You

1:18

can certainly order it online from any distributor.

1:20

We work with Wiley Publishing. They're very good

1:22

to us. They've been great with us, but

1:25

we work with them because they can get the book

1:27

anywhere. There that people want to get it. So if

1:30

you are a local bookshop person, go

1:33

get it at your local bookshop. That's beautiful. That's

1:35

great. And they can get it through Wiley Publishing.

1:38

If you get your books in other places, go get it there.

1:40

A lot of people ask me, will there be

1:42

a E version? Yes.

1:45

I can't really explain why, but they take the

1:47

first two or three weeks and they do just

1:49

the hardcover. Then you will get

1:51

an E version that will be released at some point

1:54

very soon. And also an audio book will be coming.

1:57

Hate to disappoint you all. I will not be reading it

1:59

again. We

2:01

did have me read a little bit on

2:03

the first one and they did not

2:05

like it, which I don't blame them. I appreciate

2:07

you all listening to the podcast. I appreciate you all being here.

2:10

I appreciate everyone being part

2:12

of this conversation with me, but

2:14

let's talk honestly with each other.

2:16

I don't have a great voice.

2:18

I certainly don't have

2:21

a great reading voice. And

2:23

I just think like the tone and the tenor of

2:25

what I do. I've been very happy with the audiobooks

2:28

as they've been released. I'm

2:30

an audiobook person. I consume

2:33

at least two a month all year. And

2:36

so I'm going through, you know, a couple dozen or

2:38

more audiobooks in a year. And I

2:41

will tell you, the person who

2:43

reads it makes a big difference

2:45

in the quality of the book,

2:47

right? I'm also a double speed

2:49

person, so I tend to listen on

2:51

double speed. And if

2:54

I don't know who it is who's reading

2:56

it, I will listen to the excerpt first

2:58

and say, can I

3:00

handle listening to this person for eight hours? And

3:03

I got to say, I have not

3:05

purchased books because I didn't like

3:07

the reader. You

3:09

may all appreciate it because we talk a

3:11

lot, but the reality is that I don't

3:13

think most people would appreciate me reading it.

3:15

So I'm not upset that that's the case,

3:17

but I appreciate everybody's been very kind, encouraging

3:19

me to read it. Bad

3:22

business decision for everyone. All right. With

3:24

the book coming out tomorrow,

3:26

I've been going over

3:29

my head like how I want to talk about it

3:31

and how I want to introduce it. Not

3:33

to start by drawing distinctions, but

3:35

I do think that the tension

3:38

or the biggest distinction here is

3:41

really the one that we have with

3:44

people who are described as nimbies and

3:48

people who are self-described as

3:50

yimbies. There is a

3:53

nuance here with the Strong Times approach. Of course

3:55

there is. There's a little

3:57

bit of tension, too, that's been created. particularly

4:00

amongst the yimby crowd. And

4:02

I want to address it today because

4:05

I think we

4:07

are more in common than we have in difference. I

4:09

want to get out of the table what we have in common.

4:12

And I want to highlight the nuance because I actually think

4:14

that there's a lot of people today who,

4:17

you know, just like in

4:19

our politics, you've got two teams, they're both

4:21

growing more and more extreme to each other.

4:24

You kind of are forced to choose a

4:26

team. In many ways, there are people like

4:29

myself who have opted out of that, found

4:31

a lot of peace and comfort and not

4:33

being part of that force

4:35

to an extreme. I think that

4:37

the yimmy-nimmy thing also has the same kind

4:39

of dynamic. And you'll see

4:42

here in a moment as we talk about this, we're not

4:44

trying to split the baby. But

4:46

we do recognize that there is

4:49

shortcomings in both of these approaches that

4:52

we can actually do something about in

4:55

a very bottom up and proactive way,

4:57

a way that we own locally. So

5:01

it was a decade ago now, maybe more. I don't

5:04

know. At some point in the past, I

5:07

came across the idea of a yimby.

5:11

Yimby is in contrast to nimby,

5:13

of course. And nimby is not

5:15

in my backyard, the acronym given

5:17

to people who show

5:19

up at meetings and oppose everything. You want to

5:23

build a house? No, that used to be a nice field

5:25

my kids would play in. I'm against that. You

5:28

want to make a duplex? Oh, no, that's

5:30

horrible. It will create too much traffic. And

5:32

I don't want those kind of people living

5:34

here and all this stuff. Nimbies

5:36

are kind of the personification of

5:40

the worst kind of thing you get at

5:42

a playing commission meeting, right? Yes,

5:45

I want this thing,

5:47

but I don't want it anywhere near me. I don't want

5:49

it in my backyard. I don't want it on my block.

5:51

I don't want it in my neighborhood. Sure,

5:53

I support affordable housing. Sure, I

5:55

support taking care of the homeless.

5:57

Sure, I support, you know, insert

5:59

your thing here, I just,

6:01

this is a wrong location. Near me

6:03

is the wrong place. And

6:06

I think the NIMBY mindset

6:08

can be very galling because

6:10

it tends to also correlate with a

6:13

high degree of affluence and

6:15

connectivity. So, you know, poor

6:17

neighborhoods tend to not be as

6:20

organized or influential to actually

6:22

exert any NIMBY influence. So

6:25

poor neighborhoods often get stuck with the things

6:27

that the NIMBYs don't want. But

6:30

the NIMBYs tend to, I mean,

6:32

I think the most obnoxious ones are

6:34

the ones that are the most affluent. You know, well, we

6:37

can't have that thing here. This is a very

6:39

nice neighborhood. NIMBYs, I

6:41

think, are easy to caricature because

6:44

the NIMBY reaction of,

6:46

I've got mine, you

6:48

go get yours someplace else is,

6:50

you know, kind of the

6:53

basis of human instincts and

6:56

kind of the grossest thing to look

6:58

at when you're seeing it on full

7:00

display, right? Strong

7:02

towns. I'm going to voice some

7:05

sympathy to NIMBYs here in a little bit. But

7:08

as a general rule, when we look

7:10

at the Venn diagram of strong towns

7:12

in NIMBY, there is very, very little

7:15

overlap, very, very little overlap.

7:17

So when I first heard the

7:19

word YIMBY, yes, in my

7:21

backyard, yes, let's do it. I'm

7:23

like, I identify with this. This

7:26

is this is me, like I'm on board. In fact,

7:28

I remember once on Twitter, somebody asking

7:30

me, are you a YIMBY? And I'm like, of

7:32

course I am. Yes. I'm like, I'm

7:34

there, like count me in. This has

7:37

got me in a lot of trouble. Let's

7:39

just let's just put it that way. My

7:41

gut instinct of like, yeah, you know, I'm

7:43

not a none of

7:45

my backyard. I am a yes in

7:47

my backyard. Like let's go. That interaction

7:49

got me in a lot, a

7:52

lot, a lot of trouble. And I spent quite

7:54

a bit of time, in a

7:56

sense, mentally extracting myself from

7:59

the war. going on let's say

8:02

between the personified NIMBY and

8:04

the the YIMBY advocate. So let's

8:07

let's delve into that a little bit. In

8:10

general the NIMBYs are

8:12

just wrong, right? Wrong,

8:15

right? Yeah that's a very Minnesota-ism

8:17

there. The NIMBYs are clearly wrong.

8:21

Their worldview is based on

8:24

what I would say is like the

8:26

marketing brochure of the post-war development pattern.

8:29

If we look at pre-Great Depression patterns

8:32

of development it was it was all incremental. We've

8:35

talked about this many many times here at Strong Towns

8:37

but the idea that a city would start small little

8:40

bets neighborhoods would build up over time. Buildings

8:43

would be reworked, expanded

8:45

on, replaced. There's a natural

8:48

redevelopment pressure that occurs as land becomes

8:51

more valuable, it rises up, the buildings

8:53

fall apart, people buy these things, they

8:55

renovate them, they make them more intense.

8:59

You can see this over and over

9:01

and in my presentations I show my

9:03

hometown of Brainerd and its evolution. I

9:06

was getting a lot of pushback on well that's cute it's a

9:08

small town but that's not where we're at. So

9:11

I got pictures of Times Square and show the

9:13

same thing, right? Times Square starting

9:15

small, the next increment, the next increment, the

9:17

next increment and all of a sudden you've

9:19

got this place that is iconic in North

9:22

America. We all know Times Square, right? This

9:25

is the way the natural,

9:27

I'm gonna say evolution or the

9:29

natural kind of organic way that

9:31

cities grew prior to our centralization

9:34

approach, prior to the suburban

9:36

experiment was this bottom-up

9:39

organic approach and really let's

9:41

be very clear and part of the

9:43

book that is coming out, part of

9:45

escaping the housing trap, I have a

9:47

whole section on JC Nichols and a

9:49

speech that he gave to a bunch

9:51

of realtors. JC Nichols was a Kansas

9:54

City based developer,

9:56

part of the founding generation of

9:58

the ULI. And, you

10:00

know, his vision that he laid out in this

10:02

speech was what

10:04

he called permanent prosperity. He

10:07

looked at the cities of the past, and he looked

10:09

at the way we built cities. And

10:12

he called it chaotic. He said we got

10:14

little mushrooms popping up and then going away.

10:16

He talked about them

10:18

very derisively, the constant building up

10:20

and tearing down, you know, the

10:22

redevelopment. And his argument

10:24

was, we now have

10:27

the smarts, the capital, the

10:29

will, the know how, we're just really,

10:31

really powerful and good. And we've got

10:33

all this land, and we've got all

10:35

this money and like, all this industry,

10:38

let's just go out and build

10:40

things right the first time, let's just

10:42

build a permanent prosperity. And

10:45

out of this mindset comes,

10:48

you know, here's how far buildings

10:50

should be spread apart. Here's the street with

10:52

his sidewalk, you get the cookie

10:54

cutter, non

10:56

organic, right? The opposite of organic, you

10:59

get that approach to building cities,

11:01

you get the post World War

11:03

Two approach, the suburban experiment approach

11:05

to building places. The

11:08

marketing brochure of that approach is

11:11

one of permanent prosperity. And

11:13

the thing is, is we can all step back and

11:15

look and recognize. And if maybe

11:18

I'll just say this, because maybe it's not clear to

11:20

everybody. When you go in and

11:22

you build a subdivision, you

11:24

might be able to, in

11:26

your marketing brochures, say permanent

11:28

prosperity, we're going to build all the homes

11:31

are going to be very nice, we're gonna have a

11:33

park, it's gonna be brand new, it's gonna be very

11:35

nice. We're gonna put these amenities in, they're also going

11:37

to be very nice, the road is gonna be brand

11:39

new, your streets, your sidewalks, everything looks

11:41

great, everything is wonderful. Here's the marketing brochure

11:43

of this place. And if you move in

11:45

here, if you buy, if you join us

11:47

here, in this brand new,

11:49

you know, name the name of your perfect

11:51

subdivision, you will

11:53

enjoy this prosperity that

11:56

everybody in here is going to share.

11:58

That's what people are buying into. That's the the

12:00

marketing brochure. But

12:02

when you build, whether it's 40

12:04

houses, 400 houses or 4,000 houses,

12:08

all basically at the same time, right? You

12:10

go out and you build it all in

12:12

cookie cutter fashion. What

12:15

you are guaranteed of is

12:17

that everybody's roof is going to fail

12:19

at the same time, right?

12:23

All the houses are built the same time, all

12:25

the roofs last the exact same length, right? If

12:27

it's a 25 year roof, you can say 25

12:29

years later, everybody's going to need a new roof

12:31

in this neighborhood, right? At

12:33

some point, everybody's siding is going to fail

12:35

at the same time. It's going to need

12:38

to be repainted or redone. All the

12:41

sidewalks in the entire development are going

12:43

to fail at the same time. Everybody's

12:45

appliances will go bad at the same

12:47

time. Everybody will need the exact same

12:50

maintenance at the exact same time. There's

12:52

essentially an echo where

12:54

now everything has reached the end of its useful

12:56

life, and it all starts

12:59

to fail. It all starts to go

13:01

bad. It needs intense levels of maintenance.

13:05

In the traditional development pattern, in the organic

13:07

development pattern, the pre-grade depression pattern, things

13:10

weren't built all at once, right? They were built incrementally,

13:12

and a little bit here, a little bit there, things

13:14

kind of building up over time. The

13:16

interesting thing about that spacing, that

13:19

time spacing, is that when

13:21

things started to fall apart, they

13:23

would be falling apart in a sense at different times.

13:26

The neighborhood would be anchored to multiple

13:29

kind of levels of prosperity. If

13:32

you were in the poorest place, that

13:34

was falling apart the most, you could look

13:36

around and find other buildings that basically had

13:38

more value than yours, that were in a

13:41

sense pulling the neighborhood up.

13:44

As a redevelopment, you

13:47

were again, being going to be closer to the

13:49

center of town because the city grew organically out,

13:51

not in these large leaps out to the edge.

13:54

That combination of the

13:57

time difference, you had a different

13:59

state in the life, life cycle. And

14:01

you also are in places where the underlying

14:03

land is appreciating because the neighborhood around you

14:05

is thickening up and maturing, there's more people,

14:08

there's more stuff, some things going on meant

14:11

that the way

14:13

you dealt with decline in an

14:16

organic neighborhood is you bought the

14:18

building that was in decline, and

14:20

you redeveloped it you, you brought

14:22

it up to a new height,

14:25

a new level of prosperity. This

14:27

is like a reinforcing mechanism. In

14:31

the suburban experiment, when everybody's

14:33

roof fails, what do

14:35

you do? Everybody's house is essentially

14:37

at the same price, right? You built a

14:39

subdivision, they've all got single family homes, they're

14:41

all the same price point, right? They're marketed

14:43

to the same group. If you've got a

14:45

higher price point, you build that in a

14:48

different neighborhood, right? You segregate these neighborhoods from

14:50

each other. That's what zoning is meant to

14:52

do, is designed to do. So

14:55

you have this kind of monoculture, and it

14:58

starts to go bad. We all

15:00

know the story, right? The first

15:02

thing that happens is that the

15:05

people with affluence in this neighborhood start

15:07

to get out, right? They look around

15:09

and they're like, this neighborhood starting to get a

15:11

little sketchy, I'm not sure about it. I've

15:14

got means and the ability to

15:16

move. That neighborhood over there looks really nice.

15:18

I'm just gonna move to that one. This

15:21

doesn't happen after 18 months, it

15:23

happens after decades, right? So this is kind

15:25

of part of the natural rhythm and flow of

15:27

life. I'm gonna move over there. That's like, that's

15:29

the next neighborhood. If

15:33

half the people in the neighborhood decide,

15:35

I'm gonna go fix my roof, I'm gonna stay on top

15:37

of this maintenance, I'm gonna really take care of my place, I'm

15:40

gonna make it really nice. They can keep

15:42

the neighborhood going, right? Like they can keep the

15:44

neighborhood nice. But the other half the homes will

15:47

start to fall apart. The

15:49

paint will need, gosh, that place is

15:51

looking a little rough. Not

15:53

really taking care of that. You

15:55

start to see this falling

15:57

down the spectrum. of

16:00

affluence. So a place that might have been

16:02

for an upper middle class family is

16:04

now for a solidly middle class family or

16:07

a lower middle class family, right? There's this

16:09

like, slow decline that starts to creep in.

16:12

Because there's a

16:14

mechanism to renew it, right? If

16:16

you have a neighborhood of single family homes, even 10%

16:19

or 20% of which are not being well tended

16:21

to, they've all reached their kind

16:24

of useful life. What

16:27

market incentive is there to go in and buy

16:29

the home that is in dis repair, and

16:31

then do what? Fix it up,

16:35

put a bunch of money into it to kind

16:37

of catch it up to everybody else. Generally,

16:40

if you have that much money to do that,

16:42

you would be better off going to a neighborhood

16:44

just buying your own Newcastle. Those

16:47

tend to be transactions that people

16:49

of lesser financial means make. And

16:52

so these neighborhoods get

16:55

stuck. And they get stuck

16:57

when this echo of maintenance kicks in,

17:00

they get stuck in this cycle of

17:02

decline. And so instead

17:04

of experiencing a permanent prosperity, what you

17:06

get is you get

17:08

a one life cycle or one

17:10

generation illusion of prosperity. And

17:13

then all of the hardship kicks

17:15

in. The public

17:17

side starts to become expensive. You're not just bringing in money,

17:19

but now you got to go and fix stuff. The

17:22

private side, the maintenance starts to build up, the

17:25

affluent people leave, and there's this downward pressure.

17:28

And we can go back and look at the neighborhoods that in the 1950s and the

17:30

1960s were the place to be the brand new suburbs,

17:34

the wonderful places, and they are in deep,

17:36

deep decline, many, many, many of them, a

17:38

huge percentage of them, we can look at

17:40

the ones that were built in the 70s and the 80s, and

17:43

the first half of the 90s. And we see

17:45

that they are also now they were once

17:47

the great place to be, they're also now a step

17:49

or two down the ladder from that. This

17:52

is what you get when you

17:55

create stasis. And

17:57

so that the NIMBY mindset,

17:59

the NIMBY marketing, of

18:01

permanent prosperity is just wrong, right?

18:04

This idea that I

18:06

don't want my neighborhood to decline, I don't

18:08

want my neighborhood to change, I'm gonna say

18:10

no to this in my backyard because I

18:12

don't want the negative stuff. By

18:14

not having change, by not

18:16

allowing your neighborhood to organically

18:18

evolve, you are

18:20

guaranteeing decline. You

18:23

are essentially creating the conditions where

18:25

decline becomes inevitable. It's

18:28

only a matter of time. And

18:30

this is where I want us to have a little bit of sympathy

18:34

for the human reaction of

18:36

NIMBY. If for you the

18:39

idea of neighborhood evolution

18:42

is off the table, which, I mean,

18:44

let's just be clear, it's

18:46

off the table for most planners in this country,

18:49

let alone, you know, typical residents

18:51

in there. Like they teach zoning

18:53

codes and basically like

18:55

suburban stasis in a

18:57

lot of planning programs today. When you go work at

18:59

a city hall and you're working on a zoning code,

19:02

you're working on a planning, you

19:04

are not working on organic evolution,

19:07

right? You are working on what type of

19:09

permanent stasis are we going to put in

19:11

place here? And if we

19:13

are gonna talk about redevelopment, how is it like the

19:16

big, I was gonna say,

19:18

or willian, the big top-down

19:20

plan, we're gonna redevelop this neighborhood,

19:23

maybe in a gentler version of urban

19:26

renewal, that is what is part

19:28

of the conversation in city hall. The organic

19:30

development pattern of the pre-Great

19:33

Depression era is really not part of

19:35

the modern planners toolbook. And

19:37

so it's really hard for us

19:39

to look at people living in a neighborhood

19:41

and expect them to get this when

19:43

the people who are planning and designing cities really

19:46

don't get this or struggle to get this. If

19:48

you live in a neighborhood that

19:50

was designed in the

19:52

suburban experiment, in the post-World War

19:54

II mindset, this permanent prosperity, What

19:58

you witness is a long-term, Long slow

20:00

decline. What? You witnesses

20:03

kind of death by a thousand cuts.

20:05

It doesn't happen overnight. It happens over

20:07

years or decades. But.

20:09

I think it's a natural human

20:11

reaction to want to stop that.

20:14

And to in a cherry pick

20:16

the things that don't. Look

20:19

like the original mark a brochure

20:21

and say this must be part

20:23

of what is contributing to that

20:25

declined. I

20:28

think that if I have

20:30

a defensive of the nimby

20:32

mindset, it is may be

20:34

empathy to understanding that the

20:36

only. Investment.

20:38

That neighborhoods tend to get today under

20:40

the current model is investment that is

20:43

either a grossly out of proportion and

20:45

we can talk about why that is.

20:47

I mean I mentioned earlier known going

20:49

to buy the single family home and

20:51

then you know, make it a less

20:53

crappy single family home in a declining

20:56

neighborhood. If you got that kind of

20:58

money, was not gonna do that. So

21:00

what happens is you tend to get

21:02

predatory capital. You tend to get capital.

21:04

That's what in the organic pattern development.

21:06

when you buy. The little place you're

21:09

going to redevelop it to a higher

21:11

level of intensity. that does a market

21:13

mechanism in there with the land value

21:15

going up. suburban development where the land

21:17

values stagnant. The only way you get

21:19

that increment of value is by doing

21:21

something way out of proportion. So you

21:24

by single family home you put in

21:26

a four storey apartment building. That.

21:28

Economically, the only thing that works right

21:31

in an environment of stagnation. The only

21:33

thing that works from a redevelopment standpoint

21:35

is a massive massive leap. And

21:39

this is why you,

21:41

i think see a

21:43

natural nimby reaction. To.

21:46

Investment. There. is no

21:48

incremental investment that is no modest growth

21:50

there is no way to go from

21:53

something here to something better than this

21:55

of the only thing there is is

21:57

this kind of predatory capital approach I

22:00

don't think it is the right mindset, but

22:02

I understand where it comes from. And I think if

22:04

we don't understand when it comes from, we're going to

22:06

miss out on stuff. The

22:09

reaction to this is the Yimby reaction. Yes,

22:12

in my backyard. And I

22:14

want to say at the very beginning, when I

22:16

heard of this, like I said earlier, I'm like,

22:18

are you Yimby? I'm like, yeah, absolutely. Like, this is

22:20

what I am. Like, let's build. Come on, let's go.

22:24

And then I started to listen to

22:26

the Yimbys and I started to engage

22:28

with them and I

22:30

started to have them, let's say, engage

22:32

with me, right? Yeah,

22:36

I started to have them be very loud

22:38

and vocal toward me. I

22:40

decided that I am Yimby at heart,

22:43

but I'm probably not one of them. I'm

22:45

probably not one of them. I

22:48

think the thing that pushed me over the

22:50

edge was the the

22:53

kind of Manichean approach, you know, the

22:55

Manichean idea of you're either with us

22:57

or against us. You're either for

23:00

housing or you're against housing. You're

23:02

either for growth or you're against growth. You're either

23:04

for new development or you're against new development. And

23:07

I, you

23:10

know, I my mind doesn't work that way.

23:12

I don't go seeking grads. Someone tell me

23:14

before I'm a contrarian and I really like

23:17

I don't think I'm a contrarian at all. I

23:19

think I do see nuance and I do think

23:22

I see maybe second

23:24

order and third order effects of decisions

23:26

we make. Part of embracing

23:28

a complex as opposed to

23:30

a complicated approach, part

23:33

of embracing the idea that cities are

23:35

bottom up or an organic is

23:37

that I recognize the value in what

23:39

I don't know. I recognize the value

23:41

in trying things, letting things

23:44

grow and develop as opposed

23:46

to having my own grand vision of

23:48

knowing exactly how everything will work out

23:50

and then imposing it on the world.

23:53

As I got more interactions

23:55

with the Yimbies, I got a

23:57

lot of the latter. We

24:00

know what's wrong. What's wrong is there's not enough housing.

24:02

We need to go build housing. Anywhere you're building housing

24:05

is good. Chuck, you

24:07

are giving aid and comfort. I think this is where

24:09

I cut bait with them. You

24:11

are giving aid and comfort to the enemy by

24:14

having any nuance. And

24:17

so part of

24:19

the pushback that I got early on

24:21

from the Yimbies is that Nimbies were

24:23

showing up, apparently at public meetings, using

24:25

our stuff. They were saying, to

24:27

quote strong towns, and then they were going on and on.

24:30

And this was ticking off a whole bunch

24:32

of people who were there, let's

24:35

say, with the best of intentions, trying

24:37

to get more housing built. I

24:40

remember that line, giving aid and

24:42

comfort to the enemy was something that

24:44

was given to me. And I'm like,

24:46

that is very Manichean, right? You

24:48

are with us or you're against us. And

24:51

we're here doing the Lord's work, trying

24:53

to get housing built. And

24:55

you've got these selfish, self-righteous,

24:59

fill in all your adjectives, Nimbie

25:01

people who got theirs and don't

25:03

care about anybody else and da-da-da-da.

25:06

And they like you and you are giving aid

25:08

and comfort to them. Yeah,

25:12

all right. So I wanna

25:15

talk about three instances.

25:18

Let me say this first. If

25:20

you picture a Venn diagram with

25:24

a circle for Nimbie and

25:27

a circle for Yimby, a circle for no in

25:29

my backyard and a circle for yes in my

25:31

backyard, if you think of

25:33

that Venn diagram, I agree that there's little,

25:36

if any overlap in

25:38

terms of what these kind of two people

25:40

believe. One identifies as Yimby. I think the

25:42

other one doesn't identify, self-identify as Nimbie, but

25:45

let's label them that way, like we have

25:47

the caricature in our head. I

25:49

think that of those two groups,

25:51

the circles probably don't overlap, but

25:54

there's a strong town circle that

25:57

does overlap with both. And

25:59

I want you to, envision this in your mind. So

26:01

imagine the yimby circle and the nimby circle and

26:04

they're sitting there next to each other but they don't overlap.

26:06

And then there is a strong town circle. The

26:09

strong town circle is gonna have a tiny

26:11

bit of the nimby circle, a tiny, tiny

26:13

bit. And I'm gonna talk about those next.

26:16

And then it has almost all

26:18

of the yimby circle, except for

26:20

a bit of the yimby circle doesn't fit.

26:23

So I started this

26:25

podcast by saying that I have tension with

26:27

yimbies. Tension

26:29

with yimbies that I don't have with the nimby

26:31

group. Understand what that

26:33

is. That is a result of

26:36

us having a lot in common. There's

26:38

this really funny joke and I don't have it and it's

26:41

long, but it basically like this

26:43

guy is going to jump

26:45

off this building and commit suicide. And

26:48

this other person goes out to talk to them

26:51

and they have this long conversation and the first

26:53

conversation is like, don't jump,

26:55

like you believe in God. And he's like, yes, I

26:57

believe in God. And then he's like, are you a

27:00

Christian? Yes, I'm Christian. And then they

27:02

start having this conversation. And at every

27:04

point there's an agreement like all the

27:06

way down and they get to finally,

27:08

like the last sentence is like, okay,

27:10

you're part of this denomination and this

27:12

subsect and this subsect and this subsect.

27:15

Do you believe in this part of prophecy or this

27:17

part of prophecy? And he says, you know, the first

27:20

one and then the guy who went out to save

27:22

him throws him off the building and calls him a

27:24

heretic. It is a

27:26

funny joke because it demonstrates how

27:29

the more you have in common,

27:31

the more you tend to see

27:33

the disagreements, the more you

27:35

tend to be maybe sensitive and heightened to

27:37

these nuanced disagreements. So I'm gonna say the

27:41

Venn diagram between Strungtowns

27:43

and Yimby is almost like a solar

27:45

eclipse, right? It's almost like we're almost

27:47

there. There's a few points of nuance,

27:50

but those points of nuance I do think are

27:52

very important and I wanna speak them here. I

27:56

want you to get the book and read this

27:59

And I want you to... To kind of draw a distinction

28:01

because what we're trying to do is very bottom

28:03

up. Were. Trying to really

28:06

empower neighborhoods, individuals, cities to

28:08

build a ton of housing.

28:11

But that does mean walking away a

28:13

bit from some of what I think

28:15

has become dogmatic is in be. Let's

28:18

talk about this. I thought I would

28:20

give three cases. Where. I

28:22

have actually had was called a quarrel.

28:24

Why I've actually had a quarrel with

28:26

Jimmy people? Were able

28:28

to draw this distinctions that the first case

28:30

is building single family homes out on the

28:33

edge of the city. This. You

28:35

come as no surprise to anyone that

28:37

strong. How sick. Hence the idea of

28:39

a brand new subdivision on the edge

28:41

of the city from day one for

28:43

like the first blog post I did

28:45

back in two thousand and eight we're

28:47

talking about the cost of this stuff

28:49

has has bankrupting cities and we should

28:51

not do it's Others gives you a

28:53

short term cash infusions. With these long

28:55

term liabilities we are building ourselves into

28:57

decline in the solvency to stop stop

28:59

stop stop stop. Okay, But.

29:02

Shock were in a housing crisis. Any home is

29:04

a good home. We just need to build homes.

29:06

We need more rooftops. Here's

29:09

the first nuance. I don't think

29:11

a policy that builds more homes,

29:13

but bankrupt the city is one

29:16

that I am interested in pursuing.

29:19

I. Don't think we have to make that kind

29:21

of trade off to have housing that is

29:23

probably affordable. And so

29:25

when I see the you Beasts very

29:27

vocally supporting greenfield development of single family

29:30

homes and doing that under the county

29:32

gym be guys. have we just the

29:34

more rooftops? Many more homes. Build A

29:36

build A build Any houses good house.

29:38

I'm out. I'm opt out. That's where

29:40

our Venn diagram does not overlap. I'm

29:42

not with. That's a not with that

29:44

trade off. I don't think we have.

29:46

To make that trade off in order

29:49

to have housing that is broadly affordable.

29:52

Let. Me give you the the second one and I think this

29:54

is one where. Does. A lot more tension.

29:57

and that is when it comes to redevelopment

30:00

neighborhood. I spent a bit of time earlier

30:03

talking about the mechanisms of

30:05

that organic development pattern. If

30:08

you think of a culture growing

30:10

in a Petri dish, it starts small and

30:12

it grows out incrementally. If we

30:14

look at cities of the past, we can see the

30:16

same kind of pattern. This is why I don't use

30:19

the word sprawl. Sprawl has got

30:21

a lot of different definitions, but it's kind

30:23

of meant to be the horizontal expansion of

30:25

cities. Cities have always

30:27

grown horizontally. Horizontal expansion is

30:29

not the problem. There's

30:31

a bunch of other things that are the problem,

30:34

but when we talk about horizontal expansion, horizontal

30:36

expansion is a natural part of city

30:38

growth and development. We've seen it in

30:41

every successful city throughout all of human history

30:43

as horizontal expansion. It tends

30:45

to be small, incremental, little bets out on

30:48

the edge that eventually grow

30:50

closer to the center as the city

30:52

continues to expand. When

30:54

you grow closer to the center, the value of

30:56

your property goes up. The value of the land

30:59

goes up. If you built a

31:01

cheap little house, if you build a cheap little building,

31:03

if you built something that was not meant to last

31:05

a hundred years, but meant to last 10 years or

31:07

15 years or 20 years, it will start to fall

31:09

apart and it will decline. But your

31:11

land value will have gone up enough where you

31:13

will be able to justify either through sale to

31:15

someone else or through your own equity, building

31:17

something more substantial on that property. We see

31:20

this over and over and over again. As

31:22

cities grow, the land value in the middle

31:24

goes up the most. As

31:26

you get to the edge, it goes up, you know,

31:28

there's like a bell curve out to the edge. As

31:31

the city continues to expand out, everybody

31:33

gets lifted up the closer you are to

31:35

the middle. You'll have different neighborhoods, you know,

31:38

start to grow. You'll connect them in different

31:40

ways. There is

31:42

an organic pattern here that raises

31:44

land values and by raising land

31:47

values allows things to incrementally grow

31:49

and mature. The suburban

31:51

experiment arrests that. It basically

31:54

flattens land values. Once

31:56

you build something, once you develop it, it

31:58

is done. There's nothing that... makes the

32:00

underlying land. Now people are gonna say land

32:02

values still go up. Yeah, they go up

32:05

by inflation, but they don't actually go up

32:07

in that they become more valuable over time

32:09

because of their geographic location, right? For the

32:12

most part, you build a suburban subdivision, or

32:15

you build a suburban neighborhood, and

32:17

it's just going to be at that

32:19

value indefinitely, the land value, you might

32:21

have other things you do on the

32:23

property. But the underlying land value stagnates

32:25

then there's no upward kind of incline

32:28

of it. What happens then,

32:30

is if you're

32:32

going to see redevelopment in a neighborhood like

32:34

this, what generally happens

32:37

or what we see now today as the

32:39

norm, and by the way, I think this

32:41

is wrong. And if you read our book,

32:43

you'll see, you know, like our strategies to

32:45

not have this. If you've read stuff that

32:47

I've written online, I've done podcasts on this

32:50

before about decline not being

32:52

normal. In our current

32:54

environment, decline is normal. And the

32:56

way we arrest decline is through

32:58

a massive jump in the

33:01

development pattern. People come

33:03

in, they'll buy a property or two

33:05

or three or four, they will assemble

33:07

land as developers might call it. They'll

33:10

put this together. And they'll take, you

33:13

know, three single family homes, and they'll

33:15

turn it into a four story apartment building. They'll

33:17

take six single family homes, they'll

33:20

tear them down. And you'll get a six

33:22

story condo unit of you know, five over

33:24

one type building, a story

33:26

of concrete with five stories of wood

33:29

structure on it. This is

33:32

where I probably have the most tension

33:34

with yinbies. Because in

33:36

the mindset of we just need more

33:38

housing units. If you tear down

33:41

four units, and you build 50 units, you're adding

33:43

36 units, you're doing the Lord's

33:45

work. And it doesn't matter how

33:47

this happens, or the mechanism that happens, it's just that

33:49

increment, right? Like, we're gonna go from here to here.

33:51

That is a net good I support it. And

33:54

how dare you, Chuck, you know, be against this or

33:56

call it a question or say you don't want it

33:59

or or give comfort and

34:01

aid to the enemy who says, I don't

34:03

want an apartment building in my neighborhood. How

34:05

dare you do that? The

34:07

biggest issue that I have or the biggest

34:09

struggle I have with this style

34:12

is that it buys

34:14

into the financial model of stagnation

34:20

and not only buys into it, but

34:22

it reinforces it in a way that

34:24

is ugly and pernicious. If

34:27

you go into, and this doesn't happen in

34:30

wealthy neighborhoods, unless the

34:32

neighborhood is hyper, hyper gentrified,

34:34

right? Where the difference

34:37

between what is viable

34:39

on that land and what is

34:41

there now is so massive that

34:44

you can do it. This generally

34:46

happens in poor neighborhoods and

34:51

lower middle-class neighborhoods, neighborhoods where

34:55

there's a lot of poor

34:57

property in decline, there

34:59

is a lot of disenfranchisement, people not

35:01

able to really push back or do

35:03

anything else. A

35:06

little bit of money goes comparatively long

35:08

way. What

35:11

we see is that people will go in, they'll

35:13

buy up multiple lots, they'll assemble these, and they'll

35:15

do this kind of large leap of development. It

35:18

usually requires zoning

35:20

changes, variances, all

35:22

this kind of regulatory stuff that normal people

35:24

like you and me have a tough time

35:27

getting, but people who are in

35:29

the business and know how to do development and

35:31

bring their attorneys and their whatever to the meeting

35:34

can work through this process and get this done. It

35:37

is a large finance model.

35:40

The reinforcing part comes from

35:43

what happens to the properties around it. And

35:46

it's amazing because I've had people argue with me

35:49

on this, I feel like

35:51

they're being willfully ignorant in a way,

35:54

if you own a single family house

35:57

in decline and in disrepair, In

35:59

a neighborhood that's... Falling apart and someone next

36:01

you goes in and buys up a

36:03

bunch of houses in Bills. a six

36:05

story condo unit. If.

36:08

You look at your own property, then.

36:10

You. Ask yourself the question: what is

36:12

the future of my property. It.

36:15

Is almost certainly to sell the someone

36:17

who's going to do something similar. It.

36:20

Is very, very unlikely that the sale or

36:22

transaction of your property is going to be

36:25

the someone who's going to come in and

36:27

have it as a single family home. Now

36:30

it might be to a slumlord. Aka

36:32

a land speculator someone who's gonna come

36:34

in a by their property from you

36:36

try to get are you know everyone's

36:39

gonna try to have the lowest price

36:41

the cats but then their business model

36:43

is just to kind of write it

36:45

down that slope of decline rented out

36:47

as higher prices you can get for

36:49

a really junkie properties. Let it fall

36:51

apart our and then you. Know looks

36:53

some day to get as much cash out

36:55

of it now season, someday sell to than

36:58

the decks developer who's gonna build the the

37:00

big apartment building right? I mean that that

37:02

becomes the model throughout the neighborhood. As

37:05

a what happens is it. Reinforces.

37:07

The. Stagnation. It reinforces the

37:10

decline. It tells everybody on

37:12

that neighborhood don't bother. Fixing.

37:15

Up your house, don't bother repainting,

37:17

Don't don't bother planting flowers and

37:19

your front yard. or stick senior

37:21

roof. Don't bother putting in granite

37:23

countertops or that's that sauna you've

37:25

always wanted. Like don't doing the

37:27

things I would be really really

37:29

dumb. The future of your property

37:31

just like the future very other

37:33

properties neighborhood is the go through

37:35

this period of been slumlord rental

37:37

and and ultimately wind up being

37:39

read developed. And hey, guess

37:41

what? Because. Of that,

37:43

your property will now start declining in

37:45

value and will actually go up marginally

37:48

in value. So you're going to have

37:50

some money. More money than you otherwise

37:52

would have had on of this. So.

37:54

The story goes and you're probably will

37:56

be of eventually put to a higher

37:59

better use. I.

38:01

Hate this. I hate it. I hate

38:03

it. I can tell you how

38:06

much I hate it because. This

38:08

first of all with will never scale

38:10

rights and I'm gonna get to that

38:12

a little bit. Why the small scale

38:14

but this as a solution to the

38:16

housing problems will never ever scale and.

38:19

By. Pursuing this strategy not only do

38:21

we, you know, empower a top

38:23

down capital model, which is really

38:25

let the say. The other day,

38:28

if we want to call a

38:30

disconnected model a model with very

38:32

long feedback loops, I think that

38:34

would be accurate. If we want

38:36

to cause an exploitative or a

38:38

predatory model, I think that's actually

38:40

accurate to whichever way you feel

38:42

most comfortable describing. it is a

38:45

model where the marketplace becomes more

38:47

sensitive to what the Federal Reserve's

38:49

sets. Interest rates at than what

38:51

people's actually ability to pay is.

38:54

When we transform a neighborhood in

38:56

that way by what in it

38:58

with massive amounts of capital we

39:01

stagnate the neighborhood artificially. We take

39:03

the people who live in that

39:05

neighborhood and we sidelined them, their

39:07

ambitions, their hopes in their dreams

39:09

in exchange for a tiny pay

39:11

off. And

39:13

we give up all like

39:16

a power control capacity that

39:18

we would otherwise have to

39:20

make this neighborhood a better

39:22

place. The.

39:24

Jimmy's. Like

39:27

this model. A lot of them

39:29

do because it creates new your. you can

39:31

see the new units been built. There's four

39:33

units today. It's now. we have twenty units

39:35

that a net increase of sixteen. I'm for

39:38

it. I get that. I think it's wrong.

39:40

I think it's short sighted and I think

39:42

it hurts us in the long run. I

39:44

don't think that model scales. Is.

39:47

Part of were of and diagram doesn't overlap.

39:51

The third one I'm gonna get. is probably

39:53

the other place where i've had the

39:55

most stress and tension with the him

39:57

bees and that is just the right

40:00

apartment building. The

40:02

random building in the middle of nowhere and

40:04

this could be you know in a city not in a city

40:07

on the edge of town in the middle of the neighborhood there

40:10

again is the dogmatic thing that more units is

40:12

always good if you can build two better build

40:15

four if you can build four better build eight

40:17

if you can build it here build it if

40:19

someone will come and put a unit in good

40:21

for them like let's just do it okay

40:25

let me give you the one case that I see all the time

40:28

which is there's a transit stop

40:30

within half a mile of this place there's

40:33

a lot here that someone got a deal on

40:35

or whatever and they want to build the apartment building

40:37

on it everyone's jumping up and I

40:40

like yay yay this is good it's for transit it's not and

40:42

they'll have all these things and then you actually go look at

40:44

it and you're like well first of all this is like eight

40:46

blocks from the transit stop to

40:48

get there from here you actually

40:50

have to climb like over

40:52

a strode through a drainage ditch

40:54

like it's not like this is a great

40:57

place in like you do this and then

40:59

people are gonna suddenly be using transit what

41:03

this is and I think this

41:05

is what we have to see it as

41:07

what this generally is is a financial transaction

41:12

a big part of escaping the housing trap when you

41:14

read this is gonna have a lot on the

41:17

way that finance shapes what we

41:19

build when I

41:21

see a five over one when I see the

41:23

random apartment building put somewhere really when I

41:25

see a single-family home subdivision on the edge of

41:28

town what I am looking

41:30

at and what you should also be looking at

41:33

is not housing you should be looking

41:35

at it for what it is and

41:37

that is a financial product it

41:39

is the mechanism that creates a financial product

41:42

what is the financial product that is being

41:44

created when you build a

41:46

five over one you're creating a commercial real

41:48

estate loan that loan can be

41:50

sold off on a secondary market it can be bundled

41:52

it can be securitized it can be sold off that

41:55

is what's driving the market when you see

41:58

a subdivision of single-family homes What

42:00

you are looking at is a financial product.

42:02

Each of those homes will generate a mortgage.

42:04

All those mortgages will get sold off on

42:06

a secondary market. They'll be bundled together, they'll

42:08

be securitized, they'll be sold off of stock.

42:10

There's a lot of money to be made

42:12

through that securitization process. It

42:15

is that process that is driving the

42:17

types of investments that we see. And

42:20

so when you get the random apartment, the apartment

42:22

that is out of place,

42:24

out of context, like it doesn't fit in

42:26

this neighborhood. It's not a natural evolution of

42:28

the next step. It's not like

42:31

really connected to a transit stop or someplace

42:33

where we really need, where

42:35

we quite frankly screwed up and built too

42:38

much transit than the land use pattern could

42:40

support. And so now we need a

42:42

decade or two of catch up to get us

42:45

there. It's not that, right? It's just

42:47

like someone built a random apartment building somewhere,

42:50

generally like cheap property on the edge of a

42:52

stroad, right? Someone built it there

42:54

and yay, now we all have to celebrate it

42:56

because it's more housing units. Look

42:58

at it for what it is. It is a

43:00

financial product. It's not an

43:03

evolution of the neighborhood. It doesn't reinforce

43:05

good development patterns. It's not

43:07

going to be repeated over and over again.

43:09

It is a financial product that

43:12

is plopped in place in order to create

43:14

a daisy chain of paper

43:16

that can be traded on a macro

43:18

market. Let me

43:20

simplify this down to what

43:23

I think the part where the

43:26

strong towns and the yimby conversation do

43:28

not overlap where they have tension. I

43:31

think it's fair to describe. I'm painting with

43:34

a broad brush. There's a bunch of very

43:36

dogmatic people who describe themselves as yimby. Let's

43:39

go use the word dynamic. There's a lot

43:41

of very dynamic people. There's a lot of

43:43

free thinkers. There's a lot of people with

43:46

complex minds who see nuance who also describe

43:48

themselves as yimby. So I'm painting with a

43:50

very broad brush here. I've talked to a

43:52

lot of people who are self-acclaimed like yimby

43:54

warriors and their beautiful, wonderful, thoughtful people that

43:57

I can have deep nuanced conversations with. So

43:59

I'm painting. with a broad brush here, but

44:01

I feel like this is where the tension is.

44:03

I feel like the core of the YIMBY conversation

44:06

combines two things that strong

44:09

towns is just not on board with. The first one

44:11

is what I'll just

44:13

call, let's I fair local regulations. Let's

44:17

I fair, like no regulate, like let's just

44:20

build whatever you want, wherever you want, let the market handle

44:22

it. At strong towns, we're just

44:24

not on board with that. Like that's not how we approach

44:26

things. The second part,

44:29

let's I fair local regulations and

44:31

centralized top down capital, if

44:34

we can pour more money into a Wall

44:36

Street banks, if we can have more money

44:38

flowing out of the Federal Reserve into the

44:40

mortgage market, if we can have more money

44:42

flowing out of the treasury into housing, we

44:44

can have all that money trickle down and

44:46

we'll build great things at the local level.

44:49

We categorically reject that idea.

44:52

When you combine these two together, basically complete last I

44:55

fair of what you can build and where you can

44:57

build. If someone wants to build it, go build it.

44:59

And the idea that we're going to

45:02

juice that with lots and lots of

45:04

centralized capital flowing, essentially in

45:06

preferred troughs trickling down to

45:08

the local level. We are

45:10

absolutely not on board with those things.

45:12

And I think those two things combined

45:15

are deeply, deeply pernicious to

45:17

our cities, to our neighborhoods,

45:20

to our blocks, to what we are trying

45:22

to accomplish in building strong towns.

45:26

Here's where the overlap is with strong

45:28

towns and NIMBYs. We

45:30

agree that we need to build a lot of

45:33

units, a ridiculous number

45:35

of units. There's this nuance

45:37

that my colleague, Daniel has pointed out. And

45:39

I think it's, it's genius. There's a lot

45:42

of genius stuff that comes from Daniel,

45:44

but here's the one that I find, you know,

45:46

perhaps the most compelling. He

45:50

would say there's a huge difference between building

45:52

affordable housing and

45:55

building housing that is broadly affordable. A

46:00

lot of the. You be conversation is

46:02

about building affordable housing or building

46:04

more housing For that housing you

46:06

know somehow magically drops in price.

46:09

I. Feel like the idea that we

46:12

go out and we below apartment building

46:14

here. Five on here and a new

46:16

subdivision over here. if you actually look

46:18

at that and look at the mechanisms.

46:20

The problem is it doesn't scale.

46:23

It never will scale to the problem.

46:27

If we want to make

46:29

housing broadly affordable, we have

46:31

to do something that actually

46:33

changes the market dynamics. At.

46:38

The core of. Really

46:40

as every yumi conversation that I've

46:43

ever had, every conversation with a

46:45

yummy ever had is this insight

46:47

about supply and demand in the

46:49

way markets works. Understand

46:51

you probably starting to like one

46:53

of these. You know most strident

46:55

market advocates who's gonna be in

46:57

the urban space here like? That's

46:59

me. I'm I'm a big markets

47:01

person. But I

47:04

think that the him be largely

47:06

have markets wrong or their their

47:08

miss identifying markets their their misunderstand

47:10

what marketplaces. The.

47:14

Idea is that. The more

47:16

units we build aka the more

47:18

supply we create, the more supply

47:21

and demand will equilibrium at a

47:23

lower price point. This is like

47:25

Econ one on one rights. There's

47:27

so much demand, the so much

47:30

supply. When prices are too high

47:32

you increase supply that will bring

47:34

prices down. when prices are too

47:37

low, you lesson supplies and and

47:39

and prices will go up at

47:41

I feel like what that gets

47:43

wrong is the entire demand. Side

47:46

equations and where the demand is

47:48

coming from. In

47:51

every real estate transaction, you

47:53

are competing with what is

47:55

called the marginal Buyer frame.

47:57

The marginal buyer is what

47:59

is food. Determine the price basically

48:01

for the whole market. I think

48:03

one way that to imagine this

48:05

is the thing about what the

48:08

prices for. Like a free agent

48:10

in baseball someone. Becomes

48:12

a free agent. They can sign with any team

48:14

they want or team that gets assigned A person

48:16

is generally the team that will pay the most.

48:20

There's a there's a joke. In

48:22

baseball that the lucky team

48:24

is the team who was

48:26

seconds because by definition whoever

48:29

paid the most overpaid or

48:31

you know paid has. Paid.

48:33

The most and paid more than

48:36

what they needed to to secure

48:38

that right. The. Same

48:40

goes for housing when we look in

48:42

the housing market. What? We

48:44

see is that large capital. Whether.

48:47

It's coming through in the speculators

48:49

and the large developers whether it's

48:51

coming through in hedge funds by

48:53

and hundreds thousands in some markets

48:56

of homes to put them on

48:58

the rental market. Whether

49:00

it is people buying air B

49:02

N Bees as a money making

49:05

things, people buying houses to flip,

49:07

there's a whole like range of

49:09

ways. That centralized, top

49:12

down capital. Is the

49:14

market maker with in our local

49:16

market. Even. If is

49:18

driving five percent of the demand. Or.

49:20

Even less than that, it is the marginal

49:23

buyer it is. The market maker is the

49:25

person pain the most for show hey or

49:27

tawney And what it does is it changes

49:29

the entire rest of the market. On.

49:32

Top of that, You. Have

49:35

a system. Where. The suppliers,

49:37

the people who are building

49:39

the houses are very, very

49:41

sensitive to oversupply. They

49:44

have no incentive. In fact, they have less

49:46

incentive. They have a lot of incentive to

49:48

under supply. They have no incentive to oversupply

49:50

the system. We are

49:52

to someone on a couple weeks on up

49:54

zoned who pointed out that one fourth of

49:57

all housing built this country is built by

49:59

twenty five companies. I mean

50:01

the you you do not have a

50:03

dynamic systems were supply is gonna be

50:05

built so so much that of a

50:07

sudden were flooded with houses and the

50:09

market's gonna crash. The dynamics of supply

50:11

nauseam just will not work that way.

50:14

It's never going to work that way.

50:17

As though the Young Be theory of less is

50:19

bill bill bill Bill Bill is flawed on the

50:21

supply and and on the demand side. The

50:25

supply and will never outpace growth.

50:27

The way that we're building it today

50:29

and the demand side is always going

50:31

to be flooded with the marginal buyer

50:33

is less space. It's every time housing

50:35

starts to fall in price was our

50:37

reactions. We pump a bunch more money

50:39

into the system. Every

50:42

time housing starts to slow or

50:44

false, we pump more money into

50:46

the centralized players to go and

50:48

be the marginal buyer and drive

50:50

up prices. Again,

50:52

You're looking at financial products. You think

50:54

it's shelter. You think it's a house. You

50:57

think that new subdivisions is being built so

50:59

people are places to live. It's been

51:01

Bills because there's a market for the mortgages.

51:05

You're not understanding the marketplace.

51:09

All. This flood of capital makes. Our.

51:13

Cities. Are. Neighborhoods or

51:15

blocks the people that live in them

51:17

a little bit like. Been

51:20

on a ship in like a stormy

51:22

sea were getting blown arounds interest rates

51:24

go up. all my gas prices here

51:26

is rates go down. All we're going

51:28

to say or do some funny of

51:30

using are tightening over here. The Feds

51:33

going to buy mortgage backed securities or

51:35

or Jp Morgan decided to use. We

51:37

are dressed in a big macroeconomic see.

51:40

We are on more, we are on anchored

51:42

and we are in a sense at like

51:44

the whims of all the stuff outside of.

51:47

Our. Control. The.

51:51

Korean be premise is to go with that

51:53

in say we just need a bill Bill

51:55

Bill Bill Bills. and the

51:57

core strong tells response a housing is like

51:59

know We actually need to anchor

52:01

ourselves. We need

52:03

to anchor ourselves on something solid

52:06

so that while all the craziness is going around

52:09

it, we will not be

52:11

participating in the boom or the bust

52:13

cycle of housing that we

52:16

live in today. As

52:18

Strong Towns, we got three

52:20

approaches to dealing with the housing crisis.

52:23

We go through these in the book. I want you to

52:25

get the book. I want you to share the book. I want

52:28

you to talk about the book. I want you to come to

52:30

the book tour. I want you to work with us and go

52:32

with us on this journey because we desperately

52:34

need to change the way we do housing

52:36

in this country. We

52:38

need to help our cities anchor to something solid.

52:41

So here's the three

52:43

steps. The first one, regulatory reform. This

52:45

is all yimby. Like we're with you

52:48

up to the last I fair part,

52:50

right? We need to

52:52

change our zoning codes so it is

52:54

ridiculously easy to build the next increment

52:56

of housing everywhere. And

52:58

I've said this many years while I'm out talking

53:01

to people, out giving talks and what have you,

53:03

to me the standard we should have is you

53:05

walk in at 9 a.m. with a completed permit,

53:07

you walk out at noon with the ability to

53:09

go build and you start building at one o'clock.

53:12

That is the level of turnover we need

53:15

for the stuff that we need to see. What does

53:17

that stuff look like? It

53:19

looks like accessory apartments. We

53:22

have so many people in this country that have massive homes

53:25

with one or two people living in them. They got four

53:27

bedrooms, they got five bedrooms because they used to have a

53:29

bunch of kids and now they just got a big house.

53:33

We need to be able to take one of those bedrooms, put

53:36

a kitchenette in it, put in a firewall,

53:38

put in an exterior door and rent that out.

53:41

That can happen really, really quick at scale

53:44

in all kinds of neighborhoods without

53:46

refitting sewer and

53:48

water, without building new parking, without

53:50

doing anything really big at all.

53:53

I mean, these are places

53:55

that had teenage drivers and now they have

53:57

nobody parking in the driveway. They

53:59

got enough room for... cars, they got everything. Why

54:02

is this not happening? Well, we see regulatory

54:04

hurdles is all the time, right? What

54:07

is it? This looks like backyard cottages. Stop

54:09

calling them ADUs. No one wants an ADU.

54:11

But a backyard cottage is a beautiful little

54:13

thing, right? Why can we have college students?

54:15

Why can't we have the the

54:17

mother in law? Why can't we have the friend up

54:20

the street who's on hard times that the divorcee

54:22

who's between houses? Why can't we have them live in

54:24

a backyard cottage? A person

54:26

living in a house needs, you know, extra room, like,

54:28

I don't want to mow all that. Turn

54:30

that into a backyard cottage. And now it is

54:33

a rental unit generating money for you. We can

54:35

make both of these accessory apartments, backyard cottages win

54:37

win where the people living in the

54:39

house want the product, because the product

54:41

is going to give them more financial

54:43

freedom, more financial flexibility, it's going to

54:45

give them more capacity, they can be

54:47

our advocate, right? We got

54:49

to loosen the regulations to make this

54:51

as easy as possible. We got to build small units.

54:55

We don't build small units anymore. And I

54:57

mean, I don't mean small units, like 1200

55:00

1300 square feet. I mean, what my

55:02

mom grew up in, right? 600 square

55:05

foot house. If

55:07

you go look in all your neighborhoods, your

55:09

old historic neighborhoods, you're going to see they

55:11

are full of 600 square foot houses. Now

55:14

many of them have been turned into 1200

55:16

2000 square foot houses because they've got an

55:18

addition on an addition on an addition on

55:20

but they started as a starter house, a

55:22

small house. Don't call it a tiny

55:24

house. Don't make it a little fetish thing. Don't build

55:27

a commune of tiny houses. Fill

55:30

in the gaps in our streetscape with small

55:32

houses. Regulatory

55:34

reform, we make it as easy

55:36

as possible to build what is

55:38

basically like the penny loafer of

55:41

housing, the lowest level. And I say

55:43

that we need to flood the market with these things

55:45

because we can actually build those at scale.

55:47

And when we have a lot, a lot,

55:49

a lot of entry level products, what it

55:51

does is it limits the ability of

55:54

that low tier mid tier price product to

55:56

climb higher up the price scale. We

56:00

are anchoring the prices in our community when

56:02

we build a ton of these small units.

56:05

Second strategy, we need incremental developers. We

56:07

need an ecosystem of incremental developers in

56:09

every community. If

56:12

you look at development work today, for

56:14

the large part, what you have

56:16

is you have the labor being sucked up

56:19

in the big buildings, the

56:21

big Wall Street capital funded stuff, the single

56:23

family homes on the edge, the five over

56:25

one, the big apartment, these places suck up

56:28

all the free labor that's out there. This

56:30

is going to get worse as

56:32

time goes on because we have

56:34

a shrinking labor pool of people

56:37

able to and willing to do this work. I

56:40

can't solve the labor pool problem, but what

56:42

I can do is change the economics of

56:45

the people doing this. There are a ton of people

56:47

who are pounding nails for someone else who

56:50

would love to be an incremental developer. There

56:52

are tons of people who are teachers who

56:55

would love to see the house across the

56:57

street from them, become really nice and be

56:59

converted into a duplex and have the ability

57:01

on evenings and weekends and summers to make

57:03

that happen. There are a

57:05

lot of people who are working part-time jobs who

57:07

would love to do incremental development. Yes,

57:11

some people can do this on their own. Yes,

57:13

some people are heroic and can figure this out.

57:16

But for the most part, we can

57:18

build an ecosystem. We can create the

57:21

networks and the bonds and the training

57:23

to bring more and more people to

57:25

lower the bar of entry into this

57:27

pursuit and make it something

57:29

that not only do we celebrate as a

57:31

community, but we support vigorously. These

57:34

can be our heroes. We're

57:36

gonna line up of people out there doing

57:38

the Lord's work in neighborhood after neighborhood, doing

57:40

these important things that need to be done.

57:42

Cities need to have a strategy,

57:45

and we're gonna help you with this, to

57:47

build a neighborhood, an ecosystem of

57:50

neighborhood developers. Third

57:52

then, we

57:54

localize our capital. I'm gonna

57:56

do a podcast in the future on this, because I

57:59

realize that this... as this is one chapter

58:01

in the book, as I'm talking to people, this is the

58:03

thing that everybody wants to talk about, because this is the

58:05

thing that blows people's minds the part

58:07

they don't get. You

58:09

want to build a house, you need a 30 year mortgage, you want

58:11

to build a commercial real estate project, you're going to have this

58:14

product that can sold on a secondary market,

58:16

we are so fixated, we're so locked in

58:18

by what the capital allows us to do

58:20

that we've limited our menu of things that

58:22

we can do. It doesn't

58:26

need to be this way. And

58:28

in a city committed to building

58:30

affordable housing units, and that in

58:32

a city committed to scaling affordable

58:34

housing to the need that they

58:36

have, in a city committed to

58:38

making housing broadly affordable, we

58:42

can finance as a community, lots

58:44

and lots of this entry level stuff, we

58:47

can be the financial lubricant that gets all

58:49

of it going. Let me

58:51

give you one example. And I'm

58:53

gonna tell you, there's many, many, many, many, many

58:55

ways that we can do this. But

58:57

let me give you one example, the city of Muskegon. And

59:00

of course, it's Muskegon, because Muskegon is one

59:02

of the most innovative cities in North America.

59:05

Muskegon has a bunch of vacant lots

59:07

throughout their core downtown. They

59:10

have gone in with these vacant lots. And

59:12

they have brought in builders build the house.

59:15

And we are going to help you finance it

59:18

using tax increment financing. Generally,

59:20

we use tax increment financing in

59:23

very dumb and nefarious ways. To

59:26

to to redevelop commercial properties,

59:29

people will come in and be like, this is the old

59:31

Taco Bell and we want to build the new thing here.

59:33

Give us a tax subsidy. We won't pay taxes for 22

59:36

decades. But now you'll get a new Arby's or

59:38

whatever it is. And cities salivate

59:40

over this and they jump off and down

59:42

and they're like, yes, please let us give

59:44

you the money. These are generally like really

59:47

dumb, dumb, dumb transactions. But

59:49

that doesn't mean the tool is bad.

59:52

Muskegon is saying, hey, this

59:55

lot's been sitting empty for 50 years.

59:57

No one's built on it. It's got sewer.

59:59

It's got water. It's got sidewalk. We

1:00:01

have a housing crisis. We have a house emergency.

1:00:03

We need someone living here. Go build the house

1:00:07

and we'll be able to lower the price by 20,000, 30,000,

1:00:11

40,000 by a sense deferring the taxes that

1:00:14

we're gonna collect on the new house for

1:00:17

a decade or two. We're gonna be

1:00:19

able to roll that money over, help pay

1:00:21

down your mortgage and get you into

1:00:23

that house a lot cheaper. Here's

1:00:26

the amazing thing about doing that. The city

1:00:29

takes no risk. Now

1:00:31

you can say, well Chuck, the city takes

1:00:34

some risk. Yeah, not really, not really because

1:00:37

when your city does a taxing them

1:00:39

in subsidy, when they do it a thing like this, they

1:00:41

will jump the line in front of

1:00:43

everybody else. They'll jump the

1:00:46

line in front of the bank with the first mortgage

1:00:48

and the second mortgage and the third mortgage and whatever

1:00:50

other lien you have. They're gonna

1:00:52

get their money back first. So

1:00:54

they are taking basically no risk.

1:00:57

That means the city can do this over and over and

1:01:00

over and over and over again.

1:01:02

They could do this a thousand times if they

1:01:04

wanted to. It does

1:01:06

not cost them anything to do this.

1:01:09

And this is the magic part about financing

1:01:11

this stuff in this way. When we focus

1:01:13

on the small, when we focus on the

1:01:15

bottom up, when we anchor our market to

1:01:18

a price point that is entry-level, we can

1:01:20

build a ton of units really quickly. We

1:01:22

can mobilize the people to do it, helping

1:01:24

them build stuff for their neighbors

1:01:26

and grow wealth and grow their own capacity.

1:01:28

And we can finance this locally in a

1:01:30

way that scales to the size of

1:01:32

the problem. In

1:01:34

a way where that supply and

1:01:36

demand market feedback that the YIMBY's

1:01:38

kind of dogmatically rely on actually

1:01:40

works. Because it

1:01:43

works in an ecosystem of competitors,

1:01:45

not in an oligarchical system where

1:01:48

some people have preferred access to

1:01:50

capital, but most people do not.

1:01:54

We could do this. We can do it at scale

1:01:57

and we can radically, radically, radically

1:01:59

change. the price dynamics

1:02:01

in our market, not in

1:02:03

a way that crashes your property value,

1:02:06

but in a way that creates an entry level

1:02:08

for people to get started and

1:02:10

in the process, thickens up our

1:02:13

neighborhoods, makes them better places to

1:02:15

live, gets people local ownership so

1:02:17

that they start investing in the community

1:02:19

and seeing that benefit for themselves and

1:02:22

their neighbors in their neighborhood. We

1:02:25

have the capacity to do this, but we

1:02:27

have to be able to think differently.

1:02:30

I love the yimbies. I really do. I really

1:02:34

really do. I love the nimbies too,

1:02:36

right? Like there's some of them that,

1:02:39

you know, disgust me deeply, but I'm

1:02:41

not gonna say that I hate you. I want

1:02:44

you to be part of this. I actually need you

1:02:46

as a nimby to see how you

1:02:48

can benefit from this. You're struggling to maintain that roof.

1:02:50

You need some extra money. Well hey, we can get

1:02:52

you an accessory apartment and you can cash flow that

1:02:54

and you can use that money to fix your roof.

1:02:57

You're sick of maintaining that lawn in the back

1:02:59

or you, you know, need someone to

1:03:01

help shovel the sidewalks in this in

1:03:03

the winter. How about a backyard cottage? Like

1:03:05

we can get you financed into one of those. It's really

1:03:07

easy. You'll be getting another $800,000 a month

1:03:10

of cash. You can sure use that as a retiree,

1:03:12

can't you? We can make this

1:03:14

work for nimbies, but

1:03:16

yimbies, I love you. Like your heart's

1:03:18

in the right place. You've got the

1:03:20

right idea. Let's go out and build.

1:03:22

Let's build, build, build a ton of

1:03:24

stuff, but let's use the nuance. Let's

1:03:26

use our nuanced understanding of what's going

1:03:28

on so that what we build strategically

1:03:30

gets us to the goal and

1:03:33

the goal is not to build

1:03:35

more units. The goal is not

1:03:38

to build affordable units. The goal

1:03:40

is to make housing broadly affordable

1:03:42

and accessible to everyone. And

1:03:45

we can do that, but we got to have

1:03:47

a little bit of nuance. Thanks

1:03:50

everybody for listening. Go and get the

1:03:52

book, Escaping the Housing Trap. Tell others

1:03:54

about it. This is a big week

1:03:56

for us because kind of first week

1:03:58

sales gives a lot of momentum. to

1:04:00

everything. If you're gonna buy the

1:04:02

book, don't wait another week. Go get it today.

1:04:04

Help us build that big mo. Help us get

1:04:06

out there. And of course, keep

1:04:08

doing what you can to build strong

1:04:11

towns. Take r it.

1:04:35

Mhm. I think they know th probably

1:04:37

right now. Mm her

1:04:48

closer I

1:04:50

like you. I I'm

1:05:07

putting water