Abundance and Scarcity: Not pie.
China has built tens of thousands of miles of high speed rail in the last two decades. When I traveled in rural Yunnan in 2004 it was an all-day drive from Kunming to Dali and another few hours to Weishan. By 2014 it was a few hours tops by road or rail. High speed rail is so successful that Chinese airlines are complaining that too few people fly from Beijing to Shanghai. Meanwhile, California’s high-speed rail proposal from the 1980s will probably never happen.
Ezra Klein and Derek Thompson have written a book called Abundance that provides a structural reason for our drop from first-world status. They argue that the nation’s institutional architecture prevents things from happening rather than facilitating things. Klein in a podcast said we have prevented good people from achieving things, which makes bad actors who promise to break the rules popular. Hence, the political reason for our drop.
Now, this might seem like the anti-regulatory banner-waving of YIMBYS and neocons, but the Klein argument is – like I said above – about structure, not politics. Not flags but terra firma. Put simply, the regulatory web is not designed to make things happen but to study and litigate them forever. And ever.
When Sara Bronin, in her role as Chair of the Advisory Council on Historic Preservation from 2022-2024, tried to make historic preservation more amenable to achieving things that would help society, like affordable housing and energy efficiency, she stumbled into a few canards. Turns out the preservation infrastructure has been a lot less clogged than environmental and habitiat issues. Even in her area of great expertise – zoning – preservationists have been ahead of the games, arguing for ADUs in SFR districts since the early 1990s.
And many have been there much longer – King William district, San Antonio.
One of the smartest things Klein and Thompson do is ask about where and how things get done. In China, you can relocate a million people to build the Three Gorges Dam because public input is extremely limited. In France and Spain you can build high-speed rail because while there is a public process and bureaucracy, approvals can happen and there is not endless litigation.
They also make use of two economic writers I appreciate – Ed Glaeser and William Fischel, who help explain that strange 1970s transformation when homes became expensive primary assets. We have a housing problem that is intractable because we want two things that are structurally opposite: We want housing to be cheap enough for all, and we want housing to be our primary source of tax-advantaged wealth. Can’t. Have. Both.
Now of course Fischel and Glaeser take their shots at the regulatory world as well, and a few land but most don’t because they aim at the anecdote. Klein and Thompson note the changes we are seeing to traditional single-family zoning and give a couple of good examples where projects got done – one by having a private entity build affordable housing and the other by a governor using emergency powers to rebuild a bridge in record time. These locally rare examples are what the Chinese do daily.
At the end the book was not a deep-diving revelation but a useful provoking of thought. What are our systems designed to do and not do? I myself was hoping for a clearer definition of an abundance Weltanschauung, rather than a staid critique of the regulatory web that doesn’t add much to what Fischel and Glaeser gave us over a decade ago.
Come on guys, tell us it isn’t pie. And why. The Chinese figured that out, clearly.
Some people get it – historic designation and affordability
It has been fashionable over the last dozen years to blame historic designation for the rising cost of housing in cities and towns nationwide. If your brain is in a simple, mechanistic mode, it might seem that regulations that encourage the preservation of single-family homes could limit the supply of denser, cheaper alternatives. That has a logical flow to it that can be seductive if you leave your brain in that simple, mechanistic mode. Don’t do that. It’s reptilian.
Some people do get it – my friend and colleague Paul Steinke of the Preservation Alliance of Greater Philadelphia shared a recent article by the Philadelphia Inquirer’s architecture critic titled Knocking Down a Fable About City Historic Districts. Inga Saffron wrote there “is no credible evidence showing that historic preservation is the reason Philadelphia has become more expensive.” She sees the culprit as zoning. When I researched the history of zoning for my dissertation, it was clear that its wide adoption in the early 20th century was driven by suburbs that wanted only single-family homes. I get it.
There has been an effort in many places (Minneapolis, Oregon) to get rid of single-family zoning because it inhibits affordability. I summarized this in a blog last year. There a strong YIMBY (Yes In My Backyard) movement with similar goals. Ed Glaeser was a big champion of this theory in his book Triumph of the City, which I reviewed when it came out. I was not terribly concerned about his argument against historic districts because it had problems of scale, causation and even economics.
SCALE
Even the most preservation oriented cities landmark less than 5% of their buildings. That includes New York if you count all the boroughs. Yes, Manhattan might have up to a fifth of its buildings with historic status, but Manhattan is a unicorn in so many ways that unicorns should be called Manhattans instead. So, how could 4% of properties drive the cost of the other 96%?
Chicago has 60 districts and about 350 individual landmarks. The Chicago Historic Resources Survey done in the 1980s and 1990s identified 17,000 buildings that might have historic interest. So that’s a lot, right! I mean, there are about 370,000 buildings in Chicago, so we are talking 4.5%! But most of those “orange-rated” buildings get torn down after a short demolition delay, so our real percentage thirty years later is smaller.
Now, I did live in a suburb – Oak Park, Illinois – that had landmarked what looks like about a third of its footprint, beginning with the Frank Lloyd Wright Prairie School of Architecture Historic District back in the 1980s. Interestingly, its 1994 Long Range Preservation Plan called for more ADUs (called coach houses or granny flats) – that is to say: more density and a step away from single-family zoning.
As you can see, Oak Park does have a lot of big historic districts, but they do not include the apartments and highrises where a majority of the suburb’s population has lived for the last two generations. The third dimension is missing from the map. Most of the residents do not live in a historic district.
Preservation folks have been encouraging greater density in those districts since 1994. Last week the Village Board took up the issue. 30 years later. (Preservationists are always WAY ahead of the game.)
Similarly, Saffron’s article on Philadelphia noted that the Old City historic district has quadrupled in population since the district was created in 2003. And as my friend Jim Bailey notes, right in the center of the oldest historic district in Texas is a 1920s development with a density of 126 units per acre. It looks like this:
So, scale is an issue and density can work in historic districts. There is also the problem of…..
CAUSATION (ECONOMICS)
Where does real estate value come from? Location, location, location, right? I bought a Frank Lloyd Wright house in 1991 for $1, but it had a negative $40,000 value. Another one of the houses in the row recently sold for $30,000, thirty years later. Real estate is as asset whose value is entirely externalized.
Unlandmarked Bucktown in Chicago tripled in value in 1987 while contiguous Wicker Park lagged in landmark limbo. Saffron’s article points to an NYU study that showed the steepest rent increases happened in the least landmarked parts of Brooklyn. Rapidly increasing real estate values, gentrification and displacement happen in many urban areas. Generally, historic districts preserve and enhance real estate values, because they reduce uncertainty about location, location and location – you know it won’t change much. But designation always arrives AFTER rehabilitation has happened. Residents rehab and then act to preserve their investment. Designation doesn’t happen before values go up.*
Advisory Council on Historic Preservation Chair Sara Bronin has a book coming out about zoning (Key To The City)and has been speaking regularly about zoning changes that would support BOTH historic preservation and affordable housing, including provisions that: enable housing conversions, create mixed-use neighborhood centers, eliminate minimum parking requirements, encourage accessory dwelling units, and strengthen transferable development rights. As noted above and before, many of these items have been on our playlist for 30 years.
Here in San Antonio, the Office of Historic Preservation has been promoting preservation as affordable housing for some years, releasing a major study in 2019. As Donovan Rypkema, the guru of preservation economics has said for years: “You can’t build new and rent cheap.” In 2024 a million dollars will build you three and a half residential units if you are lucky. The economic challenge is on the supply side.
You can’t build your way to affordability. Better to fix – and add density – to what you have. Existing housing stock is a nonrenewable resource.
2021 – Government Hill, San Antonio
2023
*My dissertation on historic districts basically found zero examples of districts created without strong community support and without rehabilitation already happening at scale.