A recent article on the work of geographer Samuel Stein argues that our housing dilemma derives from an “unholy fusion” of development and politics — “the real estate state” — which exacerbates, rather than solves, our crises of affordability, equity and sustainability.
This blog has frequently pointed out the egregious flaws in the “magical thinking” of some planners and activists — some of whom are friends of mine — who hold that adding housing supply at almost any place, of almost any kind, will somehow lower prices, promote equity, and achieve sustainable urban development. Worse, in the absence of a careful application of evidence-based tools and strategies, grounded in research evidence, we have argued that this deluded thinking will promote gentrification, degrade urban livability, and in the end, serve only the unaccountable interests of the real estate development, planning and design industry.
(Full disclosure, I am a member of this industry, but one who is, I hope, willing to entertain well-argued self-critical evidence — given the stakes when we get it wrong.)
Now, a thoughtful piece in the New Yorker dissects the flaws in this “magical thinking,” and it’s worth a careful read — and it offers a cautionary lesson for Portland and Oregon politicians, planners and activists. A few excerpts:
In 2018, Scott Wiener, a California state senator representing San Francisco, introduced a co-authored bill that detonated a debate over housing. The aim of Senate Bill 827 was to override local regulations on building height in order to allow denser, high-rise construction near transit hubs. At once radical and simple, its target was nothing more, and nothing less, than zoning—the most common American way to control land use. Zoning determines whether a building is commercial or residential, how big it can get, whether it’s a single-family home or a high-rise tower.
[NOTE: The author fails here to make a crucial distinction between two very different kinds of zoning regulation, namely regulating use, and regulating form. The former is a culprit in any number of 20th Century fiascoes, including racially and culturally motivated exclusions. The latter is a more recent and very different kind of reform tool, much more neutral on use, by whom, when, and so on, and much more suited to produce coherent, walkable urbanism at any scale. The idea was prefigured by Jane Jacobs in her classic The Death and Life of Great American Cities. But to continue from the New Yorker article…]
S.B. 827 elicited heated arguments, along with a few bizarre political coalitions. In supporting the bill, housing advocates found themselves allied with wealthy developers. Meanwhile, in opposing it, anti-gentrification activists found themselves allied with rich homeowners from places like Beverly Hills….despite late-breaking attempts to include anti-displacement measures, the bill failed to make it out of committee, losing 6–4. Of the votes in its favor, only two were from Democrats, Wiener and his co-author—further proof that the housing debate involves some strange bedfellows.
S.B. 827 nonetheless has spurred a more substantial conversation about zoning reform, of all things, than any urbanist could have predicted. Unfortunately, much of this conversation has taken place online, meaning that it’s resembled people screaming past one another and then shrinking into two opposing crags of congealed vitriol. On one side are the YIMBYs—the acronym stands for “Yes, in my back yard”—who believe that prices are too high because of market distortions that limit the amount of housing people actually want and need. For them, the solution is to increase market-rate housing, which, over time, will result in a reduction in prices and rents. Opponents of YIMBYs—often called “NIMBYs,” meaning “Not in my back yard” (as a term of opprobrium, it of course predates YIMBY)—have a variety of rejoinders to this argument, but they center on the idea that building market-rate housing will never deliver the amount of housing that people need, at prices they can afford. Furthermore, they argue that the immediate effect of introducing such housing is gentrification and displacement. It is at this point that the argument devolves into accusations that the YIMBYs are tools of rich, white real-estate developers, and that the NIMBYs are tools of rich, white homeowners, and the space in between these two positions is quickly converted into a muddy field, where no one dares show a white flag.
The particular airlessness of this debate is only partly due to its growth in the complexity-free vacuum of the Internet. The more significant constriction is that it is an argument that takes place almost entirely according to the terms of real-estate development. In a recent book, “Capital City,” the geographer Samuel Stein puts this debate into context, and adds to it. He argues that our housing dilemma derives from an unholy fusion of development and politics, which he calls “the real estate state.” Stein, a geographer at the City University of New York, tries to establish how industrial cities, in becoming postindustrial, opened the way for real estate to enter the breach. “Landowners have been determining the shape of cities for centuries, and the idea of housing as a commodity—even as a financial asset—is not exactly state of the art,” Stein writes. “What is relatively new, however, is the outsized power of real estate interests within the capitalist state.” Deriving his insights from left-wing geographers and urban historians, and also from interviews with activists in New York City, he alternates a panoptic view with one that looks more closely, from the ground up, at what reckless development does to lives and livelihoods.
But Stein’s special aim is not just to show how real estate controls everything, which, if you were halfway paying attention during the financial crisis—rooted as it was in the predations of housing markets—you already know. His principal point is that the power of the real-estate state flows from the dynamic between development and the profession of city planning. Planners are usually thought of as bureaucrats, though sometimes they take on the aspect of legend: Baron Georges-Eugène Haussmann, who tamed rebellious Paris into wide avenues that couldn’t be barricaded; imperious Robert Moses, who pummelled New York with expressways. Stein’s planners are at once lesser and greater than these. Though they may look like mousy cubicle denizens—determining the right sort of window treatment for a historic house, or calculating the Area Median Income for a smattering of affordable units in a luxury building—they’re more influential than they appear. Planners, he writes, “are tasked with the contradictory goals of inflating real estate values while safeguarding residents’ best interests.” The position is an inherently uncomfortable one. But planning holds out the promise that the future is, at least in part, knowable. Explicit in Stein’s narrative is the idea that a different, more democratic kind of planning might lead us to more democratic kinds of cities…
…Developers need planners, but a conflict arises when the former look to the latter for interventions in public space. “They demand that the state build the infrastructure that makes their land usable,” Stein writes of developers. At the same time, they are “fiercely protective of their property rights” and suspicious of planning insofar as it threatens their control over land. Planners, in turn, are agents of the public, but they are beholden to developers, in practice. Democratic societies require at least a display of public input, but often only a display: “planners must proceed with enough openness and transparency to maintain public legitimacy, while ensuring that capital retains ultimate control over the processes’ parameters.” From this comes the charade of public-comment sessions, familiar to most active city dwellers, in which so-called stakeholders are invited to discuss development plans, whose basic outlines they have little chance of influencing.
Similarly, planners who want to assert broad control over the public realm are often dependent on recalcitrant businessmen, who are unlikely to give them the full measure of what they might want to achieve, since planning often involves the creation of public infrastructure that requires business to get out of the way. Much of what does get achieved requires catastrophic, violent interventions in the lives of the very people that planners are trying to help. The land for Central Park, the “green lung” of New York and one of the greatest parks in the world, was secured by expelling Manhattan’s largest African-American settlement. The construction of most public housing required the resettlement of thousands of households, often those of working class African-Americans, in the destructive process known as urban renewal. (Urban renewal, James Baldwin said, in an interview, really “means Negro removal.”)
…This history sets up Stein’s main story, which is about the contemporary high-priced city of gentrification and displacement. Mercifully, his analysis does not mention hipsters, artisanal stationery stores, or CBD lattes. Instead, he discusses how planners have once again played a central role in scaling up gentrification “from a neighborhood phenomenon of renovation and reinvention to a larger process of displacement, demolition and development.” A miasma of guilt and misunderstanding surrounds discussions of gentrification. The usual story—of upwardly mobile people moving into depressed areas and displacing existing, less well-off residents in the process—is at least partly true. But, as geographers have pointed out for some time, it also requires disinvestment: neighborhoods decline, in part, because of state neglect, and yuppies rush in where planners fear to tread. This is how the familiar story of places such as SoHo, in lower Manhattan, and Park Slope, in Brooklyn, begins. Those neighborhoods were abandoned by the government before they were occupied by new residents.
Similarly, the past three decades have been characterized by hyper-gentrification, which is a largely legislative phenomenon, the work of planners and policymakers—not simply an ineluctable market signal that is sent when someone opens a vegan doughnut shop. Stein details the number of planning-policy innovations that have made it easier for developers and large nonprofits to avoid paying billions of dollars in taxes. In 1971, the establishment of New York’s 421-a tax program gave developers abatements on luxury construction, for anywhere from ten to twenty-five years. (One of the great beneficiaries of 421-a, Stein notes, was Donald Trump, who built Trump Plaza, on the Upper East Side with a thirteen-million-dollar tax break.) In 2016, when the program was set to expire, 421-a cost New York $1.2 billion a year. A recent revision to the law, under Governor Andrew Cuomo, brought the cost to $2.4 billion a year. That’s about six hundred million less than the M.T.A. requested from the state to fix the ailing subway system. These are the sorts of numbers that reveal how the real-estate state declares its priorities. As legislators made developers’ lives easier, planners became the helpless accomplices of urban inequality.
Jane Jacobs’s “The Death and Life of Great American Cities,” an indictment of American city planning, appeared in 1961; Robert A. Caro’s “The Power Broker,” an indictment of an American city planner, appeared in 1974. In the years between their publication—and partly owing to their arguments—planning lost whatever was left of its swashbuckling air, and was increasingly seen as a clumsy, illegitimate, even villainous profession, its members casually carving their utopian visions into the fabric of complex, heterogeneous cities.
When planning lost its revolutionary élan, it also lost its sense of ambition. Many mid-century planners, for all their missteps, tried to engineer a more equal city. As planning lost its power, an impressive variety of inequities crept into policymaking.
…According to ultra-YIMBY reasoning, the addition of [high-priced] apartments might not be a problem, since housing markets are, like other markets, subject to supply and demand. But, as the author Rick Jacobus recently argued in the magazine Shelterforce, the housing market is segmented, better understood “as a set of interrelated submarkets that can move somewhat independently than as a single market.” For example, rent for student housing may roughly follow the laws of supply and demand, but, in general, its cost isn’t eased by building a lot of housing—what matters is the supply of student housing and the demand from students. By the same token, upzoning that allows for more affordable housing to be built has effects on existing affordable housing. “When planners upzone neighborhoods to allow bigger buildings, rent-stabilized landlords will have every reason to sell their properties to speculative developers, who could then knock down the existing properties and build something bigger and more expensive,” Stein writes. The long-term effect of a housing boom may be a housing bust—but, in the meantime, all sorts of pain may be inflicted on existing residents.
There are other reasons to be cautious. Historically, attempts to remedy segregation through the real-estate market have often ended up increasing it. In a groundbreaking new book, Race for Profit, Keeanga-Yamahtta Taylor, a professor of African-American studies at Princeton, shows how the post-urban renewal-planning regime came to rely heavily on the real-estate industry. New forms of subsidized loans were, in her phrasing, a form of “predatory inclusion,” trapping black homeowners in substandard housing, while developers continued to reap dividends. Her analysis covers a specific period in time, and a particular kind of housing market, but its conclusion is general and damning: the American real-estate market was founded on racism and still depends on it. White NIBYs have kept multifamily buildings out of wealthier neighborhoods, in no small part to keep those neighborhoods racially homogeneous, and it is doubtful that real-estate developers can solve this historic inequity.
Though Stein supports efforts that would increase housing construction in wealthy areas, he is clear that these policies need to be part of a broader program. In a recent article for Jacobin, he argues that there is a general “overreliance on zoning,” which is, in any case, “a tool ill-equipped to confront the private land and property markets.” The solution, therefore, “is… the decommodification of land and housing.” In other words, having a market for housing is itself the problem. And a return to large-scale planning is the answer.
…Decades of a housing crisis, accompanied by decades of organizing and activism, have finally led to revaluations of public housing and regional planning. A policy team led by the tenants’-rights activist Tara Raghuveer recently produced a proposal for a “Homes Guarantee”—a marquee plan that proposes the construction of twelve million new, permanently affordable homes as “social housing.” Meanwhile, the law professor Mehrsa Baradaran… has called for a twenty-first-century Homestead Act, under which a public trust would be tasked with purchasing distressed or abandoned homes in historically redlined areas—a form of direct capital investment with the aim of remedying the racial wealth gap. Both are serious proposals that have the potential to shift power away from developers and toward the people historically excluded from the housing market. To be achieved, both need the backing of enormous social movements. They could also resurrect large-scale planning, conceived on a freshly democratic basis, as a profession of consequence. The planner, after decades of irrelevance, or worse, might yet be a figure of note—and perhaps, in a time of crisis, one of purpose.
Read the full article here.
One Reply to “The New Yorker: We need to “decommodify” land and housing”
This should be required reading for Portland planners and politicians. It goes well beyond “Economics 101,” which seems to be the limit of their understanding.