Where are all the apartments for families?

Originally published in Vox on April 23, 2023.

Roughly 40 percent of American millennials have four-year college degrees, and if there’s one thing these highly educated young people have liked to do over the last 15 years, it’s move to big cities.

Researchers find they (well, we) have accounted for more than half the population increase in “close-in” urban neighborhoods in the country’s largest metro areas since 2010, and they credit our migration (and our taxes) with accelerating urban revival. We don’t have to guess as to why: Millennials like diverse, walkable environments with good public transit and bike lanes. They like the rich cultural amenities, including bars, restaurants, and concert venues. And they like the higher-paying work opportunities available.

All this might make you think millennials have moved to cities permanently. But as they get older, the number of urban children has continued to drop. Lower birth rates are part of the story, but economists say the strong correlations with population shifts strongly suggest that “out-migration” of cities explains a big portion of the loss. In other words, millennials now in their mid-30s and 40s with young kids have started decamping for suburbs to raise their families.

Some older adults nod smugly, seeing these suburban migration patterns as proof that there was never any meaningful difference between their preferences and that of millennials at all. Millennials did not start the trend of moving to cities in one’s 20s: Plenty of baby boomers and Gen X moved to urban areas in young adulthood, and then back to the suburbs to raise a family once they coupled up and needed more space.

And certainly some millennial families really do crave the kind of lifestyles found in suburbs: the bigger houses and lawns, the schools, and safety.

But for many other young people looking to start families, the choice to stay in the city or move to the suburbs doesn’t feel much like a choice at all. There simply aren’t many family-oriented housing options in cities, let alone ones young couples could afford.

For years now the shortage of housing, and the dearth of new housing built to accommodate a growing population, has been getting more attention. But only more recently have people started to discuss that, even in places that have loosened their zoning rules and authorized new housing construction, the overwhelming majority of new units are studios or one- and two-bedroom apartments, built with singles, childless couples, and adult roommates in mind.

Advocates for more housing say they’re aware that cities are losing families with kids, even in areas that are adding new units to the market — and they argue that it’s one reason why reforming zoning is only the first step toward building cities that house more people.

“Yes, there’s been a ‘build baby build’ attitude because we’re so far behind, but there are big asterisks and caveats to that,” said Matt Lewis, a spokesperson for California YIMBY, a pro-housing group. “If you just do zoning, you will end up with a whole lot of one- and two-bedrooms.”

Zoning reform is necessary but not sufficient

Housing demand outstrips supply in major cities, leading to rising costs for tenants and prospective homeowners. A top culprit for this scarcity is local zoning laws that bar new construction and empower homeowners who gain financially from restricting new housing to decide whether or not to make room for more neighbors.

Over the last decade, there has been a growing movement to loosen zoning rules to facilitate more construction. And among those few places that have changed their zoning laws, evidence suggests it has helped contain rising rents, largely by reducing competition among individuals for units.

Addressing restrictive zoning is a crucial first step to making cities more affordable, and most communities still haven’t even taken that step.

Orphe Divounguy, a senior economist at Zillow, analyzed the top metropolitan areas sourced from the American Community Survey and found that the most “doubling up” — meaning a family living with another family — occurs in the nation’s most expensive cities, like Los Angeles, Boston, Denver, Seattle, and Washington, DC.

While some might simply prefer these living arrangements, Divounguy observed that nearly 70 percent of families doubling up in these high-cost cities had incomes of $35,000 or less — suggesting their choices to live in closer quarters may be driven by financial need. “We need to build more units,” Divounguy told Vox. “If we had more units then buyers and renters would have more buying power and prices would go down.”

Christopher Leinberger, a longtime land use strategist, agreed that upzoning — altering rules to allow more dense housing in places previously zoned only for single-family homes — is the fundamental prerequisite for creating more family-oriented housing. Without that, he argues, land prices will remain “completely out of whack” and drive up prices.

“A few decades ago, the plot of land itself would be no more than 20 percent of a home’s price,” Leinberger said. “Today it can be up to 50, 60, or 70 percent.”

Higher land prices is also a top reason developers don’t bother building entry-level starter homes anymore, even in areas they’re legally allowed to; the increasingly expensive plot of land can’t justify the expense of building a low-cost affordable house.

Emily Hamilton, the director of the Urbanity Project at the Mercatus Center, echoes Leinberger and Divounguy in saying that liberalizing zoning laws would help expand family-oriented housing. “Freeing homebuilders to serve a wider variety of households at a broad range of incomes is the path to abundant housing,” she wrote recently in Discourse magazine. “It would allow more parents to have shorter commutes, freeing more time to spend with their kids.”

Other regulatory barriers stand in the way of family-oriented housing

The problem is, as housing advocates are learning, upzoning is not enough.

The basic back-of-the-envelope calculations of housing developers in America today are such that if a builder can construct more housing in cities, they will almost always build one- and two-bedroom apartments because smaller units generate more rent per square foot. Developers are, in effect, incentivized to try and pack in as many units as they can.

The most successful strategy for ending homelessness is under attack

One option is to pass laws that require developers to include more family-sized units in their portfolio — more three- or four-bedroom places, for example. But housing experts say trying to force developers to build family-oriented housing will probably backfire. “Dictating to developers what their product mix should be is going to be difficult,” said Leinberger. “If you get into the business of legislating that, they’ll just go to some other town.”

So if you’ve fixed your city’s restrictive zoning, now what?

Lewis, of California YIMBY, said they’ve been learning out in the Golden State that the next step is to look at the building codes and other regulatory barriers that influence the types of housing developers choose to build.

“It’s like whack-a-mole,” he said, meaning just when pro-housing advocates think they’ve defeated the last barrier to new construction, new ones come into clearer view. “These are all arcane rules that no one was paying attention to until five-seven years ago.”

One such building code restriction is the requirement that most multifamily buildings have two stairwells. This is a rule rooted in fire safety, though most other countries allow one stairwell and opt for other fire safety strategies instead. One consequence of the double stairwell model is it ends up making architecture more homogenous and inefficient. (This is why most apartment buildings in America have long central hallways, with apartments on either side.)

Housing activists lately have been rallying around “single-staircase” reform, changing building codes to eliminate this requirement for a second stairwell. These reforms will make it easier to use different floorplans and hopefully make it more cost-effective to build family-oriented housing in cities — perhaps a three-bedroom, one-and-a-half bath apartment, with only one bedroom having a walk-in closet.

Lawmakers in Washington state overwhelmingly approved a bill this month to legalize single-stairwell construction, and California legislators are currently pursuing a similar reform.

Other barriers include regulations like minimum lot sizes, “set-back” requirements that give towns power to dictate how far back from the curb a home can be built, and “floor-area ratios” — the ratio of a building’s total floor area to the size of the land on which it’s built.

California Sen. Scott Weiner has been leading the way in his to state to push bills tackling these barriers. “We need to reform zoning, but we also need to end loopholes that make it impossible for our communities to actually build the multifamily housing for which we have already zoned,” he said.

The risk-averse banks also need to be convinced

Unfortunately, adding more homes for families in cities will likely require even more than just making these land-use changes.

Bobby Fijan, a developer who has been trying to build more family-oriented housing in cities, said one of the biggest challenges is convincing American real estate investors that these projects are worthy bets. “I firmly believe it is a chicken and egg problem,” he told Vox.

“Real estate in the US is very conservative, they want to back things in a very standardized way, and they want to look and see heaps of data showing something already works,” he said. “In industries like tech and retail, people are obsessed with the question of ‘what does the customer want?’ That’s not a question that’s really asked in real estate.”

Right now, because the housing supply and demand gap is still so wide, it’s likely that real estate investors will keep backing projects that look like what they’re already building: buildings that cater to childless adults. These are safe bets, with strong track records of delivering returns.

But this doesn’t mean real estate trends can’t change. Fijan has been working to get financing from private equity and is hoping he can build enough “proof points” of successfully profitable family-oriented housing in cities to get the more risk-averse banks to bite in the future.

It’s a gamble that holds a lot of promise. Plenty of young families will still opt for the suburbs’ greener pastures, but many parents would be happy to stay put in their beloved dense cities and raise their kids. To make that a viable option, though, they need somewhere they can actually live.


But Where Can We Shelter?

Originally published in The Nation on June 16, 2020.

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After the fifth debate of the 2020 Democratic presidential primaries, The Washington Post published one of its infamous fact-checks highlighting those moments when, in the paper’s estimation, someone got too loose with the truth. Among the 10 claims flagged by the Post was Vermont Senator Bernie Sanders’s remark that the United States has “500,000 people sleeping out on the street.” This statement was “exaggerated,” the Post admonished, because while it’s true that in 2018 the Department of Housing and Urban Development (HUD) estimated that there were 553,000 people experiencing homelessness in America, not all of them were technically on the streets; some 360,000 were in shelters or transitional housing.

Putting aside that many experts believe HUD grossly undercounts the homeless, the Post’s finger-wagging exemplified some of the peak absurdities of America’s housing crisis. The United States is the richest country in the world, but millions of its people struggle to afford housing or find it at all. Instead of ensuring that there are enough units in areas where people want to live, we’ve dawdled for decades and made excuses for why things can’t be different—or even claimed they really aren’t so bad.

Golden Gates, a new book on the housing crisis by New York Times reporter Conor Dougherty, dives straight into these problems, skillfully exploring everything from the yes in my backyard (YIMBY) movement, which promotes more housing development, to anti-gentrification activism, the normalization of homelessness, and the factors that have made it so prohibitively expensive to build anything new. It’s the latest addition to a slate of books on housing that have come out over the past few years, including Richard Rothstein’s The Color of Law, Matthew Desmond’s Evicted, Ben Austen’s High-Risers, Matthew L. Schuerman’s Newcomers, and P.E Moskowitz’s How to Kill a City. These books have explored various aspects of housing discrimination, especially the burdens borne by the nation’s poor and people of color, but Dougherty’s is among the first to look squarely at the politics of trying to respond to this disaster. By examining the inertia and ineffectiveness of political leaders who largely agree on what needs to be done, he makes a sobering case for how and why our politics have failed. While not so much a book of specific policy prescriptions, Golden Gates helps clarify why we have a housing crisis in the first place.

As suggested by the title, Golden Gates focuses on California, especially on San Francisco, where the housing troubles are particularly extreme. California has the distinction of having one of the highest housing costs in the nation and some of the highest-paying jobs. It also has, using HUD’s metric, more than 150,000 people experiencing homelessness—far more than any other state in the country. But California’s problems, Dougherty insists, are not anomalous: They are merely “an exaggerated example of the geographic inequalities” that we see in almost every American city as urban centers grapple with the increasing concentration of economic opportunity and the rising cost of living near it. As higher-paying industries like tech and consulting consolidate in and around a few dense areas and as lower-paying retail and health care jobs replace those in manufacturing, the competition to find housing near the good-paying jobs has grown more acute.

To tell this story of housing scarcity and political inaction, Dougherty focuses on a diverse set of people, including Jesshill Love, a longtime Bay Area landlord wrestling with how to raise rents, and Rafael Avendaño, the director of a youth center who tries to teach teenagers in Redwood City how to fight their evictions. We hear from housing developers like Dennis O’Brien and Rick Holliday about the byzantine barriers they face to build more homes and from state Senator Scott Wiener, who has struggled to get his housing reform bills approved. And we hear quite a bit from leaders in the YIMBY movement, like the teacher turned housing activist Sonja Trauss, who moved to the Bay Area in 2011. Since then, the Bay Area has created roughly eight new jobs for every new housing unit, far beyond the 1.5 jobs per new unit recommended by planners. Trauss and her fellow YIMBYs want more homes built, arguing that the shortage in metro areas with highly sought-after jobs has led to soaring rents and home prices and justified fears of displacement.

One of the most sobering aspects of Dougherty’s narrative comes from his historical findings. Many people are familiar with the current affordability crisis in San Francisco, which is often blamed on greedy tech CEOs and venture capitalists. But fewer are aware of its deeper roots. Digging through the archives, Dougherty shows just how long California leaders have been aware of the housing crisis that the state faced if it didn’t alter course. “Changing San Francisco Is Foreseen as a Haven for Wealthy and Childless,” read one New York Times headline in 1981. Two years earlier, an MIT urban planning professor blasted the Bay Area for its “arrogant” and “self-serving” land-use policies and traced how developers were routinely stymied by environmentalists and homeowners opposed to new people moving in. Delivering a 1981 commencement speech at UC Berkeley, the university’s top economics student warned that the Bay Area’s housing shortage would result in sharply rising prices and that homeowners were likely to keep fighting any efforts to address that.

The commencement speaker was right, yet too little was done in the years that followed. This lack of reform around land use was largely rooted in the failure of leaders to take on entrenched interests who profited from the status quo—from the investors, developers, and building trades to the homeowners who were fortunate enough to move to a desirable area first.

Today politicians are trying to tackle these structural problems more directly. Policy analysts say California needs to build 3.5 million homes to get serious about solving its housing crisis, and in 2017, California Governor Gavin Newsom committed to reaching this goal by 2025. But this is a tremendous task that would necessitate building roughly 500,000 units a year, when over the past decade, on average, fewer than 80,000 homes were built in the state annually. And there are, as Dougherty observes, considerable impediments that stand in the way, including soaring costs for construction and land. The cost of building a 100-unit affordable housing project in California had increased from $265,000 per unit in 2000 to almost $425,000 by 2016. And that’s an average. In cities like San Francisco, it can cost upward of $850,000 to build a single subsidized unit. When California’s legislature passed a $4 billion bond to build affordable housing in 2017, it was hailed as a serious step forward, one that would amount to a nearly $12 billion effort when paired with private money. But $12 billion divided by $425,000 equals just 28,235 units, or 0.8 percent of the 3.5 million goal. As Dougherty writes, “This sort of math could make a joke of any new funding effort.”

Voters across California have been more supportive of new funding packages for affordable housing over the past few years, but the quiet dread among advocates is that once the public realizes how little effect each influx of money has on the crisis, their appetite for new taxes might wane. “Behind each new affordable housing bond and the additional billions for homeless services was a public who thought they were being generous, when really the new taxes were nothing in comparison to a problem that was getting worse faster than cities could deploy the money,” Dougherty writes.

While the political leaders in Sacramento and on city councils continue to squabble, renters are doing what they can to organize, and Dougherty gives voice to their experiences too. In particular, we hear from teenager Stephanie Gutierrez, who studied every Tuesday night with other community members how to protest gentrification and eviction. One day, Gutierrez returned home to discover that her family’s rent would be jumping by 45 percent.

Gutierrez and the activists she worked with did their best to raise hell. “No hay peor lucha que la que no se hace,” another tenant insisted—there is no worse fight than the one that isn’t fought. But Dougherty doesn’t sugarcoat the hurdles that renters face. “Protests could make [housing] flips more expensive, but not nearly by enough,” he writes. Despite the occasional bad headlines, developers saw easy opportunities to make more money, and landlords were well within their legal rights to raise rents.

Dougherty also follows the YIMBY activists as they mobilize for new subsidized and market-rate housing. Their build-everything philosophy often pits them against anti-gentrification groups, which view new for-profit development as housing policy moving in the wrong direction. But activists like Trauss insist that more housing will help reduce prices for everyone by relieving pressure on strained markets. Dougherty is sympathetic to this argument, but he also notes some of the real limits faced by these mostly white, highly educated activists as they struggle to build a multiracial and cross-class movement.

Perhaps one reason Dougherty is more sympathetic to the YIMBY movement is that unlike many others, it has been more willing to confront the reality that you can’t stop people from moving to dense, crowded cities, no matter how much you wish they’d stay away. As Wiener, who is aligned with the YIMBYs, once vented, “There is a strain of self-described progressive politics in San Francisco that says: ‘Lock down the city’…. Don’t build more housing—just lock it down, and maybe if we dig a moat around the city and put crocodiles in it we can just stop people from coming.”

Despite finding some hope in local activism, Dougherty doesn’t end his book on a particularly optimistic note. The rising costs to build, the increasing polarization, and the failure to take on entrenched special interests, he suggests, could leave California in much the same place it has long been. And yet he writes that there is growing momentum on the legislative level, not just in California but across the country. Since 2017, rent-control bills and ballot initiatives have cropped up in roughly a dozen states, and in February 2019, Oregon became the first to pass rent control statewide. In June 2019, New York legislators beefed up rent control for nearly 1 million apartments in New York City, and California approved statewide rent control a few months later. Meanwhile, the Minneapolis City Council voted to end single-family zoning, a measure intended to boost the housing supply, and Oregon shortly followed suit. In the DC area, where planners say at least 320,000 new units are needed in the next decade to accommodate demand and population growth, lawmakers are considering measures to expand rent control and reduce barriers to construction.

Yet a crucial question in Golden Gates remains unanswered: What can governments do to help those who need housing now without enacting policies that could make the situation worse in the long term, whether by exacerbating displacement and segregation or by contributing to an even more severe shortage down the road?

Some new housing ideas have emerged recently on the left, such as building more housing that would be kept off the market for speculation and profit entirely. The homes guarantee movement, launched in September 2019, seeks to do for housing what Medicare for All would do for health care. While some homes guarantee advocates object to the idea of expanding Section 8 vouchers because they’d like to reduce reliance on the private rental market, others maintain that these policies are not necessarily in conflict with each other. In fact, Sanders campaigned on both a homes guarantee and making Section 8 vouchers available to all who are eligible. “Mixed solutions can feel like a cop-out,” Dougherty writes, “especially in polarized times. And yet, over and over, in city after city, it’s always where people end up and what seems most likely to work.”

He has a point. To move forward, movements will have to find ways to break out of their particular communities and build strength across class lines. In other cases, activists and political leaders might need, as was the case with Medicare for All, to find new language to address existing policy demands. One think tank in Seattle tested YIMBY messaging and found that the word “homes” worked better than “development” and the phrase “walkable and convenient” was more appealing than “density.” In Minneapolis a YIMBY group has opted for the warmer name Neighbors for More Neighbors. These are all worthwhile steps, but the politics won’t be solved by friendlier rhetoric alone. To build more housing, we’ll need to build more power.