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(Under)taxing Us Out of House and Home?

The WSJ has a short, sweet video piece summarizing the purported role of property tax assessments in discouraging urban development, even where demand is strong. Essentially, the argument goes, the focus of valuation on improvements, rather than potential land values, encourages owners to hold vacant lots or underused properties, rather than developing prime land to its potential. In theory, the aggregation of such decisions across a land market hardens into another form of resistance to the new development that cities need to address the chronic shortage of metropolitan housing units.

This rings true. Several years ago, I worked on some property valuation appeals in New Jersey. To make the case that a client’s property was overvalued by the town assessor, and should have a lower tax bill, one had to show that comparable properties had recently sold for less. Defining comparability was more art than science, but, generally, one sought examples of sales in the same town, with similar floor space, on a similar lot, and with the same use. Other factors, like condition or construction materials, or unique qualities, could be raised — but unless they were remarkable these tended to play a lesser role.

At the time, I was struck by the outsized role of improvements (i.e., actual houses or other structures) in the supposed assessment values, as opposed to land. Proximity to Manhattan, and good public schools, have been the key drivers of suburban New Jersey property values since at least the 1950s, and both are land-dependent factors. Others, like the culture or desirability or overall aesthetics of a community, are also embedded in a property’s location (i.e., the land), rather than the individual structure. This is why even a cheaply-built eyesore in a smart commuter suburb is quite valuable, while an architectural gem in a distant country town with no train and bad schools is not.

Within a suburban municipality, where zoning limits potential development by design, the sloppy allocation of value between land and improvements may not have a great impact on what gets built or how it is taxed. But in a growing, vital city — and especially in a mixed-use business distrct — the omission of potential land value from the taxing formula seems like something that could very much discourage some much-needed multifamily development, while making it easy for people to operate parking lots on prime real estate.

It will be interesting to see what happens in Pittsburgh and Detroit.

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America’s Chronic Housing Shortage

In his recent City Journal article, “Free to Build,” Edward Glaeser begins to reframe the zoning-driven housing crisis as a national phenomenon, requiring national solutions, rather than a merely local or coastal problem. Advocating for the use of federal policy to unwind the cumulative, national effects of zoning overreach strikes me as a stark milestone in the right-leaning policy world. That said, I think this may represent one facet of a pent-up, multipartisan response to the NIMBYism that, for generations, has damaged the US economy and environment through land-use policies that promote rent-seeking behavior and de facto segregation at the expense of traditional, participatory, incremental urban growth.

Photo by the author of some traditional apartment houses located in Cape May, New Jersey, illustrating how traditional urban housing is an artfcat of more liberal historical building laws.
Traditional urban housing is an artifact of more liberal historical building laws. (TMP)

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A Top Ten List for Urban Code Reform

R. John Anderson has an article at CNU’s Public Square identifying ten code-reform priorities that would help to address the endemic shortage of housing units in the United States. Several of these principles align with recommendations I’ve touched on here at LT, or in other articles, including: provisions to reduce parking requirements for new units; zoning that allows accessory dwelling units (ADUs) to be built, as-of-right; amendments to state and local building codes to allow small multifamily (Missing Middle) buildings to be built in accordance with the International Residential Code (IRC), rather than the more compliance-costly International Building Code (IBC); and a general liberalization of structural massing requirements and lot-size minimums, to facilitate more efficient uses of scarce metropolitan land parcels. This top-ten approach strikes me as a practical summary of salient points for code reformers to keep in mind. David Letterman would be proud.

To this list, I would add: amending state subdivision statutes (or municipal ordinances, in some places) to actively encourage the creation of new, tiny, privately-owned lots. I have in mind parcels less than 30 feet wide at the street line, with no side yard requirements. This would allow traditional attached buildings to be built in diverse designs, as part of a coherent overall pattern. Over time, this would foster the growth of a variety of small housing options, along with the richness and equity of a broad base of participatory property ownership. Ultimately, it would allow the kinds of tight urban blocks to be generated today, in plausible settings, that already characterize our favored old neighborhoods.

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A New York Institution Abides

The WSJ recently ran a fitting tribute to Gray’s Papaya, still going strong after about 48 years on the UWS. Reading this article, I learned a few important things, including that the original Gray’s began as a Papaya King franchise; and that its Recession Special — two hot dogs and a juice drink for $1.95 — was invented in response to an actual recession in 1982.

Sadly, I haven’t been to Gray’s since the iconic bright-yellow Greenwich Village location (Sixth Avenue and West 8th Street) closed a decade ago. Time does fly. I remember going there for a midnight snack when I lived at the New School dorm in 1999. I liked their piña colada — and the tinny sound of 1950s oldies, playing on WCBS-FM, that spilled onto the night sidewalk with the stark fluorescent light and the smell of burning hot dogs.

The erstwhile Gray’s Papaya at Sixth Avenue and West Eighth Street in New York closed around 2014.
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Yes, but Definitely No

This piece in the FT begins with an enticing premise, namely, that 19th-century urbanism achieved an ideal form, only to see it eroded by cars. True enough. Then it shifts to a common 21st-century refrain — an assertion that we can have the best of all worlds because, unlike the benighted souls who populated this planet before us, we moderns enjoy the limitless wonders of technology.

Eh, not really.

This framing isn’t completely wrong. In their better parts, Western cities of the 19th century were beautiful. No one is building new places that look like Sugar Hill or Park Slope today, and that is a shame. As an advocate for more traditional forms of urbanism, I believe that 19th-century cities expanded under a more workable framework than today’s zoned neighborhoods, and that the old way of doing things often produced practical and attractive results. (That said, the tenements of the Lower East Side provide a good counterpoint.) Meanwhile, I think one could fairly lay blame for much of the subpar urbanism since about 1920 on the rising influence of cars. If nothing else, cars decreased the emphasis builders once placed on the kinds of urban details that disappear when buildings are passed quickly.

But here’s the elephant in the room: in the United States, we now have a century’s worth of neighborhoods that were built for cars, and a large proportion of people live in those neighborhoods. Those people also need continued access to city centers.

People who argue that city motorists should be relentlessly harassed with fees, penalties, and parking rules, as a strategy to discourage the use of private cars in cities, are out of touch in a way that betrays their own privilege (despite the progressive veneer of such rhetoric). Sure, some large US cities, like New York, Chicago, and possibly Philadelphia, have adequate public transit service in core neighborhoods. (I say adequate because I’ve spent far too many years on the NYC subway to be any more generous.) That said, the parts of these cities that are adequately served tend to be the most expensive. For the vast majority of the working- and middle-class residents of the same urban regions, public transit is either a rare bird (I’m looking at you, once-per-hour buses in the suburbs!) or a hybrid option that includes driving (e.g., to the nearest subway or commuter rail station). Oftentimes, the transfer from car to public transit is further complicated by a serious lack of affordable parking options near transit nodes. This is a long-term failure of urban and regional planning policy that ought to be addressed. It is not a reason to vilify and harass residents of outlying neighborhoods who need to come into the central city.

As for predicting that e-bikes will soon be the primary form of urban transport, I almost don’t know where to begin. Are these enthusiasts unaware of the proportion of humans who are elderly, disabled, or simply dislike riding bicycles? Do they not know that people have young children? Have they never been to a city that experiences winter, or rain, or blazing heat? Do they not understand being tired at the end of a long day, or have they not noticed the many miles that often separate central business districts from the places where most people find homes? The idea is laughable. Subways (and commuter trains) are the arteries of global cities.

Until planners find ways to accommodate ordinary weather conditions (and the large number of us who live in outlying or car-centric locations), this silliness about attacking and vilifying motorized vehicles (including, apparently, now subways) has to stop.

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Salutations, and Some Readings

I’ve been writing less here over the past year because, to be candid, my writing capacity has been soaked up by other commitments. That said, we’ve been seeing a flurry of articles in the MSM over the past few months that confirm a growing recognition of one of the key premises that this blog has emphasized for more than a decade: the role of excessive, cumulative land use regulations in the chronic shortage of metropolitan affordable housing.

Thought I’d check in to post a round-up of some of the more interesting ones:

https://www.theatlantic.com/ideas/archive/2023/01/housing-crisis-hedge-funds-private-equity-scapegoat/672839/

https://www.cityandstateny.com/opinion/2022/12/opinion-new-york-finally-has-momentum-housing-its-time-breakthrough/381311/

https://www.theatlantic.com/ideas/archive/2022/11/us-housing-gap-cost-affordability-big-cities/672184/

https://nypost.com/2022/12/24/how-to-solve-new-york-citys-affordable-housing-problem/

https://www.city-journal.org/keep-talent-with-new-housing-new-york-city

You heard it here, first.

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The Decline of Chinatown’s Bilingual Street-Name Signs

I’ve always liked New York’s Chinatown, and its unique, bilingual riff on standard street-naming has highlighted the special qualities of this neighborhood for as long as I can remember — distinguishing its corners from those in the surrounding blocks of the Lower East Side and the so-called Civic Center (that cluster of neoclassical courthouses and public buildings centered on Foley Square). So this article at the Times gave me a pang of sadness — zeroing in, as it does, on a small but meaningful detail that I’d also noticed, showing how cities can change slowly, then all at once.

Several years ago, I had the good fortune to work in the Municipal Building, on Centre Street, for some time. Being there daily afforded me frequent opportunities to cover the blocks of Chinatown on foot (as well as the various subparts of the Lower East Side and SoHo), block by block, during lunch hours. I noticed then that the center of gravity was moving eastward, with a commercial nexus increasingly focused on East Broadway, far from the old core along Canal, Mott, and Mulberry Streets.

I also noticed that the new street-name signs were rarely subtitled, like the older ones had been:

Bilingual street signs in New York’s Chinatown, circa 2017. Photo: Theo Mackey Pollack

The Times essay, linked above, covers the history of these signs in the context of the history of the neighborhood. I do hope their decline is not a harbinger of rapid change. There have been rumors that Chinatown could soon be made a target for more intense gentrification; and some has already begun. But because it has not gone full-scale (yet), Chinatown is one of the few places in Lower Manhattan that retains some of the character of an older New York City — a messy, discordant, multilayered urban universe (photos by your webmaster) whose spirit has largely been tamed and curated into submission, elsewhere in the tangle of narrow downtown blocks that once teemed with so much human variety.

That is to say, Chinatown is still New York City, as it was meant to be. And I, for one, hope it will stay that way for a while longer.

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Inventing a National Currency in a Divided Nation

A photo of an early ten-dollar note, including a likeness of Abraham Lincoln.
An early ten-dollar note, including a likeness of Abraham Lincoln.

Here’s an engaging essay by Roger Lowenstein, at the WSJ, plugging a new book he’s written on the same theme: the early story of U.S. paper money and its debut by the Lincoln administration during the Civil War. This snapshot illustrates how hard it would be to overstate the transformative force of that bloody war in U.S. history. So much that has shaped and defined the modern Nation, not merely in areas of federalism and abolition, but also especially in the landscapes of law and economics, can be traced to the crucible of the 1860s. Our paper money — vested with an intangible faith in a particular living system, rather than a redemption value in a abidingly precious metal — is another ghost of that time.

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Gated, But Without Gates

That’s basically how Binyamin Appelbaum, at the Times, is describing the housing situation today in suburban Long Island, and he’s right. Four decades is an awfully long time to have to beg the good people of an ostensibly enlightened New York suburb to approve fewer than 150 new apartments:

Housing Help, a local civil rights group, first proposed the 146-unit development, known as Matinecock Court, in the late 1970s to provide some of the less expensive housing that the town so desperately needs. Huntington fought the project all the way to the Supreme Court, and even after losing the case, officials continued to find ways to delay development.

It’s not even a rental property. It’s a limited-equity cooperative. More:

For others, the issue has been transformed because now, rather than strangers, it is their children who are in need of more affordable homes. Hunter Gross, 26, grew up in Huntington and returned to the town after college in Ohio and a few years in Brooklyn. Mr. Gross, the head of a group called the Huntington Township Housing Coalition, which supports more development, makes about $60,000 a year as a political consultant, but he said he slept in a spare bedroom at his aunt’s house because he hasn’t been able to find an apartment.

None of this is new. In The Poor Side of Town, Howard Husock reported that in the late 1940s William Levitt resorted to packing a Hempstead zoning board meeting with a sympathetic crowd of returning World War II veterans (and their young families) to win approval from a skeptical board for a proposal that would become Levittown. Keeping certain groups of people out of town — and making others beg for permission to develop private property — has been par for the course since the advent of American zoning. (In earlier eras, subdivisions could achieve exclusion through similar devices in private covenants, but municipalities had less direct power to do so.) The biggest change is how much further up the socioeconomic hierarchy the exclusion now goes.

Still, one can be sure there’s no shortage of, “In this home, we believe …” lawn signs in Huntington. Across the New York suburbs, the cost of a single-family home with modest curb-appeal is creeping ever closer to a million dollars, and property taxes often rate in thousands-per-month. Here, “no human is illegal” — just the apartment that he or she could afford live in.