How to make housing cheaper

April 16th, 2017
ideas, politics
Big coastal American cities have a problem: too many people want to live there. Overall this is much better than the reverse, but lots of people wanting to move in drives up housing costs, and people get forced out. What can we do?

Overall, the best way to bring down the cost of housing is for there to be more of it. This can mean any combination of more housing space, more units, and more bedrooms. Here are ideas for how we could do this:

  • Remove restrictions on internal building layout: if it's safe, and doesn't change how the house looks from the outside, why are we regulating it? Let people divide their houses into two-families, divide rooms in two, turn attic space into bedrooms; none of this is the government's business. Floor area ratio doesn't capture anything we care about, so scrap it entirely. Don't regulate the number of units per building, the size of units, or the size of rooms.

  • Let people live together: living with other people is far more efficient than living alone. Regulations like "no more than four unrelated adults may live together" push landlords to divide their buildings into more units, losing bedrooms to kitchens and living rooms.

  • Allow tiny houses: the existing tiny houses around us fit into the neighborhood well, and from a massing perspective are very similar to the sheds and garages that the majority of lots have.

  • Reduce uncertainty over construction: there's currently a lot of uncertainty about what you will be allowed to build. This is part of why good developers earn so much: they're being paid for knowing how to get their proposal through the city government, the risk that they won't succeed, and their ability to identify projects that are likely to be approved. Simplify rules, and make it easier to tell what will be allowed.

  • Pre-approve construction: going even further, for properties that could be much more efficient than they are now, like a single story house in a place where most houses are three stories, the city could approve construction on its own, not in response to an external request.

  • Turn streets into housing: lots of land in walkable areas that are well-served by transit is currently used for roads and cars. In many cases there's enough room to put housing in the middle of the road with usable street space remaining on either side. Perhaps combined with cut-and-cover subways. You could require a supermajority of the property owners along the street to agree, and they could each get a share of the money from selling the lots in the middle.

  • Relax rules for additions: right now there are often very restrictive rules on additions, with their size limited beyond what existing setback rules would require. Same goes for other expansions like dormers; new ones here may only be half the length of the ridgeline, but lots of existing ones are larger.

  • Don't worry about affordability: instead of requiring developers to make some units available below market, try to get as many units available as possible. Existing units are being gut-rennovated to turn them into luxury housing, but it's much better if those units stay as they are, renting relatively cheaply, and people who want fancy modern units live in new construction.

  • Remove parking requirements: in areas that are already relatively dense, requirements that buildings have appropriate parking are often big restrictions. These exist to reduce pressure on limited street parking spaces, but we can have this same effect a different way: allow developers to opt-out of parking provision requirements, in exhange for the units being ineligible for resident parking permits. Or auction off the street parking each year and divide the money equally among residents.

This list is an attempt at compromise: let more people live in the cities where they want to, without big changes to how neighborhoods feel. I'm not advocating letting people build skycrapers in the middle of suburbs, or up-to-the-sidewalk five storey apartment buildings. But if we keep letting prices rise without building anything our cities will continue to reflect a smaller and smaller fraction of the people who want to live in them, and who should be living in them.

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