Housing

Today I’m launching CityDensity.com to compare the world’s big cities.

The website works by breaking the world up into tiny squares, with each square having 1km sides. Because the squares are essentially random they’re also fair - no political borders can make a city seem bigger or smaller than it is. 

Khan launched Right to Buy-back in July last year to boost London’s supply of council homes. It gives boroughs the funds to purchase former council homes that have been sold into the private market through the government’s Right to Buy programme.

Since then 14 London boroughs have been given £152 million to purchase 1,577 market homes that have been or will be converted to social rent or to house homeless families. A total of 1,756 council homes in London were sold through Right to Buy in 2021.

According to the New Economics Foundation, the scheme has led to an average net loss of 24,000 social homes a year since 1991.

The mayor’s office says it has already exceeded his previous target of starting 10,000 new council homes this year. Khan now aims to start a further 10,000 homes in a significantly shorter time – a total of 20,000 new council homes by 2024.

Welcome to Vienna, the city that may have cracked the code of how to keep inner-city housing affordable. As other cities battle spiralling rental prices, partly fuelled by inner-city apartments being used as short-term holiday rentals or being kept strategically vacant by property speculators, the Austrian capital bucks the trend. In the place that last year retained its crown as the world’s most livable city in the Economist’s annual index, Vienna’s renters on average pay roughly a third of their counterparts in London, Paris or Dublin, according to a recent study by the accounting firm Deloitte.

Part of the reason Schranz’s apartment is so affordable is simple: it’s owned by the city. In Vienna, that is (almost) the norm. The landlord of approximately 220,000 socially rented apartments, it is the largest home-owning city in Europe (in London, which has more than 800,000 socially rented apartments, they are owned by the local councils). A quarter of the people who live in Vienna are social tenants – if you also include the approximately 200,000 co-operative dwellings built with municipal subsidies, it’s more than half the population.

In a recent report, only 30 to 40 percent of those polled in a national survey of urban and suburban residents believed a 10 percent increase in housing production would result in lower home prices and rents. Against that backdrop, however, a research team at New York University issued a report last month arguing that there is clear evidence that boosting supply is the key to lowering or moderating housing costs.

“All the evidence shows that it does reduce housing costs,” said Vicki Been, director of the NYU Furman Center for Real Estate and Urban Policy. The report by Been and two NYU colleagues attempts to look at all the evidence available from studies of the question.

“In sum,” they write, “significant new evidence shows that new construction in a variety of settings decreases, or slows increases in, rents, not only for the city as a whole, but generally also for apartments located close to the new construction.”

[…] 

One thing the report authors, state housing officials, and supply skeptics agree on is that building more housing alone will not solve the housing crisis facing people at low incomes.  

Increasing the supply of housing is necessary, said Been, but “it’s not sufficient because there will always be people who do not make enough money or can’t work for whatever reason and don’t have enough income to pay for housing.” She and her co-authors said robust housing subsidy programs are crucial for those households.

Calgary's downtown development incentive program, which offers $75 per square foot to building owners willing to convert underused office space to residential apartments, is unique to North America.

It was launched in 2021, at a time when the city — home to more corporate head offices per capita than anywhere else in Canada — was reeling in the wake of an extended downturn in oil prices and the COVID-19 pandemic.

Commercial property values in the city's core had collapsed due to a wave of energy sector layoffs and consolidation that had left close to a third of Calgary's downtown office space empty.

Desperate to fill nearly 13.5 million square feet of unoccupied space and boost its dwindling tax base, Calgary launched the incentive program with the goal of removing six million square feet of empty offices from the city's downtown by 2031.

Sheryl McMullen, who manages the program for the City of Calgary, said it was unclear at the time what the reception would be.

But the program turned out to be so popular that in October 2023, the city was forced to press pause after reaching its $253-million funding threshold.

Capitalism relies on maintaining an artificial scarcity of essential goods and services (like housing, healthcare, transport, etc), through processes of enclosure and commodification. We know that enclosure enables monopolists to raise prices and maximize their profits (consider the rental market, the US healthcare system, or the British rail system). But it also has another effect. When essential goods are privatized and expensive, people need more income than they would otherwise require to access them. To get it they are compelled to increase their labour in capitalist markets, working to produce new things that may not be needed (with increased energy use, resource use, and ecological pressure) simply to access things that clearly are needed, and which are quite often already there.

Take housing, for example. If your rent goes up, you suddenly have to work more just to keep the same roof over your head.  At an economy-wide level, this dynamic means we need more aggregate production — more growth — in order to meet basic needs.  From the perspective of capital, this ensures a steady flow of labour for private firms, and maintains downward pressure on wages to facilitate capital accumulation. For the rest of us it means needless exploitation, insecurity, and ecological damage. Artificial scarcity also creates growth dependencies: because survival is mediated by prices and wages, when productivity improvements and recessions lead to unemployment people suffer loss of access to essential goods — even when the output of those goods is not affected — and growth is needed to create new jobs and resolve the social crisis.

There is a way out of this trap: by decommodifying essential goods and services, we can eliminate artificial scarcity and ensure public abundance, de-link human well-being from growth, and reduce growthist pressures.

On a summer day last year, a group of real estate tech executives gathered at a conference hall in Nashville to boast about one of their company’s signature products: software that uses a mysterious algorithm to help landlords push the highest possible rents on tenants.

“Never before have we seen these numbers,” said Jay Parsons, a vice president of RealPage, as conventiongoers wandered by. Apartment rents had recently shot up by as much as 14.5%, he said in a video touting the company’s services. Turning to his colleague, Parsons asked: What role had the software played?

“I think it’s driving it, quite honestly,” answered Andrew Bowen, another RealPage executive. “As a property manager, very few of us would be willing to actually raise rents double digits within a single month by doing it manually.”

RealPage software is used to set rental prices on 4.5 million housing units in the U.S. A series of lawsuits allege that a group of landlords are sharing sensitive data with RealPage, which then artificially inflates rents. The complaints surface as housing supply in the U.S. lags behind demand. Some of the defendant landlords report high occupancy within their buildings, alongside strong jobs growth in their operating regions and slow home construction.

A controversy in planning concerns the degree that upzoning can increase affordability.

I reviewed this issue two years ago in Planetizen columns, The Housing Supply Debate: Evaluating the Evidence, and A Critical Review of 'Sick City: Disease, Race, Inequality and Urban Land', and in a Governing Magazine article, The Housing Affordability Recipe. Recent studies support the conclusion that broadly-applied upzoning that allows more compact housing types (townhouses, multiplexes, and multi-family) in multimodal neighborhoods, with complementary policies such as reducing parking minimums, can increase housing supply, drive down prices, and increase overall affordability.

This research has not prevented skeptics from arguing the opposite; that upzoning increases rather than reduces housing prices and reduces affordability. Such skepticism is understandable: housing prices tend to be higher in dense urban areas and a parcel's value tends to increase if it is upzoned. However, upzoning a large urban area has very different effect: it creates a competitive market for land prezoned for higher density housing which minimizes lane value increases, as discussed in UCLA Professor Shane Phillips' report, Building Up the "Zoning Buffer": Using Broad Upzones to Increase Housing Capacity Without Increasing Land Values.