Upzoned

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June 22, 2022  

Looking for an Affordable Starter Home? HUD Suggests Trying a Manufactured Home.

More than 75,000 kit homes in 400 different styles were ordered from Sears Roebuck and Co. and put together by the people who bought them a century ago. A new White House proposal aims to fill a need for affordable starter homes with a new generation of manufactured homes. 

The Sears kit home has many examples still standing in good shape in Kansas City, where Upzoned Host Abby Kinney lives and works. Those homes arrived on railroad cars and were assembled by the homeowners, for the most part. They were somewhat more complex than the modern manufactured home, but the concept is similar. 

Kinney and her guest, Strong Towns Senior Editor Daniel Herriges, talk over the possibility that manufactured homes might be a realistic approach to the problems encountered by people seeking affordable housing in 2022 and beyond. 

The question is brought to the podcast this week by an article in Bloomberg’s CityLab called, “Factory-Built Homes Could Make a Comeback as Affordable Housing.” 

“We just can’t continue to build the houses we grew up in,” says U.S. Housing Secretary Marcia L. Fudge in the CityLab piece. “These houses are more efficient, more resilient. But the other thing is, we need so much new housing. These can be built quickly, installed quickly. They are at a great cost point. And so it is a big part of the solution.”

A 450-square-foot manufactured home model can be purchased and assembled for $100,000, resulting in a mortgage payment below $1,000 per month, Kinney notes. But stigma surrounding whether they fit into a neighborhood, issues with financing, and zoning hurdles remain unaddressed. 

But the potential to provide affordable, safe options in many overheated housing markets—perhaps even as accessory dwelling units—is undeniable, says Herriges. “How does this reshape the American landscape if it catches on big?”

Find out on this week’s episode of Upzoned.

Additional Show Notes

June 15, 2022  

NIMBY: Hero, Villain, or None of the Above?

A quote from Batman, “You either die a hero, or you live long enough to become a villain,” echoes through a great discussion on this week’s Upzoned

Host Abby Kinney brings “Twilight of the NIMBY,” a New York Times article by California-based housing and economics writer Connor Dougherty, to the table. Dougherty profiles retired teacher Susan Kirsch’s two-decade battle to stop 20 condos from being developed in her neighborhood in the Bay Area community of Mill Valley.

Kinney, a senior planner with Multistudio in Kansas City, was fascinated by this profile of Kirsch as a NIMBY (Not In My Backyard) American archetype, a suburban homeowner who runs a nonprofit that “pushes back against statewide housing policy measures intended to subvert local anti-development activism.”

In the profile, Kirsch is cast as a crusader for local control of development, working to protect her single-family home neighborhood from a condo development on an empty lot at the end of her street. 

“She believes in slow growth as a perspective and it’s partly reinforced by a distrust in large institutions…(a) ‘small C’ conservatism that local government is better and more responsive to citizens than a bigger one that is further away,” Kinney says in her introduction. “So she represents one person in this longer movement, fighting development and campaigning for the right for local cities and suburban cities to have control over the built environment.”

Kinney’s guest, Strong Towns Senior Editor Daniel Herriges, recognizes the archetype Kirsch represents. Herriges is sympathetic to the idea that “neighbors who know the place best, who care about the place most…get the ultimate say in what happens around them.” 

The problem, however, is that Kirsch and many in her generation who seek local control of housing policy are eating from two plates. 

They are sitting atop a mountain of equity in their homes buoyed by a system of market supports in the form of government-backed mortgages and other state and federal development policies. Kirsch’s home, a modest, single-family residence she bought for $100,000 in 1979, is now valued at almost $2 million. A state law intended to give homeowners protection from property taxes rising alongside astronomical home values, Proposition 13, keeps the taxable value of Kirch’s home at $250,000. 

Herriges says, “The reality is that this whole cohort of people have been incredible beneficiaries of large institutional forces…massive subsidies for suburban homebuilding in the post-WWII era of billions and billions of dollars of investment in the interstate highway system, in freeways that opened up huge swaths of suburban land to development.” 

“We see it is unable to be replicated generation after generation, and so there's a whole bunch of younger people who would love to live Susan Kirsch's American dream, who can't dream of it. Middle-class, white-collar people in California who have given up on ever owning a home. That's the dissonance you have to reckon with.” 

Kinney agrees, but points out it’s too easy to turn homeowners like Kirsch into villains, reducing people who are, in the end, our neighbors, into cartoon characters. Should we see NIMBYs as heroes or villains? Dig into this episode of Upzoned to hear how name-calling won’t win any arguments, and the nuances of housing policy don’t lend themselves to broad stereotypes.

Additional Show Notes

June 8, 2022  

Inflation or Lower Housing Values: Pick Your Cleanest Dirty Shirt?

During the height of the pandemic, the nation’s central bank, the Federal Reserve (aka The Fed), started a new round of bond purchases that swelled its portfolio of mortgage-backed securities to $2.7 trillion from $1.4 trillion it held in February 2020.

That created ultra-low mortgage rates which heavily stimulated home buying and refinancing activity in America. 

To combat inflation, the Fed is now planning to let its holdings shrink as securities get paid off, writes Neil Irwin in his recent Axios post called “The Fed's $2.7 trillion mortgage problem.” The problem is that “[e]xtracting itself from this market risks crashing the housing industry and creating intense political blowback for incurring financial losses.”

Irwin writes that the Fed’s pandemic actions to loosen up capital unseized a market and fueled a housing boom, but the opposite reaction could lose U.S. taxpayers billions and be bad for housing. 

Since housing is 15% of the U.S. economy, these decisions will have major implications. 

Upzoned Host Abby Kinney asks her podcast guests, Strong Towns President Charles Marohn and Andrew Ganahl, an infill developer in Kansas City who used to work for the U.S. Treasury, to put it into perspective on this edition of the podcast.

Additional Show Notes

June 1, 2022  

Uber’s Bull Run Is Over, Says CEO

Uber has been providing cheap and convenient rides for the last decade, and has been knocking out transportation alternatives like Zipcar, taxis, and even public transit.

As noted in a recent article from Slate, though, Uber is notorious for burning through cash. The company has lost more than $30 billion since it became public in 2019, amounting to an enormous investor-fueled subsidy of America’s ride-hailing habit. In a memo released earlier this month, Uber’s CEO called the past decade an “unprecedented bull run,” and that this next period will be different and will require a different approach.

And consequentially, ridesharing will get much more expensive. In fact, both Uber and Lyft prices have already risen between 45 and 92%—and more recently, surcharges have been added to account for high gas prices.

So, does this mark the beginning of the end for Uber? Join Upzoned host Abby Kinney and her regular co-host Chuck Marohn as they “upzone” this topic—and talk about how it relates to the economy, as a whole.

Additional Show Notes

May 25, 2022  

Corporate Investors Own Nearly Half of This City’s Residential Property

One hundred years ago, homes were primarily places for people to live, and weren’t considered as investments. Most Americans acquired wealth through income, and homes were only partially an investment consideration. For many reasons since the Great Depression, home ownership has begun to play a larger role than income in carrying generational wealth for Americans. “Housing has become (more of) a financial investment, not a place where you live,” Strong Towns founder Charles Marohn states in this latest episode of Upzoned. “And that changes everything about how we deal with housing.”

Those changes include the role of institutional investors, who have become a much more significant player in many housing markets. 

Upzoned host Abby Kinney and Marohn, her regular guest, talk over an article about research done by the Rutgers Center on Law, Inequality and Metropolitan Equity (CLiME). The study found corporate investors in Newark, New Jersey, now own nearly half of Newark’s residential property, the highest rate in the nation, researchers said. 

Dig into the details of this discussion and hear an early notice about an upcoming Strong Towns book on housing on this week’s Upzoned.

Additional Show Notes

May 18, 2022  

Philadelphia Is Launching the First Public Bank Owned by a City

This week on Upzoned, host Abby Kinney wades into a proposal for a new Philadelphia-based public bank, a financial institution being created to provide new loans with reduced cost of capital in marginalized neighborhoods. Along with co-host Charles Marohn, president and founder of Strong Towns, Abby examines the concept of public banks as presented in a podcast by the progressive non-profit media outlet, Next City

Next City Executive Director Lucas Grindley and Senior Economics Correspondent Oscar Perry Abello ask whether the first public bank owned by a city can be a “systemic gamechanger for the racial wealth gap,” according to the group’s summary of the podcast. Derek Green, a Philadelphia city council member championing the city’s public bank, joins the Next City hosts to explain that loans to small businesses can be a source of jobs in economically stagnant “bank deserts.” 

This could be a creative option if you're looking for creative financing solutions in your place and find that local Community Development Financial Insitutions (CDFIs) are too strapped to make loans. Nevertheless, it might make sense for public bank shareholders—aka local taxpayers—to be watchful.

Additional Show Notes

May 4, 2022  

Are Cars Here to Stay?

Are cars here to stay? This week on Upzoned, Host Abby Kinney leads a spirited discussion (joined by Strong Towns President Chuck Marohn and Strong Towns Board Member John Reuter) on just such a provocatively titled post written on the Persuasion Substack by Alex Trembath

For Kinney and her guests, the summary or subtitle, “Real progress on climate change will require innovations that some on the left won’t like” was the poke in the ribs that got the conversation rolling and moods shifted. 

Trembath writes that fossil fuel manufacturers and automakers are not responsible for the appetite Americans have for commuting to suburban developments. The author criticizes the urbanist and climate movements for not adequately reckoning with the enduring appeal of suburbs and car commutes.

What's the Strong Towns take on this issue? Find out in this episode of Upzoned!

Additional Show Notes

April 27, 2022  

Process Versus Visible Outcomes

The U.S. Department of Transportation was the administrative tool with which the Interstate Highway Act of 1956 was implemented, a massive public works program of a scope not seen since in the United States. It resembled the scale and transformative impact of the high-speed rail China built in the 21st century. 

Now, the USDOT is rolling out a $1.2 trillion Infrastructure Investment and Jobs Act (IIJA) over the next five years. Among its 539 amendments and 127 related bills is the law of the land for transportation funding for the next five years. Contained within are new requirements for equity in the way IIJA locates minority-owned contractors and conducts public hearings in underserved neighborhoods. 

In their blog, Pedestrian Observations, Alon Levy takes issue with USDOT’s equity action plan. Levy’s April 15 essay, called “The Solution to Failed Process isn’t More Process,” says the plan “suffers from the same fundamental problem of American governance, especially at the federal level: everything is about process, nothing is about visible outcomes for the people who use public services.”  

In this episode of Upzoned, host Abby Kinney points out that local knowledge and participation are critical to successful projects in her experience as an urban designer. But transportation budgets are more telling than rhetoric, Kinney argues. 

Her co-host Charles Marohn of Strong Towns says in order to get $8 billion of equity funding, Congress had to pass a $1.2 trillion budget. That’s less than 1% for equity. IIJA funding for projects such as $1 billion dedicated to removing freeways built through poor neighborhoods of color in the 1960s (originally $20 billion) pale in comparison to the hundreds of billions which will be spent to expand the highway system in America in the next decade. 

Since the Interstate Highway Act, massive DOT budgets and the highway projects they support have served to marginalize and pollute urban neighborhoods where poverty is concentrated. “Maybe we should just abolish the U.S. Department of Transportation?” Marohn asks.

Additional Show Notes

April 20, 2022  

Can We Build Strong Towns from Scratch in the 21st Century?

With the housing market still hot as a red poker despite an uptick in interest rates, Nolan Gray, in a recent article from Bloomberg’s CityLab, explores the idea of building brand-new cities (in the mode of 21st-century China or the Brasilia of the latter 20th century) to address the housing crisis. Alain Bertaud, a fellow at the Marron Institute for Urban Management and a former city planner at the World Bank, engages with Gray in this published interview to explain whether or not this is a realistic solution. 

Host Abby Kinney and her co-host Charles Marohn of Strong Towns chew it over in this episode of Upzoned

“Historically, infrastructure follows the market, not the other way around,” Kinney notes. “Huge public investments in infrastructure where there are no jobs are not really a very smart investment because the upfront costs of building an entire city's worth of infrastructure are so incredibly high. The public sector would have to be in a negative cash flow for a very long time.”

Marohn talks about places where this has actually been done, with the government fronting the money for infrastructure and subsidizing individuals through mortgages and commercial real estate loans. “They fail in every financial metric that is longer than the immediate sugar high you get out of the transaction,” he says. 

There are interesting examples, as both hosts discuss, but it’s hard to beat an organically grown, incrementally developed city, where historic trial and error has made places that work. Where do you fall on this question?

Additional Show Notes

April 13, 2022  

Who Should Be Able to Veto New Housing Production?

Should states and counties push back against local governments to crack open more options for housing? Will that be counterproductive? How much do multiyear litigation strategies by “Neighborhood Defenders” affect new housing production in tight markets?

A recent post in the DCist blog written by Ally Schweitzer got a lot of traffic from the housing, transportation and urbanist communities, who debated this nuanced question. A zoning battle ten years ago in the affluent Maryland suburb of Silver Spring was so contentious it’s still hot as a coal today and provides the infrastructure for this debate.

“Fights like this play out every day in cities and suburbs across the country, “ Schweitzer wrote. “But in the D.C. region, where local governments are struggling to address a severe housing shortage that is driving up prices, elected officials are under growing pressure to push back against civically engaged homeowners who mobilize against new housing construction. Montgomery County, an affluent D.C. suburb that has experienced transformative growth and demographic change in the last 30 years, exemplifies how hard that can be.”

Jenny Schuetz, a senior fellow at the Brookings Institution who examines the national housing shortage in her book Fixer-Upper: How to Repair America’s Broken Housing Systems, told Schweitzer: “We have this system where local governments are the gatekeepers for new housing production…local governments, in turn, have outsourced a lot of their authority to existing residents, so existing homeowners in particular have essentially veto power over proposals to build new housing.”

Upzoned host Abby Kinney and her guest, Strong Towns Content Manager Jay Stange, discuss how to respect local neighborhood’s choices about where and how new housing options should be considered in tight markets. Top down solutions rarely work, but change has to be greater than zero or communities will stagnate.

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