Justin VannPashak
Sep 21, 2018 · 7 min read
Photo by Mike Benna on Unsplash

Unaffordable Housing is kind of a big deal. What’s causing it? If you ask most developers, it’s that we don’t have enough housing supply. The developer lobby asks government to remove development restrictions and regulations so they can supply the market with more units. As I pass the condo towers in my city in the evening, it’s hard to see unit supply being the problem. There are very few lights on… The condo towers have gone dark. There are no lights on because there’s nobody home. Are we building homes or are we dressing up a paper asset?

There are no lights on in Vancouver condos.

Nobody’s home in Boston.

Building housing units is more lucractive than building housng is in New York.

Another example.

It’s happening across the world.

Developers certainly benefit if we increase the unit-supply with government subsidies.

When a government attempts to cool down speculative and investment real estate demand in their city, the developers cry foul and demand they be allowed to increase unit-supply at all costs. They look to the market to solve the problem, but they look to the wrong market. There is a market that can solve this problem, but it isn’t the market of units in one particular city. There are two markets at play in the real estate game of great cities. We have the home-buyer market and the investment market. These are extremely different markets. Despite the fact both markets are competing for the same product, they are entirely different in almost every way. One of these consumers is more profitable for developers to attract. It isn’t the regular people looking for a place to live and do regular work. It’s the people looking for an investment or luxury asset.

The authentic demand for housing in the world’s great cities is so high that it has attracted speculation and corporate real estate investors. Without the organic demand generated by people that are looking for a great place to live and work, the investors wouldn’t be overheating the market like they are. You might ask: With all the places to live, why are so many people clamoring to live in these places instead of somewhere more affordable.? Part of it is work and the other part of it is desirability.

The reductionist logic of any-market-can-solve-everything.

The developers are almost right. We need to increase the supply of something, but it isn’t the supply of units we need. We need to increase the supply of land. There are cities with land to spare, so some might say, “Problem solved, everyone just move to these cities.” This reductionist solution doesn’t get to the root of the problem. To pursue this solution forces people into a lifestyle they don’t want. To solve the housing problem in world class cities, these people would have to make too many trade-offs. It’s clear, people want to live in great cities. The great cities of the world are experiencing a housing affordability crisis. The solution is not for these great cities to imitate mediocre cities. Mediocre cities must become more like great cities.

If we want a supply-side solution, we need to be specific about what to supply.

Great cities have shown there is a huge market for the world-class experiences and lifestyle they offer. Normal, working people in the bottom 90% of the wealth distribution have shown that they want to live in these great cities. As prices started to surge due to this homegrown demand, the investors started to move in looking for a low-risk, high reward investment. Investing in San Francisco, Vancouver, London, New York, and Toronto has fit the bill. I do not advocate for slowing down demand. I’m advocating for diluting it to other cities. I’m advocating for increasing the supply of world-class livability. We don’t need to increase the number of units in great cities, we need to increase the number of great cities. We need more land to be used to build world-class cities instead of the McCities that make up the majority of our urban landscape on this continent.

Cities that aren’t world-class like to call themselves world-class. If you have to say it about yourself, it’s probably not true. The increased demand for the lifestyle of a city identifies the cities that are world-class. The demand to visit your city, to live in your city, and to build a life in your city are measures of the greatness of your city.

Photo by adrian on Unsplash

Many great cities were forced to be great.

Many of the policies coming from great cities are solutions to their particular geography. In many cases, good urban policy came from cities where mountains and/or water forced them to use land more efficiently. As the land available for development disappeared, they had to enact policy that was more careful with how they used space. It turns out this makes for very desirable, complete communities. Before world-class cities were world class, organic demand came from the geography, those mountains and that water. Other cities were forced to become world class by another physical constraint, mobility. Cities that were big before we started using rural transportation (the automobile) in urban spaces are some of the most in-demand cities in the world. The data supports decisions made my great cities. We have detailed information, gathered over a long time with a very large sample size. These cities and their policies are in demand. Not-so-great cities don’t have to wait to emulate their demand inducing policies. We can start building great cities without being forced by physical constraints, doing it because the data supports it.

Photo by Pedro Lastra on Unsplash

How do cities that aren’t forced to be great, become great?

We’ve zoomed out and made this a state, provincial, or national problem with a solution that scales up too. We need incentives and resources from higher levels of government for adopting high-demand policy. One city can’t make another city great. Vancouver can’t tell any other city how to manage itself, neither can San Francisco. That’s why the incentives have to come from a bigger government.

The problem causing the Affordability Crisis isn’t the type of policy that individual great cities have enacted and continue to enact. Those policies ARE THE SOLUTION to the problem of unaffordable housing. The policies of great cities must be applied in low-demand cities. The market has shown us that the policies of world class cities have made them desirable cities to a very large market. The problem isn’t that these cities are adopting policies that are driving up the cost of living, it’s that not enough cities are adopting the policies that make these cities so appealing. What are the not-so-great cities to do? They should do what the market dictates; they should enact the policies that have shown to be in demand.

Great Cities do the Following:

  • Transit Oriented Development
  • Pedestrianization
  • Growth Boundaries
  • More Land-uses per Acre
  • Connected and Permeable Active Transportation Networks
  • Green Spaces
  • Limit Sprawl
  • Limit Large Format Retail (Box Stores)
  • Remove Parking Minimums, Reducing the Amount of Parking
  • Mobility Pricing
  • High Architectural Standards
  • Protect Wild Spaces, Keeping them Wild and Public
  • Market Intervention
  • Collectivist Policy

Not-Yet-Great Cities Do These Things:

  • Build Freeways
  • Build Parking Lots
  • Facilitate Urban Sprawl
  • Don’t Build Sidewalks
  • Consider White Paint Lines on the Road a Form of Active Transportation Infrastructure
  • Attract Multi-National Retail and Hospitality Business (Box Stores and Fast Food)
  • Have no Architectural Standards

Making great cities out of the cities that don’t “have to be” great.

The supply of low-demand cities is just way too high. As a result there is too much concentrated demand for housing in the world’s great cities. We need to dilute this demand to make it more manageable. In North America, we’ve essentially flooded the market with a bunch of cheaply made, unfashionable cities that people don’t want to invest in. The fact that people do buy into these cities is not proof that they actually want to buy what the city is selling. It’s the same way any cheap, mediocre product is purchased; people buy it because it’s all they can afford. There’s a missing middle in the types of cities we have to choose from. There are extremely expensive cities and there are cities that are too cheap to offer a good quality of life. So many of our cities are the bargain bin version of a city and the stats say people are buying. Some cities use these stats to keep doing what they’re doing, but if we made great cities more cheaply, the stats would change. Land value is causing the housing affordability crisis in great cities. All we need to do is build great cities on cheaper land, it’s the missing middle in the supply of cities. This should be facilitated and subsidized by state, provincial, and national governments because the problem is at that scale. Let’s make all cities great.

Justin VannPashak

Written by

Plangineer writing about improving the Urban User Experience.

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