(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.

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)

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.

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.

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.

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.

A Quick Status Check on Zoning Reform

I have an article at Strong Towns that looks at recent zoning-reform developments from around the US, including — primarily — efforts to reduce the footprints of exclusively single-family residential zones. The goal of such efforts is allow for legal two-family homes, mother-in-law houses, studio apartments, and similar lower-impact arrangements on privately owned land. Check it out for a snapshot of reforms, and early results, in Minneapolis, Oregon, and California.

The Intrinsic Value of Poor (or Adaptable) Neighborhoods

Howard Husock’s The Poor Side of Town: and Why We Need It looks at the history of American housing policy since Jacob Riis. Exploring the social and economic value of poor neighborhoods, Husock examines how urban processes are intertwined with civil society, and their traditional role in allowing Americans (especially migrants) to shape their lives and obtain an initial foothold in a commercial society. Husock also explores how a century of American public policy — in particular, the growth of prescriptive land use regulations and the failures of large-scale public housing — has interrupted or distorted the participatory, resourceful urban adaptations that once fostered new communities and small-scale property wealth. My review of this timely and thoughtful book is now up at National Review.

Pace Jacob Riis, many working-class neighborhoods of the industrial age, like this street in Philadelphia circa 1910, comprised small rowhouses or other human-scaled housing options. Source: Helen Parrish, National Housing Association (1911).

The Missing Middle for Incremental Growth

I have a new essay in City Journal that looks at Daniel Parolek’s Missing Middle Housing — and the case for both land use and financing policies that encourage builders to develop more midsized housing options in growing regions. The bottom line: traditionally, homeowners could develop additional units as neighborhood markets signaled demand through rising prices. As this demand was met, prices would trend toward an equilibrium — with the smaller units being most affordable.

Today, land use policies often prevent or limit these kinds of resourceful adaptations by owners — and subject any proposed changes to the gauntlet of local politics, where those who oppose any change often have a deep advantage. (Note how even the legal concept of ‘spot zoning’ militates against boards allowing incremental change, by deeming it facially illegitimate to change the rules for a single property outside the comprehensive planning process — even though such gradual adaptation in response to opportunities is how cities have historically grown.) One result, in the aggregate, has been a widespread shortage of affordable housing in growing regions.

Victorian-era rowhouses in New York’s Hudson Valley. Such construction traditionally provided an attractive segment of housing on small amounts of land. Photo: Theo Mackey Pollack.

Besim Hakim on Traditional Urban Growth

The historic center of Tunis, as it appeared circa 1890. Source: Wikimedia Commons.

In the spring, I mentioned the work of Besim Hakim in an article at TAC about the traditional urbanism of the Mediterranean. Since then, I’ve had the good fortune to speak with Hakim (an incredibly kind and knowledgeable man); and also to read an earlier book of his, Arabic-Islamic Cities, in which he laid out his findings about traditional urban planning rules from the Islamic world. Here’s an excerpt from a review that I offered:

Excellent research and analysis. The author provides an in-depth study of the traditional rules and urban forms that shaped urban growth in the Islamic west (i.e., the Maghreb and Andalucía). Much of what he uncovers and writes about (including treatises by medieval jurists and observations of repeating patterns) adds significant depth to the conventional present-day, Western understanding of urban genesis.

The author’s primary case study is the old city of Tunis, which sits near the Mediterranean coast, close to the site of ancient Carthage. For more than a thousand years, Tunis grew according to a bundle of simple and flexible traditions. The author’s maps and diagrams illuminate these visually — and an accompanying narrative provides context and explanation. Topics range from the small (e.g., party walls, windows, houses, and cul-de-sacs) to the large (e.g., marketplaces, religious sites, defensive walls, and citywide patterns).

Many unique elements of Islamic and Mediterranean urbanism (e.g., covered markets, privacy measures shaped by religious traditions, and arcades over public streets) are treated carefully. Citations to the Quran and Hadith illuminate the cultural aspects of the Islamic components (or justifications) of the urban form. (A later book by the same author, Mediterranean Urbanism, traces a variety of similar urban phenomena from ancient times down through the Byzantine Empire to the building practices of Christian Europe.)

This is a valuable piece of scholarship that is focused on the traditional, sustainable building patterns of vernacular urbanism. Urban planners, lawyers, builders, and architects should read this (as well as Hakim’s Mediterranean Urbanism) for a deeper understanding of how towns and cities were traditionally formed. Highly recommended for anyone with an interest in urbanism, history, property law, or the dynamic between customs and the built environment.

I’m gradually making progress on an essay that I think will be of interest to general readers, that will examine some of this history, including what Hakim has uncovered. In the meantime, I highly recommend Hakim’s work to readers with an interest in the nuts and bolts of more traditional approaches to urban growth. His writing is incredibly interesting, well researched and documented, and relevant to the challenges towns and cities face today.