Author: Democratize Development

Book Review: Escaping The Housing Trap

Posted on by Democratize Development

Escaping the Housing Trap, published in the Spring of 2024, is a book co-authored by Charles Marohn and Daniel Herriges that explores the contemporary American housing market from the perspective of the Strong Towns movement. In previous posts, I have reviewed Unleash the Swarm (another of Daniel’s books), discussed the Strong Towns movement, and analyzed criticism of the movement. Having been familiar with the Strong Towns movement since its early days as Marohn’s blog, I can comfortably say that I find the movement’s approach to issues related to transportation planning, urban development, and housing to be compelling. My view on Escaping the Housing Trap: The Strong Towns Response to the Housing Crisis is no different.

I highly recommend this book to affordability advocates, public officials, planners, and anyone else interested in housing. The book provides helpful commentary on the private housing and real estate development market, the limitations of public subsidies to address affordability, and actions that ordinary people can take to begin addressing the housing crisis. Rather than summarizing the book or listing the many points of agreement, the following blog post will focus on a few inaccuracies, moments of disagreement, and other areas of the book that I think could be improved.

THE ORIGINS OF THE SUBURBAN MODEL OF PLANNED DEVELOPMENT

In Escaping the Housing Trap, Marohn and Herriges state that the pre-Great Depression housing crisis was largely one of quality. The authors go on to explain that through the New Deal the federal government got involved in private housing by insuring mortgage-backed loans that met certain criteria. This, it is argued, led to a way of developing housing that depended on debt and eventually gave rise to the suburban model of instant housing development. This is partially correct.

Pre-World War One example of substandard “slum” housing in an American city

Prior to World War One, much of the housing available to the poor was indeed of very low quality as compared to what was available to households with higher incomes. Beginning in the late-nineteenth century and continuing into the twentieth century, municipalities adopted increasingly higher minimum standards for development in order to improve the health, safety, and quality of housing. By the 1920s, many local governments had adopted one or more regulations that greatly increased the cost of building housing. This, in tandem with other social and economic factors, effectively ceased the construction of new housing that was attainable to the poor. Instead, homebuilders focused on providing housing for the middle and upper classes and the poor increasingly had to rely on down filtering of existing housing.

“In finance, we had a pre-Depression status quo in which debt was not easily available as a means of securing housing.” p. xv

Even prior to the availability of federal insurance for modern longer-term lower-interest mortgage-backed home loans, debt- and special assessment-fueled housing and community development projects in the 1920s contributed towards the severity of the Great Depression. Reliance on debt-financed and instantly-developed urban housing predates the creation of the modern home mortgage. After the Great Depression, the federal government expanded its role in providing public housing and started getting involved in the private housing market. Federal insurance for: 1)mortgage-backed home loans helped mitigate the risks associated with relying on debt to finance housing development and 2) home improvement loans (along with public housing) helped reduce the poor’s dependence on down filtering. In the 1960s and 70s, municipalities increasingly adopted restrictive land use regulations like zoning and wetlands ordinances, which essentially made highly planned middle class developments the minimum standard for constructing new housing.

Example of a planned development in an early-twentieth century suburb

JC Nichols, who was a key player in developing the model of instant development of planned suburban subdivisions, is discussed in Escaping the Housing Trap. And Herriges has previously written about the earliest roots of the suburban experiment. But the book’s presentation of the sequencing of events around the Great Depression and understanding of the New Deal’s housing programs could use some refinement.

THE THEORY OF NEIGHBORHOOD SUCCESSION

Many of the realtors, administrators, public officials, and other influential people who guided mid-century housing programs and policies subscribed to the idea that housing, like consumer goods, depreciates in value and that neighborhoods decline physically and in desirability over time. These ideas are evident in the program guidelines, neighborhood maps, and other official documents that local realtors and bureaucrats produced for the federal government in the mid-twentieth century. It seems that Marohn and Herriges may subscribe to these beliefs as well.

“What happens to a neighborhood where permanence is the foundational understanding of its existence? Neighborhoods built all at once, to a finished state, experience an echo of maintenance. [A] neighborhood predicated on permanence will have a period – perhaps a couple of decades – where everything is shiny and new. After this, everywhere and all at once, decline will start to set in.” p. 40

How do the authors see a place like Levittown, New York, which was originally developed as a suburban subdivision development for a middle class community but has seemingly kept up with maintenance and retained, and even increased, its desirability over time? After a half century of existence, should we expect the streets, parks, and houses of Levittown to be crumbling? Since they aren’t, are we to assume that the community must be propped up by an unsustainable level of debt? Does Levittown possess some special physical characteristics that differentiate it from other declining suburbs? Is it an anomaly? Or are there larger economic and social factors at play in determining the fate of places like Levittown?

HOLC, FHA, AND REDLINING

According to Escaping the Housing Trap the Home Owners’ Loan Corporation (HOLC), which was created under the New Deal to refinance home loans that were at risk of default during the Great Depression, created Residential Security Maps to guide its work. The authors also state that both HOLC and the Federal Housing Administration (FHA) engaged in redlining by excluding urban neighborhoods and ethnic minorities from their programs.

“Neighborhoods that were coded red were considered the riskiest and were generally excluded from HOLC lending programs.” p. 23

HOLC actually created its maps after it had finished its work of refinancing millions of home loans across the country. The Residential Security Maps were made retrospectively. In fact, HOLC refinanced many home loans in neighborhoods that were subsequently color-coded red on its maps. Contrary to popular notions, HOLC’s refinancing program benefited large numbers of nonwhite homeowners and reviews of its lending practices have yielded no indication of discrimination on the basis of race.

“The primary mechanism the FHA used was mortgage insurance.” p. 24

The FHA administered multiple programs, including insurance for mortgage-backed loans and for home improvement loans. Between 1934 and 1940, FHA insured more than four times as many home improvement loans as mortgage-backed home loans. Its true that FHA’s guidelines did discourage use of insurance for mortgage-backed loans in some urban neighborhoods. However, many of the mortgage-backed loans insured early on by the FHA in the 1940s and 50s in inner ring suburban neighborhoods would, within a decade or two, become home to ethnic minorities who were moving out of older city neighborhoods.

Example of an FHA-insured home for a black family in 1941

There are also examples of the FHA insuring mortgage-backed home loans for nonwhite homebuyers in new subdivisions. It seems that the FHA may have primarily been skeptical of insuring mortgage-backed loans in aging neighborhoods that were undergoing change and whose stability over the term of an FHA-insured mortgage-backed loan appeared uncertain in the eyes of mid-century bureaucrats. In 1968, the FHA revised its guidelines and began a concerted effort to insure mortgage-backed loans in circumstances that would not have qualified under previous guidelines. Within just a few years of beginning this effort, many urban homeowners defaulted on their loans and the US Department of Housing and Urban Development was left holding these properties. For some, this gave credence to the FHA’s prior concerns.

Example of a HOLC Residential Security Map

Even though FHA-insured mortgage-backed loans may have been difficult to attain for some people and in some neighborhoods prior to 1968, other types of loans were available. In addition to home improvement loans, rehabilitation loans became available in 1954 for financing significant improvements to substandard housing. Redlining aside, it is important to consider the market forces that had a significant impact on urban housing as well.

Urban abandonment, vacancy, and demolition in the 1970s

In the 1960s and 70s in metropolitan areas many people and businesses found that new suburban quarters could be more cost effective and of higher quality than what was available in cities. Others were even willing to pay a premium for new buildings and facilities in suburban settings. Within cities it was also common for the cost of renovating an older building in compliance with contemporary standards to exceed the amount for which the building could be rented or resold. As a result, urban buildings were often abandoned, burned down as part of insurance scams, demolished, or sold to the government for highway, public housing, or urban redevelopment projects. While government use of eminent domain played a prominent role in mid-century federally-funded construction programs, many people willingly, and even enthusiastically, sold their properties to the government. Others sold their aging urban houses at a discount to realtors, some of whom fixed up the houses using home improvement loans and then resold them or rented them out.

BARRIERS TO HOUSING ATTAINMENT

The history of discrimination in housing is complicated. First of all, there are many forms of discrimination. Some discrimination, like behavioral discrimination, is rational and legal and some of it, like racial discrimination, is irrational and illegal. Significant effort has been put into rooting out racial discrimination through the courts. Prior to 1913, local governments could adopt race-based zoning. Prior to 1948, states could use their police power to enforce private deed restrictions that prohibited people of certain ethnic backgrounds from purchasing or living in a house with such a deed restriction filed on the land records. Prior to 1968, it was legal for individuals in the private market to refuse to sell or rent a house to someone solely based on their racial identity. Despite being illegal today, racial discrimination in housing persists and is often very difficult to identify, prove, and prosecute.

Many housing advocates believe that a next step in rooting out racial discrimination in housing is eliminating exclusionary and highly-restrictive zoning, specifically the banning of single-family zoning. The authors of Escaping the Housing Trap are supportive of efforts to allow middle housing development in single-family neighborhoods. Importantly, they also have their eyes on a larger barrier.

Our dependence on highly-planned professional real estate developments, whether they are privately-financed or publicly-subsidized, is a major challenge to meeting market demand and addressing housing insecurity. Unleashing a pack of semi-amateur developers of small and middle scale housing into their local communities may be able to help address our dependence on professional developers, but there is a bigger issue that, to my knowledge, the Strong Towns movement has not yet articulated.

ESCAPING THE HUMANKEEPING TRAP

Humankeeping, or the practice of providing housing for others’ occupancy, is necessary for a healthy private housing market and for meeting the needs of those unable to attain housing through conventional methods. Humankeeping – whether privately or publicly financed, or instantly or incrementally developed – is only a part of the puzzle. Alternatives to humankeeping are needed as well. Public sector action by governments can help encourage an optimal balance between humankeeping and its alternatives as part of a comprehensive effort to meet everyone’s housing demands.

“Humankeeping” by Barbara Daniels

The Strong Towns movement’s theoretical framework currently lacks this aspect of the housing conversation. While smaller-scale developers, missing middle housing providers, and local landlords can certainly expand housing options beyond what the developers of highly planned communities and government subsidies can provide, these incremental developers also cannot scale to fully meet demand. Humankeeping alone cannot solve the issue, whether it is practiced by large-scale professional humankeepers or by cadres of smaller-scale humankeepers. Luckily, there exists a third way of building housing and a conceptual framework that incorporates and expands upon the Strong Towns approach. To learn about this perspective, take a look around this website and keep an eye out for future content.

Progressive City is simply Authoritarianism Dressed in Democratic Garb

Posted on by Democratize Development

In September 2023, Current Affairs, an online magazine with a politically-left perspective, published The Strong Towns Movement is Simply Right-Libertarianism Dressed in Progressive Garb. The article, written by Allison Lirish Dean of Progressive City, offers a critique of Strong Towns, a non-profit media advocacy organization. Democratize Development has previously written about Strong Towns here. Throughout the Current Affairs piece, Dean presents her [mostly fair] understanding of the Strong Towns’ position on several urban planning topics followed by her critiques. As the following post will explore, the author’s arguments include constructive criticism, differences of opinion from (rather than refutations of) Strong Towns, as well as some misunderstandings of urban history and theory.

In the Current Affairs article, Dean discusses her understanding of Strong Towns’ perspective on urban planning, which is informed by her digestion of Strong Towns’ media and interviews with leadership, including the movement’s founder Chuck Marohn. The author finds several of Strong Towns’ points on various topics compelling and in alignment with her sensibilities. However, contentions quickly arise in the article. One such contentious topic is whether or not the historic development of Savannah is an appropriate example of Strong Towns’ philosophy in action.

the Public Sector’s Role in Planning and Development

Dean portrays Marohn and his Strong Towns Movement as broadly anti-government whereas, according to at least one scholar, the public sector at the local level played a central role in guiding Savannah’s early development. Surely then Savannah cannot embody the Strong Towns agenda. Except that I very much doubt Marohn would describe himself as anti-government or deny that government has an important role to play in planning and development. My sense is that Strong Towns is trying to rediscover and distill many of the planning and development principles that gave rise to the kind of urbanism found in places like Savannah.

Strong Towns argues in favor of a role for the public sector that is appropriately balanced with other sectors so as to initiate and sustain processes of urbanization as exemplified by many (not all) aspects of pre-World War II Savannah. This is not an anti-government sentiment. The public sector at the local, regional, state, and federal levels needs to be appropriately-scaled, -funded, and -tasked so as to be in balance and harmony with other sectors. If the public sector is too small and limited, things like substandard housing conditions among working class renters may proliferate. Likewise, government that is too centralized or expansive, may stifle private sector housing development with onerous regulations and taxation, thereby restricting housing supply and reducing options for working class renters.

Further digestion of Strong Towns media and discussions with leadership may reveal to Dean that any disagreement about what Savannah’s development history exemplifies is more semantic than substantive.

The Issue Facing Public Transit

A major point of contention arises in the Current Affairs article around the issue of how to finance and operate transit service. To discuss this issue, some historical information is helpful.

Many cities’ early transit services were initiated as private business ventures. In the mid-to-late nineteenth century, cities were home to a growing population of people with disposable incomes who were both able to afford to pay a modest fee for transportation to and from residential, employment, commercial, and leisure destinations, and also willing to pay such a fee in exchange for that service. Groups of entrepreneurs became aware of this. In response, they developed business plans for horse-drawn streetcars traveling on railroads within the public right-of-way and along routes for which entrepreneurs suspected people would want to ride and be willing and able to pay.

These groups of entrepreneurs would then seek out financiers and the rights the build railroads within the public right-of-way. The financiers, sometimes land speculators, would provide the capital, in the form of debt or equity in the business, to build the infrastructure and begin operations of transit service along a corridor. Overtime the fares collected from passengers would be used to pay for operating expenses, repairs and upgrades (like to overhead electric wires), and to pay down the debt from the initial and ongoing investments.

If the entrepreneurs made bad assumptions about the location or future ridership of their transit line, they may not have been able to collect sufficient fares to cover costs and the business might go bankrupt, close down, and have to sell off assets to pay off debt, and the investors could lose their money. Successful streetcar lines, meanwhile, might be expanded, the number of cars operating on the line might be increased, and the land along the route might become more valuable and get developed more intensely. Really successful transit businesses might start buying out the other streetcar lines from their owners and consolidating and streamlining operations to achieve economies of scale.

As Dean mentions in her article, the proliferation of personal automobile ownership in the first half of the twentieth century severely impacted the ridership and operations of fixed path transit like streetcars and buses. Traffic-congested urban streets reduced transit travel speeds, increased frequency of stops, and made using transit less desirable and convenient. Middle class riders often moved out to new sprawling suburbs with residential, commercial, industrial, and recreational enclaves built around trucking and automotive commuting. Declining overall ridership, decreasing middle class ridership, less efficient service, and spread out service areas and destinations resulted in fares no longer covering operating expenses. In the second half of the twentieth century, many private transit companies went bankrupt and were acquired by local, regional, or state government agencies.

Today, most public transit agencies seek to provide service to people who want it regardless of riders’ ability to pay for the operating costs of that service through fares. The government adopting the failed business model of unsuccessful private transit operators that went bankrupt and lost their investors’ money as a strategy for providing public transit service has not worked out well for the tax payer investors. So is the primary issue facing transit, as Dean contends, a lack of will to impose transit costs on communities regardless of their interest in or ability to fund those costs through taxation? Or is the primary issue a lack of the urban conditions that are required to make the provision of transit service possible and allow viable transit service providers to emerge?

Perhaps there is an opportunity for a movement that advocates for fostering those urban conditions that support transit in our sprawling contemporary built environment. Maybe an organization that advances arguments for redesigning stroads, redeveloping single-use enclaves, intensifying land use in existing low-density neighborhood, and strengthening towns will emerge someday.

The Value of Heterodoxy

Dean’s next criticism revolves around Marohn’s suggestion that there are a variety of ways to think about supplying water for fighting fires, showering, watering lawns, toilets, and drinking. In the context of Flint, Michigan, which has faced issues related to drinking water contamination, Marohn wonders if a single centralized piped water system serving all those uses is the best and only option. Dean is convinced that separate water services for different uses is neither practical nor ethical for a community like Flint. She may be right about the practicality of such a proposal, but there is value in Marohn’s way of thinking about an issue like the supply of water to cities.

  • Water Fill Up Station
  • Truck Filling Up Water Tank
  • Well Water System
  • Gravity Fed Water Tank
  • Intermittent and Continuous Piped Water Systems
  • Piped Water Supply Diagram

Too often people take our modern urban systems for granted without appreciating or understanding how they emerged, what sustains them, and what alternatives are available. Strong Towns has contributed important insight into the history and development of piped water and gas, sewer and stormwater drainage, electric and telecommunications service, and other urban systems that our cities depend upon. Understanding how different utility services and infrastructure systems were created and what options exist for delivering them today is helpful in decision-making around maintenance, expansion, and improvement of these systems.

There are advantages and disadvantages to supplying water via home water tanks filled up by water trucks versus separate piped systems for different uses versus one centralized network. One is not right and the other wrong. One may be better in a given situation than another, but there are trade-offs between cost, reliability, control, and risk no matter which system is chosen. For instance, paved streets and sewer infrastructure were installed in inner city “slum” and fringe suburban neighborhoods in the early twentieth century in accordance with public health policies. It has been argued that this contributed towards many more people losing their homes through foreclosures during the Great Depression than would have been the case if the installation of that infrastructure had been delayed or built more incrementally. Basic provisions like potable water, shelter, and food being available to everyone regardless of their income is a good goal. Failing to match the methods of making basic provisions available to a community with that community’s ability to pay for the method is bad policy. Imposing expensive services and infrastructure upon communities regardless of their ability to afford it is not ethical.

Limitations of the Private Market

One of Strong Towns’ central calls is to unleash small-scale private developers in neighborhoods to do the work of building ADUs, plexes, cottage courts, mixed-use walk-up buildings, and other missing middle-style buildings. If empowered to do so through various regulatory and financing reforms and training, Strong Towns claims that these small builders will be able to create a wide variety of housing that improves overall affordability in the housing market, local wealth creation, and fiscal stability, among many other socioeconomic benefits.

According to a 2020 study, landlords who own just a few rental units tend to live closer to their tenants and file fewer evictions as compared to landlords with large portfolios. Anecdotal evidence also supports the idea that mom and pop landlords tend to charge lower rents than large-scale institutional real estate investors who are more likely to use formulas and property management services to maximize rent. Smaller-scale development also lends itself to local sourcing of finance, building materials, and labor to a greater extent than large-scale development, which often requires highly-capitalized investors and well-insured architectural, engineering, contracting, and law firms.

There are benefits that small-scale builders and development offer to communities, but, as Dean correctly points out in the Currant Affairs article, there are also significant limitations to what private developers, no matter how small, can do to build community. One of these limitations is in providing housing that is affordable to low-income households. As Cameron Murray convincingly argues, the private market can typically only provide housing to the poor through slums, or substandard housing.

Community Planning and Development

In her article, Dean imagines that advocacy around issues like increasing wages and reducing workday length will result in more people participating in community planning efforts. I doubt Strong Towns would object to that. The distinction between what Strong Towns is interested in and what Dean presents as the Progressive position is in what the two foresee resulting from community planning processes.

Often times community planning meetings consist of a couple scenarios. In the first scenario, local public officials will solicit input from members of the public to envision the future of their community. In the second, a developer is seeking a public concession in the form of zoning relief or subsidies and community members are given an opportunity to weigh in. Dean and Marohn would both likely recognize these scenarios and have concerns about them. Participants in community meetings tend to consist of older and wealthier homeowners in a community who have free time available to them. Many of the comments expressed by this group of Neighborhood Defenders can range from unrealistic expectations and infeasible goals for their community’s future to irrational fears about development on the one hand and legitimate grievances about the lack of opportunity to influence projects that have already been finalized behind-closed-doors on the other hand.

Strong Towns envisions a different community process whereby meeting attendees are transformed from passive observers and commentators on development proposed in their community into active participants in their own development of their community. This requires providing residents with information and training on demographic trends, market opportunities, real estate finance, and managing small-scale development projects. Dean might see the private sector’s limitations in such a proposal even if the developers are members of the community. I get the sense that Dean’s ideal community planning process would instead steer participants into advocating for greater public sector participation in housing and urban development through governmental entities.

There is an opportunity here to clarify and expand our terminology around these topics that I believe will benefit both the Strong Towns and Progressive planning movements. Strong Towns also often deploys a metaphor that compares bees swarming to small-scale developers. I’ve previously written about my concern with how Strong Towns uses this metaphor here. There is also a problem with limiting discussions of housing and real estate development to what the private and public sectors can do. There is a third sector that is important to consider.

Private, Public, and Popular Sectors

Dean misinterprets Strong Towns when she assumes that small-scale development would solely produce housing for the private marketplace. To be fair, Strong Towns does not clearly differentiate private and popular sector development. In the Current Affairs article, Dean calls for renewed investment in Public Housing as a preferred method for housing people who are unable to afford housing in the private marketplace. Identifying the differences between the private, public, and popular sectors would assist both Strong Towns and Dean.

Examples of private sector development include a large-scale suburban shopping center or mixed-use building, or a small-scale missing middle-style project that is developed by a private developer. An example of a public sector development would be a traditional Public Housing community that is developed by a government agency. A popular sector development could be a person improving their own home or organizing to buy a multifamily apartment building with their fellow residents. In other words, a popular sector development is developed by the end user for their own personal use rather than for sale, rent, or use by another person through a marketplace (though the line between popular and private can become blurred if a homeowner builds an ADU, for instance).

When Strong Towns advocates for small-scale development, they sometimes mean small-scale private development and other times they mean small-scale popular development, though they have lacked the terminology to make such a distinction until now. Just as there are significant limitations to providing affordable housing in private markets, the capacity for government to participate in housing – whether by subsidizing the private market or building Public Housing – is also limited. There are important differences in the abilities of the private, public, and popular sectors to meet housing demands of low-income households. On a level playing field, the private and public sectors are much more limited than the popular sector.

The Progressive Error

The Progressive tendency, as advanced by Allison Lirish Dean in her Current Affairs article, is to address problems through centralized, authoritarian public sector interventions by government “empowered to properly tax, redistribute wealth, and deliver broadly beneficial programs.” The Strong Towns approach is much more about promoting strategies that naturally distribute wealth broadly throughout communities without the need for a central authority to tax wealth and then redistribute it. Centralized collection of wealth through taxation more often results in incompetent, inefficient, and sometimes corrupt bureaucracy than it does efficient and effective redistribution. Belief in strong centralized governments can often lead to diffusion of urban responsibility, wherein residents can come to believe that the provision, management, and maintenance of systems like piped water and gas, sewer and stormwater drains, street trees, and other infrastructure is the responsibility of some abstract governmental body or agency rather than their own. Strong Towns empowers individuals to take responsibility for the urban systems they use. A society consisting of individuals in the former group will not be able to sustain or maintain complicated urban infrastructure. A society consisting of the latter group of individuals will be far better equipped to setup and maintain processes for managing infrastructure.

Let’s take the issue of nutrition as an example. It can be observed that acquiring nutritious food is often more expensive and less convenience than junk food. This can be particularly true for lower-income households living in lower-resource and -opportunity communities. Should the Progressive solution focus on creating government agencies to build tax-exempt non-profit full-service restaurants that subsidize the costs of meals for households that can’t afford to eat at a private restaurant for every meal?

As I understand it, the Strong Towns approach would take a different perspective. Strong Towns might encourage local residents to grow herbs in window boxes and plant vegetable gardens at home, work with neighbors to create a community garden, start a community kitchen and farmer’s market, allow homeowners to build corner stores, cafes, and restaurants as Accessory Commercial Units, incrementally upzone neighborhoods to create the residential density needed to support a grocery store, and a range of other community development initiatives that provide a variety of food options to people. Any gaps in food access that might remain could be addressed through some form of publicly-funded supplemental nutrition assistance program.

With housing, should creating tax-exempt non-profit Public Housing be the focus of Progressive efforts to address housing affordability crises? Is the best way to measure housing affordability by analyzing median household income, costs of new housing construction, and median home prices? Isn’t that akin to measuring nutrition affordability by analyzing median household income, costs of meals prepared in restaurants, and median meal price? Can Progressives also put their energy into advancing a wide range of bottom-up community development initiatives that result in residents building their communities with lots of different housing options and strategies? Any gaps that may remain can be closed with some form of publicly-subsidized supplemental housing assistance program. In the rare situations where people are incapable of housing themselves through private and popular sector strategies, Public Housing may be necessary, but private and popular sector development initiatives should suffice for the vast majority of people.

Progressive City is simply authoritarianism dressed in democratic garb. Strong Towns is seeking to balance private, public, and popular sector development under a philosophy of subsidiarity.

Strengthening Places: A Look At The Strong Towns Organization

Posted on by Democratize Development

Founded as a blog in 2008 by Charles “Chuck” Marohn, a land use planner and civil engineer, Strong Towns has since developed into a non-profit media advocacy organization with a fulltime staff and thousands of members. The organization posts media content, including articles and podcasts, and provides a growing variety of educational services on topics related to land use, transportation, and urban planning, housing and community development, and municipal infrastructure and finance.

The organization and its ideas are frequently linked to an appreciation for the way in which communities were developed and the physical characteristics of places built prior to the mid-20th century. As indicated by the coordination of Strong Towns first national gathering in May 2023, the organization is also associated with the New Urbanism movement. Central to the Strong Towns message is both a critique of what proponents refer to as the suburban experiment and veneration of traditional patterns of development.

Large-lot single-family housing suburban subdivision
Low-density, single-use commercial strip shopping plazas
Big box retail stores with large surface parking lots in a suburban shopping plaza

The Suburban Experiment

The suburban experiment is often characterized by institutional finance, chain businesses, single-use and frozen-in-time zoning, low-densities, and other aspects of sprawling real estate developments oriented around cars. For the Strong Towns organization, the landscape of shopping malls, office parks, government centers, recreation areas, and McMansion subdivisions assembled along a dendritic and hierarchical roadway system produces fragile places. Not only does this development pattern, which was widely disseminated across the American countryside in the decades following the Second World War, induce traffic congestion and danger, degrade the environment, and create an aesthetic dessert, the suburban experiment also fails to produce long-term wealth.

The vast infrastructure of stroads, piped water, sewers and stormwater drains, electric and cable wires, and piped gas needed to support the suburban experiment create liabilities for municipalities that require routine maintenance, replacement, and upgrades throughout their lifecycle. The short-term prosperity of development fees and tax revenue are often dwarfed by these ongoing and longer-term infrastructure liabilities. One of the results of this pattern of development can be insolvent municipal finances, but Strong Towns has made clear the many problems with the suburban experiment.

Compact Development

The Strong Towns message is not limited to critiquing the built environment. The organization has also developed a coherent set of guiding principles and specific examples for addressing the financial, aesthetic, cultural, and other critiques of the suburban experiment. To help inform their perspective, Strong Towns draws from a variety of sources on contemporary urban theory and practice. One such example is Urban3’s land value per acre analysis, which Strong Towns has incorporated and promoted in their work.

Example of Urban3’s property value per acre analysis. Heights of bars indicate taxable value of real estate per acre. The central downtown (yellow, orange, red, and purple) outperform the outlying areas (green).
Large-scale mixed-use development in an urban center

In essence, Urban3’s analysis shows that mixed-use, higher-density, and compact development generates far more tax revenue than the sprawling single-use residential and commercial areas characteristic of the suburban experiment. Equipped with this analysis, Strong Towns advocates for land use and development regulations that foster the creation of compact and mixed-use communities. Mixed-use and multi-story buildings organized around a distributive grid of narrow streets and served by transit are better equipped to support long-term maintenance of infrastructure. In many ways, this denser and more transit-oriented development pattern creates strong and anti-fragile places.

Example of a sprawl repair project to repurpose a suburban shopping mall into a dense mixed-use center

Without a doubt, compact, transit-oriented, and mixed-use development out performs sprawling, car-oriented, and single-use development in a number of metrics, including tax revenue and infrastructure finance. Through Sprawl Repair, it’s even possible to transform underperforming suburban areas into higher-performing mixed-use centers. Still, this transit-oriented development pattern is not entirely safe from the Strong Towns critique.

From the Strong Towns perspective, many mixed-use and multi-story developments share certain disadvantages with single-use and lower-density developments despite the surface-level differences in appearance. While compact development can achieve a level of walkability and urbanity that shopping plazas, office parks, and tract housing often lack, both share the characteristic of being large-scale and coarser grain development patterns. The presence or absence of sidewalks, street trees, and storefronts with apartments above belies similarities in how McMain Streets and McMansions are planned, financed, constructed, and managed.

Large-scale suburban-style commercial development
Large-scale mixed-use “McMain Street” development

Large-scale developments, whether more urban or more suburban in appearance, require well-capitalized developers, tens or hundreds of millions in financing from big banks and institutional investors, well-insured Architectural, Engineering, and Construction firms, and other real estate professionals that are unlikely to be sourced from within the local community where development is occurring. Commercial tenants of large-scale developments are more likely to be chain retailers interested in signing 10-year triple net leases. And unfortunately, money spent in chain stores is far more likely to be exported out of the community than money spent in locally-owned businesses. As a result, most of the expenditures, revenue, and value of large-scale developments is extracted out of rather than distributed within the places where they are built. The money needed to finance large-scale development can be – to use Jane Jacob’s term – “cataclysmic”.

Small-Scale Development

To address this critique of large-scale development with urbanistic appearances, Strong Towns draws from a wealth of smaller-scale and more bottom-up approaches to planning and development. While many of the goals of large- and small-scale urban development, such as walkability, transit-orientation, diversity, and beauty, may be shared, the two development processes differ in important ways. One difference is that large-scale development often extracts wealth, whereas small-scale development naturally lends itself to generate wealth within the community. Large-scale development requires complex financing and qualified professionals to deliver a successful project. It is unlikely that the local real estate broker, credit union, and tradespeople in your community will be able to undertake the development of several-hundred units of housing all at once. There is nothing inherently nefarious about this – it’s just the inevitable result of completing a large project is a short amount of time, which requires the use institutional finance.

Example of the development of a block with a multi-story mixed-use building with a central parking structure (source: Bevan and Liberatos)
Example of that same block developed with smaller-scale buildings (source: Bevan and Liberatos)

Encouraging large-scale dense development can be an effective strategy for maximizing local property tax revenue for the municipal government. It is not, however, a particularly effective way of maximizing the distribution of real estate expenditures, revenue, and value within the community. To address this, some communities have looked to exact development impact fees, local hiring requirements, unionization of support staff, and other measures on large-scale development projects in order to better ensure that wealth generated from real estate development benefits the local community. Another approach, and the one championed by Strong Towns, is to encourage smaller-scale and finer grain development. While small-scale projects do not require the use of local finance and professional services, small-scale development can be, and often is, undertaken by local real estate brokers, lenders, and tradespeople without incentives or requirements from government.

  • EPSON MFP image

For Strong Towns, places that maximize the distribution of community wealth through widespread small-scale development are stronger and more anti-fragile than places that maximize the concentration of taxable real estate value through pockets of large-scale development. To this end, Strong Towns has promoted the work of organizations like the Incremental Development Alliance, which trains local residents to become small-scale developers and business owners. When unleashed through incremental upzoning and other Lean Urbanism land use and development regulatory reforms, this swarm of small-scale developers can create increasingly mixed-use, fine-grained, dense, and complex places oriented around walking and micromobility. These places will be populated with ADUs, ‘plex houses, townhouses, courtyard apartments, mixed-use walk-ups, and other missing middle development types.

Conclusion

Strong Towns has effectively drawn from a myriad of sources to inform its work. The organization has convincingly argued that places populated with dense mixed-use buildings served by transit are stronger economically, aesthetically, and socially than places created under the suburban experiment. The distinction Strong Towns draws between large- and small-scale development further develops the idea that places built by many hands over time are stronger than places built instantly by a few hands. These are key insights.

However, as convincing and powerful as the Strong Towns organization’s arguments often are, there is a central question, at least for me, lingering underneath the surface. If some places are stronger than others and places are capable of becoming stronger, then what characterizes the strongest and most anti-fragile places? Does there need to be an ideal towards which to strive? What is that ideal? What is the Strong Towns telos?

Strong Towns proponents might respond by saying that encouraging smaller-scale and more finer grain development will make a place stronger than larger-scale and more coarser grain development. Gradually developing to the next increment of land use intensity is better than rapid change in development intensity and scale. Placing decision-making authority in the smallest and most local body of government through subsidiarity makes more sense than giving distant bureaucrats control over local and hyperlocal matters. How can the accuracy of these claims be measured? Through what means and metrics?

Can the strongest and most anti-fragile place best be described by its physical appearance and attributes? Can it be described by people’s spatial and sensory experiences of the urban form of a place? Are increases in land use density and intensity necessarily an indicator of strength? Must strong places change over time? How is stability distinguished from stagnation? Is the strongest, most ideal town measurable by a chart of municipal revenues and expenses? Or by the collective wealth of the community? Is the strength of a place ultimately dependent upon its inhabitants, their beliefs, and their actions?

If a place’s inhabitants are individually animated towards communal action by a set of beliefs, convictions, and narratives, then will it naturally and inevitably follow that the physical appearance of the place will be aesthetically pleasing, the municipal budget will be balanced, and wealth will be widely distributed? If so, the question then becomes: what is a set of beliefs that can animate people into developing a culture of building the strongest places and strengthening existing ones?

I’m curious to hear the Strong Towns response to that question. For my answer, check out existing content and be on the lookout for future content from DEMOCRATIZE DEVELOPMENT.

Book Review: Unleash the Swarm

Posted on by Democratize Development

Published in October of 2021, Daniel Herriges’ book “Unleash the Swarm: Reviving Small-Scale Development in America’s Cities” is both concise and fascinating. The book is also underdeveloped in some key ways. The following article will take a brief look at some of the strengths and weaknesses of the book and close with an opportunity to further discuss the ideas presented therein.

Front Cover of Daniel Herriges’ book “Unleash the Swarm” published by Strong Towns

From the consumer’s point of view, one of the strengths of “Unleash the Swarm” is that it is available as a free downloadable e-book. In addition to that, Herriges manages to cover a lot of ground on the topics of housing, real estate, and urban development history, theory, and contemporary practice. Through a series of short chapters, the book offers meaningful insight into affordable housing, restrictive land use regulations, and local economic development policy.

Essentially, the book makes four claims. First, until fairly recently small-scale developers played a major role in constructing housing, stores, workshops, and other buildings in America’s cities. Second, the role of small-scale development in American cities has declined significantly due to the adoption of restrictive land use and building regulations by states and local governments and lack of financial instruments for incremental and accessory- and mixed-use development. Third, loosening the restrictions on land use and building regulations and real estate finance in order to encourage small-scale development will help unleash a swarm of small-scale developers. Fourth, unleashing this swarm will produce many benefits, including increased housing production and affordability, more small businesses, and local wealth creation.

Home Improvement Company advertisement for small-scale residential conversion services, 1944

On the author’s first claim, he is undoubtedly correct that small-scale developers were integral to constructing housing, stores, and other buildings in America’s cities. As one illustration of this, from the beginning of the Great Depression to the mid-1950s approximately four million housing units, or two-fifths of all housing units, were created across the United States through small-scale residential conversion projects. Examples of these projects range from finishing an attic or building an addition in order to create an apartment to converting a four-story single-family row house into four rental flats. These four million new housing units accounted for one-fifth of all new housing units created in the US at the time. This is significant. It also occurred during an era when many States and local governments adopted land use and building regulations. Herriges would likely argue, with much merit, that these early zoning ordinances and building codes were not as restrictive and exclusionary as the regulations that emerged in the latter half of the twentieth century.

To the book’s second claim about the impact of land use and building regulations and real estate financing on small-scale development, some clarification is warranted. The rise of land use and building regulations, such as zoning ordinances and public health and building codes, certainly corresponds with a rise in development costs in the early twentieth century. And, as a result, it became unprofitable for landlords and homebuilders to provide housing for the lower-income end of the market. Innovations in real estate finance, like the use of mortgage-backed loans, largely supported the development of middle and upper class residential subdivisions, which may have opened up some aging housing for lower-income households through filtering. The federal government’s entry into real estate finance during the Depression came in the form of insurance for housing loans. Federal Housing Administration-insured home improvement loans provided financing for many of those four million residential conversion projects undertaken by small-scale developers. While the rise of land use and building regulations had a stifling effect on development, certain kinds of real estate finance like the mortgage-backed residential loan and home improvement loans subsequently supported smaller-scale housing development.

Chart of FHA Home Improvement Loans (blue line) from inception to present, indicative of a rise and then decline in smaller-scale development over the course of the 20th century (source: Kevin Park)

The third claim made in “Unleash the Swarm”, along with the book’s title, is perhaps the source of my main criticism, which centers around the use of the term swarm to refer to small-scale developers. There are a variety of real estate developers, and while the lines between them may be blurry, I don’t think any activity involving the provision of occupiable space to another person for rent or sale, regardless of scale, can be characterized as analogous to bee swarming. Much of what Herriges refers to is more akin to beekeeping. Without a doubt, there are important differences between the large-scale real estate developers of McMansion subdivisions, big box retail, and McMain Streets and small-scale developers building duplexes on vacant lots, adding ADUs to rental properties, and renovating small mixed-use walk-up buildings on Main Streets. Just as there are differences between large-scale industrial beekeeping and small-scale hobbyist beekeeping. While the hobbyist beekeeper may have a small operation that supports their livelihood, supplements other income, or just provides occasional jars of honey for family, friends, or farmer’s markets, this activity is not to be confused with swarming.

Honey bees swarming

With this distinction between beekeeping and bee swarming in mind, the call to loosen restrictions, like land use and building regulations and real estate finance terms, in order to unleash small-scale developers can be seen in a different light. NIMBYs often perceive things like upzoning (no matter how incremental) as a means to unleash speculative real estate developers (no matter how small) in their neighborhood, which elicits a defensive reaction. Afterall, don’t beekeepers wear protective suits and use smoke because their actions elicit defensive reactions from bees that are protecting their honeycombs? Should we expect anything different from homeowners reacting to speculative and rentseeking real estate investors?

Having said that, incremental upzoning is likely a reasonable course of action for many places. However, even if every neighborhood were upzoned to the next increment of land use intensity, there are limits to the amount of development that can occur. This leads to my commentary on the book’s fourth point that unleashing small-scale developers will produce many benefits. When there is a confluence of demand for a real estate product (housing unit, retail storefront, office suite, etc.), an ability to pay for the cost of providing that space plus an acceptable return for the developer, and a willingness for a consumer to pay, developers often find a way to provide for that demand. This may involve negotiating the right terms with a lender, requesting a zoning change from a local governance board, or convincing investors that returns will be competitive. Unfortunately, when there is a demand for a spatial product, but an inability to afford to pay for it, developers can’t do much. For instance, a quarter of all renter households nationally are severely housing cost burdened, or are spending more than half of their income on housing, and an additional 25 percent are paying more than 30 percent of income on housing. As a result, high consumer expectations and low household incomes are larger obstacles to the provision of housing by developers than zoning or real estate finance.

Based on the central arguments made in “Unleash the Swarm”, a more accurate, albeit less catchy, title for the book may be “Unleash the Hobbyist Beekeepers: Reviving Small-Scale Humankeeping in America’s Cities”. Despite this post’s focus on some of the perceived shortcomings of the book, it is nevertheless an important contribution to contemporary debate and dialogue around real estate, housing, and community development. I suspect the author has already identified revisions he would like to make to the content of the book, just as there will likely be changes I’d like to make to this post after publishing. Herriges, through his work at Strong Towns and elsewhere, has continued to develop the ideas presented in his book. For that, he should be commended. There is much merit in efforts to encourage small-scale humankeeping.

“Humankeeping” by Barbara Daniels

My point, however, remains. Small-scale humankeepers are not the swarm. If they aren’t, then who is? Bees, not beekeepers, make up the real swarm. Can this swarm be unleashed? Fortunately for bees, while beekeepers need them to live in hives, they do not need beekeepers or hives. Of course bees can be unleashed from captivity. But once bees abscond, then what? They must swarm, lest they be susceptible to perishing in the wilderness or being kept again in a beekeeper’s hive.

For humankind, the real swarm, as distinct from the swarm to which Herriges refers, was also once integral to building America’s places. At times, the real swarm was responsible for building between one-third and two-fifths of new houses from the turn of the twentieth century until the onset of World War One. In part due to the rise of land use and building regulations, this swarm’s productivity went into decline between the First and Second World Wars. By mid-century, however, the real swarm was again producing one out of every three new housing units and completing half of all home improvement work undertaken by homeowners. This is in addition to (not inclusive of) the units being produced by small-scale developers, or hobbyist beekeepers. Today, this swarm’s past contributions to the creation of strong towns is both remarkable and almost completely unknown by main stream academics, activists, and researchers.

It is my contention that bees ought to be unleashed from being kept, encouraged to swarm, and empowered to regulate the optimal intensity of land uses to allow the colony to thrive in their environment. In that order. This approach is counter to an approach that believes an ideal mix of uses, density of residences, and appearance of development can be prescribed for a place. And that land use regulations can be crafted to enable those prescriptions and doing so will produce a place that is conducive and attractive to swarming. Reforming land use regulations to unleash small-scale developers in the hopes that they will create a built environment ideal for human and environmental flourishing may be putting the cart before the horse. Human and environmental flourishing has to be the mover of the built environment. Small-scale developers are likely to face a level of resistance from neighborhood defenders that the real swarm would not encounter.

In summary, there are many strengths to Daniel Herriges’ “Unleash the Swarm” that contribute to contemporary discourse. In part, my criticism boils down to semantics as to whether small-scale developers can accurately be compared to a swarm of bees. However, I believe this semantic criticism reveals a more substantive one. And it is a criticism of which I believe Herriges and the Strong Towns movement is actively engaged in and working through. Therefore, this post is ultimately meant to be an invitation to open a discussion of the ideas explored in “Unleash the Swarm”.

National: Federal Housing Agency (United States)

Posted on by Democratize Development

We are in the midst of the greatest affordable housing crisis in American history. Even before the pandemic, increases in rents and home prices in urban areas outpaced the increase in wages for most working families. Now, pandemic-induced unemployment is about to cause more people to lose their homes, and many more tenants to be evicted. This severe and persistent crisis calls for a new approach to the provision of housing.

Murtaza Baxamusa

In “We Need A Federal Housing Agency“, an August 2020 article published in ShelterForce, author Murtaza Baxamusa accurately describes the housing affordability crisis that many American families are facing. Baxamusa also offers a compelling critique of neoliberal policy and its misplaced reliance on market forces to address affordable housing issues.

…neoliberal policy aims to loosen political control over economic actors and markets, replacing regulation and redistribution with market freedom and uncompromised ownership rights…

Neoliberals frame housing as a commodity that should be governed by the laws of the marketplace, rather than a basic human necessity. Within this paradigm of market fundamentalism, it is difficult to find any justification for a productive role for the public sector in housing policy.

Neoliberal policies like the Low Income Housing Tax Credit Program (LIHTC) seek to encourage private real estate investors to finance affordable housing in exchange for reducing their Federal income tax burden. In 1986, President Reagan’s Tax Bill removed all income tax deductions on credit with the exception of home mortgage interest. This effectively increased the amount of taxes that middle class households paid, enabled a reduction in tax rates on high income and investment earnings, and helped fund LIHTC.

Baxamusa is correct that today’s affordable housing crisis calls for a new approach to the provision of housing that differs from a neoliberal faith in markets. Unfortunately, the author’s proposal does not offer a new approach. Rather, he recommends reviving 1930s-era New Deal-style public housing programs.

If implemented, which is politically unlikely, the impact of Baxamusa’s proposal would merely set the stage for a subsequent resurgence of market-driven “solutions”, which, in turn, would set the stage for a revival of governmentally-driven “solutions”, and so on ad infinitum. The truth is that neither market-driven, governmentally-driven approaches, nor a combination thereof can solve the affordable housing crisis. Philanthropy, dependent upon the spoils of investing in private markets, similarly fails to provide an adequate solution to the crisis of affordability in housing.

If not a Federal Housing Agency, then what?

When properly understood, autonomy in housing, as opposed to governmental authoritarianism or market consumerism, provides an answer to the crisis. The private sector’s role in housing is too expensive. Public Housing neither pays local property taxes nor helps rental tenants build equity. The public sector shouldn’t subsidize private sector landlords through rental vouchers or build tax-exempt public housing. The federal government, if it is to play a role in housing at all, ought to be in directly assisting people with unmet housing demands to meet those demands in ways that build wealth and equity.

Regional: RPA Report ‘Be My Neighbor’ (New York Metro)

Posted on by Democratize Development

The Regional Plan Association (RPA) is a planning organization for the New York Metropolitan Area including New York City, Westchester County, eastern New Jersey, and southwest Connecticut. Since its founding a century ago, the RPA has released a total of four major regional plans related to transportation, land use, and economic development. The Fourth Regional Plan, the group’s most recent comprehensive publication from 2018, provides a framework for equitable growth and development in the region. In July 2020, RPA published Be My Neighbor, a supplemental report within the larger Regional Plan.

Be My Neighbor calls for creating hundreds of thousands of new residential rental units in the New York Metropolitan Region over the next several years through new construction, additions, and conversion projects on existing single-family residential properties. By creating new units and legalizing existing unpermitted units in communities with higher opportunity and transit access in the region, RPA believes that positive health, education, social, and economic outcomes will materialize for lower-income residents of the New York Metro area. Allowing Accessory Dwelling Units (ADUs) by right in residential neighborhoods and providing technical assistance are seen as ways to help increase housing production through conversions.

One of the stated goals of the RPA’s Be My Neighbor report is to increase the diversity of housing products available on the marketplace. RPA cites demographic changes as a major driver of demand for rental apartments in low density residential areas. Increasing production, it is thought, will increase housing options for low- and moderate-income residents. Curiously, the report’s sole focus is on increasing the number of just one type of housing: dwelling units. In addition to representing only one of the many different ways to house people, dwelling units are also the most expensive.

The Costs of Dwelling Units
Buildings that contain up to two dwelling units are regulated under the International Residential Code (IRC). Multifamily construction, on the other hand, must adhere to the International Building Code. The IBC sets far more stringent standards and often requires hiring an architect. Multifamily buildings must have fire separation between units and common spaces, fire suppression systems like sprinklers, two means of egress, handicap-accessible units, and elevators in multistory buildings.

Even two-family houses require a minimum of 200 amp electrical service, whereas 100 amps is sufficient for a single-family dwelling. All dwelling units must contain full kitchens and bathrooms. Detached back yard dwellings require extending existing sewer, water, and electric service from the main house to the new unit, or establishing new connections to the street.

The construction of additional dwelling units can be very expensive – ranging from tens to hundreds of thousands of dollars per unit.

Obstacles to ADU Development
The significant costs and physical changes associated with creating new dwelling units limits their adaptability. As a result, removing or modifying a dwelling unit to quickly accommodate changing household demands can be difficult. A homeowner’s ability to pay their mortgage may depend on rental income from a tenant since an ADU can significantly raise the value of a single-family property, for instance. As another example, the plumbing and electrical requirements of full kitchens in dwelling units may similarly limit the flexible use of rooms.

Financing the creation of ADUs represents another obstacle for many homeowners. While lending products to fund home conversions are increasingly available, many places still lack access to appropriate financing tools to fund the design and construction of ADUs. As a result, ADU construction has largely been reserved for wealthier homeowners who have access to home equity loans, personal savings, and other sources of funding for home improvement work.

Ways of Financing ADUs
One way to encourage more funding options for ADUs is to subsidize the provision of technical assistance to homeowners. Nonprofit, governmental, or other community entities can help single family property owners to plan, design, and finance individual projects. Alternatively, pre-approved plans for ADUs can be created by architects and made available to homeowners as another strategy to reduce costs, save time, and attract financiers.

Another way to make ADUs attractive to lenders is by liberalizing and universalizing land use regulations across a metropolitan area. By removing restrictions like owner-occupancy requirements, and lowering minimum lot sizes and coverage, and shrinking setbacks local governments and states can make ADUs more viable for longer-term financing. These practices have been implemented in places like Austin, TX, Denver, CO, Los Angeles, CA, Seattle, WA, and the State of Oregon.

Concerns with Liberalizing Land Use Regulations
Unlike the Western United States, the Northeast region is home to many small municipalities whose boundaries were established in the 18th century. Each of the hundreds of local governments located within the New York Metropolitan Area administers their own zoning regulations. Moreover, Connecticut, New York, and New Jersey each have their own State Building Codes. Any attempt to liberalize and universalize ADU regulations across the region would likely require unified state legislative action.

ADUs and home conversions may help property owners and financiers to create wealth, generate passive income, and build equity while increasing housing options for moderate-income households. However, this will not address the affordable housing crisis facing low-income renters. Furthermore, removing owner-occupancy requirements from ADU regulations may attract rental property investors.

Since the Great Recession, institutional investors, acting through real estate professionals, have spent billions – often in cash – to amass vast portfolios of residential rental properties in the New York Metro. Upzoning residential neighborhoods may increase the value of properties and encourage large-scale investment firms to acquire residential properties many of which are currently owned by their occupants or hyper-local landlords.

This could further exacerbate income inequality, concentrate real estate wealth, and expand the rental class.

A Different Approach
In Be My Neighbor, the RPA is promoting the rezoning of single-family residential neighborhoods in the New York Metropolitan Area to allow for the creation of additional dwelling units on existing properties. This would be accomplished by permitting Accessory Dwelling Units and multifamily conversions. For the reasons stated above, this approach may produce undesirable outcomes, including attracting rental property investors, burdening homeowners with higher taxes and mortgage payments, and limiting the adaptability of residences over time.

It may very well be that encouraging multiple additional dwelling units on single-family properties throughout the region must eventually play an important role in comprehensively addressing housing issues. Growing preferences for renting and declining rates of homeownership may become a permanent trend in the housing market. Still, the first step in reforming land use regulations needn’t be abolition of single-family zoning districts. A more incremental approach may achieve many of the desired goals while avoiding political opposition.

Example of a split-level ranch home whose garage could be converted to an apartment.

Rather than encourage the addition of multiple dwelling units to single-family properties, the RPA might instead support the gradual upzoning of low-density residential neighborhoods. Eventually, single-family zones could allow multifamily housing, but not as an initial step. At first, property owners might be allowed to create an additional rental housing unit for a guest within their existing single-family dwelling. After evaluating the impact of this lower costs, less permanent, and more easily adaptable densification strategy, an accessory dwelling unit for a relative could be allowed. Next, two-family housing could be allowed, then multiple guest or accessory dwelling units followed by detached backyard dwellings, multifamily, and so on.

At every step, residents and homeowners, not planners or developers, ought to be guiding incremental upzoning processes.

Local: Open Woodbridge Campaign (Connecticut)

Posted on by Democratize Development

In late September 2020, a group of affordable housing development advocates convened a press conference in front of a Connecticut community’s Town Hall. Representatives of Open Communities Alliance and Jerome N. Frank Legal Services Organization at Yale Law School organized the event to announce their submission of a 145-page document to the Woodbridge Town Plan and Zoning Commission. The Application to Amend Woodbridge Zoning Regulations and Plan of Conservation and Development includes an application to amend the Town’s zoning regulations, a historical account of Woodbridge’s zoning, and a legal argument against the Town’s planning practices.

2 Orchard Road, Woodbridge, Connecticut (New Haven Independent)

The application to amend Woodbridge’s zoning regulations calls for abolishing single-family zoning townwide in order to allow multifamily uses by right. Included in the application is an example proposal to replace an existing single-family house at 2 Orchard Road with a four-unit multifamily housing development. Under Woodbridge’s current zoning regulations, multifamily housing is not allowed at this property, nor any other single-family residential zoning district in town. The proposed multifamily development meets all other existing setback, parking, bulk, building height, and area requirements. Through siding materials, window placement, and unit entries, the proposed 2-story design is meant to mimic the form, scale, and appearance of a single-family house. Still, this proposal for 2 Orchard Road would not comply with the current zoning regulations. However, with a few minor alterations, a very similar design for 2 Orchard Street (with comparable occupancy) could be approved under the existing regulations.

Proposed 4-Unit Multifamily Development on Orchard Road

According to the report’s historical account of Woodbridge’s zoning regulations, the Town’s residents and planners have intentionally excluded small residential lots, multifamily uses, clustered development, condominiums, and other types of housing resulting in a lack of socio-economic diversity in the Town. Woodbridge has, instead, increasingly zoned for large lot single-family housing since the 1930s. The Town has repeatedly chosen not to liberalize its land use regulations, despite many developers’ attempts to propose amendments to the zoning regulations to allow for multifamily developments.

The authors of the Application claim that by preventing multifamily housing development, Woodbridge is in violation of various State statutes and Federal laws. According to this legal argument, the Federal and State Fair Housing Acts, Connecticut’s ban on segregation, and Title 8-2 of Connecticut’s General Statutes obligate Woodbridge to offer greater housing opportunities to low- and moderate-income households in the region. The report suggests that adopting the proposed Opportunity Housing Zoning Regulation, which would allow multifamily housing developments like the 2 Orchard Road proposal in the Town’s existing single family districts, is a way to remedy the supposed violations.

While the Town’s stated reasons for maintaining its exclusionary zoning mechanisms sometimes reference the physical status quo (preventing traffic congestion, preserving open space), often public opposition to any density increase has been rooted in protecting the socioeconomic status quo—keeping property values high, keeping families in more diverse neighboring towns out of Woodbridge schools, and keeping out would-be newcomers who cannot already afford to own a single-family home on a large lot.

-Application to Amend Woodbridge Zoning Regulations (p. 51)


DEMOCRATIZE DEVELOPMENT agrees that Woodbridge’s large lot single-family zoning likely contributes to a lack of opportunities for low- and moderate-income families to move into town. This represents a problem for addressing housing demands in the Greater New Haven Region. When housing options for working families are restricted to existing residential units in polluted, high-tax, and high-crime areas served by low-achievement schools, negative externalities eventually bleed out into the larger society despite the efforts of some towns to wall themselves off. Higher healthcare costs, higher state and federal income taxes, worsening service provision at low wage jobs, and many other downsides may result from continued socioeconomic segregation.

Woodbridge’s historic rejection of developer’s applications for denser housing and continued focus on large lot single-family zoning has enticed the ire of affordable housing advocates.

As to the other claims, assertions, and proposals made by the authors of the Application to Amend Woodbridge Zoning Regulations, DEMOCRATIZE DEVELOPMENT finds many instances of disagreement.

Should Woodbridge residents be shamed for wanting to keep their property values high and stable? After all, property tax revenue allows the Town to provide services like public schooling, fire protection services, and park and open space management. Local residents are legitimately concerned about allowing a significant amount of moderate-cost rental housing for families because those land uses often require more services than they contribute in property tax revenue.

Moreover, by enabling denser housing development, planners may need to attract more industrial and commercial development in order to offset the costs of public services. In the 20th century, nearby towns like Orange, North Haven, and Branford underwent a similar process in response to an influx of moderate-income and middle-class residents, rising demands for services, and exploding property tax rates. Adopting the proposed Opportunity Housing Zoning Regulations may, over time, transform Woodbridge’s traffic patterns, infrastructure demands, and physical appearance to the dismay of many residents.

The Costs of Multifamily Housing
To help address the issue of segregation, advocates of the #OpenWoodbridge Campaign propose that the Town allow multifamily development in all residential zones, including the existing single-family districts. Furthermore, the proposed zoning regulations would mandate that multifamily developments be deed-restricted to ensure that a portion of units are set aside for rental-assisted and moderate-income households. According to page 80 of the Application,

Allowing multifamily housing is a “particularly strong” remedy to desegregate neighborhoods, driving substantial and statistically significant increases in the Black and Hispanic population.

The construction of single- and two-family dwellings are regulated under the International Residential Code (IRC). Multifamily construction must adhere to the International Building Code. The IBC sets far more stringent standards and often requires hiring an architect. Multifamily buildings are often required to have fire separation between units and common spaces, fire suppression systems like sprinklers, two means of egress, handicap-accessible units, and elevators in multistory, corridor buildings. All dwelling units require full kitchens and bathrooms. The significant costs and physical changes required for multiple dwelling units limit future adaptability. These expenses virtually necessitate long-term debt financing and often are not affordable to low-income households without subsidies. As previously mentioned, multifamily housing built for low- and moderate-income households often consume more services than they contribute in property taxes despite the high relative cost of multifamily construction.

The construction of multifamily housing can be very expensive – ranging from a few to several hundred thousand dollars per unit.

Wealth Creation and Multifamily Housing
On page 81 of the Application to Amend Woodbridge Zoning Regulations, the authors make the following point:

The well-documented racial wealth gap impairs members of communities of color from purchasing residences in a Town with median home value in excess of $400,000.

The authors are correct that existing properties in Woodbridge are prohibitively expensive for many of the region’s families to purchase and continue to use as a single-family residence. The proposed multifamily zoning regulations, however, do not address this issue. Multifamily rental housing provides an opportunity to build equity and wealth for owners and investors, not tenants. Besides, the real wealth gap in America is not, as many activists incorrectly assert, between residents of places like Woodbridge and residents of places like Hamden, West Haven, or New Haven. The real wealth gap is between tax-sheltering and rent-extracting investors and tax-paying salaried workers who live in the communities from which developers seek to extract wealth.

Activists often attempt to use residents of places like Woodbridge and households with low- and moderate-incomes as tools for advancing their own social, political, career, and academic status. In the case of the #OpenWoodbridge Campaign, activists are empowering professional real estate investors rather than existing Town residents and the families they are purporting to help.

Liberalizing land use regulations may attract speculative developers, rather than help new and existing residents build local wealth and community.

If there is demand for rental units in Woodbridge and developers find that they can turn a $350,000 single family home into a $700,000 multifamily real estate asset, absentee rental property investors may begin to acquire property in town. Under this scenario, the price per unit may be lower in multifamily buildings, but the property will become even less affordable for homebuyers to purchase.

In the unlikely case of a buyer occupying one of the units, that owner-occupant’s ability to make mortgage payments will depend on reliably collecting rental income from every other unit. Complying with the affordable housing requirements and deed-restrictions may be too complicated for novices, thus limiting multifamily ownership to absentee real estate professionals. Furthermore, demand for public services could increase fourfold, while the increase in property tax revenue to the town will only increase twofold.

Alternatively, the burden of complying with the proposed mandatory affordable housing component for multifamily construction may end up deterring developers. Redeveloping single-family lots for multifamily use also requires a homeowner putting a property up for sale, a developer out-bidding other homebuyers, installing a new well and septic system, finding income-restricted tenants interested in living in Woodbridge, and navigating the other complexities of a development project. In this case, Woodbridge might see few residential properties redeveloped for multifamily use and the Opportunity Housing Zoning Regulations would be more symbolic than practical.

In any case, real estate investors and developers will only provide housing to others so long as they can guarantee a minimum return on their investment, which is dependent upon their ability to generate rent from tenants in access of the expenses to own and operate the rental property. Achieving significant affordable housing development and welcoming more working families into the community may require a different approach.

Commercial and Authoritarian Development vs. Community Building

To put the claim simply and directly: the Town’s zoning restrictions preclude the development of new affordable, multifamily housing by private actors.

-Application to Amend (p. 91)


Herein lies the disconnect between the #OpenWoodbridge advocates and many of the Town’s existing residents. It ought to be legal to preclude private (speculative) actors with zoning restrictions. The problem is that the Town’s zoning restrictions also precludes the development of new affordable housing by non-speculative actors.

Activists have failed to make a distinction between commercial or authoritarian actors and democratic or community actors. As a result, the misunderstanding and dismissal of legitimate claims made by local residents at public hearings continues. Woodbridge residents have already articulated this distinction. At a Town Plan & Zoning Commission meeting on January 26, 2015,

A “lifelong resident of Town and former member of the Board of Education” was “bothered by the proposed changes for the CCW and the concept of cluster housing,” characterizing the developer Toll Brothers as “house builders, not community builders.”

-Application to Amend (p. 37)


The #OpenWoodbridge Campaign is, on the one hand, correct that Woodbridge’s large lot single-family residential land uses likely exacerbate the region’s housing issues. On the other hand, local residents are also right that Woodbridge’s future development shouldn’t be guided by top-down planning and dictated by out-of-town activists on behalf of developers. Is there a remedy to this situation?

The Town’s zoning regulations ought to include the development of new affordable housing by community actors.

Conclusion
The #OpenWoodbridge Campaign advocates for reforming the Town’s zoning regulations to allow multifamily construction on existing single-family properties. Design guidelines could help new multifamily buildings to mimic the physical appearances of surrounding homes and mandatory affordability would limit some units to moderate-income tenants. The concern about the physical appearance of properties may be misplaced. It is possible that allowing smaller residential lot sizes served by piped water would better preserve the “character” of Woodbridge, rather than allowing multifamily buildings designed to look like large single-family dwellings.

Cities like Minneapolis and Seattle and States like Oregon and Vermont have garnered widespread news media coverage in recent years due to their efforts to allow multifamily development by right in formerly single-family zones. Rather than adopt the practices of other places, Woodbridge might consider looking a little closer to home for alleviating affordable housing concerns in the region. If residents, planners, and activists truly seek a collaborative way forward, they can follow the path of existing trails laid by two communities at the base of West Rock.

In New Haven, all residential property owners citywide, including those within the City’s two single-family zones, are currently allowed to create additional housing units by right. Structural changes to residences require building permits and exterior alterations require zoning review by the City. Nonstructural changes to the use of existing rooms, however, require only written approval from the enforcement officer. Furthermore, residential lots that do not conform to lot size or width in New Haven may, nevertheless, be developed with dwellings so long as other bulk, yard, and parking requirements are met.

In order to discourage speculative development of residential property in Woodbridge, Town planners might consider adopting a version of New Haven’s accessory housing provisions, but limiting it to owner-occupied properties. Nearby towns like West Haven, Milford, Hamden, Branford, and Guilford have owner-occupancy requirements tied to their Accessory Dwelling Unit provisions.

One of the biggest oversights of the #OpenWoodbridge campaign is that much of the Town’s housing is under-occupied. While much of the community may be close to fully built out under existing zoning with large-lot single family houses, those existing residences are not fully occupied under existing regulations. Additionally, many houses can accommodate additions, dormers, and accessory buildings. It is true that a four-unit multifamily building identical to the one proposed for 2 Orchard Road cannot be built under the existing regulation. However, with a few design revisions, a remarkably similar building with comparable occupancy could be built.

Country Club of Woodbridge Property

While perhaps not an example of what to build, the Woodbridge Flats might offer a model for how to build new communities in town. An affordable rural housing program would better suit a place like Woodbridge than rent-assisted multifamily developments. In any case, there are many ways for the Town to accommodate more affordable housing options. The point is: existing and future residents ought to play integral roles in development efforts, including the building of new communities on properties like the Country Club of Woodbridge and Baldwin Road Farm.

Denser development on sites with access to piped sewers and water may also make sense in certain parts of town, though the role that expanding sewer and water infrastructure in the 1920s played in the Great Depression should also be understood. Multifamily uses, however, should be pursued with caution and only after other efforts like expanding accessory housing provision, higher occupancy of existing residences, new community development projects, and denser housing around supportive infrastructure are exhausted.

The report submitted to the Town of Woodbridge by the Open Communities Alliance makes some valid points about the impact of large lot single-family residential land-uses on housing affordability and opportunity in the Greater New Haven Region. Woodbridge’s existing zoning has enticed developers to propose denser housing developments. The Town’s continued rejection of those proposals over the years has attracted the attention of activist groups. The solution to Woodbridge’s inaction around zoning reform, however, is not to give in to the interests of speculative real estate developers nor to accept the preferred solution of affordable housing advocates.

To remedy Woodbridge’s exclusionary policies, activists and the Town ought to empower current and prospective residents to lead community planning and development efforts.

State: Desegregate Connecticut Platform – Part 2

Posted on by Democratize Development

This is the second part of a two part series looking at the Desegregate CT platform. To read Part 1, click here.

plat·form
noun
• the declared policy of a political party or group.

Part 1 of this series attempted to strengthen the historical framework ungirding the Desegregate CT movement. This second part will take a closer look at some of the group’s policy recommendations.

Liberalizing Development Regulations
In essence Desegregate CT aims to liberalize what are, in the movement’s view, exclusionary and restrictive land use regulations and review processes across Connecticut. By streamlining zoning approval and building permitting procedures for housing development, the hope is that the supply and diversity of housing products available in the marketplace will increase. According to some theorists and analysts, increasing the provision of housing may slow the rise of, stabilize, or decrease the property values and prices of existing housing. Lower prices for homebuyers and renters may enable more people of diverse socioeconomic backgrounds to attain housing in formerly exclusive communities.

As Desegregate CT acknowledges on their website, liberalizing development processes alone will not solve the housing affordability crisis. At best, increasing the provision of housing products available on the market will marginally lower overall housing costs. Modest cost reductions may enable some moderate-income households, who can currently afford housing elsewhere, to move into more exclusive suburbs. Absent large scale investments in infrastructure, social services, and housing subsidies, however, low-income families without access to cars will likely continue to be excluded. To lower the price of extant housing and build supportive infrastructure, existing homeowners and taxpayers would need to accept both lower property values and higher taxes.

Desegregate CT’s strategy for liberalizing development processes in Connecticut includes Statewide design guidelines, regional planning bodies, and local zoning reforms. DEMOCRATIZE DEVELOPMENT believes each of these strategies is worth pursuing. Advisory design guidelines and model regulatory texts could serve a useful purpose today to advertise and promote best practices. The State’s Regional Councils of Governments currently play an important role disseminating transportation funds and conducting studies, but regional zoning boards may also be able to provide greater support and oversight for housing development and policy within their regions. Creating incentives for local zoning boards to adopt model codes at the municipal level may achieve many of the goals Desegregate CT supports without removing local control.

Statewide guidelines, regional zoning boards, and model codes may be sensible vehicles of reform, but the driving principles and recommendations deserve a closer look.

Form-Based and Transect Zoning
Use-based functional zoning, which has dominated since the inception of the planning profession a century ago, conceptualizes cities as instruments for industrial production and consumerism. Within Metropolitan areas, districts are designated by their functional use – whether heavy industry, light industry, warehouse, commerce, government administration, recreation, or residences for laborers, managers, or owners. This way of zoning asserts that to create a stable investment environment for housing finance, property values in residential districts must be protected. Protection, it was thought, could be accomplished by separating residential from commercial and industrial uses and multifamily from single-family districts. Use-based zoning tends to encourage sprawl, inhibit urbanization, and prevent change over time. The Euclidean zoned city aspires to be a machine inhabited by human gears.

Rural to Urban Transect Diagram (Congress for the New Urbanism)

Form-based zoning romanticizes the form of the pre-zoned industrial city organized around transit, walking, and distinct, but still connected, hamlets, villages, towns, neighborhoods, and downtowns. The urban-to-rural transect, the preferred conceptual tool of form-based zoning proponents, perceives cities as a series of spatial experiences produced by building and street types. Inhabitants of the ideal form-based city can experience seamless transitions between wooded back roads, quiet suburban streets with yards and houses, busy urban avenues and grand plazas, and intimate courtyards and pocket parks. Urban morphology, or change over time, is allowed but always towards a pinnacle of 1920s mixed-use commercial block real estate assets. The form-based city is a movie set inhabited by resident actors.

Cities ought to be a forum for physical manifestations of self-realization, cooperative action, and accumulation of experience over time. Sure, Connecticut’s towns and cities follow similar formal patterns, but those patterns did not result from legal prescriptions limiting building height, front yard setbacks, and uses. These patterns resulted from conditions, agents, and actions that existed at certain times and in a specific places. Euclidean zoning seeks to rationalize industrial urbanism. Form-based zoning attempts to prescribe ideal building forms in ignorance of the conditions, agents, and actions that produce those forms. Fundamentally, both land use concepts fail to differentiate between speculative development activity and community building.

Neither Euclidean nor form-based zoning provide adequate frameworks through which to reform Connecticut’s land use regulations.

Policy Recommendations
Accessory Apartment, Additional Dwelling, and Multifamily Units
On the one hand, the policy recommendations of Desegregate CT promote housing strategies and unit types that tend to cost less than new market rate development. These lower cost strategies includes small-scale development interventions, homeowner participation, and the conversion of existing spaces to more intensive use. On the other hand, by promoting additional dwelling units, multifamily construction, and professional real estate development, Desegregate CT is advocating for quite expensive strategies of providing housing.

The construction of single- and two-family dwellings are regulated under the International Residential Code (IRC). Multifamily construction must adhere to the International Building Code. The IBC sets far more stringent standards and often requires hiring an architect. Multifamily buildings must have fire separation between units and common spaces, fire suppression systems like sprinklers, two means of egress, handicap-accessible units, and elevators in multistory buildings.

Even two-family houses require a minimum of 200 amp electrical service, whereas 100 amps is sufficient for a single-family dwelling. All dwelling units must contain full kitchens and bathrooms, including the accessory apartments proposed under Connecticut Senator Anwar’s zoning and affordable housing bill, which Desegregate CT supports. Detached back yard dwellings require extending existing sewer, water, and electric service from the main house to the new unit, or establishing new connections to the street. The significant costs and physical changes associated with creating new dwelling units limits their adaptability.

The construction of additional dwelling units can be very expensive – ranging from tens to hundreds of thousands of dollars per unit.

Transit-Oriented Middle Density Housing
Another recommendation by Desegregate CT is for municipalities to zone at least 10 percent of their land, including all land within a half mile of fixed-path transit stops (trains) and a quarter mile of commercial corridors for middle density housing. Defined as small lot single-family, houses with accessory apartments, or small house-scale multifamily buildings, middle density housing was a popular form of middle class housing prior to the advent of affordable automobiles and long-term, low-interest residential mortgages in the 1920s and 30s. Encouraging greater residential density around transit and commercial land is thought to promote ridership, mixed-use redevelopment, and more walkable communities to meet market demands.

Commentary on Policy Recommendations
Allowing accessory apartments to be developed by right (without a public zoning hearing) statewide, as Desegregate CT recommends, may empower some existing homeowners to accommodate an aging relative, an adult child, or a rental tenant on their property. Providing additional housing in this manner is often less expensive than new construction. Requiring all accessory apartments to be dwelling units with full kitchens, bathrooms, and private entries, however, imposes high minimum costs of construction that will likely prevent these units from being affordable to low-income households. High construction costs, lack of adequate financing products, and the difficulty of de-converting dwelling units will also discourage homeowners from building additional units.

The costs of architects, building code compliance, and full sanitary and cooking facilities make multiple dwellings the most expensive type of housing.

While some homeowners will likely create these apartments or backyard cottages on their property, the absence of owner-occupancy requirements may induce further speculative acquisition of residential properties by professional real estate investors. Since the Great Recession, international private equity investors have acted through real estate professionals to acquire vast portfolios of residential rental properties. Absentee landlords acquiring houses for their rental value may drive up home prices, property values, and property taxes for prospective homebuyers and existing homeowners while providing them little in return.

Enabling accessory apartments across the state and requiring middle density housing on 10% of all land, within 1/2 mile of transit, and 1/4 mile of commercial thoroughfares may be too aggressive as an initial goal. Each of these ideas makes sense to consider, but perhaps these provisions ought to be piloted in stages and evaluated prior to becoming permanent. Potentially, a first stage might allow an accessory apartment on properties near transit; followed by a second stage of accessory apartments on 10% of town land and one detached and one attached ADU on properties near transit; and a third stage of statewide accessory apartments, multiple ADUs on 10% of town land, and middle density housing near transit stops and commercial areas.

Model Codes in Connecticut
Developing and publishing model zoning provisions that local governments can adopt is an excellent idea. Existing provisions from within Connecticut are a good place to start. Promoting examples of sensible zoning regulations that will help achieve the admirable goals of Desegregate CT may be possible without following popular trends from other States.

In New Haven, for instance, all residential property owners citywide, including those within the City’s two single-family zones, are currently allowed to create additional housing units by right. Structural changes to residences require building permits and exterior changes require zoning review by the City. Nonstructural changes to the use of existing rooms, however, require only written approval from the enforcement officer. Furthermore, residential lots that do not conform to lot size or width in New Haven may, nevertheless, be developed with two-unit dwellings so long as other bulk, yard, and parking requirements are met.

These existing provisions are virtually unknown to planners in the city and rarely used by property owners. One risk of promoting these provisions, however, is that it may attract the interest of rental property investors. In order to discourage speculative acquisition of residential property, New Haven might consider limiting the use of these provisions to owner-occupied properties. Nearby towns like West Haven, Milford, Hamden, Branford, and Guilford have owner-occupancy requirements tied to their Accessory Dwelling Unit provisions.

Local communities across the state could benefit from adopting a version of New Haven’s accessory housing unit and nonconforming residential lot provisions.

Greater uniformity between zoning regulations in different towns of Connecticut may create a more predictable investment environment for developers who are active across the state. The benefit of uniform statewide regulations may be less important for encouraging local homeowners to create additional units on their property. At the same time, statewide commonality may help in developing pre-approved drawing sets and lending products for additional housing units that could benefit local homeowners. Owner-occupancy requirements would discourage speculation, but also make lenders less likely to loan. Luckily, New Haven’s accessory housing provisions allow for very low cost projects that may not require debt financing at all.

Conclusion
Desegregate CT strives to reduce residential segregation by socioeconomic status in Connecticut. The movement’s proposed method is to liberalize land use regulations statewide. Doing so may encourage developers, landlords, and homeowners to increase the supply of diverse housing types in the marketplace. In addition, new construction, redevelopment, and conversion projects are encouraged in low-density residential neighborhoods, near transit, and close to commercial thoroughfares. These strategies are seen as one part of a larger effort that includes tax reform, housing subsidies, minimum wages, and other work to be spearheaded by separate organizations.

Desegregate CT is wise to focus on one area within a larger effort. If the land use reform component, however, is not handled properly, others may end up exerting effort to address the unintended consequences of poorly planned land use reforms. For instance, upzoning low density residential neighborhoods may accelerate the dispossession of housing from owner-occupants by absentee rental property investors. Responding to the consequences of unleashing developers on residential neighborhoods may fall on tax policy reformers, Community Land Banks, housing subsidy programs, and workforce development efforts.

Desegregate CT, like other advocates of form-based zoning, see housing in terms of building types and cities in terms of spatial experiences – both of which are capable of physical change over time. This limited view of building typology and urban morphology results in developer-centric policies. Neither developers nor the marketplace can comprehensively address issues of housing affordability and residential segregation. To avoid repeating the planning mistakes of the past century, today’s Statewide land use reform efforts have to be resident-driven.

Residents, not academics, planners, or investors, must be empowered to lead Connecticut’s future development.

State: Desegregate Connecticut Platform – Part 1

Posted on by Democratize Development

This is the first part of a two part series looking at the Desegregate CT platform. To read Part 2, click here.

plat·form
noun
• a raised level surface on which people or things can stand.

In June 2020, Desegregate Connecticut publicly launched an initiative to address residential segregation with statewide zoning reform. Through an ongoing series of news media articles and well-attended virtual meetings, the role of restrictive land use regulations, like exclusionary zoning, are being discussed. Curious residents, academics, and design and planning professionals from around the State are seeing presentations about increasing housing costs, barriers to development, and the segregation of people by race and income.

Desegregate CT, in collaboration with many local, regional, and statewide organizations, is advocating for changes to local zoning ordinances that would allow for greater production and availability of a variety of housing products in Connecticut’s urban, suburban, and rural communities. By increasing the supply of housing, this collaborative advocacy group hopes to play a significant role in making cities and towns more affordable places in which to remain or relocate. Ultimately, Desegregate CT would like residential neighborhoods across the state to be racially and economically integrated.

The rapid mobilization of individuals, legislators, and dozens of professional organizations over the summer of 2020 to support a movement to desegregate Connecticut has been impressive. In this work, there is much to commend. DEMOCRATIZE DEVELOPMENT would similarly like to see the reduction or elimination of residential segregation resulting from unlawful or unethical discrimination. To list all of Desegregate CT’s accomplishments and instances of commonality with DEMOCRATIZE DEVELOPMENT would be repetitive. For that reason, the following commentary will focus only on constructive criticism and areas of divergence.

The intent of the first part of this two part series is to take a critical look at the platform upon which Desegregate CT has built its policy recommendations. DEMOCRATIZE DEVELOPMENT believes that movements ought to be informed by the most accurate data possible so that decisionmakers can make the best decisions available. Just as housing should be built on a solid foundation, statewide legislation should be based on correct information. The following commentary is intended to bolster the foundation upon which Desegregate CT assembles its movement. Doing so many broaden the movement’s audience, include greater diversity of thought, and build consensus across traditional political lines. Thus far, the movement has been dominated – to its detriment – by narrow Progressive, neo-liberal, and politically left-leaning interests.

History of Residential Segregation in Connecticut
According to the Desegregate Connecticut website,

Connecticut’s racial and economic segregation results from decades of backwards government programs and policies.

Connecticut’s communities have been segregated in a variety of ways since their inception. In the 17th century, local night watchmen kept lookout for outsiders trying to come into town. Early on, farmers occupied the rural hinterlands, merchants settled close to harbors, laborers squatted around the periphery of town centers, and native tribes lived on reservations. By the late-19th century, distinct ethnic enclaves emerged within cities and their surrounding suburbs. Yankees, Blacks and waves of Irish, German, Italian, Polish, and Russian immigrants lived where land was available to improve and cultivate, improved property was attainable, landlords would rent them rooms they could afford, preferred religious institutions were located, specialty grocery stores were present, and familiar languages could be heard.

In response to rapid industrialization and development, local governments in Connecticut’s cities began to play an important regulatory role in housing through fire safety codes and tenement laws. For instance, the City of New Haven, at the urging of Progressive social reformers concerned about the living conditions of laborers, passed an ordinance prohibiting the construction of backyard tenements in 1898. Seven years later, the State of Connecticut adapted existing local city ordinances to establish a set of statewide standards for tenement housing.

It was not until the private market struggled to adequately address the national housing shortage during the First World War that the Federal government got involved in development. Multifamily residential communities, like Seaside Village in Bridgeport, were built and temporarily managed by the government in cities with major wartime manufacturing operations and limited supplies of housing to serve workers. More than a decade later, the Great Depression spurred the Federal government’s involvement in housing finance through New Deal legislation.

Residential segregation by socioeconomic status in America predates government involvement in housing policy.

Regulations and Housing Costs
The Desegregate CT website goes on to say that:

Our laws prevent us from having an adequate housing supply and a diversity of housing for people of all incomes and backgrounds.

Significant reductions to public health standards, zoning regulations, housing ordinances, municipal waste policies, and building codes would be required in order to significantly lower the cost of developing housing for the private marketplace. For instance, should developers be allowed to construct housing without toilets, baths, sinks, and other sanitary facilities? Should all single-family homeowners be allowed to open a boarding house by right? Should residential living space be permitted in all cellars? Should urban property owners be able to opt out of paying for and using municipal waste collection services? Should sleeping be allowed in windowless rooms?

Merely allowing higher density dwellings will not substantially lower the cost of producing housing for a consumer market.

Ignoring or failing to recognize why laws were first adopted may risk recreating the undesirable conditions that inspired their initial creation. In the mid-20th century as household incomes steadily rose in the United States, a growing consensus emerged around the importance of preventing and remediating environmental pollution. Improving air and water quality, cleaning up contaminated soil, limiting noxious industrial uses, protecting wetlands, and preserving open space became major concerns of State and Federal legislation in the 1960s and 70s.

For example, many suburban communities in the postwar era saw the population of lower-middle class residents, schoolchildren, demand on municipal infrastructure and services, and developed land area rapidly increase. Towns in New Haven County had to drastically raise their property taxes to cover the costs of educating children and providing services. In 1963, Branford taxed property at a rate of 50 mills, while North Haven’s mill rate climbed to that same level by 1970. Communities were often unprepared and ill-equipped to quickly transition from rural towns into built-up suburbs.

In accordance with environmental and budgetary concerns, Connecticut municipalities sought to limit residential development in environmentally sensitive areas and concentrate on attracting tax-positive commercial businesses and industry to their towns through their decennial Plans of Conservation and Development, zoning regulations, and economic development policy. In 1968, the Fair Housing Act sought to open up formerly exclusionary suburban communities to a wider segment of the metropolitan population by prohibiting racial discrimination in housing.

Having learned from experience or observation, concern about a second wave of tax-negative residential development is a major reason why suburban towns have restricted growth over the last 50 years.

Condominiums, which privately maintain and provide their own infrastructure and services, became a preferred method for developing housing in some communities in the latter third of the 20th century.

Government Involvement in Housing and Urban Development

[The United States Housing Authority] authorized the construction of racially segregated public housing, and the [Federal Housing Administration and Home Owners’ Loan Corporation] spearheaded the obstruction of government-sponsored homeownership and private investment in areas with “inharmonious racial groups.” These areas, deemed unfit for investment, were “redlined,” or colored red on appraisal maps of cities across the country.

In the early-20th century, Progressive social reformers like Emma Rogers in Connecticut advocated for government-regulated minimum standards for housing through statewide tenement laws, local public health codes, and other land use and development regulations. The intent was to improve public health and safety for residents in so-called “slum” neighborhoods. One of the unintended results was to increase housing construction, repair, and maintenance costs, higher rents, new utility fees, and make many pre-existing buildings becoming non-compliant with the new regulations. During the Great Depression, these higher costs became burdensome and many tenants fell behind on their rent and bills while owners defaulted on mortgage, property tax, and utility payments.

To prevent a nationwide collapse in residential mortgaging, Congress passed New Deal Legislation in 1933 and National Housing Acts in 1934 and 1937, which authorized the creation of the Home Owners’ Loan Corporation (HOLC), Federal Housing Administration (FHA) and United States Housing Authority (USHA), including local Public Housing Authorities (PHAs).

HOLC was given two tasks: refinance Building & Loan Association home mortgages at risk of default; and determining the riskiness of residential lending within segments of local housing markets. For the second task, HOLC surveyed metropolitan areas throughout the country in the mid-to-late 1930s. Federal and local surveyors considered several factors when evaluating the lending security of neighborhoods, including demographics, income of residents, employment status, sales data, rental prices, private lending activity, age and condition of housing, access to utilities, and quality of improvements on the land.

1937 HOLC Residential Security Map of Hartford, CT

Neighborhoods with unemployed, lower-income, and ethnic minority families and few recent home sales, low rents, little private lending activity, older non-compliant housing stock in poor condition, and lack of sewers tended to rank low. The lowest ranked neighborhoods were labeled “Grade D” and colored red on maps published by HOLC. Academics often assert that neighborhoods were “redlined” due to the presence of Black residents and mixed-use and multifamily rental housing stock. Yet there are examples of White, suburban, and residential communities being given “D” grades. In fact, 92% of the population of redlined areas was White. At the same time, there are also instances of neighborhoods home to Black residents not being “redlined”.

The term “redlining” is frequently associated with a racially-discriminatory lack of lending activity. In their reports, however, HOLC surveyors explicitly stated that they did not to intent to imply that good mortgages did not exist or could not be made in D-grade neighborhoods. In actuality, most HOLC refinancing of short-term, high-interest rate mortgages with longer-term, lower-interest rate mortgages in the early-to-mid 1930s was done in neighborhoods subsequently labeled “C” and “D” Grade.

Some lenders found that skilled laborers in modest homes were more reliable mortgagors than upper management professionals in upscale housing.

Likewise the FHA was very active in cities like Bridgeport, New Haven, and Hartford immediately before and during the Second World War. Through insurance, the FHA made small, low-interest loans available to property owners for repairs and improvements to existing housing stock. While FHA residential mortgage insurance is often associated with new postwar Whites-only suburbs, much of its activity throughout the late 1930s and early 1940s was concentrated on lending for improvements to aging houses and existing structures many of which were in “redlined” neighborhoods. There are also instances of the FHA insuring mortgages for new residential subdivisions for Black families.

Mid-20th century long-term residential mortgage lending appears to have been primarily concerned with the stability and predictability of neighborhoods with dynamic and rapidly changing conditions over time. Neighborhoods prone to economic instability or highly unpredictable change were avoided by lenders and insurers of long-term home mortgages. Neighborhoods, whether inhabited primarily by Black or White families, with economic stability and the appearance of more long-term predictability through deed restrictions and zoning regulations were attractive to long-term lenders and insurers.

Essentially, in residential areas deemed desirable for long-term home mortgages according to underwriting criteria, FHA offered mortgage insurance and, in less desirable areas, FHA offered insurance for short-term home improvement loans. In the ladder half of the 20th century, nonwhites lived in many of these areas. In mixed-use and other residential areas deemed undesirable for long-term mortgages, FHA insured rehabilitation loans. Residential properties beyond the point of rehabilitation were often redeveloped under Federal Public Housing and Urban Renewal programs.

The properties that were non-compliant with public health, land use, and building regulations often required investments above the FHA loan cap. Moreover, many of these properties housed residents who could not afford a rent increase commensurate with a substantial rehabilitation project. As a result, some residential properties and property owners in cities could not qualify for loans.

Lending to people with low or unreliable sources of income, poor credit history, small savings, or little collateral can be risky. Same with severely deteriorated buildings that violate housing codes and lack sufficient market demand to repay the loan. When risky mortgages are made, they often come with less favorable terms, including shorter repayment periods, higher interest rates, and higher down payments. Repaying a loan for something as expensive as code compliant housing requires a long-term commitment, stable income, and interest payments on top of the principal loan amount. If recipients default on these loans, the lenders may be labeled predatory. Avoiding lending in these situations, on the other hand, may be perceived as unethically discriminatory.

Perhaps a bigger issue than either predatory lending or redlining is the insistence by Progressives that housing be provided through means that require expensive debt financing.

Under the Housing Act of 1937, Federal funding was made available to condemn, acquire, and demolish “slum” communities in cities across Connecticut. In their place, new rental dwellings that met minimum health and safety standards and were affordable to working families were built. Until the early 1960s, Public Housing complexes were allowed to be racially segregated. In the 1940s and 50s, federal housing projects built in neighborhoods where a single race predominated were sometimes reserved for that race, while developments in mixed-race neighborhoods might be segregated by building.

Back yard privy in New Haven, 1913
Bathroom in Public Housing dwelling unit

In the mid-20th century, Public Housing vastly improved the quality of affordable rental accommodations for working families in cities. The program also helped alleviate a housing crisis during World War II. In recent critical accounts, these achievements have been overshadowed by the initial authoritarian “slum clearance” delivery process, later economic development rationale, and subsequent concentration of impoverished residents, physical deterioration of buildings, and incompetence and corruption present within some PHAs.

The HOLC surveyors adopted existing private lending practices as one consideration for determining the financial riskiness of hyperlocal housing markets. In some ways, the Federal government spearheaded making public and encouraging private investments in “risky” neighborhoods.

The Federal government made enormous investments in “redlined” neighborhoods through HOLC mortgage refinancing, FHA home improvement loan insurance, and the Public Housing and Urban Renewal Programs.

According to Desegregate CT,

[T]he urban renewal movement caused the dislocation of many communities of color. In 1949, the Federal Housing Act allocated public funds for “slum clearance” with the goal of improving the quality of life for people in neighborhoods considered “blighted.” The effect was quite the opposite, with neighborhoods torn apart and new housing quickly falling into disrepair.

New Haven, for example, received more federal urban renewal money per capita than any other city. It used this funding for projects such as the Oak Street Connector, a highway system that displaced 886 families and uprooted an entire neighborhood. Today, New Haven is working on projects to remedy the harmful outcomes of these developments.

As a result of Urban Redevelopment and Renewal projects in New Haven in the 1950s and 60s, an estimated 30,000 people in 10,000 households had to relocate. The majority (56%) of those people were identified as being White. Residents identified as Black may have been disproportionately impacted, but urban renewal dislocated more White communities than “communities of color”.

In the mid-20th century, the Oak Street neighborhood was a dense, mixed-use, working class, and Jewish neighborhood increasingly becoming home to Black Southern migrants. The neighborhood was built atop a former creek bed that had been used by tanners until it was filled in the 1880s. Prior to the completion of Interstate 95 in the 1960s, car traffic between New York and Boston traveled along Route 1, which existed as a two lane street in New Haven. The Oak Street neighborhood was physically deteriorating, losing population, snarled with traffic, sitting on contaminated soil, and lacking the market demand necessary to cover clean up, infrastructure construction, and building improvement costs.

The New Haven Redevelopment Agency used Federal funding to condemn, acquire, and clear the land, build infrastructure including sewers, roads, and public parking facilities, and consolidate small lots into larger parcels in order to attract private developers to build apartment towers, office buildings, and medical laboratories. Since 2012, the City has created new zoning districts, offered tax breaks, and applied for Federal and State transportation grants to build bridges, layout new streets, and widen existing roads in order to accommodate private developers building medical offices, research laboratories, and parking structures.

The Oak Street Connector may have been replaced by Downtown Crossing in nomenclature, but the methods and goals of past Urban Renewal programs and current economic development policies are nearly indistinguishable.

In recent decades, Community Development Block Grants, Low Income Housing Tax Credits, Hope VI, Empowerment Zones, Enterprise Zones, New Market Tax Credits, Choice Neighborhoods Initiative, Opportunity Zones, and other State and Federal housing programs have invested in formerly “redlined” neighborhoods.

The Location of Subsidized Housing

Restrictive zoning, costly review processes, and arbitrary impediments thwart affordable and multi-family housing development. Perhaps as a result, Connecticut’s affordable housing efforts have overwhelmingly located in areas of concentrated poverty. Between 2011 and 2013, Connecticut allocated 48.6% of its affordable housing tax credits to neighborhoods where the poverty rate was greater than 30%.

Each living unit in a housing project typically costs hundreds of thousands of dollars to develop. Those costs can be repaid in one of two ways. First, tenants can pay the full costs through their own rental payments. Second, the public, through local, state, and federal subsidies, can cover the gap between the revenue needed to develop and operate the housing and the rent that low-income households can afford to pay.

Developers tend to pursue affordable housing projects in communities where they are confident the local legislature will provide tax breaks and work to help secure other state and federal subsidies. Communities with sewers, highways, job centers, and transit service also attract multifamily developers. Budget-conscious councils in towns without supportive infrastructure often do not attract subsidy-seeking developers.

Conclusion
Readers of the Desegregate CT website will likely get the impression that unethical racial and economic discrimination under official government policy is the primary cause of today’s residential segregation. Hopefully, this post helps to paint a more complex and accurate history of housing in Connecticut. This history is troubling enough without the need to make exaggerated, misrepresented, or inaccurate statements.

One of the toughest challenges facing the State today is how to meet the housing demands of low-income families. In the mid-20 century, an FHA program insured home mortgages, which allowed developers to build large Whites-only planned residential communities of detached single-family houses at prices that modest wages could afford. In fact, monthly mortgage payments for a new house in Levittown on Long Island in the 1950s were less than Public Housing rents in New York City.

In some cases, houses today regularly sell for hundreds of thousands of dollars in Levittown. What were affordable starter homes several decades ago have become prohibitively expensive for many working families to buy. High property values are partly the result of restrictive zoning, which limits new supply and raises prices on existing houses. For the most part, however, the steep ascension of real estate values in postwar suburbs resulted from owner-initiated home improvement projects such as dormers for new attic bedrooms, rear and side additions, finished basements, and porches and decks. In other cases, formerly Whites-only suburbs have become inclusive and diverse over time.

DEMOCRATIZE DEVELOPMENT is in favor of extending the opportunities and responsibilities of homeownership to everyone that desires it. One of the issues that must be reckoned with is that many of the affordable Cape-style starter home developments built in the postwar era do not meet current housing and building code requirements for bedrooms per occupant, fire safety, energy efficiency, and accessibility. Additionally, forests have regrown on former farm land and other open spaces in recent decades – increasing clearance and site preparation costs. Addressing residential segregation, like housing affordability, is a major challenge that eludes simple answers.

The long-term success of any structure depends on the strength of the foundation, or platform, upon which it is built.

To continue on to Part 2 of the series about Desegregate CT, click here.

National: Universal Housing Assistance (United States)

Posted on by Democratize Development

The following post discusses the current state of Federal housing assistance in the United States, ongoing efforts to make rental assistance an entitlement available to all qualifying households in the era of COVID-19, and why Housing Choice Vouchers is not the right model for a universal housing assistance program.

Many proponents of social justice believe in a Right to Housing. This right entitles all people to be housed in healthy, safe, and desirable accommodations regardless of a person’s ability to afford to pay for those accommodations. Any gap between what households can afford and the cost of minimum standard housing is seen as a need.

Supply, Demand, and the Market
When there is demand for a product or service, there are a few ways that demand can be satisfied. Demands for goods and services can be provided in a marketplace, through private charity, by a publicly-funded government service, or through other means.

When a person is willing to pay for a good or service, but does not have the capacity to pay someone else to provide that good or service for a mutually agreed upon price, that demand cannot be satisfied through the marketplace. If there is an ability to pay for a product or service, but no one willing or able to provide for that demand, a market has yet to emerge to satisfy the opportunity. Only when there is a convergence between one’s willingness and capacity to pay someone else for a product or service AND an ability to provide that good or service for an agreeable price can a marketplace begin to emerge to satisfy demand through competition among providers and consumers. Absent this convergence, either charity, the State, or another means is required to subsidize, or provide, that product or service.

In the 19th century, rising wages, employment stability, and disposable income for a growing middle class due to industrialization provided an opportunity for robust markets to emerge for consumer goods, professional services, various kinds of insurance, and many other products and services. Rising incomes also provided opportunities for private transit services and utilities. Over the course of the 20th century, social activists increasingly saw these goods and services as a need and access to them as a right. In the 21st century, access to high-speed internet is seen as a necessary provision, particularly amid stay-at-home orders during the Covid-19 global public health epidemic.

Fulfilling the Right to Housing
Ultimately, in the view of social justice advocates, the State (through its tax payers) is responsible for ensuring the adequate provision of desirable housing to all people. More specifically, the onus for generating revenue for State redistribution ought to fall upon those citizens who’ve accumulated wealth.

In practice, income and consumption is taxed more often than wealth.

When the State is unable to generate sufficient revenue to house all people, there are two options. First, the available revenue can be used to provide as many people as possible with the means to attain desirable housing, while advocating to raise additional revenue for everyone else. Second, the available revenue can be distributed among all those who lack adequate housing, while advocating to raise additional revenue to cover the full gap between incomes and private market housing costs.

Today in the United States, the former describes the status of funding for housing. Limited government revenue is redistributed to a fraction of the number of qualified applicants, while social justice proponents advocate for ways to generate additional funding. For decades, housing programs, like rental and downpayment assistance, have left most qualified people without assistance most of the time.

A Housing Assistance Entitlement Program
Recent scholarship, news coverage, and media attention on the issue of residential evictions across the United States has sparked greater interest in and support of turning rental assistance, specifically Federal Housing Choice Vouchers (HCV), into a universal entitlement program available to all qualifying households.

Housing advocates sometimes point to the Supplemental Nutrition Assistance Program (SNAP) as a model for HCV to emulate. SNAP provides participants with a debit card that is regularly-replenished with funds for the duration of the entitlement. The payment card can be used for food purchases at qualifying grocery stores. The program helps to supplement recipients’ incomes by covering the gap between what households can comfortably afford to pay for food and the estimated cost of groceries that provide a nutritious diet.

Funding Universal Housing Choice Vouchers
Some proponents of making Federal rental assistance into an entitlement program, point to the Home Mortgage Interest Deduction program as a potential funding source. Every year millions of American homeowners deduct the interest on their monthly mortgage payments from their taxable income. Repealing this deduction for households earning more than $100,000 a year could generate an additional $52 billion in Federal income tax revenue from existing homeowners with mortgages. That revenue could cover the cost of making the Housing Choice Vouchers program a universal entitlement.

Due to its popularity among homeowners, removing the mortgage interest deduction for so many families would be politically difficult. Moreover, doing so would be perceived as a tax increase on the salaries of workers in order to subsidize low-income rental property investors. Equally difficult politically, but perhaps a more ethical way to pay for universal housing assistance, would be either: a tax on household wealth, or to repeal the IRS Building Depreciation policy, which allows passive rental income to be sheltered from taxation. In any case, there are several deeper issues with current thinking about the Right to Housing, a universal housing assistance entitlement program, and using SNAP as a model.

Conclusion
If housing is a human right then people are entitled to require a responsible party, usually a government agency, to house them. In the United States, housing must meet minimum standards of habitability and safety. Any gap between the cost of providing minimum standard housing and the amount someone can afford to pay for that housing becomes a need that the State is responsible for covering for all people. Since the cost of providing housing that meets minimum standards is very high, and the earnings of low-income households are comparatively meager, covering that price gap for millions of American households is expensive. In the near-term, funding the Right to Housing is untenable economically and politically.

Furthermore, if people are entitled to anything, it is not a Right to Housing, but a Right to Habitat. Guaranteeing the human habitat to all is far more feasible, just, and desirable than trying futilely to guarantee a right to housing. Households are responsible for housing themselves. Neither the State nor developers are responsible for housing others. When public policy inhibits households from housing themselves, reform must focus on empowering current and future residents to house themselves. Instead, reform efforts often mistakenly focus on attracting professional real estate investors and developers.

Even if universal housing assistance through rental vouchers and downpayment assistance were economically and politically feasible, which they aren’t, such an entitlement program would produce undesirable outcomes. That low-income rental property investors are in such unanimous support of housing assistance ought to offer a clue as to the primary beneficiaries of rental and downpayment assistance programs (hint: not tenants).

Increasing the provision of rental vouchers and downpayment assistance would: 1) fuel acquisition by property investors, 2) primarily benefit realtors, sellers, and lenders, and 3) increase housing values and prices for homebuyers.

Lastly, the Supplemental Nutrition Assistance Program is indeed an appropriate model for a universal housing entitlement program. However, the Housing Choice Vouchers program is not an appropriate housing program to universalize as an entitlement. If SNAP provided adequate funding for recipients to purchase professionally prepared and served meals from restaurants throughout the day for each member of the household, then it would be the equivalent of a universal rental assistance entitlement program.

A nutrition assistance program built on that model would be prohibitively expensive to fund due to its over-reliance on professional commercial-grade food preparation and service costs. Instead, SNAP supports food purchases at grocery stores to enable home cooking. Therefore, a housing entitlement program for all qualifying households would not be Housing Choice Vouchers, but a Supplemental Housing Assistance Program.

If you want to learn more about the Right to Habitat or how a Supplemental Housing Assistance Program could work, explore these services offered by DEMOCRATIZE DEVELOPMENT.