How TO solve a housing crisis

As more people become aware of the problematic logic behind Oregon’s HB 2007 and similar pro-demolition and “anti-NIMBY” measures, attention rightly turns to better approaches

The author discussing “voodoo urbanism” and its more successful alternatives with other participants at the Pacific Cities Sustainability Initiative conference in Los Angeles, June 27, 2017. L-R Dr. Paul Bunje, Chief Scientist, Domain Impact Strategy, XPRIZE; Patrick Condon, Chair of the Urban Design Program, University of British Columbia; Deanna Weber, Principal, AECOM; the author; and Steve Kellenberg, Senior Vice President, The Irvine Company.

In this blog and elsewhere, I and other critics have taken the proponents of Oregon’s proposed “anti-NIMBY” bill HB 2007 to task for sloppy knee-jerk thinking, a failure to consider the actual evidence of what works, and symbolic gestures of identity politics that only further polarize and divide our community — at a time when we need more urban unity on our challenges, not less.

But the next question is only fair: what, then, is the alternative?

First, it should be recognized that the problem of housing affordability is hardly a Portland-specific or Oregon-specific problem.  I just returned from speaking at the Pacific Cities Sustainability Initiative conference in Los Angeles, sponsored by the Asia Society, USC and other partners.  The stories from different cities were all remarkably similar — and indeed, compared to many places, Portland’s and Oregon’s problems seem relatively modest.

Representatives from cities across the Pacific Rim, and indeed other parts of the world, all described similar problems – from Los Angeles to Hong Kong, Vancouver to Sydney.   A wave of global capital is rushing into real estate, fueling speculation and land price surges.  Cities that try to build their way out of the problem without dealing with the underlying economic forces are likely to exacerbate, not remedy, the problem.  And the result may be not only less affordable housing, but a steady, tragic loss of their most valuable sustainability asset – their livable heritage.

What, then, is the answer?  A number of participants spoke of effective tools and approaches that have been found to work in other cities.  Here are some of them that were discussed:

  1. Taxation, including land value tax. Patrick Condon, professor at the University of British Columbia in Vancouver, described the “Vienna Model” — new projects are taxed heavily, which depresses land cost without raising costs for market-rate housing.  The taxes go to affordable projects, and to buying more land – which is then less expensive.  Other cities tax the land value directly, using so-called “Georgist” tax policies.  We need to look at similar tools to conserve resources (like land) and reward good development.  Such policies can help to “monetize externality costs” (like sprawl).
  2. Other tools to damp down speculative real estate bubbles. Housing is a human need, not an interchangeable investor commodity – yet current policy is rewarding a dangerous new wave of speculation.  The last time this happened, 2008, the world found itself in a global financial crisis.  We need better tools, including local regulations, that control excessive speculation.  We need less childlike faith in the magic of markets.
  3. Better tools to unlock under-utilized sites. There are enormous reserves of wasted land, empty lots, parking lots and other suitable sites, in Portland and elsewhere — but there is a shortage of imagination and tools to access them. The National Trust for Historic Preservation recently cited a 2014 survey that found that in just a part of New York City, nearly 2,500 vacant lots and more than 3,500 empty buildings had enough capacity to house 200,000 people.
  4. Tools for “gentle densification”. Some of these tools are addressed under the misguided HB 2007 – but we need less heavy-handed, more incentive-based approaches to apply them. They include accessory dwellings, duplexes or rental conversions, pocket neighborhoods, “tiny houses,” and other innovative forms of compatible, human-scale housing, as alternatives to “jamming it in.”
  5. “Beauty In My Back Yard”. Portland is full of beautiful, neighborhood-compatible typologies, including a rich tradition of human-scale courtyard apartments.  Where sites are available, such positive alternatives should be developed through “win-win” consultations with residents.
  6. Targeted protections for existing renters and owners, and aggressive help for the homeless. There is no excuse for letting people suffer, particularly when proven alternatives have been demonstrated by other cities. Salt Lake City, for example, has demonstrated one positive approach to ending homelessness; there are others.  Some cities have developed policies that legally disincentivize increases in rents above inflation (like property tax re-assessments based on higher incomes).  Portland needs to be less insular and over-confident, and more willing to share global lessons, showing greater humility and willingness to learn from others’ lessons.

Above all… Stop demonizing NIMBYs.  As Jane Jacobs said, sometimes NIMBYs are right – things should be done differently.  In a democracy, people who live in a community should have the right to participate in land use that affects their public realm, with a voice in decision-making. (That principle is enshrined in Oregon’s land use system as “Goal One”.)

The political environment in this country is ugly enough without fomenting more needless divisions with communities that have been allies in the past, including the historic preservation community, and the community of neighborhood activists — the one that was key to creating the Portland we love today.  The new divisive tactics are not only ineffective and counter-productive, they are unconscionable (especially when they stoop to unfounded and offensive accusations of “self-segregation”).   Such polarizing foolishness won’t solve the housing crisis.  But it might help lead to a Portland that is increasingly polarized, unable to meet its challenges, and facing decline – a sad shell of the city it once was, and could be again.

Coming back from Los Angeles, I couldn’t help but think: Portland and Oregon have a narrow window of choice.  We can try harder to learn from other cities, and spend a little less time being so insular and self-satisfied with our own aspirational politics. I fear the result of the latter is that we will only become less and less distinguishable from the growing list of cities in crisis – just another fashionable victim of deluded “command and control” thinking and “voodoo urbanism”, with a progressive veneer.

But I would like to think we can once again be pioneers for other cities, in finding and combining effective new solutions.  May that needed conversation begin.


Beware of “Voodoo Urbanism”

Over-focusing on the wealthy cores of cities only fuels inequality, displacement, and other runaway urban problems — and degrades the cores too

Portland, Oregon — currently a textbook case of voodoo urbanism going wrong. Image: Wikimedia Commons (Truflip99)

The story is distressingly similar in many cities around the world. Newly popular city cores are drawing more people, pushing up prices, and driving out small businesses and lower-income residents. City leaders, alarmed at the trends, try to build their way out of the problems, on the theory that more supply will better match demand, and result in lower rents and home prices. But the efforts don’t seem to work – and even seem to exacerbate the problems.

That’s because cities aren’t simple machines, in which we can plug in one thing (say, a higher quantity of housing units) and automatically get out something else (say, lower housing costs). Instead, cities are “dynamical systems,” prone to unintended consequences and unexpected feedback effects. By building more units, we might create “induced demand,” meaning that more people are attracted to move to our city from other places – and housing prices don’t go down, they go up.

Unfortunately, we have been treating cities too much like machines, and for an obvious reason. In an industrial age, that has been a profitable approach for those at the top, and in past decades, it seemed to fuel the middle class too. More recently, we have begun to see very destructive results — creating cities of winners and losers, and large areas of urban (and rural) decline. Even government programs meant to address the problems have seemed at times like a game of “whack-a-mole” – build some social housing here, see more affordability problems pop up over there.

In the years after World War II, and especially in the United States, the largest areas of decline were often in the inner cities, leaving the “losers” of the economy behind, while the “winners” (often wealthier whites) fled to the suburbs. But more recently it has been the cores of large cities that have become newly prosperous, attracting the winners of the “knowledge economy”.

Meanwhile, the inner-tier suburban belts and the smaller industrial cities have suffered marked decline, with a predictable political backlash from the “white working class”. Lower-income and minority populations have been relegated to even more peripheral locations, with limited opportunities for economic (and human) development. This gap in opportunity means a gap in the lower-end “rungs of the ladder” that are so essential for immigrants and others to advance.  It is a gap in urban justice too — and it is not just bad for those in the peripheries, it’s bad for the city as a whole.

This more recent pattern of core gentrification and geographic inequality has also been an unintended result of conscious policies. This time we aimed to achieve not suburban expansion, but the urban benefits of knowledge-economy cities, and their capacities as creative engines of economic development.

In the USA, authors like Ed Glaeser and Richard Florida have come to prominence by promoting the undeniable economic power of city cores. Florida’s “creative class” ranks alongside concepts like “innovation districts” to promote a critical mass of talent and interaction. Glaeser’s “triumph of the city” points to the environmental efficiencies of compact living, as well as the economic benefits.

These and other authors have cited as inspiration the urban economics of Jane Jacobs, who did indeed champion the remarkable capacities of cities, and their synergistic “agglomeration benefits,” as creative engines of human development. But Jacobs also warned against the kind of “silver bullet” thinking that imagines that the benefits of an innovation district or a downtown creative class is will automatically trickle down to the rest of the city and the countryside. On the contrary, she pointed to the dangers of any form of concentrated “monoculture” – including even the partial monoculture of an innovation district or of a creative class.  (More recently, Richard Florida has expressed the same sober re-assessment of his own earlier work.)

Instead, Jacobs argued for a more diverse kind of city – diverse in population, diverse in kinds of activities, and diverse in geographic distribution too. Hers was a “polycentric” city, with lots of affordable pockets full of old as well as new buildings, and multiple opportunities waiting to be targeted.  In such a region, economic growth — and likewise the demand for housing — could be tempered and modulated to remain more even and equitable.

This is a point that Ed Glaeser  and the fans of “innovation districts” might not yet comprehend. Glaeser for one has been harsh in criticizing Jacobs’ defense of old buildings – for example, in Greenwich Village – which he sees as a sentimental preservation instinct that only feeds gentrification. His formula has been to demolish and build new high rises.

But Glaeser and other critics seem to miss Jacobs’ point. For Jacobs, the answer to gentrification and affordability is not an over-concentration of new (often even more expensive) housing in the core. Rather, we need to diversify geographically as well as in other ways. If Greenwich Village is over-gentrifying, it’s probably time to re-focus on Brooklyn, and provide more jobs and opportunities for its more depressed neighborhoods. If those start to over-heat, it’s time to focus on the Bronx, or Queens. Or Cleveland, Detroit, Baltimore, New Orleans…

There is almost no end of existing good urban fabric, in the US and in other countries, that is ready for some positive gentrification, the kind that increases diversity and opportunities for human development. (As we also offer targeted protections against displacement for existing residents.)

At the same time, it seems more important than ever to provide good urban fabric in the suburbs too, where increasing percentages of the population live (including increasing numbers of the displaced poor).  “Good urban fabric” means walkable, mixed, transit-served, with expanding opportunities in older as well as newer buildings.  It means the same kind of geographic as well as other kinds of diversity, achieved through conscious strategic actions to dampen, incentivize, catalyze, and use other kinds of tools.

It is not wise to over-concentrate on the existing cores, in the belief that this “voodoo urbanism” will magically benefit all of the city’s residents.  Like George H.W. Bush’s “voodoo economics,” this approach reveals a naïve faith in  the capacity of the top of the economic pyramid (or the core of the city) to generate wealth that trickles down to all the rest.  (In this light, it is ironic that so many supposedly progressive city administrations are lured by this approach.)

A second, related issue is the scale of urban plots or lots. Here too we need diversity at the smaller scales, just as we need geographic diversity at the largest scales of the city. Just as old buildings tend to be more affordable, accommodating smaller businesses and startups, so too, small plots and lots tend to be more affordable for those same users.  There are other strategies for providing a diversity of opportunity too.

But as the cores experience hypertrophic growth, often the pressure to build very large buildings on very large sites also becomes financially irresistible. A mix of small and large plots, established by zoning code, can help to tamp down this tendency. At the same time, other tools can manage overheating of the core, and steer growth into new locations. For example, we can use land value tax to dampen speculation in real estate — so-caled “Georgist” policies. As Jacobs recommended, we can also use new public projects in new locations to serve as catalytic “chess pieces” to redirect growth into more benign forms.

These and many others are examples of Jacobs’ “toolkit” approach – one that is badly needed today, to cope with the dynamic challenges of rapid city growth around the world.

The lesson is that we need to become wiser stewards of urban diversity, in both scale and location, so that we can counteract the effects of our current overheated urban growth. There are ample lessons in the past successes of cities that offer us effective tools and strategies.  By doing so, we can support a more even and equitable growth of smaller businesses, and viable employment for lower and middle classes. Out of that creative exchange, we will continue to get unimaginable marvels of innovation, and we might also get the next new world-famous startup. But we will also get many thousands of other healthy and creative businesses, forming the backbone of great cities.

HB 2007 challenged in national debate

Planetizen’s feature article on HB 2007

Planetizen, the Los Angeles-based US planners’ website, ran some of our material on HB 2007 for a nationwide and international audience of planners and policy experts.  The comments were very interesting.

Jeff Joslin, Director of Current Planning at San Francisco Planning Department, wrote:

Since this is a national forum and not a local op-ed, I thought I’d shed light on one aspect.

The reviews the bill would obviate are not onerous, and there’s no data to support the case that eliminating them would result in more housing faster or meaningfully reduce the cost of housing (and increasingly true as projects scale up and the cost of review is spread across multiple units). This is because Oregon – since the 70s, has had in place a requirement that ALL discretionary reviews (even the largest and most complex in the land) be complete within 120 days of an application being complete, including any local appeal. This is remarkably streamlined by any measure, and provides a level of certainty that is readily incorporated into any project budget.

If this legislative effort was genuinely about the affordable housing it feigns to address, exceptions to certain types of reviews would be a carve-out rather than universal. Such is not the case. It is a jaded, opportunistic effort by certain forces (with a local and a national agenda) to wave the “housing crisis” banner and use it to significantly erode land use controls in the one state and city where they’ve been most effective (and which have served as a replicable model elsewhere). By bringing down a cornerstone of Portland and Oregon’s systems, the strategy can be applied throughout the land.

The problem is a genuine one, and the solution needs to be as well; not the cynical hijacking of the affordable housing issue to suit other agendas. This legislative effort is not that solution.

June Weenen, an advocate of “Georgist” land value tax policy based in the UK, wrote:

Affordability issues have zero to do with the supply side. A 100% tax on the rental value of land would half average selling prices and rental incomes while raising the disposable incomes of working households by thousands of dollars. Sorted.

It would also allow the market to allocate immovable property at optimal efficiency eliminating excessive vacancy and under occupation.

Sure, more building is always needed to put people where the economy requires and give them the living space they need. But until the demand side is sorted out first, then a dysfunctional market cannot know what to supply or where.

This is the kind of focus on a broader set of tools and strategies that we think is so badly needed.  (See more on Georgist policy and “Land Value Tax” at

Closer to home, Ethan Seltzer, Professor of Urban Planning at Portland State, made a rather shocking comment in criticism of our piece:

When livability gets equated with faux tudor bungalows hyped up as historic, you know you’re in trouble.

From this it appears that Professor Seltzer believes that Portland’s classic bungalow neighborhoods (full of “faux” houses, apparently) are entitled to no historic protection, and we should be free to demolish them at will — anyone, at any time, for any reason.   Let’s demolish them all then!

I must say I find it a sad day when Portland and Oregon are willing to sell out their own livable legacy, on so slender a foundation of evidence and sloppy thinking.

Is this the Portland we want to become? Who gets to say? Will it be more affordable, more just? Where is the evidence? There is precious little – but lots of divisive identity politics and questionable thinking.