Monday, August 1, 2011

New World Economics on the New New Suburbanism

Note: I'll be reposting Nathan Lewis' urbanism-related content as it becomes available.  Feel free to comment on his articles here.

In his latest post, Nathan Lewis wants to tell you how to make a pile of dough with the traditional city, and has provided illustrative drawings and calculations to show exactly what he has in mind, among many other observations on the New Urbanism, the history of American home sizes, and the issue of affordable housing:

"City governments everywhere wonder how to create "affordable" housing, but how is that possible when everyone has to buy way too much land, and build a house that is way too big, and also indirectly support an incredibly excessive roadway system, and a system of school buses for the public school, and also a second or third car to get around this ridiculous landscape? The larger houses themselves have a certain logic: once you have the way-too-big land plot, the second and third car, and the vastly excessive roadway system, you might as well go whole hog and get the big house too. You're already 80% committed."
 It's an in-depth piece, but I strongly recommend reading through the whole thing.

10 comments:

  1. I like the new angle that Mr. Lewis is taking with the SFDR + single car parking + really narrow streets. I'm a vocal advocate of traditional city design, and people are usually very receptive of the idea. The first thing they want to know is how we get there given what we have, and Nathan lays it all out for us with this article and his previous ones on the subject. It's a great transitional model to follow.

    Down the street from where I live, a developer is building micro homes w/o parking at a corner that would typically have a condo building with parking garage.

    http://www.drhorton.com/Where-We-Build/Oregon/Portland/Division/Division-43.aspx

    They are pretty expensive, and I don't quite understand why they don't go with attached walls, but I think its a step in the right direction. But it's only one lot on a greater grid of wide streets.

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  2. Um, what? Affordable housing is mainly a problem for major cities where way more people want to live than there is room for them. Housing costs in Tokyo, New York, Hong Kong, Paris, London, and other cities where housing doesn't come equipped with too much land are very high; housing costs in Houston and other cities that are barely recognizable as urban are lower, people substituting high transportation costs instead.

    It's not really a design issue. The cost of constructing a two-bedroom condo on the Brooklyn waterfront is about the same as that of building a greenfield exurban house, but because of pent-up demand, the two-bedroom condo costs much more, and the developer pockets the profit. Making it possible to build the Brooklyn condo more cheaply - which in the environment in question boils down to removing parking minimums - would not solve the problem. Neither would Really Narrow Streets; if they did, Tokyo wouldn't set world records for high housing costs.

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  3. Alon -- I think Nathan's point there is not about bringing center city prices down, but about how the typical subdivision and/or zoning requirements basically set a baseline cost for a single-family home even in areas where land values are extremely low. You can't build your way to affordability in Manhattan as I've argued, but where land is not exceedingly scarce nor demand exceedingly high it should be possible elsewhere. It's a suburban densification strategy as much as an alternative urban vision, I think, with the SFDR form a concession to perceived preferences of American consumers.

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  4. "Affordable housing" is mostly a factor of too much housing; either too much land or too many square feet. For example, I consider housing in Tokyo to be quite affordable. You can live in a lovely downtown neighborhood for less than $1000 a month. You could even live in a top-quality neighborhood for less than $400 a month. Purchase prices reflect capitalized rents. However, you get what you pay for: these apartments are very small, and some are a little old and dingy.

    So, basically, to make the Brooklyn condo cheaper, you would make it smaller. You can fit a two bedroom apartment in 600sf. To put it slightly differently, the same building with the same floorspace would have twice as many units.

    For example, this nice 2-bedroom apartment is in 522 square feet.

    http://www.newworldeconomics.com/archives/2010/031410_files/2ldk.jpg

    I should note, however, that New York City prices are rather expensive today compared to rents. Thus, there is a market factor. Basically, people are paying too much. However, in general, purchase prices reflect capitalized rents.

    Most U.S. cities have a funny dynamic going on. There is much less construction than there should be.

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  5. The other aspect of "affordability" is that many U.S. neighborhoods are considered "no go zones." For various reasons, people just don't want to live there so they pay up to get into the 10% of "good neighborhoods."

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  6. By the way, here is some wonderful data on construction costs for high-rise buildings. Basically, it is about $200 per square foot.

    http://evstudio.info/cost-per-square-foot-for-construction-for-8-to-24-story-apartment-buildings/

    Here are some more construction costs.

    http://www.blueoceanconstruction.com/faq.html

    In general, costs are a lot higher than I thought. I've been using the $100/sf baseline for economy wood-frame construction but maybe that is low. Of course, this kind of custom work tends to be more expensive.

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  7. More on NYC construction costs. This is from 1999 but the figures are much lower. Very detailed.

    http://furmancenter.org/files/publications/NYCHousingCost.pdf

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  8. Unfortunately city planners still seem to be mentally trapped in the Wilsonian "Progressive" era, in which dense neighborhoods are festering slums of crime and poverty, and the solution is to spread people out in little cottages.

    A while back someone proposed "charter cities" in which a section of a city (Detroit would be a great candidate) would be exempted from all the usual zoning regulations, as an experiment to see what people will build if they can build whatever they want. Sounds like an idea worth trying.

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  9. Cambias, that is something I've been curious about as well. What we see in the remnants of places built in the days before zoning codes, even with the hypertrophic street layout, is a general consensus of what the built environment should look like. (Of course, you see the downside of this, with factories next to homes, etc., that was the reason for zoning codes in the first place.) There is both unity and diversity to be found in many pre-zoning neighborhoods that suggests an organic consensus would form.

    I think the factor that would make such an experiment REALLY interesting would be the impact of all these years of zoning. As a result of finally being freed from such restrictions, would people just go wild?

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  10. Interesting post. I think that there are affordable new homes in Houston and other areas. I think you just have to look in the right places.

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