POLITICS ISSUES

March 08, 2019 by Stefan Novakovic 2.6K 2.6K Where's the Progressive Coalition for Zoning Reform? share tweet share The appetite for change is here. Emphatically manifested in U.S. Representative Alexandria Ocasio-Cortez's proposed Green New Deal, a new American progressive movement calls for a bold reinvention of America's physical and socio-economic fabric. Rooted in confronting climate change, the Green New Deal marries social equity and decarbonization—and the built environment is a key focus. A proviso for "upgrading all existing buildings in the United States and building new buildings to achieve maximum energy efficiency," ranks among the Green New Deal's ambitious goals. Yet, for some urbanists, a crucial ingredient is missing: zoning. "A truly Green New Deal must end exclusionary single-family home zoning laws that promote long car commutes, greenhouse gases and climate change by pricing out workers from living near their city jobs," argues Randy Shaw. Writing in Beyond Chron, the San Francisco-based housing activist points to land use policy as a fundamental impediment to decarbonization. Beside San Francisco's famous 'painted ladies' houses, a hint of urban density. Photo by Emiliano Zapata via Unsplash It goes beyond the Green New Deal. Across North America, the widespread implementation of green building policies is met with with structural inaction on zoning reform. While cities like San Francisco, Seattle, and Toronto have all implemented progressive 'green building' policies governing thermal performance and greenhouse emissions, the same cities retain widespread single-family zoning policies that prohibit anything but detached homes across much of their land area. “The single biggest factor in the carbon footprint of our cities isn’t the amount of insulation in our walls, it’s the zoning," explains Tree Hugger's Lloyd Alter. Even modest increases in density—achieved through the adaption of single-family homes into multiple units and modestly scaled "missing middle" development—can have massive carbon impacts. By reducing car trips and providing an alternative to sprawl, greater urban density alleviates carbon emissions while creating the type of walkable, transit-friendly communities conducive to healthier, active lifestyles, and street-level vibrancy. And what about social inclusion and housing affordability? Shaw argues that zoning policies are "barring new affordable apartments in so many residential neighborhoods," yet they stubbornly persist in many of North America's most politically progressive cities. Single-family zoning restricts new housing supply, and with it, new residents. Assuming the tenets of supply and demand apply, it also hinders affordability. If single-family zoning insulates white, wealthy communities from becoming more diverse and inclusive, does it also implicitly burden denser, poorer, and more diverse urban communities with gentrification and displacement? In a transformative political moment where climate change, inclusion, and housing affordability, are at the forefront of urban consciousness, single-family zoning appears situated at the intersections of some of our most pressing social issues. But even as the horizons of the possible expand, zoning reform as a progressive political issue still has limited—if growing—traction. Is gentrification — and displacement — an inevitable byproduct of new urban density? Photo by Anna Holowet via Unsplash. Either the progressive movement is missing what ought to be a key part of its platform, or the consequences of zoning reform aren't as progressive as we'd like to think. Although the environmental impacts of urban density are fairly straightforward, the issues of housing affordability and social equity are harder to parse. Can an infusion of market-priced housing supply really make cities more affordable and inclusive, or does it inherently spread gentrification and displacement? The complex and controversial relationship between housing supply and affordability is at the heart of why the issue of zoning reform is something of a political orphan. Where left-leaning urbanists see a push for inclusion and affordability, others see the obvious failures of supply-side market deregulation. Where upzoning advocates foresee a dismantling of a historically entrenched system that props up racially and socio-economically exclusionary urban geographies, critics might predict accelerated gentrification and a return to top-down planning, blind to community concerns. The lack of a progressive consensus for zoning reform is at least partially rooted in these tensions; the limits—and harms—of supply-side market liberalization, the lack of cohesion between zoning and affordable housing policy, and the toxic political baggage of past top-down urban planning efforts. A Freer Market Can't Solve the Housing Crisis Last year, California State Senator Scott Wiener proposed a landmark housing bill that would streamline approvals for new four-to-eight-storey apartment buildings in transit-rich areas across the state. Intended to address the housing crisis and alleviate car dependance, Bill SB 827 would have rezoned most of San Francisco, as well as much of the Bay Area, and parts of Los Angeles and San Diego. The much-touted proposal spurred what Randy Shaw described as “the biggest public debate ever held in California over urban housing policy.” And it failed. The rookie State Senator's bill drew predictable criticism from homeowners associations and municipal politicians, with Berkeley Mayor Jesse Arreguín going so far as to describe SB 827 as “a declaration of war against our neighborhoods." While insidious claims about historic neighbourhoods replaced by endless luxury condos also permeated the discourse, the bill also faced determined opposition from the same low-income residents it aimed to help. In Los Angeles, a coalition of 37 community groups argued that SB 827 would "exacerbate the very issue it seeks to remedy, especially in low-income communities and communities of color." By allowing—and incentivizing—the replacement of existing homes with new density, concerns that low-rent housing stock would be replaced by luxury apartments came to dominate the discourse. But what about supply and demand? Wouldn't the infusion of new housing bring bring prices down? Writing in Shelterforce, Rick Jacobus outlines a stark disparity between market-driven support for the bill and community-based opposition. "Commenters wondered what it was about supply and demand that voters can’t quite understand. More than one person suggested that all voters be required to take an entry-level economics class," Jacobus notes. But the impacts of zoning on supply, demand, and housing affordability aren't so straightforward. Analyzing the market impacts of upzoning, a recent study by Yonah Freemark in Urban Affairs Review finds that transit-oriented zoning ordinances in Chicago did not lead to a decrease in prices, nor an increase in housing supply. Instead, the parcels which were up-zoned—in 2013, and more aggressively in 2015—actually increased in property value between 2010 and 2018. In Chicago, new transit-oriented zoning didn't lead to affordability. Photo by Austin Neill via Unsplash. According to Freemark, the rise in prices can be attributed to the potential for more density. By allowing more housing units, liberalized zoning offers greater revenue potential for landlords, which becomes reflected in higher land values. Undertaken over a relatively short five-year period—which doesn't reflect an adequate timeline to deliver new housing supply—Freemark's study hardly invalidates the need for zoning reform and urban density. In an exchange with urbanist Richard Florida, Freemark acknowledges that the study's results aren't "suggesting that increases in the number of housing units won’t eventually lead to lower prices overall.” Instead, the study shows that up-zoning a parcel of land doesn't inherently make it more affordable. But what if new zoning was applied across an entire metropolitan region? Responding to Freemark's research in CityLab, Alex Baca and Hannah Lebovitz point to the links between declining market-rate rents and new housing construction in Washington, D.C., and Seattle. In these cities, the lower rents "have been attributed to an increase in supply, which can be induced by upzoning." Similarly, a 2015 study by Megan Elizabeth Shannon compares four growing cities—Dallas, Houston, San Antonio, and Austin—finds that the highest price appreciation is happening in Austin, which also employs the most stringent zoning restrictions. On the scale of a city, rather than a neighbourhood, zoning can make a difference. By contrast, "simply changing a few elements of a zoning code within a small area would not, in isolation, lead to new housing that’s affordable, nor make existing housing more affordable by creating more supply," note Baca and Lebovitz. In Vancouver, however, a recent study by Andy Yan also finds dispiriting results. In an analysis of property assessment values, Yan found that communities with density-oriented "neighbourhood plans" experienced rapid land value appreciation, even as the value of land in other parts of the city slowly declined over the same two-year period. As in Chicago, the selective "spot zoning" that allows greater density on select areas appears to drive price gains in response to higher revenue potential. Responding to Yan's Vancouver study, urban planner Patrick Condon laments that Vancouver's zoning changes have only made affordability problems worse. "If we can all agree, based on Andy Yan’s statistical evidence and what we all know in our gut, that increasing allowable density only reduces affordability, then we should start by not increasing allowable density, anywhere, in the city," Condon writes in The Tyee. It's a bold and misguided prescription. Condon extrapolates that the land value impacts of "spot zoning" would be replicated in a broader regional upzoning effort—with endless demand driving up the cost of land everywhere. However, the relative value of any given upzoned site changes when the surrounding region is subject to the same rules. (To say nothing of climate impacts). Nonetheless, Condon's reluctance to embrace a strictly market-based solution is well founded. Condon stresses that Vancouver should "only increase density anywhere in the city in return for social benefit." By tying density allowances with inclusionary zoning provisions, Condon rightly argues that the city can guarantee affordability by simply mandating it. While Condon's affordability concerns are a dubious justification for the continued prohibition of urban density, tackling the housing crisis requires more than a market solution, no matter how much new supply can be induced. Even if land was free, the current material and labour costs of constructing new housing would make it unaffordable for low- and modest-income people. From an affordability standpoint, zoning reform could play some limited role in alleviating housing prices—and only if applied at the metropolitan scale. Even then, zoning should be understood as a prerequisite to creating inclusive and affordable environments. "The reason why upzoning is so necessary is because other measures—such as the development of subsidized, permanently affordable buildings, or the construction of market-rate buildings to which rent controls could be applied—are often impossible unless zoning is loosened," write Baca and Lebovitz. Human Right, Commodity, or Capital Asset?

The debate around single-family zoning is largely predicated on the market impacts of new supply. Yet, most zoning reform advocates acknowledge that upzoning is no panacea to affordability problems. While new supply can play a role in alleviating demand pressure, the roots of the 21st century housing crisis run much deeper than an imbalance between supply and demand. For starters, there are two distinct housing crises. The well-documented lack of affordable market-price housing in global cities is paired with growing neglect of public housing programs. Since the mid-20th century, governments in the English-speaking world have retreated from providing affordable housing, a process that accelerated in the Reagan-Thatcher-Mulroney era of the 1980s. In 2019, it means that market-price housing is out of reach for urban workers, while remotely adequate public housing is no longer being provided to lower-income people. According to the National Low Income Housing Coalition (NLIHC), the US government spent roughly three times as much on housing programs in the 1970s as it does today. In an e-mail to the New York Times' Emily Badger, NLIHC President Diane Yentel describes a “modern phenomenon of homelessness didn’t exist in the late 1970s because our country housed almost everyone, including the lowest-income and most vulnerable families.” Put simply, “the key difference between then and now is declining federal subsidies.” In Canada, meanwhile, government policy has almost exclusively focused on incentivizing home ownership—at the expense of renters. According to a study by J. David Hulchanski, an emphasis on a high rate of home ownership has exacerbated the country's social divisions: In recent decades the growing gap between rich and poor Canadian households has increasingly manifested itself in the housing system. The social need for housing exists mainly among renters – tenants whose income (and lack of wealth) cannot generate effective market demand. Meanwhile, public policy decisions since the mid-1980s have further privileged the ownership sector and helped exacerbate problems in the rental-housing sector, problems that include widespread homelessness. Alongside the middle-class crisis of housing affordability, there's a parallel crisis of public affordable housing. Myriad factors influence the former, but the latter is a product of simple neglect. In Canada and the United States, decades of strong cultural and institutional focus on home ownership have come at the detriment of basic public housing provisions. Last year, investigative reports showed that the New York City Housing Authority had a staggering $32 billion in unmet capital needs. In Canada's largest city, the Toronto Community Housing Corporation faces a comparatively modest state of good repair backlog of $2.6 billion (CAD), with under $1 billion in secured funding. For two of the world's financial capitals, it's difficult to interpret the situation as anything short of a moral failure. It gets worse. Since the post-war period, North American housing policy has shifted to subsidizing ownership in lieu of building housing. In both the US and Canada, substantial public subsidies for home ownership help perpetuate the financialization of housing. In Why Can’t You Afford A Home?, market researcher Josh Ryan-Collins argues that the urban housing crises across the western world are first and foremost the products of a global banking system where aggressively scaled-up mortgage lending drives up the price of the land that it borrows against. Writing in the Financial Times, David McWilliams offers a more provocative take. According to McWilliams, former US Federal Reserve Chairman Ben Bernanke's quantitative easing policies—crafted in response to the subprime mortgage crisis—gave rise to the wave of "millennial socialism" exemplified by Alexandria Ocasio-Cortez and the Green New Deal. "By exchanging old bad loans on the banks’ balance sheets with good new money, underpinned by negative interest rates, the Fed drove asset prices skywards," McWilliams explains. "Soaring asset prices, particularly property prices, drive a wedge between those who depend on wages for their income and those who depend on rents and dividends." In 2019, housing is oftentimes foremost an investment. While the cultural importance of home ownership partly rests on intangible values, 21st century price appreciation in cities like New York, San Francisco, Toronto, and Vancouver, makes property a lucrative investment—particularly given the public policies that induce its purchase and drive its value. As a growing number of middle-class boomers in Canada and the U.S. come to depend on home equity as a substitute for retirement savings, what would happen if property values fell? And what about urban millennials—and investors? Would they take on record debt and risk to purchase homes barring expectations of virtually guaranteed price growth? As housing becomes more expensive, we paradoxically become more dependant on prices continuing to rise. It's a tension that Daniel Hertz gets to the heart of in City Observatory. “We say we want housing to be cheap and we want home ownership to be a great financial investment," Hertz writes. And unless “we realize that these two objectives are mutually exclusive, we’ll continue to be frustrated by failed and oftentimes counterproductive housing policies.” If the housing crisis is not primarily a function of supply and the built environment, our response to it can't be solely rooted in addressing the physical structure of cities. The case for affordability and inclusion must entail much more than zoning reform, tackling both the lack of public funding for affordable housing, and a financial system that props up home ownership at the expense of renters and lower-income people. The Toxic Optics—and History—of Top-Down Planning In the public imagination, the financial complexities of housing are sometimes distilled into narratives about global capital flows, interest rates, speculation, or foreign buyers. The same homeowners who prompted to "take an entry-level economics class" about the laws of supply and demand have some reasonable justifications for eschewing supply-side economic thinking. In a system where housing exists as capital, it's easy to frame zoning and density as the purview of self-interested developers. Historical precedent also lends a helpful—if misleading—hand. In his recent book Generation Priced Out: Who Gets to Live in the New Urban America, Randy Shaw argues that many of North America’s global cities chronically fail to provide adequate new housing supply. Like San Francisco, solidly liberal cities Denver and Portland are also places where new development is chronically–and often aggressively—contested. For Shaw, these otherwise progressive communities are “trapped in the framework of past urban renewal fights,” which pitted low-income urban residents against cruel top-down planning policies. In a recent article in Building Magazine, I explain how these historical viewpoints are manifested, and twisted, by today's homeowners: These past conflicts are neatly epitomized through the now-legendary conflicts between Robert Moses and Jane Jacobs. Spearheading New York City’s mid-century urban development, Moses’s policies created elevated expressways at the expense of working class inner-city neighbourhoods, hastily bulldozed in favour of suburban America. In opposition to Moses, Jane Jacobs rallied local residents to oppose the Lower Manhattan Expressway, which would have torn through neighbourhoods like SoHo and Little Italy in the name of "slum clearance.” Moving to Toronto in 1968, Jacobs helped guide the city through similar conflicts that defined the 1970s ‘reform council’ era. The city pushed to demolish large swathes of the inner city, including much of The Annex and Chinatown, to build the Spadina Expressway. Luckily, the expressway was halted. So too was a plan to demolish Queen Street’s Trefann Court, protecting a low-income community from forced evictions. The preservation of Trefann Court marked a turning point in Toronto’s approach to urban planning, giving rise to a more robust community consultation process that puts local residents at the heart of urban decision-making. Like most North American cities, Toronto now hosts extensive public consultations, with residential neighbourhoods protected from disruptive change. Today’s restrictive zoning and community-oriented urban planning ethos emerged as a necessary corrective against the 20th century’s acutely harmful top-down planning regimes, which were often explicitly racist and exclusionary. Viewed through this lens, contemporary opposition to zoning reform continues a long progressive history of urban preservation: a perspective as myopic as it is far-sighted. No longer hubs of immigration and incubators of vibrant ethnic communities, Toronto’s ‘stable’ inner-city neighbourhoods are now full of multi-million dollar homes. Immigrants and low-income Torontonians are increasingly clustered far from the Victorian townhouses once threatened by the Spadina Expressway. The same ethos of community-led planning that once protected the vulnerable from displacement now arguably entrenches the privilege of the few. While community control of the planning process retains links to progressive roots, its implicit density restrictions arguably perpetuate a long and racist history of exclusionary zoning. Yet, the ostensibly progressive optics of community land use control are buttressed by opposition to developer business interests, top-down planning, and the free-market narratives that often accompany pushes for zoning reform. Take, for example, the notion of 'filtering,' which posits that the addition of new luxury housing stock will serve to make older housing more affordable by providing more attractive options for the wealthy. Even if it works, it reads as Reaganite trickle-down economics. Insufficient and Necessary By some metrics, Toronto is the development capital of North America. Signs of growing urban density are impossible to miss. With more per-capita tall building under construction that anywhere else in North America, the city is obviously not averse to new residents. It's also not averse to losing them. As quoted in the Globe & Mail, Canadian Centre for Economic Analysis CEO Paul Smetanin, 52% of Toronto's land mass has lost population since 2001, registering a loss of over 200,000 since the turn of the millennium. For a growing city, the reality of widespread population losses—offset by massive increases in density in small pockets—is an obvious logistical problem. Why do we allow the transit-rich Annex to continue losing population while we push density into Etobicoke's Humber Bay Shores? In Toronto, the so-called 'yellowbelt' of single-family homes (a term coined by urban planner Gil Meslin) loses population as the overall city adds jobs and people. It shouldn't. According to urban planner Cherryll Case, the demographic shift away from the nuclear family has left many residents in single-family homes 'overhoused', yet zoning restrictions prevent them from easily being converted into the duplexes and triplexes that fit today's smaller households—all as high-rise towers spring up on every downtown vista. Even most of the existing mid-rise buildings that dot Toronto's older residential neighbourhoods could not be built today. In 2019, single-family homes still make up much of inner Toronto. Photo by Chelms Varthoumlien via Unsplash. The growing concentration of jobs in alpha global cities like Toronto and New York makes them obvious magnets for new residents. If we hope to continue welcoming immigrants and growing our cities in an environmentally conscious manner, we ought to reconsider how urban land is used. It happened in Minneapolis. Last year, the unprecedented Minneapolis 2040 plan effectively up-zoned the entire city, allowing triplexes—and sometimes fourplexes—across areas that presently contain only single-family homes. In Vancouver, meanwhile, a less ambitious reform legalized the addition of duplexes on single-family lots, while Toronto's much-touted laneway housing policy allows homeowners to add Accessory Dwelling Units (ADUs) to their properties. In California, State Senator Wiener is promising to return with an updated housing bill; one that promises to protect renters from displacement while pushing more density into wealthy transit-connected suburbs. Perhaps it's a model of things to come. As urban affordability problems and the need for environmental action become more urgent, a new political coalition to re-shape our cities may be taking form. According to the Lincoln Institute of Land Policy's Anthony Flint, "a potential compromise" to the housing deadlock "has begun to emerge thanks to forward-looking policy makers: increasingly, cities are formalizing the requirement that new residential development include a percentage of affordable homes, the policy known as inclusionary housing." Despite being left out of it, the movement for zoning reform and density can take inspiration from the Green New Deal. By combining an environmental mandate with new affordability measures—whether through extensive inclusionary zoning, a renewed commitment to publicly built housing, or a combination of both—zoning can become a key part of the progressive agenda across North America. Just as the Green New Deal combines climate action with social welfare programs and a new industrial policy, the push for zoning reform ought to use the mandate for density as a prerequisite for creating affordable and inclusive low-carbon communities. By itself, the market liberalization facilitated by widespread zoning reform may do relatively little to assuage the housing crisis. Yet, the goals of creating inclusive and more resilient new communities are impossible unless the construction of new homes is legally permitted. Zoning doesn't just apply to luxury developers; it's a roadblock for affordable housing too. Let's change that.