Community Engagement and Housing

Kate Cooney:

This is CitySCOPE.

Uzma Amin:

A podcast from the Inclusive Economic Development Lab at the Yale School of Management.

Evan Oleson:

Where we learn about what might be possible in our city by talking with others about what is happening in theirs.

Joy Chen:

Are we ready?

Allen Xu:

Let’s go.

MUSIC (K.Dub):

Elm City, what up?

Joy Chen (00:00:26):

Welcome to Season 2, Episode 2 of the CitySCOPE podcast. My name is Joy Chen and I am a second year MPH student at the Yale School of Public Health. I will be one of your hosts for this episode.

Charlie Gress (00:00:40):

And my name is Charlie Gress, and I’ll also be one of the hosts for this episode. I am a first year MBA student at the Yale School of Management.

Kate Cooney (00:00:48):

And I’m Kate Cooney, Senior Lecturer in Social Enterprise and Management at the Yale School of Management.

Joy Chen (00:00:53):

I think this may be one of the few times when having a lot of cooks in the kitchen can be a good thing.

Kate Cooney (00:00:58):

So what are we covering in this episode?

Charlie Gress (00:01:00):

In this episode, we are going to be rethinking community engagement. Back in Episode 1, we heard from Elihu Rubin, Professor of Architecture at Yale about the lessons of urban renewal, namely the importance of including community voices in the planning process. He was describing how the ethos of new urbanism has supplanted the older narrative surrounding urban renewal. Here’s Professor Rubin.

Elihu Rubin (00:01:23):

It risks repeating the same error of not really listening to people who occupy the spaces of a city in an everyday way. It’s replacing one religion with another religion. There may be a lot of better aspects of contemporary trends in urban design or urban planning, there might be parts of it that are better, but we can’t stop listening, can’t forget about that lesson, that listening and storytelling is so crucial.

Kate Cooney (00:01:55):

So what you might take from that conversation, and it is certainly something I’ve heard many people say - is that community engagement is important. We have to provide space in urban planning processes to allow for community input, right?

Joy Chen (00:02:08):

It’s interesting because community engagement often appears to us to be a positive good; and yet, it has worked against the creation of more affordable housing in cities across the United States. One of the stats reported by the National Low Income Housing Coalition is that there is not a single state or county nationwide in which a renter earning minimum wage, working full time, can afford a typical two bedroom apartment.

Joy Chen (00:02:33):

We also are learning that this is not just about low income households. According to a Curbed Magazine article, Harvard researchers found that in 2016, almost half of all renters were cost burdened, including high income earners in expensive coastal cities.

Charlie Gress (00:02:47):

And it turns out community engagement is part of the problem. Anika Singh Lemar, a professor at the Yale Law School, who also runs the school’s Community and Economic Development Clinic, wonders if we can have too much of a good thing in her article titled, Over participation, describing how community engagement can sometimes be a bad thing in the zoning and land use domains. To start, she echoes Professor Rubin’s sensitivity to the lessons of urban renewal and tells us a story from New Haven’s history.

Anika Singh Lemar (00:03:17):

I am Anika Singh Lemar, and I am a Clinical Professor at the Yale Law School. Doing urban development and community development work in New Haven, I think we are all very sensitive to the history of urban renewal. New Haven, famously, received more urban renewal dollars per capita than any other city in the country, and the scars of urban renewal are less visible today than they were 20 years ago, but it’s still quite visible as you walk around the city. One neighborhood where the scars have been particularly visible is New Haven’s old Oak Street neighborhood. The neighborhood was torn down to build a highway connector that was never completed, so the area where the houses came down, remained vacant for decades.

Anika Singh Lemar (00:04:15):

And it’s important to remember that there are lots of criticisms of that period of time, including an over focus on automobile centered development, a undervaluing of streetscape… I mean, there’s all sorts of criticisms of what happened at the time, but one of the criticisms is that the process in place does not sufficiently take into account the perspectives of people who lived in the neighborhoods, and there wasn’t sufficient opportunity for people who lived in the neighborhoods to guide what got built in the neighborhoods.

Kate Cooney (00:04:53):

We are still on the storyline that community engagement can help right the wrongs of the past, so where is the turn from here to the notion that community engagement is actually the problem?

Anika Singh Lemar (00:05:04):

I don’t think there’s another local government function that prioritizes and empowers public participation the way that land use does. I’m not sure there’s another governmental function period. There’s no other area where public participation is prioritized and valued the way it is in land use. It’s funny because I think a not insignificant number of people who pay attention to urban development questions, would say that the greatest flaw in American urban planning has been failure to take into account public participation.

Anika Singh Lemar (00:05:45):

And with people thinking about things like highway development and urban renewal in particular, I guess it’s not a total contradiction that both of those things are true, because a lot of our public participation processes in land use are responses to the urban renewal period, and the sense that during that time period, overreaching governmental actors ignored the pleas of people on the ground to destroy a neighborhood, or to erect infrastructure that tore up the underlying neighborhood.

Kate Cooney (00:06:19):

Okay, before we get into the critiques of local control, let’s hear more about why proponents say a rigorous process allowing for community input is valuable.

Anika Singh Lemar (00:06:29):

I think there’s at least two threads of thought going through how people think about that. One is that people who live in a neighborhood know stuff about that neighborhood and that knowledge is important. People who live in a neighborhood have opinions about what goes on in their neighborhood, and those opinions ought to be credited. So I think one significant thread in that school of thought has to do with local mileage.

Anika Singh Lemar (00:06:55):

I think another significant thread has to do with the role of capital. So the idea being that people who live in a neighborhood are people and that real-estate development is somehow not people, that real-estate development is about capital and capitalism. And in this context, the only way for people to have a role and a say in how things operate is to be able to participate in these public processes, because otherwise, the movement and deployment of capital would essentially decide what places look like.

Anika Singh Lemar (00:07:39):

That second argument doesn’t get made super explicitly among land use lawyers necessarily, but it does get made pretty explicitly in a lot of political discourse around why land use participation processes are important.

Joy Chen (00:07:58):

But what Anika points out is that the process appears to only reinforce power differentials within the community itself.

Anika Singh Lemar (00:08:05):

I think there’s a couple of flaws with both of those threads. On the former, it is true that people on the ground may know things about their neighborhoods and the way their neighborhoods function or ought to function. But there’s nothing about the process that distinguishes between the kinds of issues where local knowledge is important and the kinds of issues where local knowledge is not important, and there’s a lot of hesitation to come to terms with the idea that oftentimes local knowledge is not important. I mean, there are things where local knowledge is not important.

Anika Singh Lemar (00:08:41):

There are significant flaws with the second thread as well, one of which is that new development might be driven by wealthy people, but existing development is often also occupied by wealthy people. And the public participation processes as they exist today, often reflect and magnify wealth and power differentials, rather than mitigate those wealth and power differentials. And it’s important if you’re hoping that public participation will mitigate wealth and power differentials, to actually craft the processes so as to accomplish that and not simply hope that the presence of the process itself will do it.

Kate Cooney (00:09:28):

This links back to the bigger themes of the season, rethinking community engagement and the role of narratives in inclusive economic development. With reports from the National Low Income Housing Coalition citing a need for seven million more units in affordable housing to close the gap, there’s been a renewed attention to the fact that in a regional economy, there are some towns and neighborhoods that are totally devoid of affordable housing due to blanket single family zoning and minimum lot sizes. This is certainly true in the greater New Haven region, where in the towns that surround the city, like Woodbridge, Madison, Guilford, only 1% to 3% of housing stock is affordable; whereas, in the city core, upwards of 30% of the housing is in the affordable category.

Charlie Gress (00:10:14):

Right, and even with fair share statutes in place requiring all towns in Connecticut to have 10% of their housing stock in the affordable category, neighborhood activists in these towns can stall the development of housing stock for years.

Anika Singh Lemar (00:10:28):

We represent a small suburban public housing authority. They operate two projects that are on adjacent parcels. Each of them is 50 units currently occupied exclusively by elderly and disabled individuals. They’re all very small efficiencies and one bedroom units. The pair of projects have been around for 30 plus years, and as is typical of affordable and public housing, are in need of significant redevelopment. One is in need of basically a total redevelopment, and they have been working to redevelop that project.

Anika Singh Lemar (00:11:13):

Unfortunately, what seems like it should be a pretty straightforward redevelopment project, a publicly owned project, on publicly owned land, desperately in need of redevelopment, has been complicated by a neighbor’s reaction to the idea that the project will be somewhat larger - 67 units, rather than 50, and that the housing would be occupied, not just by elderly and single, disabled people, but also by families.

Anika Singh Lemar (00:11:45):

So, we began work with the housing authority in the fall of 2017. It was their second attempt to get land use approvals, exactly because the existing zoning, the baseline zoning, makes it very difficult to do multi-family housing. They had a first effort the previous year… they had met with a lot of neighbor opposition, so they actually voluntarily withdrew their application, agreed to redesign it in response to neighbor feedback.

Anika Singh Lemar (00:12:14):

And when we got involved, we were expecting this to be pretty simple actually because they had responded to the neighbor feedback. They had reoriented the building, they had decreased the number of units; but they hadn’t done the things that the neighbors really cared about, which is to say that they hadn’t done the things that the neighbors cared about, but weren’t allowed to say out loud, which is that they had to impose a limitation that the housing only be for elderly people, so that there could potentially be families there and there could potentially be children there.

Anika Singh Lemar (00:12:43):

And there’s nothing that suburbs like less than low income children, particularly children of color who might attend their local schools. So even though they completely redesigned the project in response to neighbor opposition, the neighborhood opposition didn’t go away.

Kate Cooney (00:12:59):

That’s an amazingly long time to have this held up. What are some of the ways in which these kind of projects can get bogged down in the process?

Anika Singh Lemar (00:13:14):

Yeah, that’s a great question. So for an affordable housing project to get held up by the land use approval’s process for three years, is a really long time, but it’s also completely typical. So it is extraordinary, but it is not extraordinary in the sense that it is totally ordinary. We oftentimes work in partnership with developers, non-profit and for-profit alike, who are doing affordable housings throughout Connecticut, and are not at all surprised to hear that something’s been in the works for a decade or more.

Anika Singh Lemar (00:13:49):

So how do they manage to draw out the process? So the first thing is that despite the fact that Connecticut law requires every town’s zoning code to accommodate the development of multi-family housing, the vast majority of Connecticut towns operate in clear violation of that mandate and do not permit multi-family housing anywhere in town.

Anika Singh Lemar (00:14:20):

It’s almost impossible, it’s very difficult to do affordable housing as single family housing because it’s just too expensive. And even if you could do affordable housing as single family housing, you would want it to be relatively dense single family housing and most Connecticut towns don’t accommodate any kind of density, which is to say that they have minimum plot size and minimum acreage requirements of an acre or more that make it financially not feasible to do affordable housing without seeking some kind of approval from the local zoning authority. It’s because the default zoning doesn’t permit you to do affordable housing.

Anika Singh Lemar (00:14:59):

So you’ve got to go and get permission, and as soon as you have got to go get permission, you then are subject to whatever timelines on which the local boards act, and that can easily take months or even upwards of a year. And then, if they deny you, or as we’ve experienced in this particular case, they impose lots of untenable conditions on your “approval”, then you end up in court and the legal process takes time. So a few years ago, Connecticut actually created a dedicated land use docket in an effort to speed some of these things along, but there’s only so fast the legal process can move.

Anika Singh Lemar (00:15:50):

Most affordable housing is also dependent on subsidies, and in Connecticut, before you apply for subsidies, you have to have your land use approvals in hand. The primary subsidy for affordable rental housing is the low income housing tax credit and the 9% credit that is an application only credit. That application happens to come around once a year. In some states you can apply more frequently, but in Connecticut it’s once a year.

Anika Singh Lemar (00:16:18):

And then, most projects don’t get funded in their first go around. You apply once, you don’t get it, you make changes to your projects, so that you get more points, and then you apply again. But in Connecticut, if you don’t get funded the first time around, you have to wait. By the time you hear that you didn’t get it, you’re probably waiting like another six months. You can see how very quickly you’re talking about multiple years.

Kate Cooney (00:16:41):

So is this part of what drives more affordable housing to the city? Are the city processes faster? Because, if you’re a developer, you’re not necessarily going to want to have a project held up for that long.

Anika Singh Lemar (00:16:55):

It’s not just the time it takes to get approved, it’s the uncertainty of knowing whether you will ever get approved, because plenty of projects die in the land use approval’s process in the suburbs. And keep in mind that even getting to the point where you’re submitting an application means that you’ve spent likely tens of thousands of dollars on architects, engineers, and lawyers to prepare that submission. So there’s a good deal of sunk cost to submit yourself to a process, where you may or may not get an approval, and you have no idea whether the time it will take you to get that approval will launch you into the next recession, because it will be such a long time.

Joy Chen (00:17:35):

Further, fair share policies meant to ease development hurdles for affordable housing have mixed outcomes. Here’s David Schleicher, a professor at the Yale Law School, an expert in local government and land use policy.

David Schleicher (00:17:48):

So fair share policies are targeted at requiring that each city has a certain amount of below market rate housing. So it is called Capital A Affordable Housing, housing that hits a certain amount of region AMI, or it’s affordable to certain people below a certain amount.

David Schleicher (00:18:07):

I’ll just stick to the simplest one which is the Massachusetts system that every city needs to have 10% of its housing stock be below market rate housing, and if you have not hit this target and someone proposes a new unit that includes below market rate housing and it gets denied, that developer can appeal to basically a state wide rezoning decision that is not determined at the local level. It turns out this policy has been quite effective at producing affordable housing.

David Schleicher (00:18:37):

It does not however target broader housing growth. So it focuses on providing affordable housing to poorer segments of the population, but it doesn’t target broader housing growth. And in fact, in a lot of ways, it encourages cities not to engage in broader housing growth in some dimensions.

David Schleicher (00:18:54):

So because a certain percentage of your housing has to be targeted at affordable housing… let’s say you’re a town and you’re just at 10%, and someone proposes some new market rate housing in your area, the effect of allowing new market rate housing would mean that you have to include some new affordable housing. You may create disincentive to allow new market rate housing, because you would then also have to allow more affordable housing.

David Schleicher (00:19:17):

The proposals I often hear are targeted at broader housing growth. They’re not in any way in conflict with goals around affordable or below market rate housing, but they’re targeted at the real kind of structural problem, which is there’s just not enough housing in our high demand areas. In the Silicon Valley’s and Boston suburbs of the world, there’s just not enough housing for the demand, and that’s true for the poorest people, but that’s also true for middle class people, it’s even true for rich people that housing is too expensive and that a huge amount of the gains from economic growth in these area have gone to landlords.

Joy Chen (00:19:52):

So we have two goals for housing policy - more supply in general and more affordable share of the supply. As David notes, fair share can be effective at creating affordable units that actually decrease supply overall.

Charlie Gress (00:20:05):

And these fights don’t only happen in the suburbs. David tells us the tale of Carroll Gardens, an instance where even at a time when the city was prioritizing the development of housing, a Brooklyn neighborhood engaged in broad scale downzoning driven by community opposition to development.

David Schleicher (00:20:23):

We start the article discussing Carroll Gardens for a couple of reasons, but notably the Bloomberg administration had right around this period announced a desire to allow New York City to grow. They estimated there’d be a million new residents over the next 20 or 30 years, and so they wanted to allow New York to grow.

David Schleicher (00:20:43):

Carroll Gardens, right on the F train, a rich homeowner neighborhood, seemed like an optimal place to allow growth. But at the exact time as they were announcing their desire to grow, they were rezoning Carroll Gardens to remove capacity to build; they were downzoning it, or reducing the available heights and densities for builders in the area. And we thought this was characteristic of some systematic problems with the way cities approach zoning procedurally.

Kate Cooney (00:21:16):

There’s a new book out by Katherine Levine Einstein and David Glick, which takes a whole year’s look at minutes from these kind of land use meetings. My dog is panting in the background here.

David Schleicher (00:21:30):

Very excited about land use.

Kate Cooney (00:21:31):

Yes. Yeah. So 97 cities and towns and they find, just even demographically you can see that it disproportionately tilted toward long-term residents - older, whiter, more male than the actual population. They’re considerably organized; there’s professional backgrounds represented. Can you talk about the cost of collective action and who that privileges in these processes?

David Schleicher (00:22:00):

So the central insight is that the way we organize land use procedure has predictable outcomes for political participation, which itself has predictable outcomes for outcomes. Because we make most zoning changes in a localized manner, we make them seriatim, one after the other. When we seek to make a change, certain groups get activated while others do not.

David Schleicher (00:22:25):

So if we make a change, we’re going to up zone a neighborhood, up zone, allow more density in the neighborhood, the people who would oppose density in that area, neighboring home owners who either don’t want the externalities, the smoke, the traffic, the whatever it is that comes along with a new development, and also don’t want the competition as they’re the holders of assets, their homes, and they don’t want new homes which could drive down the value of their homes, become activated because it’s something in their neighborhood and they are a neighborhood of people who are physically proximate to one another and are able to organize.

David Schleicher (00:23:01):

In contrast, the consumers of new housing are not activated by a localized one off decision. Future renters or future homeowners are obviously not there, and any one land use decision in one neighborhood in a metropolitan area won’t activate any of their interests. They’re interests are too small in any one of these areas, even if collectively across all potential neighborhoods they’re quite large.

David Schleicher (00:23:26):

Similarly, employers who have an interest in more housing because it allows them to basically give their workers a higher real wage for a equal nominal wage are not activated by a rezoning in one area. JP Morgan, who’s the biggest single private sector employer in New York, is not going to fight over a rezoning in Carroll Gardens, Brooklyn, because it’s such a small part of the broader metropolitan area in which JP Morgan is active and where JP Morgan workers can live.

David Schleicher (00:23:57):

And so, we activate certain communities the way we make decisions and a different way of making decisions could activate different groups. So where we have public meetings among people who are local to a project and because we’re making the decision on a geographically defined narrow set of projects or a rezoning, that will encourage a group of people to become involved who are local to the project, are likely homeowners and are richer and whiter than the broader population, which would include a full set of renters and people from all around the region.

David Schleicher (00:24:34):

And so, the insight is that the process helps define who gets politically involved and that the who gets politically involved has a result on the outcome.

Charlie Gress (00:24:45):

David and Anika stories highlight the many issues at play here, including but not limited to the impacts of racial segregation and the broader NIMBY or, not in my back yard movement.

Joy Chen (00:24:58):

Yeah, I mean, the issue with racial segregation is an especially salient one as the history of housing policy has primarily supported the acquisition of home ownership by wealthy and white populations, creating concentrations of wealth and whiteness. White cities and towns don’t want to let in communities of color which creates a housing problem within cities. It begs the question, who exactly has the responsibility to create affordable housing? Who should be held accountable? What are some opportunities to shift away from the status quo?

Charlie Gress (00:25:29):

Let’s start by going back to the urban renewal era and listen to another story Anika told us from that time period.

Anika Singh Lemar (00:25:36):

In New Haven, we have a couple of stories we tell about the urban renewal period, one of which is the Oak Street story, but the other of which, which I also tell in the paper is the Wooster Square story. Wooster Square gets targeted for urban redevelopment a little bit later than some of these other neighborhoods. By the time it comes, people on the ground are sort of forewarned as to what this might look like and they have a chance to launch a defense.

Anika Singh Lemar (00:26:07):

So there was at one point a plan that would have had I-91 running straight through what is now Wooster Square Park, and the neighborhood successfully advocated for two primary things. One, for the highway to be moved over. Note that it was moved over; it wasn’t eliminated. It was moved over. There was housing that was still torn down and people who were dislocated in order to build the highway. And they were able to advocate for the use of federal funds, not to raise and build anew, but to do renovation of existing buildings, and that required a change to federal laws. Not that Wooster Square caused the change to federal law, but by the time urban renewal came to Wooster Square, that change had occurred, so they were able to do it.

Anika Singh Lemar (00:26:59):

So the neighborhoods where public participation was ignored, fell, that’s the Oak Street, and the neighborhoods where public participation was valued, succeeded and that’s the Wooster Square story. But of course, it’s overly simplistic in a lot of senses; one of which is that Wooster Square was actually a quite politically powerful neighborhood, largely white, largely Italian immigrants and their descendants. So we shouldn’t actually be all that surprised in that respect that they had power where some other neighborhoods didn’t.

Anika Singh Lemar (00:27:31):

And two, the way that they wielded that power, was not to make sure that nobody got displaced and nobody’s lives were harmed by the erection of I-91, instead they moved the highway to a part of the neighborhood that was poorer and where there was a higher percentage of residents who were people of color. So the idea that the story is a success story for public participation is complicated to say the least.

Anika Singh Lemar (00:28:01):

The simple extrapolation from those two anecdotes is that public participation can simply exacerbate power differentials, rather than address them. One can imagine modes of public participation that, rather than present a free for all where people with more time, more resources, more money, more lawyers win the free for all. So if what you’re actually trying to do is address wealth disparity and power differentials then how would one craft a strategy that actually does that, that prioritizes the construction of affordable housing, that does it in places that are well resourced and where there’s likely to be opposition to affordable housing?

Anika Singh Lemar (00:28:51):

It’s just one example. I mean, housing is not the only thing. If what you care about is wealth and income inequality, housing is just one important thing, but not the only thing. But, if those are the things we care about, if you’re in that second bucket of public participation proponents that I mentioned earlier, who are hoping that the public participation is a way to get at wealth and income inequality, then I think those two anecdotes pair to suggest that public participation in and of itself is not the thing that is going to go get you there, you’ve got to craft the public participation process in an effort to deal with those things more explicitly.

Joy Chen (00:29:32):

Anika Singh Lemar emphasizes reforming the process, making it more standard and rigorous. She suggests making it a requirement to have a structured, deliberative process that requires input across the many stakeholder groups. As one potential option, Anika proposes that governments can create this requirement by adopting a process that’s already codified, though admittedly not without its own flaws, the Model State and Administrative Procedures Act.

Anika Singh Lemar (00:29:59):

Most administrative processes distinguish between two different basic kinds of processes that in lay speak distinguish between rules that are generally applicable and then adjudications that are specific to a particular person, or company, or entity, that are specific to particular individuals. And the rule making process by which administrative agencies make generally applicable rules, incorporate public feedback.

Anika Singh Lemar (00:30:38):

So there has to be a process during which any member of the public can provide comments, that always includes written comments. It sometimes also includes public testimony, and there is a requirement that the agency doing the rulemaking engage with, in a meaningful way, the various comments that it receives and that it responds to those comments.

Anika Singh Lemar (00:31:06):

Somebody who had an opinion about how that should play out, would have to make a case to the adjudicating party, to the judge, or the administrative law judge in this case, that they belonged in the proceeding, that the results of the proceeding were going to affect them so much that they ought to have a seat at the table as well, and that there’s a standard for that, that you have to meet and that may change depending on what the applicable rules we’re talking about are, but it’s not a total free for all where anybody can step in.

Anika Singh Lemar (00:31:44):

And it strikes me that we ought to keep thinking along these lines in the development context as well. There are states that still do this. I mean, this is what the original Standard State Zoning Enabling Act did, was draw lines, not using these exact words, but draw lines that looked like what I just described, and there are some states that still do that.

Anika Singh Lemar (00:32:04):

Unfortunately, the states that are most well-known for the difficulty of building new housing are also the states that have embraced wide open public participation processes, even in the context of development approvals for a particular parcel of land and a particular developer.

Charlie Gress (00:32:28):

But Anika doesn’t think just codifying requirements is enough; cities can take it a step further.

Anika Singh Lemar (00:32:34):

We should be going out to where people are. We should be soliciting their feedback. We should be making it easy for them to get feedback. We should not just be asking for feedback, we should be finding out what people want or think in the planning process, and make the development approval’s process more streamlined and feel good and okay with the fact that it’s more streamlined and there’s less activity for public participation, because we know that public participation informed the planning and the zoning that set the rules that are applicable to everybody.

Joy Chen (00:33:06):

David Schleicher offers another set of solutions. He draws inspiration from seemingly unrelated policy fields of trade policy and military base closings.

Charlie Gress (00:33:16):

These policy domains, like housing, feature situations where action creates concentrated harms but diffused benefits. David Schleicher argues that housing policy can learn from these two disciplines and how they have rearranged incentives to create less resistance to action towards broader goals.

Kate Cooney (00:33:34):

One of the things I really enjoy about your work is the creativity you take with both conceptualizing the problem and the jumps you make to thinking about the problem through the lens of other kinds of policies and your recommendations for policy adjustments. I want to start on the conceptualization side. You take inspiration from thinking about base closings and trade policy - what do you think we can learn from these other domains that can inform housing policy?

David Schleicher (00:34:02):

The base closing commission and the change in trade policy we saw in the 1930s, have in common with housing policy both a problem and a potential solution. So both of them involve situations in which there are geographically concentrated harms. Closing a base in town will create economic harm in that town; similarly, reducing tariffs on a product made in one place will have geographically specific harms on that place. Whereas, the benefits of, in the context of base closings, is like a cheaper, more efficient military, and in trade policy is general reduced consumer prices are broadly dispersed.

David Schleicher (00:34:42):

And as Mancur Olson famously found, policies where there are geographically concentrated harms, those groups will generally have the more incentive to be involved in politics, whereas, situations where there’s a dispersed benefit, because the benefit is so small to each one of them individually, have a little incentive to get involved in politics. So we can end up in bad outcomes because of the nature of the harm. So this is true in base closings, it’s true in trade policy, and it’s true in housing.

David Schleicher (00:35:09):

In the context of base closings and trade policy though, Congress came up with a procedural policy designed to reverse the dynamics of this politics. And so, in base closing, they created the BCRA, that was designed to make a single recommendation to Congress on all of the bases that had to be closed, and required Congress to vote on it on a closed rule.

David Schleicher (00:35:33):

And the idea of this was rather than it being one off decisions about individual bases, they would face the question of should we improve the military in a package of closing down bases and force cities around the country to effectively negotiate with one another, or agree to fight the battle on the local versus broader terms with the issues joined.

David Schleicher (00:35:56):

In trade policy, the Reciprocal Trade Act in the 1930s had the effect of tying import tariff decisions to decisions made in other countries, basically made a formally and legally linked what was happening with other countries’ trade tariff policies to what was happening with our tariff policy, basically, it’s this statutory basis for trade deals.

David Schleicher (00:36:22):

And, this had the effect of encouraging a different interest group, exporters, to become interested in import tariff decisions. There’s no natural reason why Boeing would lobby to change import tariffs on fabric imports or clothing imports. But the Reciprocal Trade Act had the effect of making these two issues linked, which encouraged another interest group to get involved. And, we take these two examples to fashion a policy or a way of thinking about policy that would allow cities to overcome homeowner opposition with respect to housing decisions.

Kate Cooney (00:36:57):

So is the idea that the zoning budget would get created either at a metropolitan regional level or even a state level, that would allow for the larger employers to actually weigh in? It would be a level broad enough as opposed to the local Carroll Gardens meeting, their interests would be represented and could be solicited? Take us down to brass tacks a little bit; how would you conceptualize that working for housing?

David Schleicher (00:37:26):

So our proposal in balancing the zoning budget takes the hardest problem, focusing in on policy need at the city level and how you could take advantage of whatever time you see a pro-housing group, pro-housing mayor, or a coalition in power to change procedure to create systematically more pro-housing outcomes down the line. But it would be easier if you did this at a regional level or state level. So I can get into that in a second, but the idea is that at the city level, so the city level is bigger than the way we ordinarily make land use decisions which are done at the neighborhood level, neighborhood specific zoning amendment, or even more a project specific zoning change.

David Schleicher (00:38:04):

The idea is that if the city established a target for housing growth, we need a 100,000 new units in the next four years, something of that sort. The setting of that target, if it was binding in some way, would encourage the JP Morgan Chases or the AFSCMEs to get involved in the decision at the broad level, the overall housing target, which would then by procedural rules, bind the capacity of the city to make more localized decisions. And so, the idea is that to set a target, a budget, you would encourage these interest groups to get involved at the city level.

David Schleicher (00:38:40):

Now, the same logic could happen at the state level, and so you think about something like the California Regional Housing Needs Allocation system, these are a series of local targets set through a complex procedure involving both state and local officials. But the idea in some ways is the same, which is that it encourages a broader group to get involved in what are eventually local decisions, and to link those local decisions to the broader goals with a bunch of procedural rules.

David Schleicher (00:39:08):

And so, that’s the basic structure of the idea. A little more specifically, the idea is that once a target is set… so the city says, “In the next four years we need a 100,000 new housing units,” the city would be barred from passing any new down-zonings until the target was hit, and then once the target was hit, it would need to match any down-zonings with up-zonings. And so, that’s the idea is that it would bind it to its target. By the way, it would be reciprocal so that if once the target was hit, if it wanted to up-zone, it would also have to down-zone. But the idea is that this would activate the interest groups and that’s the kind of central move in the piece.

Charlie Gress (00:39:47):

So the insight involves moving the decision point to a level where regional goals can be prioritized and a broader set of interests represented.

Joy Chen (00:39:56):

Right, it brings to mind a whole set of mechanisms that can be deployed on a regional level to shift the balance of power away from NIMBY home owners, who can create long delays in new housing development.

Kate Cooney (00:40:08):

You and your coauthor talk about the New York City Special Theater Subdistrict. What’s interesting to you about the way that unfolded?

David Schleicher (00:40:17):

The New York Special Theater Subdistrict is one of the most fascinating stories in land use policy and it’s been replicated several times by New York City afterwards. The basic idea that New York City wanted to rezone the Times Square area but had faced extraordinary political difficulty in doing so. The neighbors didn’t want it to happen despite the fact that the rebuilding of it would create a very large economic benefit.

David Schleicher (00:40:46):

So New York City came up with a clever idea, which is at the time Broadway was declining really dramatically, and so, what they did was they gave theater owners, who owned landmarked theaters, the ability to sell the air rights above their building across a broad swathe of the Times Square area. What does this mean? It means that where a Broadway Theater is, is zoned for a tall building and what the policy did was it allowed those theater owners to sell the allowable density to other buildings, would then be allowed to build denser than current zoning allowance. Why was this attractive as a political matter? Well, people liked the theaters, people wanted to subsidize Broadway, this was a mechanism for doing so. As importantly, it meant that the theaters lobbied for the rezoning, because the only way they were going get these, what are called transferable development rights, were going to produce money for them is if the system was approved and they were allowed to sell the air rights. And so, the theaters lobbied for this combined TDRs and up-zoning proposal.

David Schleicher (00:42:00):

There’s a cost to this in that the city is effectively giving the theater owners money to lobby for rezoning. The city could theoretically sell itself the air rights, or it could simply allow the development on its own without creating the TDR system, but they couldn’t politically achieve the rezoning without the political heft of the theaters and the public sympathy for the theaters. People wanted Broadway to remain a going concern, and so, the city leveraged the broad public sympathy for the theaters into a rezoning by effectively allocating some of the benefit from the rezoning to the theaters.

David Schleicher (00:42:41):

New York City has replicated this several times in the Highline rezoning and in the East to Midtown rezoning and the processes are a little different, but they are effectively allocating some of the gains from a rezoning to a politically attractive group.

Charlie Gress (00:42:57):

Let’s hear about one more policy proposal David has advocated to shift the coalition of interest groups towards a balance that gives more weight to regional housing needs, something he calls the tilt.

Kate Cooney (00:43:10):

There’s another idea that you’ve proposed - the idea of the tilt, to where you’re taking a piece of the growth in taxes and allocating it back to existing land owners and it’s been picked up recently by affordable housing advocates in thinking about not only sharing with home owners, but also with renters.

David Schleicher (00:43:31):

I have proposed the tilt as a way to see off opposition to rezoning. Generally speaking, if a developer wants to build something and the city has a problem with it, the developer is required to make concessions. Sometimes the developer’s required to pay impact fees, or pay the city for the cost of services that the new development will occasion. Other times, developers engage in things called community benefits agreements, this is for very, very big projects like the sports stadiums and that kind of thing, where the developer will agree to hire locally, to build a new local park, whatever is, in order to get those community groups to support the new development. The problem with all of these is that if you make the developer pay for new community benefits, that is effectively a tax on development, but because the developer has to pay for all these new things, it costs more to develop and that taxing something means that you get less of it.

David Schleicher (00:44:26):

The tilt’s idea is that we may need to pay off these local groups in order to get them to stop opposing the projects, but that we could pay them off from a different source. We could pay them off with the gains the rest of the city sees from the new development. So, when it rezones something and build it more densely, it produces more property taxes, the property value goes up. The idea here is that you could take what’s called the tax increments, where basically, you have a set property tax rate, but the property value has gone up. That produces more property tax revenue, because the property tax is the rate times the value of the property, so the property value has gone up. You can take the new property taxes the city is getting from a project and give it to some group of opponents. So, in the paper I propose you give it to nearby homeowners. They’re generally the biggest problem for new development. So you give some percentage of the new property tax revenue from the up-zoned area to the property owners nearby. You basically reduce their property taxes, and thereby, reduce their opposition to the new project.

David Schleicher (00:45:34):

The theater subdistrict TDR system that I talked about earlier, is in many ways a even more efficacious version of this same idea, in that you’re not giving the money to opponents, but you’re giving it to some outside interest group who is particularly politically efficacious. You could imagine allocating it to specific local projects, or to renters, or whomever you think is necessary to get the project over the line.

Charlie Gress (00:46:00):

Many of David’s policy proposals rest on creating more transparent ex ante regularized processes that can smooth developer investment, but also reduce public sector flexibility. And because the public sector likes to have negotiating power, some of these policy prescriptions have been slow to spread. There is also a more general critique of comprehensive community planning.

Joy Chen (00:46:24):

Right, but as David points out, the opposite of community planning is not no planning. Let’s listen.

Kate Cooney (00:46:31):

The second article we looked at, Planning an Affordable City, you’re making a case for more comprehensive planning, right? Rather than these one off decisions to think more broadly, regionally, comprehensively about housing needs. What have been some important critiques of comprehensive planning that we should keep in mind?

David Schleicher (00:46:52):

So the critiques of comprehensive planning, which by the way, my coauthor and I agree with largely, is that it is premised on an idea that planners know where things should go. They are able to have a crystal ball and see what kind of needs people will have in the future and assign activities to places and know how much housing we need, know how much office space we’ll need, that the critiques of comprehensive planning are critiques of planning.

David Schleicher (00:47:19):

The point Rick Hills and I make is that while comprehensive planning, there are real reasons to be skeptical of it, what we’ve gotten instead of comprehensive planning is not, not planning, but instead is non-comprehensive planning. We still assign uses and densities to specific areas, the same way we always have, since the rise of zoning, but we do so in a variety of one off decisions made at the neighborhood level, rather than in city wide decisions, or region wide decisions, or state wide decisions. And, the criticism of comprehensive planning have a lot of force, but it’s hard to see what has evolved as particularly responsive to these criticisms, that everything that is bad about comprehensive planning is equally bad about neighborhood making decisions about uses and densities. But it’s in contrast, neighborhood specific planning, or block specific planning, or whatever you’re focused on, has the downside of not allowing city wide concerns, or region wide concerns to come into play.

Joy Chen (00:48:26):

As we begin to understand more about the impact of anti-development forces on the supply of housing and consider some intriguing alternative approaches to structuring community engagement, another important question might be, what is at stake?

Charlie Gress (00:48:41):

Right, the so what question. What is all this delay and disruption in housing production costing us?

David Schleicher (00:48:48):

Quite a lot is at stake if we do not build enough housing in high demand areas. Economists have attempted to estimate how much loss we’ve seen as a result of not building housing in our high demand areas. If you go back 100 years when we had booms, we had boom towns. When Chicago booms around the turn of the last century, it’s population skyrockets from 40,000 to two and a half million in 60 years. In contrast, if you look at Silicon Valley, our modern-day boom town, its population barely increases by a couple hundred thousand since the 1980s, it’s 40 years. The economists have attempted to estimate how much is lost as a result of our restrictions on housing growth in our highest demand areas. And the numbers they come up with are just enormous. So they have a variety of different methods, people use a variety of different methods of doing this estimation, but they suggest something like 8% of GDP. Some of them get as high as 12% or 13% smaller, as a result of not building housing in these rich areas.

David Schleicher (00:49:51):

And so, the idea here is simple - that people would earn higher incomes in these rich areas if they moved to San Francisco, or you moved from Silicon Valley from Detroit, and they estimate the declining amount as more people came, and they estimate how much more productive we’d be as a society. To think about what 8% or 10% or 12% of GDP is, it’s impossible to think about. You’re talking about the size of major European economies are not 12% of the overall US GDP.

David Schleicher (00:50:20):

And so, even if these estimates are off by a very large amount, you’re still talking about a huge amount of economic loss. Further, those estimates don’t think about too much about distribution. Matt Rognlie, the economist, has estimated that a huge amount of the effect you find in Thomas Piketty’s work of returns to capital over labor over the last 50 or 60 years, have been returns to land capital; that people who own dirt in the New York suburbs, in the Boston suburbs, in Silicon Valley, and in San Francisco, in the west side of Los Angeles, wherever you want to talk about, have seen extraordinary returns to their investments and the effect of this is to really bias broader economic and wealth inequality in the country. These are giant, giant effects.

David Schleicher (00:51:09):

And so, I don’t think you should put too much stock in the specific, precise estimates because you’re talking about changes over 50 or 60 years. It’s really hard to estimate, but the size of the effects on both output and equality is undeniably very, very, very, very large. And so, if we don’t build housing in our richest areas, we will not have boom towns and the result of that is that a much larger percentage of Americans than should will be excluded from those booms, and that’s very, very bad.

Kate Cooney (00:51:39):

And also stuck in a declining metropolitan region for longer than they otherwise might have been.

David Schleicher (00:51:47):

Being stuck in a declining area is really bad for growth, which is, I didn’t even really get into it, but it can have really negative effects for intergenerational economic mobility. Further, I mean, you could get into softer ideas like where do ideas come from, and it turns out that there’s at least some evidence that the ideas being in the air, in denser metropolitan areas, has effects on growth. So all of the estimates of the economic activity are level effects. If everyone moved from Nevada to Los Angeles or Nevada to San Francisco, how much higher would their income be today? But there’s a lot of good theoretical reasons to think that not only would their income be higher today, but their future productivity growth in the economy would be higher because people would be learning from one another and coming up with new ideas and doing whatever it is they do when they come up with ideas in Silicon Valley. They have coffee and they come up with an app or whatever it is they do. I don’t know, but it seems to produce a lot of new ideas and economic growth and that by keeping the large percentage of the population out of that, we’ve lost out on the capacity of those people to learn from the existing population of the Silicon Valleys and the Bostons of the worlds, and further, for the people of the Boston, Silicon Valleys of the world to learn from them.

Charlie Gress (00:52:56):

This was the reigning narrative just a few short months ago. Something to consider is to what degree these dynamics will continue to hold in the post COVID-19 era.

Joy Chen (00:53:07):

Anika pointed to some lessons we might take from the economic downturn in 2008.

Anika Singh Lemar (00:53:12):

The great recession had lasting impacts on New Haven housing market that we’re still dealing with today and the economic crisis is going to do the same. In the aftermath of the great recession, we’ve seen quite a lot of consolidation of the small multi-family housing market, a lot more consolidation of out of town landlords, and alongside that, worries about housing quality and accountability from landlords who are not local. I mean, I don’t think that local landlords are necessarily going to be better landlords than out of town landlords, but the consolidation in the marketplace has been troubling because there’s less power on the part of tenants to move into higher quality housing when all of the housing on a given block or in a given neighborhood is owned by one out of town landlord who doesn’t maintain properties very well. So I think we’re likely to see even more of that and figuring out what to do about that. It’s been tough and it’s going to continue to be tough. There’s going to be a very short to medium term struggle to figure out what to do in a situation where you have lots and lots of tenants who just can’t make the rent, and some landlords who can handle the financial shock and some landlords who can’t.

Charlie Gress (00:54:28):

We asked David the same question.

David Schleicher (00:54:30):

There are a huge number of questions associated with the effect the COVID-19 pandemic will have on the housing markets around the country. It’s fundamentally very hard to know what’s going to happen to housing markets going forward. A variety of people have predicted kind of the end of cities as a result. And one thing to note before I go into some more specific things in a second, which is that the most comparable moment in American life to the current one, the 1918 Spanish Flu pandemic, was followed by the fastest period in urban growth in America, the roaring twenties. The effects are really hard to game out. I’ll say a few… I have a few thoughts, one is in the short run. In the short run, we are going to see that cities and states are facing extraordinary, wild fiscal pressures. I mean, this is going to reduce the amount of public money available for housing, particularly for below market rate or affordable housing. That is generally produced in one of two mechanisms, one is the city builds it, or it builds it often with the aid of the federal low-income housing tax credits. Both of those sources of money are going to dry up really substantially, that cities and states are faced with huge deficits and very strong competing demands are going to just have less money available for building affordable housing. Further, the value of low-income housing tax credits has fallen and the result of that will be less money available for affordable housing.

David Schleicher (00:55:56):

And further, another mechanism, inclusionary zoning, is going to be less effective. If you imagine that there is, at least in the short run because it’s a recession, there’s a decrease in demand for everything. But further, perhaps in a localized decrease in certain areas, the ability to make developers build economically unattractive things, below market rate housing, in return for the right to build market rate housing, if the demand for market rate housing has fallen, their capacity to bear the cost of building below market rate housing will fall; and as a result, in the short run, we’re going to see the bottom falling out of the capacity of government to build below market rate housing.

David Schleicher (00:56:37):

This is going to be the first challenge. We’re just not going to have any affordable housing built for a while, or not very much, and that will create extraordinary economic pressure on certain people. Further, we may just not see much housing built overall, particularly in places where it is complicated to build because the processes have stopped. And the result of this will be even if demand falls in certain areas, as you mentioned demand to live in New York City falls, the supply is also going to fall. And so, the effect on prices will be to sag in the medium run.

David Schleicher (00:57:06):

Secondly, there is a belief that because we’re all on Zoom and people are working from home, that the future will be everyone sitting at their computer and not having to live in superstar cities to have access to superstar jobs. One thing to note is that this has been a long held belief. Alvin Toffler, in the eighties and nineties, predicted that we would all be living in Wyoming, that demand to live in metropolitan areas would fall because we could all telecommute. What’s worked in practice so far has been that technology has been more of a complement to in-person communication than a substitute. As technology has increased the range of certain businesses, that you can run a global business empire from an office park in Silicon Valley, on Palo Alto, the demand to have people there in Palo Alto and to have them working together and doing all the idea generating stuff, has increased rather than decreased. Further, people use information technology to set up in person communications. So if you think about… you send your emails, you send an email to set up a coffee, or you use Tinder to meet someone on the Internet. It’s possible that now that we’re on Zoom that this is the moment that the Tofflerian prediction will come true. And if you’re working from home, why then can’t you work from Wyoming or from Dallas and pay less for housing than it costs to work in Boston? Could be true, hard to say. There are reasons to think yes, there are reasons to think no. The reason to think yes is that well, the cost of housing in these areas is so high and the cost of office space is so high, even if they’re losing a little productivity by having people move all around the country, the gains from reduced expenditure, either for offices or for homes, is worth it. Facebook declared that people could work from home, but they noted that if people left San Francisco, they would see a salary decrease to fit their decreasing costs and presumably their decreasing productivity.

David Schleicher (00:59:03):

So the reason to think that it will not have that effect is well, it hasn’t had that effect before. We’ve had this technology before, it’s not like Zoom was created in March 2020. Firms had incentives to figure it out before and they decided in advance to think that it’s still worth it to meet in person or go to offices, their argument is that nothing will change. My guess at the truth is somewhere between, that you will see more working from home. You already were before the pandemic and I think it’s quite likely the pandemic speeds up working from home, which will decrease demand for office space in these areas. I don’t think it’ll be super dramatic, but I think it will be real.

David Schleicher (00:59:39):

The effect of this will have a couple of complex effects. One, is the first order effect which is that it will decrease demand for these areas, which will increase workers wiling to live in Akron, and maybe it will have the effect of spreading some of the gains from economic activity, while potentially decreasing productivity overall. Second, you might see if every office reduces its demand for office space in Manhattan by 10%, the price of a Manhattan office space is still pretty high and you might see people moving their headquarters from Paramus, New Jersey or wherever, to Manhattan, because the price is falling. You could see losses in suburban office space, because if you’re only going to have basically a meeting room space, or something people come to once or twice a week rather than every day, it’s possible you’d want to have that in the highest value place for people to interact. Who knows? It’s really hard to say right now what the effects are going to be five, 10, 15 years in advance are. The one thing I have encouraged policy makers to do is take a beat and think about this for a second. Land use changes take a long time. They just take a long time to do. It’s complex, there’re a lot of tradeoffs to do. It seems to me that in May or June 2020, given how fundamentally uncertain the next couple of years look, it seems like probably the wrong time to be making radical rezoning decisions, because it’s hard to know. So that’s where I’ll leave it all off, but to say that the forces of urban agglomeration have driven the huge demand for housing and office space in the New Yorks, San Franciscos, Silicon Valley, are very, very powerful forces and they - so far up until February of this year, information technology served to encourage or increase the power of these areas. It’s quite possible that the future serves to decrease them to some degree, but no, I don’t know.

Kate Cooney (01:01:36):

I’ve been think about the ideas in the air dimension too, all of that, and if that proximity you have living around each other, even though you could easily commute on Zoom, there is just something about being in the same region and part of the same political conversation that serves to create the broader creative mix of thinking. I just wonder if you’re a Hollywood agent living in Kansas, even if everything’s happening on Zoom, you’re still not in the conversation in the same way if you’re in LA.

David Schleicher (01:02:10):

Completely agree. Once in a paper I said that a lobbyist living in Capitol Hill, in DC, learns how to do their job at every coffee and every dinner; discussions are about legislative procedure. A person talking about legislative procedure in Capitol Hill is an information spillover. Everyone’s learning from them, they’re learning from everyone else. A person talking about legislative procedure in Kansas, it’s a bore. No one wants to talk to that person. And so, I think that there’ll be demand to live in these areas still, because there’s a real value in deep labor markets. And of course, some of that is internalized to firms. Firms don’t want to lose that communication among workers either, and so, that will diminish the gains they see from everyone being on Zoom.

David Schleicher (01:02:51):

One last thing. So there’ve been studies that suggest that productivity on Zoom is higher than people thought. Wherever their estimates came from is unclear, but it’s completely possible, in fact likely that it’s much easier to keep a relationship going on Zoom, than it is to develop a new one, that a culture of communication, once you know someone, you know what they’re about, you can communicate by Zoom or on the telephone or whatever else, but the types, the development of a culture, a firm culture, a scholarly connection, whatever it is, still may be easier in person. And so, it’s possible we’re currently eating the seed corn of the deep sets of relationships and corporate cultures we created pre-March 2020, but that we couldn’t recreate them over Zoom.

Joy Chen (01:03:34):

So despite how tough this situation seems right now, particularly as our economy faces the impacts of a global pandemic and an uncertain recovery, I’m excited about the ideas that our guests shared with us today about how to rethink the role of community engagement in housing production.

Charlie Gress (01:03:52):

I agree with that, Joy. As both Anika and David attested, the problems associated with the lack of affordable housing in the US, do not have easy solutions. However, the ideas we discussed today, combined with bold leadership, offer a way forward that could really shift the current dynamics in regional housing development. One thing that really comes through in this episode is how resistant communities in wealthy suburbs or well-heeled neighborhoods can be to increasing density and allowing broader access to the assets within their borders.

Joy Chen (01:04:23):

Yes, and part of that resistance may be rooted in a lack of understanding of how these neighborhoods and suburbs came to be as homogeneously white and wealthy as they are today.

Charlie Gress (01:04:33):

Stay tuned for episode three where Naomi and Ariana talk with a team from the University of Minneapolis, whose project, Mapping Prejudice, is the first in the United States to count and geolocate all of the restrictive housing covenants in the county. This project galvanized the city and led to some surprising results.

Joy Chen (01:04:53):

Don’t miss it.

OUTRO

Alexandra Sing:

This podcast was recorded in our homes on Zencastr.

Stephen Henriques:

Created by Kate Cooney and the students of the spring 2020 Inclusive Economic Development Lab class.

Marisa Berry:

All engineering and projection by Ryan McEvoy and Kate Cooney.

Joy Chen:

Special thanks to Rhona Ceppos for administration support and to [Giana Montez 00:39:57] for assistance with Zoom.

Charles Gress:

Music from the album Elm City Trees composed and performed by the artist K Dub. For more information and show notes, visit our website at iedl.yale.edu.

Arianna Blanco:

Thank you for listening.

Music (K.Dub):

Look, I’m from a city that’s half pretty and half gritty. Ain’t too many cities rocking with the Elm City. Home of the blazers. Those were the days. When I played, all these fast breaks. We don’t need plays. We play on Sundays like we don’t need praise. We pressing all game like we don’t breaks. Look, no debate. Best team in the state. We flow like the Lakers back in ‘88. I learned to play crazy eights in the city that raised the kid that want to big. Like I want to be big. I really hate the way rap’s portrayed. I want to the kids in the Elm to see a different way. Because way back I knew that I would get some pay. Every day in the mirror trying to get some waves. I ain’t trying to push weight. I want to own estates. Putting on the state on my license plate. Elm City. All I need is some Elm City trees. Avoided the trap, now you know where I be at. Everywhere I go, I rep that 203. Yeah, I love my city, but I had to leave. All I need is some Elm City trees. Avoided the trap, now you know where I be at. Everywhere I go, I rep that 203. Yeah, I love my city, but I had to leave.