Quick thoughts on the Market Urbanism approach to gentrification

Over at Market Urbanism, Adam Hengels has written a mini-manifesto on gentrification. (In which, by the way, he graciously cites this blog. Thanks!) It’s a strong articulation of why anti-gentrification politics centered on opposing new development can’t work, though I think Adam is a bit too hasty in presenting zoning deregulation as a complete fix, or the only possible approach.

Anyway, this is his Twitter-friendly takeaway:

Adam Hengels, Market Urbanism.

Adam Hengels, Market Urbanism.

In the interest of time (my own and yours), in bullet points:

  • The battlefield is both in the gentrifying neighborhoods and in the wealthy neighborhoods. The battle is also, for that matter, in the poor neighborhoods that are not being gentrified, since their gradual or rapid disinvestment sets the stage for reinvestment later on. (See the rent gap theory.) In a narrower sense, Adam is right that the engine of gentrification – that is, growing demand for housing in a system that will only accommodate that demand through rising prices – is churning both in Logan Square and Lincoln Park (or Bed-Stuy and Greenwich Village, to use a New York example). We focus on Logan Square and Bed-Stuy because they are going through a process not only of rising rents, but of dramatically transitioning social networks, from generally lower-income, mostly blue-collar people of color, to generally higher-income, mostly white-collar white people. That represents a shifting of some of the most important social-spatial boundaries that exist in American cities, and so is extremely notable. But Lincoln Park and Greenwich Village have also been changing over the past, say, 15 years – it’s just that the shift from upper-middle-class white professionals to even wealthier white professionals is a less dramatic redistricting of social geography.

    Nevertheless, I don’t think it’s productive to tell the residents of Logan Square and Bed-Stuy that their observations about the changing character of their neighborhoods aren’t valid. The fact that the outcome of the Logan Square battle depends on the outcomes of other battles around the city doesn’t mean it’s not a battle.

  • I think this is basically right, if by “enemy” you mean “the people with the power to change what you don’t like.” That said, again, I think it’s worth acknowledging that for people who are opposed to gentrification for reasons of culture or community, gentrifiers can be the people who are directly undermining the things you wish to preserve. Moreover, the fact that they are moving next door to you only because they can’t afford the trendier neighborhood two subway stops closer to downtown doesn’t mean that they won’t also be inconsiderate neighbors. And even if they’re considerate neighbors, it doesn’t mean that they aren’t undermining what you value just by their very presence. Which, as I’ve said before, is not necessarily a problem with a solution.
  • This seems like it’s leaving some stuff out. Zoning is one really big reason why shifts in demand translate into big changes in prices, as opposed to changes in the amount of housing stock. The things that drive the shifts in demand are different. Another reason, potentially, is that housing is priced by the market to begin with. Many New York City neighborhoods have bulwarks of economic and racial diversity in the form of non-market housing, which makes up something like half the city’s units (combining public housing, subsidized housing, and rent-controlled or stabilized units).
  • Again, this is one approach. Another would be nationalization (insert tongue-in-cheek emoji), or at least the large-scale removal of housing units from the market. That said, a quick evaluation of our political and financial situation suggests that such a removal is not really possible at anything like the scale that would be required. So yes, zoning deregulation really ought to happen. But that’s not exactly politically popular either, even if it doesn’t come with anything like the financial requirements of creating non-market housing. Which is to say: we need both as much zoning deregulation as possible, and as much non-market housing as possible, because we’re not likely to get anywhere close to solving the problem with either of them.
  • Yes. Yes! The greatest insight of a market-based analysis of gentrification is that the actors who are given agency, who are treated as first movers in virtually all narratives about this kind of neighborhood change, are in fact pawns. They may be pawns of greater means than some other pawns, but at bottom their choices are also about constraints: Where can I be closest to my friends, potential employers, and the amenities I want, while staying within my budget? Which is why Adam’s first point, even if incomplete, is still important. In a real sense, the battle begins outside the “gentrifying” neighborhood. Mangling the old line about immigration, a gentrifier might say: We are here because they [richer people] are there [in the neighborhood where I’d rather live].

Gentrification and the Wealth Gap

The Washington Post

The Washington Post

A bit ago, I wrote about how conversations about neighborhood change often paper over very real conflicts of interest among members of “The Community”:

A very common refrain in gentrification debates is that “the community should decide,” or that changes should “benefit the community.” But as Michael Kendricks points out, “the community” is always made up of many different people, with many different interests. Virtually any decision that’s made about a new housing development, or store, or transit project, will benefit some members of the community at the expense of others. That is politics, and anyone who has been to a neighborhood meeting about anything, large or small, has seen firsthand that neighborhoods are not above, or below, politics.

It’s far from an original observation to note that homeowners tend to benefit from gentrification, since rising property values directly increase their wealth. (Of course, they may also be squeezed if their property taxes increase much faster than their income.)

But we rarely acknowledge just how huge those stakes are. A new series from the Washington Post on the black professional class suburbs in Prince George’s County, Maryland (and Pete Saunders’ astute take on it) helps to quantify what happens to black wealth when home values don’t increase. The massive wealth gap between whites and blacks – several times larger than the income gap – is driven in large part by the difference in home values in mostly white neighborhoods compared to ones that are mostly black. And, as the Post explains, the extremity of that gap is in large part a result of the collapse of home values during the Great Recession:

The recession and tepid recovery have erased two decades of African American wealth gains. Nationally, the net worth of the typical African American family declined by one-third between 2010 and 2013….

Overall, the survey found, the typical African American family was left with about eight cents for every dollar of wealth held by whites….

Many researchers say the biggest portion of the wealth gap results from the strikingly different experiences blacks and whites typically have with homeownership. Most whites live in largely white neighborhoods, where homes often prove to be a better investment because people of all races want to live there. Predominantly black communities tend to attract a narrower group of mainly black buyers, dampening demand and prices, they say.

And the only obvious way to rebuild this wealth in the short to medium term is to raise property values in black neighborhoods. Which, whether or not that’s accompanied by racial change, is likely to price some renters and prospective buyers out.

This is not a “gentrification is clearly good, so stop complaining” argument. According to the Post story, only 43% of black Americans own their own home, so even strong gains in to property values would only go so far. But the issue of wealth deserves a more central place in the story of changing real estate values, and anyone whose knee-jerk reaction is to condemn rising home prices in non-white neighborhoods ought to have something to say about how else we can close the wealth gap.

How many carless workers are there in Chicago?

BUSES

BUSES

Redeye‘s Tracy Swartz – one of the city’s best writers on the transportation beat outside of Streetsblog Chicago, to whom you should still give money – has an interesting article about why people choose to remain on transit (or not) while gas prices plummet. There are actually some interesting lessons in that part of the article, but I want to focus on this line:

Some CTA riders also don’t have cars to make the switch to driving when gas prices are low. About 16 percent of workers 16 years old and up don’t have access to a car to commute to work, according to U.S. Census Bureau American Community Survey estimates from 2008 and 2012.

Tracy showed me the ACS tables where she got that 16% number. But for the purposes of this article, I think they’re a bit (unintentionally) misleading. They tell us that 84% of Chicago workers live in a household with at least one car – but that’s not the same as being able to use a car to commute.

In my household, for example, there are three adults and one car. According to the Census, that means that all three of us have “access” to a car. But practically, only one can actually drive to work. Some households in a similar situation may be able to carpool, but given job sprawl and service sector work schedules, it’s unlikely that number is super large. (The Census says less than 10% of all workers carpool to work.)

So what’s a better estimate of how many workers can actually use a car to commute? To figure that out, I used this Census table, which gives the number of cars in a household by the number of workers.

First, in households with only one worker, about a quarter (113,000 out of 456,000) have zero cars.

Screen Shot 2015-01-20 at 7.35.10 PM

Source: 2013 American Community Survey

 

Of the 254,000 households with two workers, about 11% (29,000) have no cars, and 38% (97,000) have one car. That translates to 155,000 workers without their own car.¹

Source: 2013 American Community Survey

Source: 2013 American Community Survey

Of the 57,000 households with three or more workers, about 9% (5,000) have no cars, 19% (11,000) have one car, and 31% (18,000) have two cars. That translates to at least 55,000 workers without their own car.²

Source: 2013 American Community Survey

Source: 2013 American Community Survey

So, altogether, there are at least 113,000 + 155,000 + 55,000 = 323,000 workers who can’t use their own car to drive to work.

The Census also tells us that there are about 1,191,000 workers in all. Which means that 323,000 / 1,191,000 = 27% of Chicago workers do not have their own car to drive to work. That’s a good deal more than 16%.

Incidentally, this also means that a huge number of Chicago’s workers – roughly 39% – live in a household where, even if they themselves drive, their spouse, or child, or parent, or friend, rely on public transit (or in some cases bikes) to get around the city. And that doesn’t include households where a high school or college student relies on transit to get to class.

Source: 2013 American Community Survey

Source: 2013 American Community Survey


¹ There are two carless workers for each zero-car household, and 29,000 * 2 = 58,000. There is one carless worker for each one-car household, so 97,000. And 58,000 + 97,000 = 155,000.

² There are three carless workers for each zero-car household, and 5,000 * 3 = 15,000. There are two carless workers for each one-car household, and 11,000 * 2 = 22,000. If each two-car household has three workers, then there’s one carless worker for each of those. (If there are more than three workers, then there’s more than one carless worker – but let’s be conservative.) So that’s 18,000. And 15,000 + 22,000 + 18,000 = 55,000.

Two fun things to do

First of all, Streetsblog Chicago – which, on a shoestring budget, regularly produces some of Chicago’s best reporting on urban transportation – is holding a fundraiser to buy new shoestrings and resume publication after a brief budget-related hiatus. It’s next Thursday the 29th, in the form of a pedway bar crawl with Moxie, the LGBTQ urban planning organization. It meets at 5:30 at Infields, in the basement of Macy’s on State Street.

Without Streetsblog, many of these stories simply won’t be covered anywhere. If you’re at all free, I’d love to see you there. If you can’t make it, consider pitching in electronically! Streetsblog Chicago is a fucking valuable thing, and we shouldn’t just give it away for fuckin’ nothin’.

Also, less importantly, I’m going to be speaking on a panel with the lovely Yonah Freemark and Pete Saunders about neighborhood change at UIC’s Urban Innovation Symposium. We’ll be speaking on Friday the 30th from 12:00 to 12:45 in the Lecture Room at Gallery 400, 400 S. Peoria. Come if you want!

In which I disagree and then agree about housing policy

Here’s a question: why does New York have an affordable housing crisis? Or, put differently: Why is New York’s affordable housing crisis so much worse than, say, Dallas’? Or Cleveland’s?

3381337771_463d22fd74_b

Credit: Katy Silberger

Henry Grabar’s Next City feature on NYC mayor Bill DeBlasio’s housing plan – which is worth a read – never really offers a theory on that front. He makes a few gestures towards one, though, of which I think these are representative:

The red-hot markets of gentrifying neighborhoods are both decried as the problem, because they displace existing tenants, and hailed as the solution, because of their appeal to real estate investors.

Entrusting affordable housing to real estate developers is a bit like going to McDonald’s to lose weight.

Over the past two decades, New York City’s rental stock has grown and changed. In 2011, the share of rental units under regulation stood at 47 percent, down from 59 percent in 1991…. But the state’s two rent regulation programs, with a median tenant income of $36,000, remain the most powerful single guardian of New York City’s economic diversity.

While the city can do its share to expedite housing construction, it can’t do much about the cost of labor, materials or land. The average price of land in Brooklyn, the city’s most populous borough, rose 25 percent between September 2013 and 2014. In some of the borough’s neighborhoods the increase was larger: Between January 2013 and 2014, land prices in Downtown Brooklyn (the focus of a major Bloomberg-era rezoning) rose from $75 to $350 a square foot. Prices for land in East New York, an area targeted by the de Blasio housing plan, nearly tripled in the first eight months of 2014.

So, in order:

1. The “red-hot market” is “the problem” – but why is there a red-hot market?

2. Just as McDonald’s unhealthy food makes you fat, real estate developers’ (unscrupulous?) behavior eliminates affordable housing. But I find it hard to believe – and I know of no evidence suggesting – that, say, Phoenix has relatively low-cost housing because its real estate developers are particularly well-behaved.

3. A declining number of rent-controlled apartments has certainly reduced the amount of housing affordable to the working class in New York. And yet Houston has literally zero rent controlled apartments, but many, many more affordable homes for people with modest incomes.

4. Land prices are rising rapidly, which for obvious reasons leads to higher home prices. But why are land prices rising?

DCF 1.0

These Phoenix homes are cheap, but not because the people who built them were nice. Credit: Hanroanu

I ask all this not to be snarky, but because I’m honestly not sure where Grabar sees the housing crisis coming from. To be fair, none of these excerpts are meant to be cohesive explanations. But given the ambitions of the piece, that seems like a problem.

Grabar’s feature is obviously meant to discredit – or set up the discrediting – of what he refers to as de Blasio’s “market-based” solution: allowing more homes to be built so as to better balance supply and demand, and requiring many of those new developments to include units with below-market rents. “If the plan falls far short of its goals,” Grabar writes, “it…will go a great length toward disqualifying the dominant municipal philosophy of affordable housing.” (Whether this is, in fact, the “dominant municipal philosophy of affordable housing” is, of course, another question. A question to which the answer is “no.”)

One issue with this framing is Grabar’s assumption that the strategy de Blasio – and before him, Michael Bloomberg – have espoused is, in fact, the strategy they’ve implemented. But just as Bloombergian zoning doesn’t mean what some people think it means, New York has not, in fact, been adding housing at a furious pace. “New York City added 180,000 units of housing between 2002 and 2011,” Grabar writes, without providing context that this represents a gain (over a slightly different period, 2000 to 2012) of just 5.8% – less than low-cost boomtowns Dallas, Houston, and Phoenix, but also significantly less than built-up cities like Boston, Seattle, and Washington, DC.

Screen Shot 2015-01-12 at 9.50.44 PM

Speaking of Washington, it’s a bit odd, too, that Grabar uncritically quotes Hunter College professor Tom Angotti:

“This is the great myth, that there’s some magical market that functions so that when you increase the supply the price will decrease,” says Tom Angotti, a professor of urban planning at Hunter College. “It never works that way.”

…given that just a day before his piece was published, the Washington Post reported:

Year-over-year average rent growth among mid-quality, three-star apartments declined during the third quarter for the first time in 2014, while average rents in higher quality four- and five-star apartments have been dropping since the second quarter of 2013…. Why has the rent gap shrunk?…. An unprecedented number of new apartment units (about 24,000) have arrived in the area in the past two years, increasing the total apartment inventory by roughly 5 percent. That new supply wave cut rents for four- and five-star apartments even further, even as rents at three-star apartments continued to outperform. But the narrowing may be slowing as the wave of supply takes its toll on three-star rents as well, working in renters’ favor.

But all of this is beside my current point. Despite these problems, I actually agree with Grabar’s central argument, which is that New York City proper is unlikely to solve its affordable housing crisis – is unlikely, in other words, to create a city in which people of average and below-average income can reasonably expect to find housing without major financial strain – by allowing lots of private-sector construction and using inclusionary zoning to squeeze out some non-market-rent units from that construction.

No, my point is that a reader of that piece won’t necessarily understand why this strategy, even if actually implemented, is unlikely to work. Interestingly enough, I think a Truthout piece from last October does a pretty good job on that front (their subject is San Francisco, but the principle is the same):

Take it from a person who knows supply and demand very well, the president of the San Francisco-based start-up and real estate investment firm, Engmann Options Inc. “You can’t build enough housing units to meet that insatiable demand in order to get the price down where it can become more affordable,” Engmann said.

…Developers won’t be able to build an unlimited supply of housing, or even build to a point where prices will drop substantially.

The problem with attempting to match supply and demand in places like New York and San Francisco – world capitals of industries that generate ungodly sums of money, cultural playgrounds for the world’s aristocracy – is that the demand is simply enormous, and there is no practical way to build enough to meet it. At least, not in the built-up central cities. (Notably, many of New York’s suburbs are actually quite low-density, and adding lots of housing there – where the majority of people in the New York metropolitan area already live – could go a good ways towards lowering average prices across the region.) That’s why we need to nationalize Manhattan.

Wall Street will not let you in. Credit: Jens Schott Knudsen

Wall Street will not let you in. Credit: Jens Schott Knudsen

But when the reason is articulated this way, a few things become clear. First of all, if we’re no longer implying that the laws of supply and demand for some reason simply don’t apply to housing – we’re merely pointing out that, given the circumstances in NYC and SF, there’s no way to supply enough to meet demand – we can see that even if building a lot doesn’t solve the problem (as in, yay, we’re done), it can slow or arrest the rise in rents, which is certainly not a bad thing. See, for example, Washington.

Second, we can see that the circumstances NYC and SF find themselves in are not the circumstances of most American cities. Most American cities are neither world capitals of robber-baron-lucractive industries, nor playgrounds of the global aristocracy. In most American cities, demand for housing is not an insatiable beast. In the vast majority of American neighborhoods, you can, in fact, build enough to meet demand.

Now, that’s still not to say that the only affordable housing policy Chicago (or Seattle, or wherever else) needs is to build until rents are reasonable. As both Grabar and Dylan Ruiz and Joseph Smooke of Truthout mention, the cost of constructing new housing – and, probably more importantly, maintaining older housing – makes it unprofitable to rent below a certain level no matter what, and many people find themselves unable to afford housing even at those market-bottom prices. Even Ed Glaeser, the most libertarian of the prominent housing supply advocates, has staked out a position in favor of massively expanding housing subsidies for the very poor.

But I do think all of this demonstrates the importance of thinking about housing policies beyond whether they fall in buckets labeled “Good” or “Bad.” Most policies don’t solve major problems all on their own, and most policies’ effectiveness depends on the context in which they’re deployed. It should not actually be shocking that the zoning laws that determine how much housing developers can legally build fit both of these descriptions.

The new asymmetry of segregation

A while ago, in one of his dumber moments, the urban economist Ed Glaeser wrote a report for the Manhattan Institute called “The End of the Segregated Century.” The headline came from the finding that all-white neighborhoods – meaning, literally, neighborhoods in which there existed not a single non-white person – were basically extinct for the first time in American history. Glaeser admitted that, of course, there were a good deal of the opposite type of neighborhoods – ones in which there were literally, or virtually, no white people – but minimized them by pointing out that most had declining populations. The emphasized takeaway was “the end of segregation.”*

Many people at the time pointed out that this conclusion was exceedingly silly. More recently, though, Dan Keating at Wonkblog took Glaeser’s data and drew a much more insightful, and important, conclusion: Segregation still exists, but “The End of the Segregated Century” does show that it’s changed in a really dramatic way over the last 40 years. Where once residential segregation was more or less symmetrical – over here we have overwhelmingly white neighborhoods, and over here overwhelmingly black ones – contemporary segregation is asymmetrical. White neighborhoods are increasingly mixed with Latino and Asian families (and a handful of African-American ones), while black neighborhoods are still basically all-black.

Keating illustrates that change by highlighting neighborhoods that are more than 85% white or 85% black in various cities around the country:

Screen Shot 2015-01-05 at 2.39.03 PM Screen Shot 2015-01-05 at 2.39.14 PM Screen Shot 2015-01-05 at 2.39.25 PM

I had actually made a very similar series of maps before this was published, although I think Keating’s are easier to read. In mine, every neighborhood is colored according to a “segregation index,” which is just the percentage of residents who belong to the area’s largest racial/ethnic group. As a result, you can’t directly see which areas are mostly white and which are mostly black, but you can see a bit more detail in changes over time.

Seg80

Seg90Seg00Seg10

Every decade since 1980 has seen the gradual integration of neighborhoods all over Cook County, turning the heart of the Chicago metro area from a place where the typical neighborhood was 90-95%, or more, of a single ethnicity, to one in which those kind of communities are relatively rare.

Except for black neighborhoods.

Which have remained almost uniformly 95%+ black.

Ironically, this shift is partly explained by another Glaeser paper. In “The Rise and Decline of the American Ghetto,” he and another economist named Jacob Vigdor use data on housing prices, levels of segregation, and legal context to suggest that the forces that built and sustained black-white segregation from the early 20th century until about 1970 are different than the forces that sustain it today.

The theory goes that up until 1970, segregation was enforced through what Glaeser and Vigdor call “collective action racism”: that is, white people got together and decided to, say, legally prohibit the sale of homes in white neighborhoods to blacks, or use the housing finance system to keep blacks in certain communities, or build public housing in such a way that it maintained segregation. Outside of the legal system, whites organized formally and informally to intimidate blacks who moved into their neighborhoods. Sometimes, that looked like racist signs and vandalism. Sometimes, it looked like bombings, beatings, and riots.

This is the polite version.

This is the polite version.

But the Civil Rights era eviscerated a lot of the legal and financial systems that kept blacks and other non-whites out of white neighborhoods. (Even if it didn’t create new systems to reverse those wrongs.) Outright discrimination on the part of realtors or home sellers became much more risky. (Although it’s still quite common.) Slowly, it became unacceptable – from the point of view of both white peers and the police – to respond to a black person in your neighborhood by throwing a bomb through their window. (Though high-profile segregatory violence continued through the 1970s and beyond, especially around the issue of school integration.)

What didn’t change, however, was whites’ overwhelming preference not to live around black people. So segregation has declined only very slowly, thanks to what Glaeser and Vigdor call “decentralized racism.” By “decentralized racism,” they mean essentially shunning: whites won’t move to black neighborhoods, and they will flee their own neighborhoods if too many black people move into them. One result is that while in the pre-Civil Rights era, blacks paid more for housing than whites – because they were forced into relatively small, overcrowded neighborhoods with an inadequate supply of homes – today, whites pay more than blacks, in part because whites bid up prices in the limited number of communities with a sufficiently small number of black people. (Raising the possibility of racial arbitrage – a possibility which, as we discussed, has so far gone unfulfilled, because non-blacks apparently really don’t want to live around black people.)

Another way to visualize this is to show the change in the “segregation index” from 2000 to 2010.

SegCh0010

Despite noticeable shifts all over Cook County – from the desegregating suburbs in the southwest, west, northwest, and north, to the increasingly-segregated (white) North Side, (Latino) far Southwest Side, and (white-becoming-black) south suburbs, the established black ghettos on the city’s West and South Sides are almost totally unchanged.

Why does this matter? There are a number of things, but one in particular, I think, is that it suggests one of the problems with segregation: the issue is not just that white and black people live in different neighborhoods, but that black neighborhoods are shunned in a way that other ethnic enclaves – from Pilsen to Chinatown to the Indian-Pakistani Devon Avenue – are not, and in a way with really powerful negative consequences for successful businesses, schools, wealth building through homeownership, and so on. This is one reason that I’m so allergic to the rhetoric around violence in Chicago: treating the entire black South and West Sides as if they were “war zones” – places where you take your life in your hands just visiting – is one of the main ways that the shunning of black neighborhoods is openly justified among whites and other non-blacks. It’s why a bunch of ten-year-olds wrote an open letter to the rest of the city begging you not to be afraid of them.

There are, however, a handful of places where black neighborhoods are integrating in Chicago. I’ll go over them in more detail in a future post.


* It’s a pattern that recurs with some frequency: Glaeser does excellent empirical work, and then draws odd conclusions from the very useful numbers he finds.

 

The problem

From Chicago NPR affiliate WBEZ’s series on gentrification:

James Rudyk says affordability doesn’t mean housing values have to remain stagnant or that certain people or businesses should stay out.

But…by definition, it kind of does, doesn’t it? If housing values don’t “remain stagnant,” then they’re growing. Another way of saying that housing values are growing is that housing is getting more expensive. In a neighborhood (Belmont Cragin, in this case) with home prices already above the city average – in a city where something like half of all residents are paying more than 30% of their income for a place to live – that suggests that every increase in housing prices is going to stretch the budget of some people who live in the area, and put the community beyond the reach of other city residents who might like to move there for better schools, safer streets, etc.

In other words, affordability will suffer.

This is the fundamental problem with using housing as our country’s main vehicle for wealth accumulation: as soon as you buy a home, you have an enormous incentive to see its value grow. But that interest, of course, is directly opposed to the interests of any people who might want to buy, who want – in many cases, need – housing prices to stay flat or even decrease in order to find a place to live. In a place where the vast majority of homes are not subsidized for the low- or moderate-income – and Chicago will be that kind of place for the foreseeable future – that means that strong returns to housing are directly opposed to affordability.

It also means that statements like this are really hard to take from theory to reality:

“If residents on Diversey and Laramie really do want a Starbucks, then let’s put in a Starbucks. If they really do want a Trader Joes, then let’s put in a Trader Joes. If they’re really fine with the fruit market, let’s leave the fruit market. So the question is, who makes that decision?,” he said.

Rudyk hopes it’s the people who live here, and not outside investors. He says that may determine whether Belmont Cragin redevelops or gentrifies.

This imagines that there are two groups of people: Belmont Cragin residents, and “outside investors.” But that’s not really true.

A very common refrain in gentrification debates is that “the community should decide,” or that changes should “benefit the community.” But as Michael Kendricks points out, “the community” is always made up of many different people, with many different interests. Virtually any decision that’s made about a new housing development, or store, or transit project, will benefit some members of the community at the expense of others. That is politics, and anyone who has been to a neighborhood meeting about anything, large or small, has seen firsthand that neighborhoods are not above, or below, politics.

It’s tempting, in this as in any situation, to try to find a way that everyone – or everyone you consider a “good guy” – can win. Unfortunately, I think there’s a lot more conflict here among the “good guys”* – conflict that isn’t about misunderstandings, but about real and immediate self-interest – than we’re willing to admit.

* I say “good guys” because I don’t think there’s anything nefarious about a middle class family in Belmont Cragin wanting home prices to increase in their neighborhood so they can have some financial security for retirement. The point, though, is that the consequences of that totally benign goal – multiplied by hundreds of thousands of homeowners – are anything but benign for people caught on the wrong side of affordability.

2014

This blog, and all the people I’ve met through it, have been an unexpected highlight of my year. Thanks, everyone. I’ve included a few of my favorite posts and articles below, in case you want to get on top of your 2014 blog reading nostalgia early.

Happy new year.

 

Ten Posts

February 24: “Why Is Urbanism So White?”

March 21: “Chicago’s Housing Market Is Broken”

March 31: “Watch Chicago’s Middle Class Vanish Before Your Very Eyes”

April 14: “How Segregated Is New York City?”

August 5: “Things That Are True About Crime in Chicago”

August 8: “The Dignity of Fifth Graders”

August 25: “The South Side: Not Actually an Unmitigated Sea of Misery”

September 18: “Nationalize Manhattan”

October 21: “Buses: They Don’t Have to Suck”

December 5: “Chicago’s Growing Income Donut”

 

Six Articles

February 20, CityLab: “Blame Overbearing Government for Gentrification, Not Just Neoliberalism”

April 23, CityLab: “There’s Basically No Way Not To Be a Gentrifier”

August 13, Washington Post: “One of the Best Ways to Fight Inequality in Cities: Zoning”

October 20, Next City: “How Metra’s New 30 Year Plan Could Reshape Chicago Regional Rail”

November 20, Washington Post: “Urban Neighborhoods Are Getting More Diverse. But What Are They Losing?

December 12, Next City: “Chicago Rethinks Rules for Affordable Housing”

Concern: Will Chicago’s new inclusionary zoning law allow double-counting?

Warning: this post gets a bit into the legislative weeds.

So as I wrote at Next City, Mayor Emanuel’s affordable housing commission just announced their recommended amendments to the city’s inclusionary zoning law, or ARO. (Affordable Requirements Ordinance.) Mostly, this involves closing or tightening loopholes that allowed developers to push new subsidized units out of wealthy neighborhoods, and into poor ones.

But one other provision gives me pause:

On page 9 of the ARO proposal. Click for a link to the document.

On page 9 of the ARO proposal. Click for a link to the document.

To summarize: the Chicago Housing Authority (or other “authorized agencies”) can buy ARO-produced units and run them as their own. In fact, not only can they do that, but the city is giving developers a financial incentive to sell. If someone builds a 40-unit building on the North Side, the new ARO says they’re responsible for four subsidized units, or an equivalent fee; one of those units has to be on site. If the developer chooses to pay the fee for the remaining three, that’s $375,000 (at $125k per unit). But if the developer sells the one unit they built to the CHA, they save $25,000 in fees per remaining unit – meaning $75,000 in all.

Anyway, at first blush, I don’t see any reason why converting ARO units to CHA units is a problem. Except for this: Rahm Emanuel has announced that he wants the ARO to create 1,200 units of affordable housing over five years. The CHA, separately, has a longstanding commitment to maintain 25,000 units of housing, of which it is short about 7,000. In other words, it appears that we currently have a commitment from the City of Chicago and its partner agencies for 1,200 + 7,000 = 8,200 new units of affordable housing over the near term.

The issue is what happens with units that are produced by the ARO, and then bought by the CHA. Presumably, Emanuel – or whoever is mayor at the time – will want to tout those as “ARO units,” since they would have existed without the law. Presumably, the CHA will also count them as “CHA units,” because, you know, they’ll be CHA units.

But what that means is that we’ll be double-counting. And in the extreme (though possible!) scenario that the CHA buys all 1,200 ARO units, instead of 8,200 new subsidized housing units, the city will get only 7,000 – because every unit the CHA buys from the ARO is a unit they don’t have to produce separately themselves.

Here is this idea in chart form:

Screen Shot 2014-12-16 at 11.58.10 AM

Screen Shot 2014-12-16 at 11.58.01 AM

Anyway: the stated purpose of the ARO amendment is to improve upon the old ARO, which only produced 189 affordable units over 7 years, or something like that. But double-counting, by creating the possibility that every new ARO unit will simply displace a CHA unit that would have been created, also makes it possible for the new ARO to have zero net impact on the total number of affordable units in the city. That is, if you look at the graph above, double-counting every ARO unit would leave the city with 7,000 new units – the same number the CHA would be obligated to provide if the ARO didn’t exist at all.

Now, caveats: I’ve asked around about this, and haven’t yet heard any reason that would prevent the CHA from buying up all the ARO units, but it’s possible that such a reason exists, and I’m just not yet aware of it. If you know of that reason, tell me!

It’s also possible that, even though the CHA has promised 7,000 new units, the CHA’s pants are on fire, and there’s no way they’re actually going to deliver that any time soon. In which case the ARO isn’t displacing CHA units, because the CHA can’t/won’t produce new units on its own. Maybe. That seems like a pretty unsatisfying answer, though: if you’re the City Council (or, say, the mayor), why not just find a way to force the CHA to live up to its promises?

Am I getting this wrong somehow? Or does there need to be some safeguard in the new ARO?

Chicago’s new affordable housing law

The proposed development at Children's Memorial Hospital in Lincoln Park, which will bring inclusionary zoning affordable units to the neighborhood for the first time in 25 years.

The proposed development at Children’s Memorial Hospital in Lincoln Park, which will bring inclusionary zoning affordable units to the neighborhood for the first time in 25 years. Credit: Chicago Architecture Blog

I wrote about it at Next City:

That goal reflects what makes Chicago’s affordable housing crisis different than the ones in a handful of coastal cities that have dominated national coverage. In many Chicago neighborhoods, depopulation, disinvestment, segregation and crime have kept housing values relatively low, even just a few miles from the booming downtown. Meanwhile, communities on the North Side — as well as a handful to the south and west of the Loop — have seen rapid gentrification and skyrocketing rents. That dynamic has led to a dramatic increase in economic segregation. (The city does not have any rent control provisions, so tenants have very few protections from shifts in the market.)