NYU Furman Center’s Post

Harvard Kennedy School’s Jason Furman recently wrote an op-ed in the Boston Globe Media on how state and localities can help build “a more progressive, inclusive, and upwardly mobile society” by building more, citing the NYU Furman Center’s recent work on Supply Skepticism Revisited.  In the piece, he discusses how the Cambridge City Council is advancing a plan that would reduce, simplify, and streamline restrictive zoning regulations. It would allow multifamily residential housing to be built anywhere. Housing could be built up to at least six stories, minimum lot size requirements would be eliminated, and setback requirements would be reduced or eliminated. Research suggests that the result of these efforts would make Cambridge more affordable, increasing opportunities for moderate- and middle-income households to avoid being priced out of the city and reducing the type of gentrifying displacement that would otherwise happen if the city continued to limit new construction. To be sure, supply is necessary but not sufficient for the lowest-income householders. Massachusetts was the first state to provide rental vouchers to some low-income residents and remains a national leader in this program. But more funding — state and federal — is needed for all the families who qualify but are on extended waitlists. Increased supply will complement rental support by helping to ensure these vouchers go even further. The economics are clear: When supply increases prices go down. The greatest risk of displacing moderate-income families in Cambridge would be if the status quo is maintained and a growing population with rising incomes drives up the prices of the limited housing stock and pushes more and more middle-class families out of Cambridge. The 88 percent of Cambridge voters who supported Harris's inclusive economic vision can still help move it forward in their own backyard, setting an example for the region and the country. Read the full Op-Ed by Harvard Kennedy School’s Jason Furman here:  https://lnkd.in/eMgTrkq3

How can we unlock the production of more middle-income housing in California? Terner's new analysis, building on our work modeling the math behind housing development, identifies how layering policy changes could bridge the affordability gap. Read more: https://lnkd.in/ggBXGm3Y Our new analysis uses prototypes for multifamily rental housing affordable to assess the viability of creating middle-income housing in three California cities. Under current conditions,, our modeling suggests such projects would be financially infeasible to build, but identifies layered policy changes that could make a difference. Read more: https://lnkd.in/ggBXGm3Y The next installment of our Making It Pencil work to demystify the math behind housing development delves into what it will take to build housing affordable to middle-income housing in three California cities. Read more: https://lnkd.in/ggBXGm3Y

You've heard of Opportunity zones..... Here is a propsal for DENSITY zones to help us produce more housing across the US to help alleviate an estimated 4.5M units in pent up demand. What would a Density Zone be? Two economists have proposed the following... (link in comments) 1) the federal government would establish a standardized zoning and building code drawn from best practices nationwide and designed to allow builders to meet local housing demand without having to navigate onerous bureaucratic hurdles. [DW Comments: This would speed up the ability to deliver housing and reduce the risks of "can you build it"] 2) municipalities would be given the opportunity to adopt this code for specific areas within their jurisdiction, be they individual blocks or neighborhoods, or entire redevelopment districts. Developers in these Density Zones, in turn, would have clear and predictable rules within which to operate, eliminating the interminable delays and setbacks that currently drive up costs and reduce the number of units that come onto the market. In communities with significant housing shortfalls, this deep and geographically targeted deregulation would lead to exactly what is desperately needed: a surge in supply, which has been proven again and again to reduce local housing costs. [DW Comments: See my prior post on the supply side economics which have been proven to reduce/slow home price and rent price increase] 3) any place that adopts the national zoning rules and meets the program’s construction targets would be awarded a “Density Dividend” proportional to the number of new housing units completed — a direct reward to housing supply. Municipalities could use the dividends for four primary purposes: the construction of sewer, roads, or other infrastructure needed to support new housing developments; education funding enabling school districts to serve growing K-12 enrollment; public transit projects that serve local residents; or loans, grants, or other subsidies to support construction of affordable housing. Each community gets to decide for itself which needs to prioritize. ... For those in MA: Doesn't this have some similarities to the MBTA Communities act that mandates a zoning overlay for more housing density in areas served by mass transit? So... What do you think folks, would you support a "Density Zone" to help build more housing? --- My name is Dave Weinstock and I’m the principal and founder of DW Capital. We help working professionals create passive income and build wealth by investing in commercial real estate. Click the “🔔” to follow me for information on real estate and passive investing.

Urban Dynamics, System Thinking and Housing Problem: Solutions for Low Income Housing Conundrum: The news item mentioned below, made me refer to a book written long before white flight, and suburbanization became part of urban planning discourse. The book in question is called Urban Dynamics by Jay Forrester, still considered controversial in urban planning circles, and shunned by urban planners. Jay Forrester, a former professor of Massachusetts Institute of Technology, was a proponent of System Thinking, in a nutshell System Thinking, is a way to formulate each phenomenon as a larger system, with some parts, and how changes in the parts affect the overall system. In his work called Urban Dynamics, Forrester, modeled city as a larger system, with three components, Industry, Land, and Types of Housing Built. Some of the conclusions he came to were average city life is 235 years, as the industries in the city mature the decay of the city start, as the land in the city get filled the city’s decay start, and the most controversial conclusion he came to was as the housing for underemployed increases the city’s decay accelerates. The reason he gave was as more housing for underemployed are built, it attracts more underemployed which makes a city to get external funding to build underemployed housing and the decay of the city accelerates.This conclusion remains controversial till date. If one takes low underemployed housing as a proxy for low income housing, the hollowed out core cities are forced to spend on low income housing like Cleveland is doing as mentioned in the news article below, whereas many of them who live in them, travel long distances in public transport or beat up cars to far off suburbs to work in low paying jobs. The one conclusion that can be made based on Forrester’s modeling is city core is hastening its decay by building low income housing, so that richer suburbs can get low cost services. The core city is not obligated to do this for suburbs, instead the suburbs have to provide rent stabilized housing to the number of low wage workers it employs, if suburbs raise the NIMBY flag, they have to kiss goodbye to all kinds of services they services they receive in their backyard, and drive to core city for their services. #hud #housing #housingproblem #lowincomehousing #fomc #lowincomehousingshortage #urbanplanning

Research shows that increasing construction of multifamily and dense single-family homes can significantly lower housing costs, enhance living standards, and reduce wealth inequality. But a complex regulatory environment and local prohibitions on multifamily units are severely limiting their supply. Cutting red tape and streamlining housing regulations could play a crucial role in increasing social mobility by enabling people to move to higher-wage areas without being burdened by exorbitant rent. This policy could also drive growth by creating millions of well-paying jobs in the construction sector, particularly benefiting men without college degrees. Deregulation could lead to more environmentally friendly development by promoting denser housing in central cities, reducing the need for long commutes and lowering carbon emissions. It can also support higher birth rates by making housing more affordable for young families. Read the full New York Times opinion piece by George Mason University Economics Professor Dr. Bryan Caplan here: https://lnkd.in/ema6Zh9Y

You've heard of Opportunity zones..... Here is a propsal for DENSITY zones to help us produce more housing across the US to help alleviate an estimated 4.5M units in pent up demand. What would a Density Zone be? Two economists have proposed the following... (link in comments) 1) the federal government would establish a standardized zoning and building code drawn from best practices nationwide and designed to allow builders to meet local housing demand without having to navigate onerous bureaucratic hurdles. [DW Comments: This would speed up the ability to deliver housing and reduce the risks of "can you build it"] 2) municipalities would be given the opportunity to adopt this code for specific areas within their jurisdiction, be they individual blocks or neighborhoods, or entire redevelopment districts. Developers in these Density Zones, in turn, would have clear and predictable rules within which to operate, eliminating the interminable delays and setbacks that currently drive up costs and reduce the number of units that come onto the market. In communities with significant housing shortfalls, this deep and geographically targeted deregulation would lead to exactly what is desperately needed: a surge in supply, which has been proven again and again to reduce local housing costs. [DW Comments: See my prior post on the supply side economics which have been proven to reduce/slow home price and rent price increase] 3) any place that adopts the national zoning rules and meets the program’s construction targets would be awarded a “Density Dividend” proportional to the number of new housing units completed — a direct reward to housing supply. Municipalities could use the dividends for four primary purposes: the construction of sewer, roads, or other infrastructure needed to support new housing developments; education funding enabling school districts to serve growing K-12 enrollment; public transit projects that serve local residents; or loans, grants, or other subsidies to support construction of affordable housing. Each community gets to decide for itself which needs to prioritize. ... For those in MA: Doesn't this have some similarities to the MBTA Communities act that mandates a zoning overlay for more housing density in areas served by mass transit? So... What do you think folks, would you support a "Density Zone" to help build more housing? --- My name is Dave Weinstock and I’m the principal and founder of DW Capital. We help working professionals create passive income and build wealth by investing in commercial real estate. Click the “🔔” to follow me for information on real estate and passive investing.

🌆🏗️ Empowering Diverse Developers in Chicago! A new Urban Institute report reveals that only 17% of multifamily housing developers in Chicago are led by people of color. With a housing affordability crisis and a shortage of 120,000 units, we need to change this! Let’s push for policies that support diverse voices in real estate—like subsidized loans and streamlined permits—so every developer can thrive. Together, we can build a more inclusive and vibrant Chicago! #ChicagoHousing #DiversityInDevelopment #AffordableHousing #InclusionMatters

The Boston Globe reports on how Austin can and can't be a model for solving the housing crisis in Boston. Here's what you should know: - Austin, Texas, has successfully addressed its housing crisis through zoning and development reforms, which have resulted in increased housing production, stabilized home prices, and even reduced rents, despite a growing population and strong job market. Boston city councilors are looking to Austin’s example to help alleviate their own city’s housing shortage. - Key reforms in Austin include simplifying zoning codes, allowing the construction of two- or three-unit homes on lots previously restricted to single-family homes, and eliminating minimum parking requirements. These changes have spurred the creation of more affordable housing options and have been embraced by the city’s YIMBY movement. - Despite Austin’s success, there are significant differences between the two cities, particularly in terms of available land and development costs, which may limit the potential for similar reforms in Boston. However, the Austin experience has sparked a discussion among Boston’s policymakers about the potential of YIMBY-style reforms. Read the full article: https://lnkd.in/e-hVCAz9

Economist Bryan Caplan recently published a comic book on why we should deregulate housing. Here are my top takeaways: • Much of the current housing shortage can be attributed to restrictive zoning (e.g. building density and height restrictions). In other words, it's artificial and can be remedied.  • Deregulating housing would unleash supply and drive down prices. • However, regulation is widely popular because it preys on what could go wrong with development and neglects what could go right, and it's easier to upset people about negatives endured than positives denied (the latter of which many don't recognize). • According to Caplan, deregulation would improve a host of social ills: inequality, social mobility, working-class struggles, homelessness, falling birthrate, and even crime. • As for deregulation's downsides, Caplan argues they're mostly exaggerated. For example, parking and traffic could be regulated with demand-based pricing (current regulation just shifts burdens elsewhere), central cities are typically 5-10% greener than surrounding suburbs and therefore make better sites for building (plus newer buildings are more energy-efficient), and the market value of beautiful/historic buildings already incentivizes owners to keep them (plus human taste suffers from status quo bias). • Ultimately, the market can weigh development costs and benefits more pragmatically. • Deregulation should have bipartisan support: For the left, it enriches the poor, promotes equality, raises economic mobility, and improves the environment. For the right, it frees businesses from regulations, promotes economic growth, raises fertility, and cuts crime. • "Keyhole" solutions can be a good compromise between regulation and deregulation, e.g. taxing development instead of restricting it. • Current homeowners can gain from deregulation too. They can move to lower-priced homes, subdivide land, sell to developers, and have cheap housing nearby for their kids. • Best objection to deregulation is that it's infeasible since U.S. housing regulation is heavily local/fragmented. State-level deregulation most realistic way forward. If you want to learn more, Bryan Caplan's book is called "Build, Baby, Build: The Science and Ethics of Housing Regulation."

While the New York City Council continues a second day of hearings on Mayor Eric Adam’s “City of Yes” proposal, NYU Furman Center’s Executive Director Matthew Murphy said in prepared testimony that it is essential to remove unnecessary obstacles that prevent New York City from adding the affordable and market-rate housing it urgently needs. The city’s severe housing shortage threatens its ability to support its existing population and sustain its economic vitality and diversity. High housing costs and lack of options will continue to constrain the city’s growth, driving away current residents and deterring new talent from coming to New York, which has long thrived on attracting people from across the country and the world. COYHO takes a significant step in addressing these challenges by eliminating key barriers to housing development, creating a path for both affordable housing and market-rate housing in every neighborhood to meet rising demand and ensure New York can remain a place of opportunity for all. To respond to this critical issue, which is central to New York City’s future, the city needs to make it easier to build affordable housing and market-rate housing. COYHO tackles these issues with a comprehensive set of provisions that, collectively, aim to increase both affordable and market-rate housing by eliminating long standing impediments to multifamily development. As a package, COYHO would make better use of New York City's limited land, help slow the increase in development costs, and unlock the potential for more housing across all neighborhoods. Importantly, it includes measures designed to address the uneven distribution of housing growth that has exacerbated inequality in recent years. Read the rest of Matthew Murphy's testimony here ▶ https://lnkd.in/eZR-Ckw4 #newyorkcity #housing #affordablehousing #research #testimony #cityofyes #zoning #landuse