Thirteen Ways of Looking at the Housing Market

Housing in Santa Clara County
Karl Nielsen

In "Thirteen Ways of Looking at a Blackbird," the great modernist poet Wallace Stevens explores what it means to know something, to show how different perspectives can be isolated while still pointing to some general (if elusive) subject.

I was of three minds,   

Like a tree   

In which there are three blackbirds.   

Every day in the Bay Area, we are bombarded with story after story about the housing market and our regional housing crisis. There are on-the-ground anecdotes and sophisticated research reports, micro assessments and macro assessments, and complex analyses of local, statewide, national and global trends. How does it all fit together? Does it fit together?

In the spirit of providing a multiplicity of perspectives, here are (maybe not quite thirteen) snapshots, news items, opinions and analysis looking at housing, from the granularity of a single California city to metropolises across the great round world.

The typical San Francisco or San Jose home earns more money per hour than actual human beings working average jobs in most of the country, according to real estate site Zillow…. [Over the past year, a] typical San Jose home appreciated at $99.81 per hour, again assuming that the per day appreciation is condensed into the period of an eight-hour workday. For a San Francisco home, it gained $60.13/hour. And in Oakland, it earned $38.57/hour.

According to a survey released Monday by the Luskin School of Public Affairs at UCLA, residents across L.A. County are increasingly anxious about the cost of living, with housing costs at the top of their worries. Young people are feeling it the most.

"It's a perfect storm for young people who are spending a disproportionate amount of their income just to have shelter over their head, and as a result, some of them tend to live farther out where housing is cheaper and so their commutes are longer," said Zev Yaroslavsky, a former county supervisor and current lecturer at UCLA who led the survey. As a result, younger residents rate their quality of life the lowest.

"What troubles me about this trend line is that young people are supposed to be optimistic and have a lot to look forward to," Yaroslavsky said. "L.A. has always been a place of optimism — that's what makes this place a magnet."

San Francisco and San Jose, for example, are both adding new housing well above their historic rates, the Trulia report shows, but are on pace to add fewer homes than Raleigh, N.C. San Francisco has issued only one permit for new housing for ever six new jobs. Sacramento, San Diego, San Jose, and Los Angeles also rate poorly for building new homes to support new jobs—unsurprising given California’s reputation for restrictive zoning regulations. In general, strong job growth and a low baseline for new construction have left these cities starved for inventory.

Laura Johansen has always loved the easiness of life in her hometown: The first-rate hiking and rafting a short drive from her front door. The quick commute to her job at a local hospital. The affordability.

But when Ms. Johansen, who was renting her home, decided to buy a house earlier this year, the Idaho native was shocked. The median price of a single-family home in Boise’s Ada County had shot up to almost $300,000, well-above the $200,000 homes she was eyeing when she first considered homeownership two years ago….

The same qualities that have kept Ms. Johansen here are drawing waves of new arrivals from other states, making Idaho the fastest-growing state in the nation last year, according to the U.S. Census….

Idaho’s low crime rate, affordability and scenery have attracted Californians especially. According to U.S. Census data, 85% of Idaho’s 15,784 net new arrivals from other states came from California in 2016.

Urbanists thought their moment had finally arrived. Those who favor increased urban density and transit options believed the housing bust and the great recession could end decades of development centered on automobiles and suburban sprawl, shifting planners' focus more to cities, density and transit.

The advocates for this model point to California as the inevitable result of inaction. If you try to grow without increased density and transit you'll end up with the traffic of Los Angeles and the home prices of San Francisco. Yet the negative effects of political inaction do not make political action inevitable. Another possibility is … Boise….

When people think of the pitfalls of development models overly focused on automobiles and sprawl, they may think primarily of the larger metros characterized as the Sun Belt -- Los Angeles, Phoenix, Dallas, Houston and Atlanta. Yet their growth is slowing as they grapple with affordability and congestion problems brought about by decades of unbridled growth.

This doesn't mean that they, or the even higher-cost, more congested coastal metros, will adopt Manhattan or Tokyo-style density and transit patterns. Instead, Austin and San Antonio might be the new Houston and Dallas. Nashville and Raleigh might be the new Atlanta. And then a whole new class of midsize metros like Boise, Spokane, Provo and Reno become what Austin and Raleigh used to be.

There may just be too much land in America and entrenched local control over land use to turn urbanist dreams into reality, at least anytime soon.

America’s housing shortage is more wide-ranging than cloistered coastal markets, stretching from pricey locales such as California and Massachusetts to more surprising places, such as Arizona and Utah.

Some 22 states and the District of Columbia have built too little housing to keep up with economic growth in the 15 years since 2000, resulting in a total shortage of 7.3 million units, according to research to be released Monday by an advocacy group for loosening building regulations.

California bears half of the blame for the shortage: The state built 3.4 million too few units to keep up with job, population and income growth.

When including all types of units, this measure also suggests that nothing out of the ordinary was going on before the financial crisis. The number of housing units added during the boom was only slightly above the long-term average.

The Census data provide surprisingly little support for the claim that there were too many homes in 2005. Figure 3 provides a couple of hints about how policymakers came to believe that housing supply had been excessive and why, in fact, supply has actually been constrained. The number of single-family home starts, especially single-family homes built for sale, did rise to unprecedented levels. That is a high-profile category, where publicly traded homebuilders operate and where many families become new homeowners.

But the other categories were either stagnant or in decline over the long term. The growth in single-family homes built for sale came mostly by taking market share from the other types of units.

Economic inequality is one of the most significant issues facing cities and entire nations today. But a mounting body of research suggests that housing inequality may well be the biggest contributor to our economic divides.

Thomas Piketty’s influential book, Capital in the Twenty-First Century, put economic inequality—and specifically, wealth inequality—front and center in the global conversation. But research by Matthew Rognlie found that housing inequality (that is, how much more expensive some houses are than others) is the key factor in rising wealth.

From reading the press, you’d think the housing crisis is mainly relevant to superstar cities like New York, London, and San Francisco. But housing is becoming increasingly expensive in a wide range of cities, including Philadelphia and Detroit. And the worst of the housing crisis by far is not in the wealthy cities of the advanced world, but in the rapidly urbanizing cities of the developing world, where hundreds of millions of people live in substandard housing, lacking electricity, running water, or basic sanitation.

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