Re: David Schultz’s June 26 Community Voices commentary, “Minneapolis residential discrimination: Why neoliberal zoning will fail”:
Things are the way they are for a reason. And the reasons can be complex. That’s why we never said that upzoning the City of Minneapolis would be the only solution to a history of racially biased policies and practices that prevented many residents from partaking in the prosperity of our community for the past 150 years.
[image_caption]Heather Worthington[/image_caption]
Minneapolis is a great city that suffers from the same disparities, racially and economically, that plague many large cities. Unfortunately, it ranks at the lowest in terms of many key outcomes for black, indigenous and people of color (BIPOC) communities. Minneapolis consistently ranks near the bottom in black homeownership, educational attainment of blacks and Native Americans, and the median black household income. We are justly proud of the diverse and long-sustained economy we enjoy in our community, but the stark reality is that these disparities have been deep and persistent, and not everyone is benefiting. Despite a narrative of exceptionalism, this community is failing people who are black and brown, and that is not sustainable.
The policies within the Minneapolis 2040 Plan that address land use practices that have been racially biased are one small way to address those disparities. Single-family zoning was the result of an intentional set of racially informed practices and policies like racially restrictive covenants, redlining, and other limitations put on property ownership. The federal government recommended policies and practices that would set those practices into law through single-family zoning, and stop the market’s natural progression toward a diverse housing typology found in the older neighborhoods of Minneapolis, where it’s common to see duplexes, triplexes, and small-scale apartment buildings.
The state of Minnesota outlawed the practices of racially restrictive deed covenants in 1958; the U.S. Congress enacted the Fair Housing Act in 1968. But the damage of 50 years of racially biased policies and practices was done. BIPOC communities were prevented from participation in the greatest era of wealth building in the nation’s history and that’s a significant part of why the median black household has less than 11 percent the wealth of the median white household (about $15,000 versus $140,000 in 2016 prices. A key provision of the 2040 Plan is the call to increase access and agency for those communities so that they can live in high-amenity areas of the city where good schools, grocery and access to transit are the norm.
It also recommends investment in areas of the city that have suffered disinvestment— but with an eye toward avoiding displacement of existing residents. And, because of the economic position of many of these people, a more affordable housing type is needed — thus the recommendation around increasing the potential unit count per single-family lot. It is not a panacea, but it will result in more opportunities, both for those who are now having a difficult time finding housing, and those who already live in these neighborhoods and want options other than a single-family home.
Homeownership Affordability in Minneapolis, 2000–2016
[image_credit]U of M Center for Urban and Regional Affairs[/image_credit][image_caption]Click on the graphic to view a larger version.[/image_caption]
Of course, this is a 10-year Comprehensive Plan, and it is intended to inform and guide, not set policy outright. Setting good policy requires all of us to think critically, resist the urge to label and assign negative intent. It’s easy to sit on the sidelines and throw opinions around. The harder work is ahead to ensure that we effectively address the challenges ahead for this city we love.
Heather Worthington was appointed to the position of director of long range planning for the City of Minneapolis in September 2017. Previously she was the first deputy county manager appointed in Ramsey County in June 2010, where she led the Economic Growth and Community Investment service team. She was the overall project manager for the cleanup and redevelopment of the Twin Cities Army Ammunition Plant (TCAAP), the state’s largest Superfund site; as well as leading the redevelopment of the former West Publishing site in downtown St. Paul.
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Thanks to MinnPost, anyone reading this article can also read David Schultz’s critique of the 2040 housing plans. I highly recommend it.
I also wonder if there is any evidence up-zoning an entire city produces more affordable housing. If so, where can I find it? Also, more specifically, I would like to see the evidence that up-zoning encourages private developers to produce more affordable housing rather than build market-rate housing that produces the best return on their investments.
Expecting affordable housing built new without subsidy is not a reasonable request. What this allows is *more housing* – exactly what we have not been doing for decades and what has put us in this crunch.
Consider that almost all of the existing “naturally occurring” affordable housing was simply built as market rate thirty, or fifty, or a hundred years ago.
So I’d say the onus is on you: provide evidence that restricting supply reduced prices. It would fly in the face of everything we know about economics, so good luck!
The pattern of “I’ve got mine” homeowners wringing hands over affordablilty of new housing is becoming increasingly hard to take seriously, especially when even the “luxury” apartments and condos they rail against are more affordable than a single family home.
Great points. I would add not all under represented groups want to live in townhomes or apartments. This plan makes it harder for those of us in mid income range to buy a small home. I also question somewhat the whole climate refugees. Most leaving the west coast do so because of the high cost of living. Not every city or suburb needs high density, but maybe having portions with it while maintaining open spaces can appeal to many. Otherwise we are back to people moving further out. Another key are increasing wages and having home buying open to more people who have been shut out.
I’m not sure I’d recommend reading that as a shining example of critique, it got thoroughly torn apart in the comments.
The City of Minneapolis, fueled by hundreds of thousands of dollars from developers funneled into Mayor Frey’s campaign, continues to promote upzoning of the inner city as the just retribution for racial discrimination in the past: “The policies within the Minneapolis 2040 Plan that address land use practices that have been racially biased are one small way to address those disparities.” But Worthington knows that racist covenants did not exist in the inner city. They existed in the outer ring. But it is the inner ring exclusively that is doomed to gentrification with four and five story apartment buildings replacing single family homes, while the outer ring will remain untouched. Look at the first map on page 107 of the Plan: https://minneapolis2040.com/media/1475/pdf_minneapolis2040_may2019.pdf The Brown Belt across the center of Minneapolis is where the racist cultural displacement of affordable housing for our Latin, African American and Somali families begins to make room for Young Urban Professionals who would like a shorter commute to downtown: https://southsidepride.com/2019/06/03/the-beatings-will-continue-until-morale-improves/
How is the status quo affordable? How can it possibly be sustainable to not increase the amount of housing units when more people want to live closer to the city center? It sounds like your beef is less with Frey and developers and more with math.
But he has a point, how many of the high density areas are near Linden Hills or Kenwood? And developers for years have had their hands in the pocket of city hall.
You’re right. Linden Hills and Kenwood could also use some apartment buildings.
I don’t understand the economics of converting a single family home into,say, three units. If I sell my house at market rates in Linden Hills or Kenwood, and you tear it down and build three 1000 sq. ft. apartments, how does this solve the affordable housing problem? If you build a market rate building does someone with an older building suddenly charge lower rents? If supply were the issue why are other cities like NYC, Boston, Chicago, etc. having the same problem of affordability despite large amounts of new supply. Maybe it’s not a housing crisis. Maybe it’s an income crisis.
The problem is that none of the apartments being constructed, Linden Hills or otherwise, are affordable to those who those who really need housing. The City is producing market-rate housing but the new housing is too expensive to be affordable. So new apartments, even in Linden Hills, will not address any affordability issues. “Affordable” according to the City is 80% of AMI, which is $50,000 a year for a single person.
This assertion is wrong. the 2040 plan, by use of Corridor zoning, calls for large apartment buildings all through the city well past the central neighborhoods.
This in fact is a different problem. The corridor zoning (Corridor 3, 4, etc….) has no practical limit on building size. The language Ms. Worthington and the planners put in names a nominal height (e.g. Corridor 4, 4 stories, but then immediately allows “or higher” if the city feels that would achieve comp plan goals. How higher? No upper limit specified.
So want to put a 10 story building on a Corridor 4 street like W 50th? offer 6 stories of affordable housing in addition to your 4 floors of market rate apartments. Make the city “an offer they can’t refuse”.
Note that these corridors don’t’ take into consideration how close you are to any kind of commercial node, so many of these stretches (Again Mr Felien I encourage you to look at the 2040 build form maps) that are intended for 4+ story multiple lot apartment buildings are currently predominantly single family homes, duplexes and the like.
I was walking along the light rail between 54th and 53rd St So, observing all the new housing, multi-unit structures, in construction. Close to the light rail, close to Minnehaha park, I thought, these do not look very special in their construction but they will probably not be low-income. No green-space is being incorporated into the design, the buildings effectively cover the entire lot.
One thing I think many advocates of density do not truly understand is, crowding people together like this only separates them from nature even more. In addition, making single-family houses more rare means only the wealthiest will be able to afford them, which also means only the wealthiest will be allowed to cultivate a patch of ground where they live, to grow food and flowers, to live with it and watch it grow and evolve.
We are creatures of the earth, at our core. Separating us from our core exacerbates pathologies, including the treatment of the earth in the abstract, which leaves so much of the earth vulnerable, prey to predation, plunder and pollution.
If we are going to seek greater density in this city, then we need to figure out how to make nature less of a passive and abstract thing, and one more vital and interactive.
More to the point of land use, as important as density in the urban, greater density in the rural – land reform – such that the trend toward consolidation in the industrial way in agriculture, which is having such a profoundly detrimental effect on land, water, pollinators and communities, be reversed, and regular people have an opportunity to work the land again, in a way that is healthy for the land, water, pollinators and community.
“Green,” shorthand for being environmentally friendl or sustainable is not the same as “green,” the color of vegetation in open space.
Allowing more people to live ~literally~ next to one of our largest parks seems like a good way to connect more people to nature.
The elitist city planners should take some time off from calling the rest of us intellectually lazy and examine some of their own logic. This article seems to argue that redlining, restrictive covenants, and single-family zoning were all tools of segregation, so all need to go. The first two were indeed inherently repugnant in a society wishing equal opportunity for all. (And by the way, they did go, decades ago.) The third one is not. Single-family zoning is a design for neighborhoods, one of many, to be sure, but one that is not inherently bad and should continue to be part of the mix.
David, single-family zoning was indeed developed initially for racist reasons. It’s “father” was Harland Bartholomew, who developed zoning policies in hundreds of American cities in the 1920s. Bartholomew was originally the St. Louis city planner, and he clearly stated racial motivations in his development of single family zoning. He said that he wanted to “preserve the more desirable residential neighborhoods,” and to prevent movement into “finer residential districts … by colored people.” I assume that those motivations don’t apply to most single family proponents today, but the practical effect remains to keep SW neighborhoods stunningly segregated, both racially and economically. I recently researched those statistics, and discovered that my Kenny neighborhood is 2% black. Lynnhurst is 3% black, Fulton 2%, Armatage and Linden Hills 4%. Single family zoning was a huge factor in both producing that and in maintaining it today.
Here’s an analysis of how Seattle came to be so segregated, a process that mirrors the situation in Minneapolis quite closely. It also talks in more detail about Bartholomew and his development of racially based zoning.
https://www.sightline.org/2018/05/23/this-is-how-you-slow-walk-into-a-housing-shortage/
And here’s a piece from Bloomberg explaining why they think single family zoning is an “urban dinosaur.”
https://www.bloomberg.com/opinion/articles/2018-12-14/single-family-zoning-is-an-urban-dinosaur
Excellent piece, thank you for writing this and including the part about future climate refugees. We have trouble building enough housing for the people who are here currently, and need to anticipate what our needs will look like in the future. As the effects of climate change spread, cities like Minneapolis are going to take on more people and we need to prepare for that now.
It’s also frustrating to read so many comments of people who do not understand what this plan is. So many of the criticisms come without any plan or viable alternative.
We need to think less about ourselves and more about what kind of place we are leaving for future generations. I envision a future city where housing is abundant and people can live without relying on a car. The future of our planet depends on reducing the enormous carbon footprint of our species, and Minneapolis 2040 is one small (but necessary) step in that direction.
Mr. Schieffer: We are not actually struggling to build enough housing for everyone here. At the top end, Minneapolis is doing quite well. High end home values are stagnant. I don’t know if you saw the article in the StarTribune who said that Krause Anderson is expecting projects to be terminated in downtown because that market demand is being filled.
It is also not clear that people will move to Minneapolis because of climate change. For example, God smote New Orleans and virtually no one moved here. Most people moved back to New Orleans.
47% of city is not zoned single family. As a viable alternative, the City could have preserved its single family housing (one out of five people in Minneapolis are under age 18 and 80% of them live in single family homes) and focused development in existing walkable environments and at transit nodes. This is what the Met Council calls for and what St Paul did. It would do much more to increase transit ridership and walking and biking than what Minneapolis has done.
I don’t really care that prices haven’t risen up at the top end. I care about affordability for everyone else. Home prices and rents have risen dramatically over the last ten years for everyone else.
Along with removing single-family zoning, Minneapolis actually is also allowing growth along transit corridors. I encourage you to check out the maps sometime. Hopefully we can get more near the new SWLRT stops as well.
You and I are in agreement that the issue isn’t about simply constructing more housing. We need more affordable housing, not simply more market-rate housing. The problem is that construction costs are so high that no one is building affordable housing without subsidies right now.
That’s a really bad NOLA take.
David Therkelsen makes an important point about the dissimilarity between racist covenants and redlining, and low-density housing zoning.
I would like to add to his critique about how this planner accuses all of us of intellectual laziness, when we’re not, that she herself is really ignorant of the history of Minneapolis.
For example, it is simply not true that Minneapolis has a 150-year-long history of racial discrimination. It is also not true that our neighborhoods were all created with an eye to racial segregation; many were developed in the 19th century–the 1880s were boom years–and they were developed for low-density housing. Not segregation. There weren’t any significant minority populations to segregate until many decades later.
One of the fascinating absences in this rather uninformed discussion of how horrible Minneapolis has been to non-white population segments is any mention of census figures about what racial groups actually had what percentage presence here. Quite different sets of facts, compared to who owns homes where today (her maps).
Minneapolis was a very, very white city until after World War II, and its black population (along with Latinos and Asian-Americans) burgeoned only from the 1980s on. Our larger black population, or population of people of color, is very recent, and they came from stressed-out cities like East St. Louis and Gary, Indiana, East Los Angeles and slum areas of Chicago. They came to get away from poverty and violence, and some of those cities’ problems came along with them. Minneapolis’s black community may be poorer on any number of scales because of those problems, not historical racist policies in their new city.
It’s trendy to claim that Minneapolis has had a noxious racial development like other American big cities like New York, Boston, Chicago, Baltimore, etc. Far from it! It has a different history, and that’s important to keep in mind when the city clucks and sighs over perceived historical failings we didn’t have to justify planning decisions of today that don’t address today’s problems.
Part of the issue is city officials’ willingness to brush historical facts under the rug in order to appear “woke” on race, instead of discussing race in our city.
The Met Council specifically addressed the fact that there are different demographic characteristics between white and black residents and even when adjusting for these differences, race continues to have a significant impact on people’s wealth, income, employment rates, etc. in the Twin Cities https://metrocouncil.org/getdoc/03bd679d-21a4-455b-af7a-15309b0c71ae/Diving-Deeper-Understanding-Disparities-Between-B.aspx
“Some question whether these disparities are, in fact, based on race at all. This line of thinking accepts that economic outcomes are worse for Black residents but rather than seeing race as the distinguishing characteristic,
point to underlying demographics as the main drivers of these inequities. For example, younger people (of any
race or ethnicity) may be less likely to be employed, show lower overall income, and are less likely to own their
home. If Black residents tend to be younger, today’s racial disparities in economic outcomes may be more the
result of age than race. Said another way, if the region’s Black and White residents had the same demographic
profile, our region’s racial disparities would be drastically reduced. However, our analysis shows that underlying demographic differences cannot explain away our region’s disparities in employment, income, and
howeownership between Black and White residents.”
I kind of agree with this, however, what Heather Worthington actually said is that “many people have reduced this plan to one headline — ‘Single Family Zoning Eliminated.’ That is an intellectually lazy approach to understanding this document…”
I think this is an appropriate defense that applies to David Schultz’s article.
It is a fact that we have a growing housing affordability problem that cannot be addressed without an increase in supply, which means more multi-unit housing. So we know that is a necessary condition to be met.
I don’t think anyone claims that it will solve the problems of housing affordability or segregation by itself. I agree with David Schultz that persistent “segregation in the placement of low-income housing and education policy choices that concentrate low-income people of color in specific neighborhoods and schools” continue to afflict Minneapolis. That cannot be addressed without distributing more multi-unit housing and affordable housing throughout the city.
Schultz also says that, “for many, single-family homes represent a sense of community, connectedness, and stability that are worth preserving.” A lot of people feel that way, and I understand the sentiment. But those qualities that we like are not the products of zoning that excludes four-plexes.
I have experienced those qualities of community, connectedness and stability in multi-unit housing, in mixed neighborhoods. Then again, I grew up in an established, affluent suburb that possessed none of those qualities at all — less than zero, really.
I understand that people fear losing what they have, but the problems we’ve been discussing will just get worse without a plan that aims for the kinds of changes in the 2040 plan. What’s your solution?
Your question is what is an alternative. The Met Council calls for clustering new development at transit nodes and in walkable environments. That lets you leverage your new development to reduce auto usage. Instead, Minneapolis has said that they will scatter new development through dozens of miles of single family homes, blowing our opportunity for creating real, usable density. Remember, we are only talking about a 10% growth over 20 years.
Ms. Worthington makes an intellectual leap between racism and single family homes that is not accurate. Yes, 70 years ago, single family home zoning was used for racist purposes. But today, zoning is not stopping families of color from buying a home anywhere in the City.
What is racist is that families of color are larger than white families, both because they have more children and because they are more likely to be multi-generational. One out of five people in Minneapolis are children and 80% of families with children are living in single family homes. 70% of all new units are one bedroom or less and the remaining 30% are virtually all two bedroom units. Minneapolis has adopted a plan that demolishes homes needed by families of color and replaces them with homes that are too small for them. That is systemic racism.
On top of that, for every ownership unit being built, 8 1/2 rental units are being built. Minneapolis is now over 50% rental, with corporations spiriting away hundreds of millions of dollars from the pockets of residents every year. It is hard to imagine a better way of keeping people poor than only providing rental opportunities.
Another leap that Ms. Worthington makes is that the marketplace will produce affordable housing for people of color if we just deregulate. That just simply isn’t happening. The City’s director of Affordable Housing said that new housing units are costing $250,000 to $275,000 to produce.Fulton Realty just held a seminar on building triplexes and said you could demolish a $260,000 house and build a triplex and rent each unit out for $3000 – $3200 a month. Not affordable. They also recommended only building in South Minneapolis south of 36th or in Uptown or Bryn Mawr. They say their numbers don’t support building triplexes in other parts of the City. The reality is that the private market alone is not producing affordable housing because labor and materials are too expensive.
Professor Schultz is correct to call this neo-liberal thinking – that the free market will provide. Hard data shows this isn’t true. Do people of color win? No. Developers, corporations and the wealthy win.
Minneapolis deserves better.
You really nailed it on the head with this one.
I’d like to point out that these city counsel members and the met counsel have this Amazing, grandiose vision of what they can make the city look like. The problem is they are hallucinating if they thing upzoning will end racial segregation. Affordable housing is important for other reasons, but it won’t fix the segregation issue.
These are the same people who envisioned that light rail would relieve traffic congestion…. their ideas are always laughable.
Mr. Schieffer, along with the author, also patronizes us. It’s not that we don’t know what the plan is. We disagree with the plan.
Minneapolis is a wonderful city, with amenities shared by few if any other cities.
There are some requirements to remaining a great city. One is a healthy business climate. Another is a welcoming attitude toward the middle class: we want them to live here, to send their children to school here, to pay attention to what happens in the schools.
If all this happens, the city remains great, and we retain the resources to address other real and major issues, including but not only racial disparities in education outcomes.
The current Minneapolis City Council, and Park Board, show disdain toward the city’s history, and ignorance about what it takes to remain strong and vibrant.
We need to elect some grown-ups to public office in Minneapolis.
Instead of calling me names, how about proposing some alternatives to the 2040 plan? I don’t see any alternatives put forth from the 2040 critics that aren’t just maintaining the status quo (which is *not* working).
Objecting to being patronized is not calling you names. I have been a homeowner in Minneapolis for 44 years and I have been paying attention. We citizens are not the elected officials and we are not the professional planners. It is not necessarily our responsibility to find solutions. However, many of us have pointed out the features that have made ours a viable urban area – and yes, in a good many ways it is “working,” though under threat from current generation of anti-business and anti-middle class elected officials. And others, including in this thread, have pointed out the growing body of evidence that upzoning is not likely to be a winning strategy to provide more affordable housing.
Dear Ms. Worthington and proponents of this doomed plan –
I find it interesting that there is suddenly back pedaling going on here, where “we never said that upzoning the City of Minneapolis would be the only solution.” In fact, if the City has chosen to listen to residents, we already knew that was the case. Unlike the the city officials aka “those of us on the ground, doing this work every day” – we did our research and took painstaking measures to expose the data that shows upzoning hasn’t worked in other cities. For people who do the work every day, you sure don’t know very much about the well-documented outcomes of the policies you are forcing on us.
Hey CPED, if you need help understanding what has happened in cities before us, here is a great little summary: https://www.governing.com/topics/urban/gov-zoning-density.html?utm_term=Will%20Up-Zoning%20Make%20Housing%20More%20Affordable&utm_campaign=Will%20Up-Zoning%20Make%20Housing%20More%20Affordable&utm_content=email&utm_source=Act-On+Software&utm_medium=email
Need another shining star resource from a city that has been in the experiment way longer? Try Seattle:
https://seattlespeaksup.wordpress.com/an-interview-with-john-v-fox-low-income-housing-advocate-and-ssu-petition-signer/
But probably the star report is from right here in the Minneapple, from our own City Planning Committee member Alissa Luepke-Pier, a real inside view on this one:
https://www.planningreport.com/2019/06/17/minneapolis-planning-commissions-alissa-luepke-pier#
But if you need more research, this website is all over it loading new content every day. Take a look:
https://www.vox.mn
If there is one thing that can be called “Intellectually lazy” it is upzoning a whole city with no plan, instead of a surgical density plan that achieves additional housing at all income levels while limiting gentrification and displacement. One thing is for sure, the first people kicked out of Minneapolis will be all the black and brown. But don’t worry, if you can’t come up with data on that around election 2021, we got you covered.
Elizabeth, I’m guessing you didn’t actually read that “great little summary” you linked to, since it in no way said the Minneapolis plan wouldn’t work, and the other cities it discussed can’t be compared to what Minneapolis has done. First, because no other city has ever done what we have done. All the cities discussed only updated parts of the city, usually small parts. New York upzoned mostly poor neighborhoods, and left the wealthy ones alone. Philadelphia has upzoned 40% of its land in piecemeal fashion, and that city further differs from ours in that it’s not overcrowded as we are. Seattle’s upzoning law was just enacted in April of THIS YEAR, and hasn’t even gone into effect yet. Further, because of opposition they scaled the number of neighborhoods way back.
The Chicago “MIT Study” was misrepresented once again. It was actually done by an MIT doctoral STUDENT. Further, the study only covered five years, way too short for any judgments, and it only covered a small section of the city. And it’s main conclusion was that the upzoning hasn’t led to new construction, directly contradicting the main objection most opponents have to the idea.
The second article you linked to was again about Seattle, but not regarding anything that has happened, since as mentioned above nothing has happened yet. It’s all just the opinion of ONE MAN. Further, I agree with him about his main point, which is that upzoning alone will not create much affordable housing in the short term, and there is potential danger to low income communities. But our 2040 plan does NOT see upzoning as even the main answer to affordable housing. And yet opponents keep attacking it as if it indeed does exactly that. The 3rd goal of the plan is called “Affordable and Accessible Housing,” and the description tells us that 22 out of the 100 official policies in the plan relate to affordable housing. These policies create “cultural districts” created specifically to help low income neighborhoods retain and enhance their character, housing and opportunities. They call for tenant protections, inclusionary zoning, preserving current affordable housing, undertaking many new and innovative housing strategies, revising regulations to “remove barriers,” and on and on. The city emphatically does not intend to allow free reign market forces to destroy our less wealthy neighborhoods.
If you want to read an actual study with facts and analyses backing things up I’d suggest the below linked study from Harvard University’s Joint Center For Housing Studies. It doesn’t deal with production of affordable housing, but rather with the concept of opposition to multi-family rental housing, which is the real reason most people in Southwest oppose upzoning.
http://www.jchs.harvard.edu/sites/default/files/rr07-14_obrinsky_stein.pdf
The study you cite is from 12 years ago, just as the housing bubble was bursting. So it does have a slant to it. But even more importantly, I don’t think Ms. Bennett is against constructing more housing. In fact, I haven’t seen anyone be against more housing. The questions are where does that housing go, who is it for and whether it builds wealth for residents or corporations. What the 2040 Plan said was that housing can go anywhere a developer feels like, despite the fact that almost 50% of the City was already available for multi-family housing before this plan was adopted. It also gives lip service to the need for affordable housing while reducing regulations on producing more market rate housing and housing that is driving gentrification. It also overwhelmingly favors rental over ownership housing, which just keeps residents poor. It also does nothing to shift development to North, where we need more development while allowing developers to just intensify around Uptown, a wasted opportunity. We are not Seattle, we are not San Francisco and we don’t need their solutions to their problems here.
Carol, Ms. Bennett may or may not be in favor of more housing, but that wasn’t my point in replying to her. She was misrepresenting analyses as being experiential proof that our upzoning plan has been proven elsewhere to not work. That simply wasn’t at all true, so I had to point that out.
Yes, the Harvard study was published 12 years ago, but it’s analysis was before the housing crash. That’s essentially immaterial, though. I read that entire darn thing, and I’ve otherwise done a HUGE amount of research myself (it became my hobby all last summer). All the points they make in the Harvard study have been validated by other studies in recent years. I linked to that because it wonderfully brings everything together in one place, and is a respected source.
I think you’re factually incorrect when you say the plan gives “lip service” to affordable housing. The discussion of Goal #3 tells us that 22 of the 100 policies relate to affordable housing. Meanwhile, as far as I know only ONE policy (#1) specifies upzoning. You also say the plan does nothing to shift development to the north, which simply isn’t correct. Policy #87 is titled “Northside,” and includes a multitude of plans to do just that for North Minneapolis. Policy #34 – “Cultural Districts” – was added during the last week, and applies mainly to North Minneapolis, calling for development in all sorts of areas, from business to housing to infrastructure.
Finally, no, we’re not Seattle or San Francisco. BUT….we haven’t mimicked their policies. NO ONE has done what we have done, as has been pointed out by multiple national stories. In fact, Seattle wanted to copy US! (Many other cities around the country are now talking about wanting to go in our direction.) Unfortunately, Seattle couldn’t get it done.
I would then challenge you – where has upzoning worked to produce affordable housing?
The Harvard study talks about regulations stopping the production of needed housing. But prior to the Great Recession, supply and demand for market rate housing was roughly in balance. In Minneapolis, we built 20,000 new housing units (net despite demolishing a huge number of homes in North Minneapolis). So it is hard to see how the Harvard study applies here in Minneapolis. Yes in New York, San Francisco, Seattle but not in Minneapolis. The data just doesn’t support it.
I did say that much of the plan is just lip service. I stand by that. The reason that comprehensive planning is done is to provide the Met Council the information it needs to make investments in regional assets like sewer treatment plants and freeways and parks. Local government has to plan for land use that fits within the Met Council plans, including how much population will be in each city. Pretty much everything that doesn’t apply to that question is extraneous. And that is most of this plan. Most of it isn’t actionable items but instead just platitudes.
As to Policy 87, I would ask what in it actually has programs or actions behind it? It was added at the end of the process because people from North were (rightly) screaming and yelling about how they were left out of the plan. In fact, that is the prevailing perspective from folks from North. That they got nothing.
As to we are not Seattle or San Francisco, those are places that have had large population growth and their housing construction has not kept up. The solution there is to build more market rate housing. But we have not had that kind of population growth. So the idea that the solution to their problem being applied here makes no sense.
Well, I’m disappointed, Ms. Worthington tells us that 2040 isn’t ALL about up-zoning, but then follows up with no substance. As a response to Mr. Schultz’s article this in simply not a serious attempt.
Unfortunately my experience with people like Ms. Worthington who are I believe sincere in their attempts to address “equity”… just don’t get it at the end of the day.
I hate to say it but whenever I see white people truing to talk about “equity” or diversity we always end up with a bunch of jargon. For instance:
” A key provision of the 2040 Plan is the call to increase access and agency for those communities so that they can live in high-amenity areas of the city where good schools, grocery and access to transit are the norm.”
What does that mean? Pretension is it own form of intellectual laziness.
Even if you take Worthington’s “historical” account seriously, there’s no apparent antidote to be found in 2040. Transit issues have been an ongoing project for decades, please tell me this is NOT one of the big new insights that “planners” have brought to the table.
The critique of 2040 that many of us have been offering is far more complex than a simple repudiation of up-zoning. In the course of our lengthy comment thread related to Mr. Schulz’s article we discussed everything from education to wealth disparity, infrastructure and institutional racism. Critics are not narrowly focusing the discussion, on the contrary.
If Worthington wants to take another crack at this, she needs to make some attempt to explain exactly how 2040 does what she thinks it will do, providing access to agency doesn’t get us there. Nor can 2040 proponents simply dismiss criticisms of up-zoning with the claim that it’s only a “part” of the plan…. THAT’S a lazy response. How can ANY of the plans objective be reached if up-zoning fails to produce the affordability, density, and diversity “planners” are predicting? The question isn’t how prominent the up-zoning is in the plan, the question is whether or not the plan can succeed without it? If the plan can succeed without the up-zoning component, then you need to tell us how that works.
And don’t tell us about your transit plans because that’s an ongoing effort that has little to do with 2040 at the end of the day. The city of MPLS doesn’t put a dime into the transit system, it’s all funded by regional subsidies.
To put a finer point on my criticism of planners without a clue, let’s just look at the fact that basic objectives are simply not addressed with any coherent language other than jargon of the day. What do we even mean by: “equity” for instance? Is diversity the same thing as “equity”, and what is the attempt to “diversify” neighborhoods even seeking to accomplish and why?
My experience is that the core assumption behind the de-segregation plans being offered here is that at the end of the day, they assume that people of color should move into gentrified neighborhoods. That assumption is so racially bias and culturally ignorant that it’s impossible to address here.
I may be accused of whitesplaining here but my limited conversations with people of color leads me to believe that they don’t dream of moving out of their current neighborhoods and living next to me. If you talk to the folks at Neighorhoods Organizing for Change they won’t tell you that their mission is to get black people out of North MPLS and spread out accross the city. They want to strengthen their neighborhoods, raise standards of living and reduce poverty IN their neighborhoods.
Likewise white people who assume that Native American’s (those without successful casinos) want to escape squalid conditions on reservations fail to understand the integral cultural role that reservations play in many Native American lives. The Native American quest for sovereignty has little to do with getting off the reservation.
How does 2040 even begin to recognize facts like these let alone “resolve” alleged segregation issues? Look at the maps Ms. Worthington provides: What do those maps actually illustrate? You could claim that they illustrate segregation, or you could look at them as map of different cultural communities. The assumption that communities want to dismantle themselves in order to live with white people in more “diverse” neighborhoods is actually its own form of racism. And frankly, I don’t how “density” even enters into this discussion other than as white affluent urban fantasy.
Here’s a radical idea- maybe the issue isn’t so much where people live, as it is the conditions they live in. Maybe the problem isn’t that so many blacks live in North MPLS? Maybe the problem is that those who live there (regardless of skin color), don’t have access to banking services, grocery stores, living wages, and a plethora of other conditions that “density” doesn’t even begin to recognize or address?
Obviously we don’t want anyone trapped within certain geographies and neighborhoods. In a free country people should be able to live where they want, we don’t want to exclude people because their race or culture. This is why red-lines, and racial covenants, and “gentlemen’s” agreements have been struck down and rightly so.
However we can’t ignore the fact that people form communities for a reason, and those communities can be part of vibrant cultural identities, places that people want to live in. If your concept of diversity requires that such communities be dismantled or dissolved in some way, your concept might not just be a bad concept, it might actually be morally wrong.
White people don’t get this because as the dominant majority and inheritors of colonial conquest we don’t think about our cultural identity and communities (beyond Ole and Lena jokes and Irish festivals). That’s what white privilege is… we ARE who we are wherever we are, we don’t look for communities that accept us or reflect our whiteness.
So I haven’t said anything at all about up-zoning. If anyone who’s been part of the planning for 2040 wants to address the concerns I’v raising please do.
One last comment regarding neoliberalism. When and if we ever decide what we’re actually trying to accomplish when it comes to “diversity” and “equity”, we’ll need to note the fact that the neoliberal policies of the last 3 decades, from charter schools to tax policy, have INCREASED segregation almost everywhere they’ve landed. In many ways and many places we’re more segregated now than we have been in decades. Neoliberalism is not an antidote to segregation, and it’s irrational to assume that a mentality that creates or promotes problems can be the mentality that imagines solutions to those problems. It’s kind like expecting segregationists will come up with a great plan to dismantle Jim Crow.
Our neoliberal era can be characterized as an era of failed compromises and policies. Many of the major issues we face as a nation and a society have grown in scope and intensity during the neoliberal era. Part of the reason for that is that neoliberals tend to be “centrists” politically who always seek limited and inadequate solutions organized around existing comfort zones. At first blush something like 2040 might appear “radical” but in fact it’s a plan that limits the scope of the solution and excludes more perspectives than it includes.
For instance despite the obvious fact that we’re dealing with complex economic and cultural issues the primary appeal of this plane is organized around the “immutable law” of supply and demand. There’s nothing “radical” much less progressive about supply and demand. In fact the principle of supply and demand is so simplistic as to not be applicable in this scenario. Far from being a radical departure of any kind, this is doubling down on “free” market ideology.
By contrast, a radical or progressive plan would be talking about banking reforms, rent controls, subsidies, and a variety of other proposals that 2040 excludes entirely.
Paul, I think your “neoliberalism” critique is off base. First, because it’s an amorphous word the meaning of which even scholars can’t agree on. Second, because it’s kind of become an all purpose epithet to fling at people with whom we disagree. If Reagan, Clinton, Gore, and Trump are all neoliberal the word can’t have much meaning. Most importantly, though, if we agree to use “neoliberal” as a synonym for “free market”, the big problem is that the 2040 plan is simply not neoliberal in how it seeks to address the problems of poverty and affordable housing,
A key point that opponents always overlook (intentionally so?) is that upzoning is intended to address two problems: affordability and ALSO the extreme lack of housing currently (vacancy rates are at dangerously low levels), which will become much worse as the population grows (significantly, per all forecasts) and as household sizes continue to shrink. In my view the primary purpose of upzoning is to deal with the second problem. We need a LOT more housing, and without upzoning that housing could not be built. Further, and in my opinion the most important thing, is that without city-wide upzoning any new housing would not fairly impact all sections of the city. Rather, the wealthy and powerful neighborhoods would be protected, as has historically always been the case.
The proposed universal upzoning plan WILL impact affordability and integration to some degree, though not as much as some supporters claim. For one thing the upzoning is accompanied by the new inclusionary zoning policy, which mandates some level of affordable housing in each new apartment building. Further, there is some level of “trickle down,” where even higher end housing stabilizes and even lowers prices as the vacancy rate increases with new construction. On NextDoor I linked several times to an analysis of the prior two years that showed stabilization of prices in cities that undertook building programs, and further showed that prices actually decreased in seven of those cities. Supply and demand theory works a bit differently for housing, but it still works. Two Federal Reserve vice presidents wrote a piece for the Star Tribune discussing the trickle down theory, including references to a couple of studies.
Trickle down is a real thing, but unfortunately high end housing has a relatively small amount of trickle down to lower end housing, and what does occur takes many years. I’ve read a study that shows that the trickle down impact is FAR greater when the type of new housing built is what could be called middle class housing. The study made the case that city governments should encourage and subsidize that middle class housing rather than the higher end housing. I fervently hope that Minneapolis does something of the sort as it turns 2040 into actual practice.
Genuinely attacking the shortage of affordable housing for truly low income housing requires MUCH more than upzoning. Fortunately, there are many such policies and proposals in the 2040 Plan. The third listed goal in the plan is “Affordable and Accessible Housing.” The write-up of that goal tells us that there are 22 official policies (out of 100 total policies) that relate directly to affordable housing. I could go on at length about details of all those policies. There’s one about preserving current affordable housing, another about helping lower income people buy homes, another about tenant protections, still another about preventing displacement, etc. Then there’s my favorite, “Innovative Housing Types.” I’ve felt strongly that we can’t just rely on new buildings plus aging and rundown buildings. We need to look at things like tiny houses, prefab houses, 3-D printed houses, mobile homes, shared housing, cooperative housing, community housing for people transitioning out of homelessness, and others. ALL of the things I listed are in that one policy! There is also language about revising current policies and regulations to “remove barriers.” I’ve also thought that was necessary, as long as health requirements aren’t compromised.
So the bottom line is that upzoning deals with the need for housing of all types, while many, many other policies directly address the production of housing that WILL work for truly low income people.
Dennis:
“Paul, I think your “neoliberalism” critique is off base. First, because it’s an amorphous word the meaning of which even scholars can’t agree on. Second, because it’s kind of become an all purpose epithet to fling at people with whom we disagree. If Reagan, Clinton, Gore, and Trump are all neoliberal the word can’t have much meaning. Most importantly, though, if we agree to use “neoliberal” as a synonym for “free market”, the big problem is that the 2040 plan is simply not neoliberal in how it seeks to address the problems of poverty and affordable housing,”
Clearly YOU don’t like the term, but it is clearly defined and some of us have been using it for decades. The core feature of neoliberalism is a belief in market efficiencies; if you don’t think Reagan, Clinton, Trump, etc. shared that belief, you’re not familiar with these presidents.
Granted, neoliberalism hasn’t been a common term in American political and economic discourse, but you’re claims regarding academic confusion are simply mistaken, those who are familiar with the term know what it means. The fact that so many neoliberals deny they’re neoliberals, or chafe at it’s application, doesn’t make it an epithet.
Up-zoning is a neoliberal policy because it assumes that tweaking a zoning code will unleash previously suppressed market efficiencies that will reduce prices, increase availability, and promote a specific kind of development. Many of us are simply pointing to a variety of flaws in that logic.
One of those flaws is your reference to vacancy rates, and their “dangerously” low levels. Vacancy rates are a product of inventory control within the industry, they are maintained at relatively stable levels between 4% and 6%, right now they’re less than one half of a percent below the “ideal” of 5%. This isn’t a housing “shortage”, but it can be a tight market. Obviously a neoliberal might have difficulty distinguishing between a tight market and an actual housing shortage.
You can’t constantly circle back to claims that market efficiencies will resolve all problems, and then deny that you believe that market efficiencies will solve all problems. It doesn’t really matter whether you call yourself a free-marketeer or a neoliberal, the reliance on market manipulations is the same.
Another way of describing neo-liberal is libertarian. Sometimes that works better with folks who are not familiar with neo-liberal.
Dennis – first off, the term neo-liberal has a very specific meaning and a specific intellectual tradition for anyone who has any sort of economics background. It is not ambiguous. If you want a good read, try “Commanding Heights” if you want to understand the specifics of this intellectual tradition. Read the first half, the second half gets a little repetitive.
As to the question of the general lack of housing, we are not Seattle or San Francisco. We have had housing demand and housing supply relatively in balance up until the Great Recession when there were several years with little housing production. The market is now catching up, at least at the upper ends. The Strib just had an article about how Krause Anderson is putting in new housing in downtown, which has a 5.2% vacancy rate right now and how they think that developers are going to start pulling projects to avoid overbuilding. So it appears that the market is correcting for under building and we are becoming in balance, at the upper end.
I wrote a rebuttal to the pieces from the Fed staff pointing out huge flaws in their arguments, by the way. If you read their piece, read mine too. Housing is not like bananas.
As to the question of “policy” vs “actual” part of what the 2040 Plan was chock full of was platitudes. Platitudes that were designed to make people feel good while providing a fig leaf for the things that were actionable. People have been reacting to what is actionable now and not betting on the come that these other policies will produce anything actionable at some point in the future. That is why this piece is pretty frustrating. Ms. Worthington wants us to look at the platitudes and trust that they will turn into something actionable but they have not. Take the “inclusionary zoning” policy that was supposed to be done by now. But still isn’t. Because the CIty wants developers or renters to pay for affordable housing and they are saying they can’t make projects work if you force them to. So they have said they will just stop developing if forced into these kinds of policies. If the goodness of the 2040 Plan was not in the upzoning but in these other policies, why didn’t the city wait to upzone until the reality of these other policies were already in place?
Paul and Carol – I don’t know how else to say it, but you are simply wrong when you say that neoliberalism is “clearly defined” (Paul) or “has a very specific meaning.” You may research it for yourself; there are multiple articles about it. I’ve linked below to the very first thing that came up when I Googled it myself, but I’ll quote from the beginning of the piece:
“Neoliberalism is the linguistic omnivore of our times, a neologism that threatens to swallow up all the other words around it. Twenty years ago, the term “neoliberalism” barely registered in English-language debates. Now it is virtually inescapable, applied to everything from architecture, film, and feminism to the politics of both Donald Trump and Hillary Clinton.
“Naming matters. It focuses agendas and attention. It identifies causation and strategies of action. It collects (or rebuffs) allies. Is the overnight ubiquity of the term “neoliberalism” the sign of a new acuteness about the way the world operates? Or is it a caution that a word, accelerating through too many meanings, employed in too many debates, gluing too many phenomena together, and cannibalizing too many other words around it, may make it harder to see both the forces at loose in our times and where viable resistance can be found?”
https://www.dissentmagazine.org/article/uses-and-abuses-neoliberalism-debate
This is from The Conversation: “This raises an important question: How do we use a term like “neoliberalism” when so many people have such different understandings of what it means?”
This is from Public Seminar: “The term “neoliberalism” drives me crazy, specifically when used in the U.S.. It explains too much with too little, concealing crucial distinctions, as it frustrates crucial coalitions against the clear and present danger of the new authoritarianism of Trump, Le Pen, Orban, Kaczynski, et al.. Further, it’s meaningless for much of the American citizenry beyond academic and leftist circles. It’s “elite — speak,” confusing at best, destructive, at worst.”
This is from the Semantic Scholar: “The overshadowing importance accorded by some to the phenomenon of neoliberalism does not signify, however, that it is a clearly defined concept. We suggest in this article that while the concept itself has become an imprecise exhortation in much of the literature, often describing any tendency deemed to be undesirable…”
Note the last part of the quote just above. That is exactly what Prof. Schultz was doing when he used the term TEN TIMES in his brief blog post. And I suspect that’s what Paul is attempting to do when he cites the term so often. It’s a handy dandy term since conservatives will think it’s bad because it has “liberal” in it. And progressives will think it’s bad because of its vaguely ominous tone and because of how its often used. So it’s a terrific little way to throw shade on something without doing much actual analysis.
Carol says neoliberalism is the same as libertarian. That’s simply not true. Hillary Clinton, Bill Clinton, and Al Gore are not libertarians.
Prof Schultz called Trump a neoliberal. But Nicolas Firzli said “With the victory of Donald J. Trump on November 8, 2016, the ‘neoliberal-neoconservative’ policy consensus that had crystallized in 1979–1980….finally came to an end.” Several scholars have said that neoliberalism is one of the main causes of environmental degradation and extinction. How then is Al Gore considered a neoliberal?
I could go on and on.
One more comment about neoliberalism. It’s more than a little humorous to imply that our city council is neoliberal. It’s been called the most progressive city council in the country. Obviously they have to use developers to get housing built. Who else is going to build it? The city doesn’t have a construction department. (Though as a non-neoliberal myself I’d favor creation of just such a thing.) And I don’t think we can do an Amish-style communal “apartment-raising.” Further, they can’t use eminent domain to dictate where new buildings will go. Vilify developers all you want, but that’s who builds new housing.
Here is a real simple definition of neo-liberal. Neo-liberal is the belief that the private market will provide solutions to societal problems, especially if it is unfettered by government. Its solutions are to reduce government intervention and allow the marketplace to function. It has a lot of antecedents but when I teach this, I start with Milton Friedman and the Chicago School of Economics. I would direct you to the book, “Capitalism and Freedom” for a great primer.
As to the “progressive” City Council, the 2040 Plan was based on neo-liberal theory. Reduce regulation on developers and the private marketplace will provide all the housing that we need. Not very progressive, as Dr. Schultz points out as deregulation has always meant the rich get richer. (Sen, Picketty, etc)
Now I will say that the pro-developer advocates did a great job in wrapping this neoliberal approach in progressive values. “We will reduce racism if we just unfetter the private market!” “We will reduce income inequality if we just unfetter the private market!” “We will have a better environment if we just unfetter the private market!” But dressing it in these clothes doesn’t make it progressive.
Dennis, this isn’t a debate game, you’re not going to get points for simply providing sources or links.
The sources you’re providing are trying to discredit neoliberal critiques, they’re not describing or defining neoliberalsim.
Al Gore is a neoliberal because his mentality is organized around a faith in market efficiencies. This fact is clearly visible to anyone who actually tries to understand what neoliberalism is simply because Al Gore ran the most extensive privatization scheme in US history (It was called “re-inventing government”). During the Clinton administration more government agencies and responsibilities were privatized than any other administration in history. Everything from student loans to immigration services was privatized under the assumption that the private sector was more efficient… i.e. market efficiencies, this is classic neoliberalism.
Likewise if you look HRC’s proposals during the 2016 election, you’d notice that almost all of her proposals involve creating some kind of presumably efficient market that would resolve issues. Most of HRC’s proposals revolved around handing problems over to the financial sector in one way or another. From student debt to infrastructure the core of her proposals was to use financial markets that would duplicate the import-export bank she was so proud of. These proposals were classic appeals to market efficiency, as was her health care proposal back in the 90’s.
The difference between Obamacare and Medicare for All is that Obamacare relied on presumed market efficiencies rather than direct intervention.
I would say your problem is that you’re trapped in the circular logic of political parties with somewhat conflicting narratives that dictate a bipolar landscape of some kind. Yes, there are difference between Al Gore and Donald Trump, they and their parties have different narratives, but neoliberalism is meta-narrative that looks at the underlying similarities.
The fact you and others have difficulty understanding that meta-narrative doesn’t mean those who use it are: “wrong”. Sure, Clinton and Trump are dissimilar in many ways, but their common belief in markets and market efficiencies is obvious.
I’m really hesitant to get back into the 2040 debate after engaging on multiple NextDoor posts. Also, the debate is really over. The plan was passed by a 12-1 vote, the Met Council is certain to approve it, and it will become law. However, there has again been so much distortion and misunderstanding that I can’t resist. When I first heard of the plan on NextDoor I had no opinion since I didn’t know enough to have an opinion. I’m a data and research analyst by profession, so it was second nature to delve deeply into all the issues. The more I studied the more I came to the conclusion that the plan, and its upzoning, represented an excellent way forward for out city. Having said that, here’s an edited version of a NextDoor comment I made addressing David Schultz’s article. It addresses the issues related to the idea that the plan is simply using “neoliberal” free enterprise to try to deal with the problems of North Minneapolis.
I’m amazed that Prof Schultz misunderstands the 2040 Plan in a massive way when it comes to the upzoning issue. He says that the Plan mostly wants to solve the segregation issue by means of upzoning. That is so monumentally untrue that either he hasn’t actually read the Plan at all, or he is intentionally distorting it. I’m assuming the former.
The Plan has many things in it related to the special needs of North Minneapolis, but the council members representing that area still had concerns, and they spent the last two days before final approval discussing those issues, and inserting special policies and actions. One of the results was the insertion of what is now Policy 34, “Cultural Districts.” The policy starts out like this: “Given the history of redlining and economic exclusion, the City will designate Cultural Districts to prevent the displacement of low-income residents while nurturing thriving commercial corridors.”
The first goal listed in the plan is “Eliminate Disparities,” and there is a long discussion of the nature of those disparities, including housing and education, the two issues that most concerned Prof. Schultz. The Plan then specifies that of the 100 policies specified in the plan, there are 39 that relate to disparities. People have said the best way to increase housing choice and diversity is to increase incomes and opportunities for poor people. Several of the policies relate directly to that. Then there is policy #87, titled simply “Northside.” That entire policy, with 8 separate action steps, refers specifically to North Minneapolis. Consider this paragraph:
“With the 2008 foreclosure crisis and the 2011 tornado, large amounts of the Northside’s housing stock has been rapidly converted into rentals causing the housing stock to disproportionately extract wealth rather than build it. To leverage homeownership as a wealth building strategy on the Northside, the housing stock must first be stabilized. Beyond housing as a wealth building strategy, housing is also a basic human right. Further, displacement causes the Northside to lose its greatest asset – Northsiders, particularly seniors, community elders, and families with children.”
I could go on and on. Multiple policies, multiple proposals. So much for the 2040 Plan “mostly” trying to deal with disadvantaged people and North Minneapolis with upzoning.
I should also point out how dissonant is the idea that our city council, perhaps the most progressive in the entire country, including members whose careers have focused on benefiting their communities, would endorse a plan based on enriching developers and destroying the people in their communities.
Thanks for pointing us to #87 Dennis. Here’s a link so people can look at that themselves: https://minneapolis2040.com/policies/northside/
If we look at the “Action Steps”, which contain the actual policy, we can see some acknowledgment of issues not related to zoning per se, but the neoliberal contradictions are obvious nevertheless.
For instance after deciding that promoting home ownership as a “wealth building” strategy is necessity, they go on to declare that building more rental housing is a priority. Furthermore, the plan to build or convert more single family houses into multi-family housing would conflict with the home ownership wealth building objective, unless you assume that fewer people will own the buildings and be landlords for everyone else? And how do we ensure that the new landlords reside in the neighborhood?
Essentially we’re left with no “there” there. The essential reliance on the power of “markets” defeats the objectives by promoting contrary policies. You can talk about “right of return” for instance, but return to what and under what circumstances? Return as a renter, or return as a home owner who’s building wealth? Return to an apartment building along transit corridors, or to a multi-family house?
In the end we don’t have any real “actions” that will be taken beyond promoting market efficiencies and we’re left with vague and contradictory objectives. If you think you’re going to promote development while restricting the rights that developers have to control and evict their renters, like Mr. Schulz’s said, you don’t understand the industry. And is this going to be a city-wide renter’s rights campaign or are you just targeting the North Side?
Paul, I’m surprised that you’ve taken such a simplistic view of Policy #87. First of all, nothing in the entire policy specifies free market actions (or “neoliberal policy,” as you enjoy calling it.) Read it again. Helping residents make their first home purchase is not “neoliberal.” Prioritizing residents with “ties to the community” is not “neoliberal.” A “Tenant Bill of Rights” is the antithesis of “neoliberal.” “Investing in improvements in environmental health and green space on the Northside” is not “neoliberal.” And on and on.
The concept of affordable housing near transit corridors implies the possibility of the “free market,” but it certainly doesn’t guarantee it. The city could well partner with a nonprofit developer like Aeon. It could heavily subsidize for-profit development, which is not neoliberal. Any inclusionary zoning requirements would not be neoliberal.
Regarding your claim of a conflict between assisting homebuyers and producing multi-family housing, you’re just not understanding the situation. There is nowhere even remotely close to enough single-family housing even in a magical kingdom where every family was given a house. For that reason alone large numbers MUST rent. Further, about 80% of renters in general do not qualify for a mortgage, either because of bad credit, insufficient down payment, or income that’s too low. That number is even higher in North Minneapolis. So the plan simply seeks to assist those buyers with the better financial circumstances, while producing more rental units for the rest of the population. Of course there will be a few less single family homes, but the loss is insignificant compared to the providing of far more total units. And others have pointed out that the Northside has far more empty lots and dilapidated buildings than we have in SW.
You’re making the mistake so many 2040 opponents make. You only see the free market upzoning, but either don’t see all the other governmentally based policies, or you see them as just flowery words since they’re not all that specific. And then you blithely overlook the fact that this is a comprehensive plan to guide policies TO BE DEVELOPED that will fit in with the plan goals.
Dennis, I’m afraid your comments appear to be trending towards more incoherence.
Now you’re claiming that the antidote to excessive rental properties is to build more rental properties so that people who are now “forced” to rent can own single family homes that don’t exist? If people can’t own their own homes, how can they build “wealth” as home owners? Are you promoting density or not? If you’re promoting density THAT means renters, not single family home owners.
And at any rate, there’s no reason to assume that simply changing the mix of rental and single family homes will reduce prices or produce more affordable housing. The people building, converting, and renovating all of this will want to sell and rent at market prices, their motive is profit. If 2040 discusses rent controls, or publicly subsidized housing or construction, please show us where.
I’ve actually said almost nothing in this comment threat about up-zoning, I’ve been deliberately avoiding the issue as much as possible in order to illustrate the comprehensive deficiencies in the 2040 plan.
Here would be my challenge to you. What does “prioritize residents with ties to the community” mean when North is getting bought up by hedge funds? What does that actually mean, other than just language to make people feel happy? How does that get translated into action?
“Investing in improvements in environmental health and green space on the Northside” is not “neoliberal.” I agree. Can you tell me what actions are being undertaken to do this? I appreciate the investments in the parks, which I led, but what other investments are we talking about? The Upper Harbor project?
The City does already partner with non-profit developers. But now, for-profit developers are taking money away from the non-profit developers.
As to families choosing rental vs home ownership, you have a couple contradictions. First, everyone acknowledges that ownership can be in condos and co-ops and doesn’t imply single family homes. But rental means keeping people poor. Right now, for every ownership unit being built, eight and a half rental units are being built. That means for every family able to build wealth, eight and a half are going to be poorer because of their housing. That is a choice that the City makes.
What is your citation that 80% of renters don’t qualify for a mortgage? Given that median home is about $275,000 or about $1400 a month and the median rent is like $1200 a month (for a much smaller space) it is hard to see how so many people could not qualify for ownership.
As to not seeing all the other governmental policies, yes, you are right. I see flowery words until I see real programs with real dollars behind them. Flowery words to ameliorate criticisms (like policy 87). But the real purpose of comprehensive planning is to guide land use planning, how much population, how much sewer capacity, how much road capacity, etc. Everything else not related to that is flowery words.
Dennis,
I guess another way of putting it is if the loss of single family homes will be insignificant, then how can the construction of multi-family homes be significant? Can you have one without the other, and where are you getting your data for this claim? What are your density targets and how many single family homes have to be displaced to reach those targets?
What’s your threshold for “significance”? On a block with 24 single family houses for instance, at what point do conversions to multi-family homes become “significant”? And again, how can insignificant changes be meaningful?
How do you know that investors and developers won’t scoop up properties and build or renovate more than an insignificant number of single family homes? What’s the basis for these assumptions?
So the bottom line for 2040 is that something will no longer will exist with the hope that something other will. One is concrete and measurable in the present the other will only be measurable after it occurs should it occur. That is a steep hill to climb with words alone. Minneapolis city government needs to better step up to control all the variables that will affect what everyone would like to be a positive outcome. I would advocate for price control.
Joe, I agree with you about the idea of advocating for price controls. We have to be careful, though. Everything I’ve read says rent control is a very tricky issue and can easily be screwed up. In general it shouldn’t be applied to new construction, but rather to current housing. Other things can be done as well, such as trading tax relief for keeping rent increases very low. Another thing some cities have done is to mandate that any builder creating new construction that displaces current affordable housing has to also create as many new affordable units as were removed. Keep in mind that 2040 isn’t law itself, but it rather guides new law and regulations on a high end basis. After final passage the city still has to go through the normal rezoning process. As part of that it could mandate controls or replacement of existing affordable housing, among other things. THAT is where the energy of people advocating affordable housing should go.
I also want to comment on your observation about replacing something that exists to create something new. The big issue is that what currently exists is emphatically NOT working. Vacancy rates are in dangerous territory, rents are rising far faster than incomes, racial segregation and disparities, along with economic segregation, are worse in Minneapolis than almost any large city. In my opinion something MUST be done, and 2040 is that something. The plan fully fits in with all the recent studies of urban scientists, and is far less invasive than critics fear. Our valued neighborhoods will not change in drastic ways. Personally, I would advocate to move farther toward returning us to the mixed use neighborhoods of the past, those that existed before single family zoning destroyed that past. I grew up in such a neighborhood, and my first house – in St. Paul – was in such a neighborhood. And both were great neighborhoods.
It is a mix of old and new and to work control needs topast across the board otherwise the exceptions start and loopholes are created. All or nothing. Partial is “screwing it up.”
Going back to economic theory, price controls have not worked pretty much anywhere they have been imposed. World War II price controls. Regulation of gas prices. Airlines. Rent control has been a disaster pretty much everywhere it has been implemented. New York City is one of the most expensive places to live because developers don’t produce housing because of rent control. Good for the people who got in on the deal but awful for pretty much everyone not on the inside.
We have to careful about condemning rent control, it HAS worked in the sense that it has controlled rents for tenants able to take advantage of it. It’s failed in other ways because of some design flaws that let exempted new construction or conversions evade the controls.
Anyone who does a quick search will find Paul Krugman’s declaration that rent control has been thoroughly studied and the one thing we know is that it doesn’t work. The problem is if you keep digging you will find that Krugman actually plagiarized Thom Friedman, who made the same claim years earlier. And the problem with all of THAT is that both claims were false. In fact no real comprehensive study of rent controls had been conducted until years AFTER either man made these claim. One has to remember that at their core, both Friedman and Krugman are neoliberals who assume that market efficiencies will prevail, and they both assumed that rent controls restrain market efficiencies.
In recent years neoliberal think tanks and university researchers have produced some papers condemning rent control (predictably) but others have produce more nuanced studies. There’s a nice article here:
https://www.kqed.org/news/11677380/is-rent-control-working-and-should-we-have-more-or-less-of-it
You can read the Standford article referenced in the KQED article here:
https://web.stanford.edu/~diamondr/DMQ.pdf
The upshot is that while rent control worked in the sense that it saved renters billions of dollars over the course of several years, it failed to control rental prices over-all, and may even have promoted more inflation. However, the reasons for the rent control fueled inflation had more to do with the way the program is design and implemented, with adjustments and a different design rent control could be more effective, although it wouldn’t be a magic bullet of any kind.
I think you misunderstood the study. The study didn’t find that billions of dollars were saved. It found that rent control is awesome if you are the first ones in and stinks if you are not. But housing production drops and rents for everyone who comes along later is higher because of rent control, thereby negating what you were trying to do. In fact, it is worse for younger people entering the market and better for older people who got their first, even though they are later in their careers and should be able to afford more. Here is the abstract of the study, which literally says that rent control does not do what it is trying to do:
“Using a 1994 law change, we exploit quasi-experimental variation in the assignment of rent control in San Francisco to study its impacts on tenants and landlords. Leveraging new data tracking individuals’ migration, we found rent control limits renters’ mobility by 20% and lowers displacement from San Francisco. Landlords treated by rent control reduce rental housing supplies by 15% by selling to owner- occupants and redeveloping buildings. Thus, while rent control prevents displacement of incumbent renters in the short run, the lost rental housing supply likely drove up market rents in the long run, ultimately undermining the goals of the law.”
Here are also some quotes from the new article you cite:
“We find for the tenants that were living in San Francisco at the time of the law change, [that became covered by rent control,] they benefit dramatically,” says Diamond.
People who ended up in rent-controlled apartments at the time of the law change saved $7 billion over 18 years.
People over 40 saved the most, and saw three times the benefit of younger people — probably because young people can’t stay put in the same way. They need to leave those rent-controlled apartments because of new jobs, marriages and growing families.
“With their earnings capped, some landlords decided to leave the rental business altogether by selling or converting their apartments. In 18 years of the study, Diamond found that 15 percent of those newly rent-controlled apartments had been taken off the rental market entirely.
“That decreases the supply of rental housing,” Diamond says, creating a new group of people who don’t benefit — other renters. “If supply goes down, prices have to go up for supply to equal demand.”
With more people trying to get into fewer apartments, landlords can charge more for those apartments. Diamond’s study found that across the city rent went up by 7 percent and cost $5 billion.
Meaning newcomers and renters without rent control end up paying more.”
Rent control is bad unless you are the in-crowd. It is also pretty stinky politically because it is easy to sell out future citizens for votes today.
Carol,
I understand the study. The point is rent control actually did control rents, nothing else has done that. I’ve already acknowledged that long term for those outside the rent control regime rents have gone up but It’s important to look at the causes of outcome. It’s not just matter of rent control being bad, if deployed correctly it could be an effective part of a price control regime. We know it’s not a magic bullet and many other policies would have to implemented as well. Part of the problem with the original rent control regime was that it wasn’t coordinated with any other policies.
Paul – the article you linked to says that rent control controlled rent only for the people that got there first. For the people who came later, they ended up paying a lot more than they would have otherwise. So it isn’t that it controlled rent – it controlled rent for the lucky few. A big difference.
We need to be careful about dismissing the concept of price controls in general as well.
One of the frequently over-looked neoliberals of the 70s is actually Jimmy Carter. Carter still brags about number of deregulation bills he signed onto law, and some of them, such as the oil and gas deregulation, removed price controls. Remember his “Windfall Profit Tax” that was supposed to compensate for the higher gas prices we all started paying?
At any rate, there are different ways of implementing price controls, some work better than others, some don’t work at all, but you can’t just write them off. Our public utility model for instance is a price control regime that works pretty well.
Looking at other aspects of the plan, we can see the “Action Plans” access to housing: https://minneapolis2040.com/policies/access-to-housing/
However the assumption again here seems to be that housing access will simply grow out of properly unrestricted markets, there’s no actual plan to push this out. There’s a lot of talk for instance about housing next to transit stations, which is great, but real estate studies tell us that this housing is among the most expensive housing in most American cities, so how do you reconcile that with the claim that all of this will drive housing prices down? You can build transit, and you can build housing next to transit, but there’s no reason to assume that this new housing will be “affordable” housing.
Two things:
First, let me explain yet again that the constant references to vacancy rates that neoliberal defenders of 2040 keep making are based on a false claim. There is NO inverse correlation between vacancy rates and housing pricing.
Vacancy rates are a metric that the housing/real estate/construction industry uses to manage and control inventory. The ideal vacancy target the industry has adopted is 5%. If you map this out over the last decade or so you’ll see that vacancy rates have actually been rather stable hovering within one percentage point of the target, while average rents have gone up 25%, and house prices even more.
The current vacancy rate in the metro area is around 4.7%, there’s nothing remotely “dangerous” about this. You’re not going to create affordable housing by tweaking vacancy rates. The function of inventory control is to maintain and increase profit margins. As long as consumers are buying what’s being sold at market rates, the industry is meeting it goals. The object is not to create housing everyone can afford, the object is to sell housing for a profit.
Second, the fact that 2040 IS a plan of some kind, doesn’t mean it’s a “good” plan. A bad or ineffective plan is not better than no plan at all, so simply bragging about having a plan doesn’t win the day on an intellectual or policy level. Bad and ineffective policies can actually make things worse. Obviously people with other plans were not involved in the 2040 development, this doesn’t mean other ideas don’t exist, it simply means other ideas were excluded from the neoliberal planning process, much the same way single payer was excluded from the neoliberal attempt to address the health care crises. Simply put, if it’s not about tweaking the market, the idea doesn’t make it onto the table, that doesn’t mean there are no other ideas.
Paul – Below is a link to a study by the St. Louis Fed that argues that housing prices are not linked to availability of housing but to income. That housing is highly inelastic so simple supply and demand doesn’t work. But as the market can bear more because people are being paid more, housing prices rise. I think that this has to also be included in the discussion.
https://fredblog.stlouisfed.org/2017/10/incomes-determine-house-prices/
Also, as the economy has improved, the number of people who are cost-burdened has actually been declining. Now the number is still too high at about 28% (2017) but it is down from 35%.
https://metrocouncil.org/Data-and-Maps/Publications-And-Resources/MetroStats/Housing/At-a-Loss-Affordable-Housing-Production-in-2017.aspx
“As to the Commissioner of Housing Preservation in New York City, the issues of New York are not the issues of Minneapolis. The idea that we are the “Minne-Apple” is long gone. We are not New York, nor should their solutions be ours.”
If we cannot apply lessons learned elsewhere, then why look at an even more specific place and time (San Francisco since 2000) than Ms. Been’s cited research does? Do you detect the contradiction, Carol?
Paul and Carol, I’m going to start this post with my ultimate conclusions relating to this thread, though I’ll post a couple of more things when I get time. The most important thing is that our debate is essentially meaningless. The real debate is over, since the plan passed the council by a 12-1 vote, and is literally certain to be approved by the Met Council and become our official 10-year Comprehensive Plan. So really there is no point in turning ourselves into pretzels about a fait accompli.
Having said that, I haven’t been posting here in an effort to convince either of you of anything, since your minds are made up. Rather, I’m posting simply because I want people who have an open mind on the issue to be exposed to the pro side, and not think that everyone opposes it. I am totally content to let undecided readers read what I have posted, and compare it to what opponents have posted.
Carol, I appreciate you trying to engage in a genuine debate, even though I think you’ve either misunderstood or misrepresented some things. (And y0u probably feel the same about me, which is OK.) I’ll probably respond to a couple of things when I get a chance.
Paul, I’m afraid I can’t be as complimentary to you. Your modus operandi appears to be to be condescending, to say things as fact when they are obviously just your opinion, and to somehow want to “win” the discussion. It also appears to me that you want to muddy the waters by branching out into tangentially related subjects rather than hone in on a specific issue. I’d love to debate 2040 with someone who is willing and able to engage in an honest debate.
Three things as examples of what I’m saying: 1. you state that the metro vacancy rate is 4.7%, but you don’t cite any sources. Below is a linked source (StarTrib) from June showing vacancy rates in the first quarter of 2019. It shows them by unit type, but you can easily calculate that the overall rate for the metro is well below 3. For Minneapolis alone it’s somewhere in the mid-3s. http://www.startribune.com/how-much-is-rent-in-twin-cities-this-guide-breaks-it-down-by-area-unit-type/414996293/?refresh=true 2. You say that there is no inverse relationship between vacancy rates and housing prices. That is simply false, and there are many studies that show that. And if you go with just rental prices, as opposed to housing prices in general, the relationship is even greater.
3. You said I said this: “you’re claiming that the antidote to excessive rental properties is to build more rental properties so that people who are now “forced” to rent can own single family homes that don’t exist?” I said no such thing, not even close. I don’t know if you just have trouble understanding things, or if you’re intentionally misrepresenting. I never said there is excessive rental housing, but rather the reverse, which is that there is a shortage. I never said we should build more rental properties as a plan to help more people own. Rather, the plan is to help as many people as possible buy a home if there is some capability on their part to do so. That leaves MOST nortjhsiders having to rent, and we need more rental housing for them.
See my next post for a straightforward challenge to you.
Paul – Here is my simple challenge to you. Based on your comments about neoliberalism, the free market, etc., it seems pretty clear that you are on the far left of the political spectrum, perhaps even a full fledged socialist (or else you’d be OK with some level of the free market). FWIW, I myself am a “theoretical communist.” Unfortunately, thanks to the realities of human nature communism has no chance to work. Nor does full-fledged socialism.
If the free market can’t be used to create enough housing for our population, both now and for the future, and especially can’t create enough affordable housing, what would be your plan to create that housing? Especially the affordable kind, both for people who are in the middle or below, and for the really low end?
Dennis,
My vacancy rate figures come from the Metropolitan Council.
Since no one here is advocating socialism I’m afraid your simple question is simply incoherent. No one anywhere is suggesting that we abolish the real estate market and replace it with some kind of command economy.
Paul, please link to an article that displays those vacancy rates. I can’t find them, and they are totally and dramatically out of line with vacancy rates I’ve seen from multiple sources over the past year. Unlike some I want to have the genuine truth. I hold my positions because my extensive research has led me (as a professional data analyst and researcher) to those positions. If data appears that points me in a different direction I’ll go in a different direction. So PLEASE, link to those rates. Thanks.
Dennis this information is easy to find, I can’t explain your inability finding it. Again, I don’t play debate games, I rarely provide links because people can look things up for themselves.
The figure I’ve been using however turns out to be in error, the rate is actually 4.4%, not 4.7%. I was mis-remembering a ruff calculation I made of the average vacancy rate over the last 9 years. A more accurate average would be 4.5%.
Here’s the link to that Met Council report:
https://www.minnpost.com/community-voices/2019/07/minneapolis-2040-plan-is-just-part-of-the-solution/?replytocom=592194#respond
The point is that claims that low vacancy rates are “correlated” with rising prices is simply not based any real analysis. The Met Council keeps making this claim but even if you look at their graph, and remember they’re comparing rates to dollar amounts you can see that the vacancy rate is actually quite stable, rarely fluctuation more than 1% above or below the target. You can claim that small fluctuations in vacancy rates can drive dramatic price changes, but you have to actually do a statisical analysis of some kind.
Paul, are you just punking me at this point? The link that you say is to the Met Council is just a link to this article we’re commenting on. Based on that and several other things it appears you’re the one playing games. I’m trying to have an honest debate but you’re just not willing to do that. You falsely stated that Prof Been’s article had not been published or peer reviewed, but it had. It says a lot about a person when they just make stuff up that is provably false. It’s also absurd to suggest that if you provide stats that are challenged and contradicted by other stats for which source and even link are provided, that the OTHER person has the duty to seek out YOUR source. That makes absolutely no sense, and is the epitome of playing games.
I note that you have 848 PAGES of comments here on MinnPost alone since 2008. Since each page averages about 10 individual comments that means you’ve made about 8480 comments! On just MinnPost.
Here is a direct quote from you: “There is NO inverse correlation between vacancy rates and housing pricing.” That is a totally untrue statement, as any economist would attest. The whole concept of the “healthy” vacancy rate is based on the inverse relationship. If vacancies are at that level rents generally are expected to rise with the level of inflation. If they fall below that rate then rents are expected to rise ABOVE the level of inflation. And we see that historically over and over again. And now you’ve doubled down on this absurd claim. The Met Council itself took pains to point out exactly that correlation. To quote their recent report: “At healthy vacancy, housing costs rise with inflation. Low vacancy rates (below 5%) can add undue, upward pressure on housing costs.” Analysis after analysis provide the same findings.
You also called my simple request that you reveal if you had a plan that wasn’t “neoliberal” that would produce adequate housing. In what universe is such a request circular reasoning? It’s the question that any smart person would ask someone who continually railed against “neoliberal” policies.
I really, truly, don’t know what you’re trying to do here, but it’s simply not working. I simply can’t waste my time going round and round with someone who is just playing games (as attested to by your ~8500 posts). Whatever you’re looking for, I hope you find it.
Paul, that’s the second time you’ve accused me of being incoherent. If there is one thing I’m not as a writer, it’s incoherent. And could you please start using “free market” rather than “neoliberal.” The latter term is provably amorphous in that it’s not debatable that different people use it and understand it in different ways. If you mean free market, just say that.
There’s nothing even remotely incoherent about asking you what you would do to create more housing and especially to create more affordable housing, both for middle income and genuinely poor people. That’s about as simple and straightforward as it gets. FWIW, I’ve ALWAYS said that affordable housing for poor people is a very difficult issue, and I have NEVER called for market forces to create or maintain that housing. Considerable governmental intervention is needed. I have elsewhere laid out in detail the sorts of things I would do. But I want to know what you would do. I reread every word you’ve written here, and after the huge volume of words it all boils down to: the 2040 plan is neoliberal, and therefore it’s bad.
Beyond affordable housing, how would you build housing for non-wealthy and non-poor people without using market forces?
Dennis,
It’s incoherent to keep demanding responses that have already been given, or expect some kind of alternative comprehensive affordable housing policy to emerge from a comment thread. This isn’t a platform for me to unveil my comprehensive affordable housing plan. Circular reasoning is irrational and incoherent and you just keep circling back to the same claims and observations. I’m not going to keep repeating or re-stating responses I’ve already given.
I know it’s tried and true debate game ploy to mischaracterize an “opponents” position ( i.e. how can we build without builders?) and demand a response to the new imaginary argument, but alas this is not a debate game.
I’ve already responded several times to the claim that criticism of any plan, be it 2040 or something else, cannot be legitimate unless the critic provides an alternative. I’m afraid readers will just have to sort through the thread to find those responses. I’m not going to keep writing them.
Here is the dilemma. The private marketplaces can produce a lot of housing but it currently can’t produce housing for low income people. This is because labor and materials are too expensive to produce cheap housing. Low income housing has become a merit good, in economic terms.
What do we do? People want simplistic solutions rather than the hard choice. Developers have harnessed this by saying “reduce regulations on us and there will be abundant housing for all.” Even though this is not true. But people want simplistic answers to hard questions so they support this stuff. The reality is that the only way housing will be affordable to low income folks is either massive subsidies (and Frey is talking $140M next year) or increasing the minimum wage, disability payments and social security. All hard choices.
Carol, I’m happy to say I agree with much of what you say in that post. Speaking for myself, I have NEVER, EVER said that affordable housing would be produced by the free market (with the minor exception of some trickle down that would gradually occur over a very long time period). And I don’t recall any plan supporters on NextDoor claiming that either. Hard choices are indeed needed. Everyone who has studied it at all agrees that affordable housing for poor people is an extremely complex and difficult process. On one NextDoor thread I went into detail on a couple of long posts regarding what I would do if given the power. Some of it would not be popular.
Here’s one important point you’re missing, though. Heather Worthington never once says anything in this article about upzoning producing affordable housing. Her focus is on trying to start a process of reducing racial disparities. Even there, she says that upzoning is only one part of starting to address those disparities. She states flat out that “these are not single issue problems,” but rather a complex set of challenges. She further says this: “The policies within the Minneapolis 2040 Plan that address land use practices that have been racially biased are one small way to address those disparities.”
There are 14 big picture goals in the 2040 plan. Goal #3 is “Affordable and Accessible Housing.” There are 22 separate policies (out of 100) that affect that goal. Only one of those (#1) specifies upzoning. And if you read through the entirety of Policy #1, including the action steps, it mentions affordable housing ONCE, in passing. Instead it talks over and over again about “housing choice and housing supply.” That phrase is used over and over again regarding the purpose of upzoning, and “affordable housing” is not used in that context.
If we want to have any sort of honest and productive debate we simply have to put to bed the belief that anyone is supporting upzoning because it will produce affordable housing for low income people. It won’t. It WILL help to produce more “housing choice and housing supply,” and in doing that will be ONE step toward addressing historical racial disparities. What people – including me – HAVE said is that since upzoning will produce more “housing choice and housing supply,” it will help to stabilize and even lower the dangerously rising rental prices in all sectors of the market. Affordable housing for low income people has to be addressed in other ways – as addressed in the other 21 policies that relate to the issue.
Supply Skepticism
As fun as it is seeing professional academics citing non-peer reviewed blogs to support their arguments (one has to wonder if the professor accepts such ‘research’ from their students), here is a professional academic- and Commissioner of Housing Preservation for the City of New York – talking about supply and demand and affordable housing and actually citing peer-reviewed empirical research to boot! We are lucky to see such a stark comparison/contrast of intellectual integrity.
First, here’s the author’s bio:
https://its.law.nyu.edu/facultyprofiles/index.cfm?fuseaction=profile.overview&personid=19774
How long will it be until we see that very special kind of mendacity needed to accuse Prof. Been and the entire De Blasio administration of being ‘neo-liberal’?
Second, here’s the article linked from her bio, entitled “Supply Skepticism: Housing Supply and Affordability”
http://www.law.nyu.edu/sites/default/files/Been%20Ellen%20O%27Regan%20supply_affordability_Oct%2026%20revision.pdf
“In a forthcoming article in Housing Policy Debate, Been and her co-authors conclude that new construction is crucial for keeping housing more affordable, even when the construction is not affordable for most. While luxury high rises may always be priced out of reach for lower-income residents, if supply is not provided for higher-income renters and buyers, they will turn their attention to existing buildings, so that housing that is currently affordable will “filter up” to higher income households.”
Theo, the article your citing is a draft, it has not been published in any peer reviewed journal, in fact it doesn’t appear to have been published anywhere.
Ms. Been is a law professor, teaching at a law school, not an economist or a statistician. This draft contains zero analysis of any kind and it’s references to any analysis are sparse. In fact the author repeatedly comments on the lack of evidence or analysis supporting supply-side housing policy, and unfortunately fails to produce any evidence or data of her own.
Ms. Been is clearly interested in combating what she calls: “Supply Side Skepticism” but her paper provides no real analysis or evidence beyond repeated declarations that this skepticism is bad. Furthermore Ms. Been’s description of the rationale’s behind supply skepticism is pretty much bereft of any of the actual rationale’s behind supply skepticism. She set’s up one imaginary rationale after another knocks them down with great bravado.
The Stanford article I link to has been published, and has been accepted by the peer reviewed journal: American Economic Review, although revisions have been requested. The author Rebecca Diamond is an economics professor, and second co-author is a professor of finance. Both of these authors have PhD’s in economics from Harvard University, and they teach at the Stanford Universities School of Economics and Business.
I clearly stated that the articles Ms. Been cited were peer-reviewed, not the article itself: [“and actually citing peer-reviewed empirical research to boot!”]. Furthermore, Ms. Been’s not just ‘an attorney’ she has actually “worked for three years as Commissioner of Housing Preservation and Development for the City of New York”, per the bio I posted. These are very poor attempts to discredit her article and the abundance of peer-reviewed research it cites and draws from. Been’s article directly rebuts the falsehood that supply/demand considerations do not have notable impacts on affordable housing and she does it by citing peer-reviewed studies showing the dynamic in effect in the real world.
It’s funny to hear the critique of pro-2040 people as ‘denigrating their opponents’ when we are consistently accused of being astro-turf supported by developers (for which their is 0 – and I mean 0 – concrete evidence). In this very forum our ideas have been dubbed ‘neo-liberal’ or ‘libertarian’. These are unarguably ad hominem attacks that presuppose that people from ‘the left’ and people from ‘the right’ cannot at times parallel each other in policy proposals but from different motivations. Here’s a more in-depth discussion of this dynamic:
https://shelterforce.org/2017/03/30/a-shelterforce-roundtable-on-regulation-and-housing-supply-where-the-left-a/
Theo, see my other comment a bit farther down the thread (just entered, so awaiting moderation as I type this). I did some research and discovered that Prof. Been’s article IS INDEED published AND peer-reviewed! I guess it’s easier (and it certainly fits one’s agenda better) to just say things, regardless of whether they are true. Hence the absurd claim that there is no inverse relationship between vacancy rates and housing costs.
Theo, thanks so much for posting that link to the Vicki Been piece. “Peer-reviewed empirical research.” Imagine that! And a huge list of references at the end of the piece to boot. What has most frustrated me about the 2040 debate – from its very beginning – is the lack of interest and even belief in such scientific approaches to the issues involved. Instead people just say things as fact that in reality are just their opinions. Or blithely dismiss the entire plan as neoliberal. I liked your comment about that.
For people not inclined to read the study, here is a sentence from what could be called the conclusion section: “The arguments skeptics advance in opposing increases in the supply of housing are inconsistent with the evidence, and if successful in defeating most proposals for additional housing (and density), are likely to result in significant harms.”
Well again:
” “The arguments skeptics advance in opposing increases in the supply of housing are inconsistent with the evidence, and if successful in defeating most proposals for additional housing (and density), are likely to result in significant harms.”
The problem is that this “conclusion” is based on the false claim that skeptics oppose increasing the housing supply. Skeptics don’t oppose new housing, the simply observe that new housing has not created affordable housing. You can keep building it, but if building alone yielded affordability we wouldn’t have a crises in the first place.
Again, the flaw with supply side housing is that in order to bring prices down builders need to build more housing than we need in a given market, they need to over-build. Builders simply don’t that, they control inventory in order to maintain price and industry growth.
The isn’t a published peer reviewed document, it’s a draft that doesn’t appear to have been published anywhere other than the law schools own website, it that. This fact in and of itself doesn’t make it “wrong”, but we should be clear about what kinds of documents we’re referencing.
I’m not directing this at Theo per se, but one of the problems with debate games is that you get points for simply producing references, those references aren’t checked or verified in real time, it’s up to your opponent to disqualify them. Consequently, people playing debate games can get rather sloppy regarding the actual content and integrity of their references. Reliable information is usually about quality of your references, not the quantity. The debate gamer goes out looking for titles that appear to support their argument, they don’t look for information that informs the discussion.
Again, I clearly stated that her article cites peer-reviewed research. You cannot accuse *me* of playing games when *you* do not acknowledge that and apologize.
One of the tactics of the pro-2040 people throughout this process is to denigrate individuals when they can’t discredit their ideas. It is almost as if proponents were trained in this tactic, it has been used so much.
Today, a lot of academics produce blogs (Professor Schultz is one) where they put out ideas for their peers to discuss. It is part of academic life and the free flow of ideas.
As to the Commissioner of Housing Preservation in New York City, the issues of New York are not the issues of Minneapolis. The idea that we are the “Minne-Apple” is long gone. We are not New York, nor should their solutions be ours.
As to your question of building more market rate housing, as addressed by Been, no one has said we shouldn’t build more housing. That is a red herring used a lot by pro-2040 folks to make anti-2040 folks look clueless and out of touch. Yet no one I know who opposes the 2040 Plan opposes more housing. The question is whether 47% of the City is enough space for them or if developers need the whole 100% of the City for their profit-making.
It is also true that up until the Great Recession, Minneapolis was producing enough housing to meet demand under our old zoning laws. We produced over 20,000 net over the last 20 years, so something seemed to be working right. It was never true that our regulations here in Minneapolis were stopping development. Data just doesn’t support that here.
I agree with Been that we need enough housing to meet demand at the higher ends. We have been recovering from the Great Recession and building that housing. Here are the vacancy rates now and there is a huge amount of inventory coming on-line in the next two years.
http://www.startribune.com/how-much-is-rent-in-twin-cities-this-guide-breaks-it-down-by-area-unit-type/414996293/
In fact, Krause Anderson said that developers were going to start withdrawing projects for market rate housing in a couple years because market-rate demand would be in balance again.
http://www.startribune.com/kraus-anderson-just-can-t-get-enough-of-downtown-minneapolis/511979412/
But building market rate housing does not produce affordable housing, as Been notes. And the issue in Minneapolis isn’t about needing more market rate housing. It is about needing more affordable housing. And as Dr. Schultz notes, the private marketplace will do what makes it profit, not what helps poor people. And that is the rub for the 2040 proponents – they say “reduce regulation and let the free market deliver” but it isn’t providing affordable housing. That is the fundamental criticism of neo-liberalism (which the 2040 Plan is) that it just makes the rich richer and the poor poorer.
Random thoughts on a Tuesday.
1. Paul, Carol and I are essentially spitting into the wind on this issue. At this point we’re probably the only three people reading these comments.
2. As I said before, the controversy is now moot since 2040 is a done deal.
3. The Southwest Journal reports that Yellow Tree is planning to build three new apartment buildings in or near Uptown. The plans currently call for 271 units. According to the Journal the “company aims to provide entry-point market-rate housing for people with salaries between $30,000 and $60,000.” And “they are aiming to keep half of those buildings’ units affordable to people who make less than 80% of Minneapolis’ medium income.” So much for the idea that only luxury buildings will result from the free market.
4. On a philosophical basis it is my belief that the development of single family zoning was one of the worst ideas in the history of urban evolution. It originated out of overt racism, it perpetuates segregation and disparities to this day, and it changes the nature of cities in deleterious ways. As I say, that’s my opinion.
5. Carol says that a common tactic of plan supporters is denigration of opponents. My own experience is 100% the reverse of that, based primarily on NextDoor. Anyone who supported the plan was immediately swarmed with derisive and often personal comments. As a primary supporter I was the recipient of much of that. At least 6 comments viciously attacking me were removed by NextDoor. I’ve never had one comment removed. I don’t know if it was on organized effort or not, but it came across that way.
6. Carol linked to a StarTrib story about developers pulling back on downtown development because the construction of the past few years has produced nearly enough units. But that fact buttresses the ideas behind 2040!!! A year ago the vacancy rate downtown, per the story, was about 2.6%, a dangerous rate. Now it’s a healthy 5.2%. So the free market has produced what was needed, and equilibrium is essentially reached! That’s how it’s supposed to work. Now builders will go elsewhere, where vacancy rates are still dangerously low.
Dennis –
For your 80% of renters not being able to qualify for a mortgage, I don’t see any citation. I showed empirically that if you are somewhere around median rent, you could afford a mortgage. As to the question of down payment availability, the City has programs to help with that.
The idea that home ownership builds wealth may not be for everyone but I can say unequivocally, that renting does not. And Shiller can’t live in his capital gains.
As to the 2040 Plan being a done deal, the heck it is. There is an election coming up and the backlash is going to be substantial. The YIMBY’s got their butts kicked in San Francisco and it will happen here too. Everywhere there is a backlash, with groups focused on different parts of this craziness popping up all over. We flip a small number of council seats and this is done.
As to the Yellow Tree development in Uptown, are you talking about the micro units? Remember, the affordable housing crisis is first and foremost about housing for families with children and micro units will do nothing for them. The question is always affordable to who?
Dennis – you oppose single family housing on a philosophical basis. Do you live in one? Most of the people who say they want more rental housing don’t actually live in it.
Zoning didn’t originate in overt racism. Zoning as we know it today, originated in 1916 in New York to preserve light and airflow and healthy conditions in cities.
As to the Krause Anderson article that I linked to, it shows that we did not need to sacrifice single family homes to the gods of development. The marketplace is meeting the needs of higher end housing without the changes that the 2040 Plan makes.
And how does zoning today perpetuate segregation? Yes, 70 years ago but now does it perpetuate segregation today? Any person of color can buy a home anywhere in the City without any legal restrictions. Yet that argument is at the heart of what Ms. Worthington continues to allege, that zoning today is racist. But how is that? There is an intellectual leap that she makes in this article that she never explains.
And there are four of us reading this – you have to include Ms. Worthington. Perhaps she could explain this intellectual leap – that zoning today is racist and somehow doing away with it will reduce racism. Because I don’t understand it and what she wrote here did not help explain.
Dennis – if the market was already to solve this problem – why do 2040?
I keep trying to get out of this conversation! But I’ll happily answer direct questions. Answer: Because the market can do it downtown, where large multi-family buildings are allowed, and where the demand is mostly from wealthier people. It can’t do it elsewhere because of highly restrictive zoning. (And remember, 2040 has multiple aims.)
Carol, as long as I’m back on this thread I should make a couple of other quick points about your longer post above.
1. Regarding your comment about people who can afford rent being able to afford a mortgage, that certainly doesn’t mean they QUALIFY for one. First off, the credit requirements are quite strict, and became more so after the 2008 crash. Second, let’s say someone’s current rent payment is enough to cover the principal, interest, taxes, insurance, and PMI for a mortgage. That certainly doesn’t mean they have enough income to meet the DTI requirements of a mortgage lender. Considering how “cost burdened” a huge percentage of renters are it’s a certainty that many would not qualify. And rightly so, since their financial burden makes them a very high risk of default. I know all this from personal experience because I did analysis and research for many years in the Credit Risk department of a mortgage company. My analyses helped set our requirements for credit quality, income, and down payment. Down payment is another big issue. Government programs can help some people, but only some. Based on my extensive personal experience the 80% figure is entirely believable.
2. I own a single family home. It’s not true that “most of the people who say they want more rental housing don’t actually live in it.” The reverse is actually true. Homeowners generally oppose 2040 because they don’t want more rental housing built. Well, at least not in their neighborhoods. Renters support it because their costs are rising so dangerously, and it’s hard to find a place to live.
3. No, the Yellow Tree units are not micro. Per the SW Journal over 2/3 are either studios or 500 sq. ft. one bedrooms. The rest are 2+ bedrooms (which of course cost more). FWIW, we shouldn’t disparage micro units. There have been many stories talking about their rise in popularity, and price is only part of the reason. They are definitely a part of our future.
4. No, renting doesn’t build wealth, but home ownership can lead to large LOSSES, as happened to millions in the 2008 era. Here’s a story about how common it’s become for home buyers to regret their purchases (63% of millennial buyers!): https://finance.yahoo.com/news/63-of-millennial-homeowners-regret-buying-home-survey-213314873.html
5. Zoning didn’t originate in racism, but “single family zoning” did, and it helps perpetuate racism today. That’s a rather complex subject, and I don’t want to start into it in this comment. If you want to hear my explanation of that I’ll be happy to oblige. (Regarding the perpetuation of racism, there have been innumerable articles about that throughout the national press.)
6. Come the next city election cycle the various comment threads in SW should be interesting!
More random thoughts on a Tuesday.
1. Carol was skeptical of my comment that 80% of renters can’t qualify for a mortgage. That came from a USA Today story. https://www.usatoday.com/story/money/columnist/2018/01/28/401-k-savings-buying-home-what-prioritize/1066728001/ They actually say “more than 80%.” As someone who has done huge amounts of data research for a mortgage company that doesn’t surprise me at all.
2. The idea that home ownership is a sure fire wealth building tool is an utter canard. The USA Today story’s main purpose was to look at the issue of renting vs. buying. Renting often makes more financial sense. Financial experts generally advise that you should buy only if you can put 20% down and plan to live in the house for at least 10 years. (The experts can vary a bit on the details, but the concept is the same.) Those figures were cited by the expert interviewed on the housing episode of “Adam Ruins Everything.” If you think it through that makes total sense.
3. Renowned Yale economist and Nobel prize winner Robert Shiller studied the increase in housing value over time. He concluded this: “Capital gains have not even been positive. From 1890 to 1990, real inflation-corrected home prices were virtually unchanged.” He also said this: “If you look at the history of the housing market, it hasn’t been a good provider of capital gains. It is a provider of housing services.” https://www.usatoday.com/story/money/2019/07/08/support-donald-trump-prompts-calls-home-depot-boycott-twitter/1677966001/
4. Paul, the article by Prof. Been that you so blithely dismiss HAS been published, and it HAS been peer reviewed. It was published by the journal “Housing Policy Debate.” Per its publication history it was received on 10-1-17, accepted on 5-11-18, and published on 12-17-18. Regarding peer review: “All submissions undergo a rigorous peer review process, based on initial editor screening and double-blind review by at least two reviewers.” This brings into doubt everything you’ve said on this thread.
5. Paul, you earlier said that there is no inverse relationship between housing supply and rental prices. Apart from the fact that no economist would agree with that, the very Stanford study that YOU linked to, and lauded as peer-reviewed, several times made a direct link between lower supply and higher rents. I’ll quote just one: “This 15 percentage point reduction in the rental supply of small multi-family housing
likely led to rent increases in the long run, consistent with standard economic theory. In this sense, rent control operated as a transfer between the future renters of San Francisco (who would pay these higher rents due to lower supply)” Note the phrase “consistent with standard economic theory”!!!
Dennis,
Your taking an observation about rent control out of context and pretending it represents an immutable feature of housing economics. I’m not going to keep repeating this but no one is saying that “supply” is completely irrelevant in any circumstance. “Supply Critics” are simply pointing out the fact that this market is too complex to respond to simple supply-side policies. Supply side interventions are pretty much the only interventions that have been deployed for decades now, and the problem not only persists, but has worsened, this simply an historic fact.
Again, simplistic supply side assumptions rely on “free” markets that don’t actually exist. We’ve been discussing this fact at length for days now. The assumption that all actors pursuing their own best interests in a capitalist economy; will necessarily yield the most equitable results as long as the “markets” are not impeded by regulation, is a faith based assumption.
A deluge of information has been posted. But it still comes down to we can see what is around us now. We see what is. The “promises” of what will be maybe based on somekind of study but we don’t not know every variable that will affect our future course. What if politics become such that tax policy shifts away from “rewarding” development of any kind ? In many ways the Big Short has not come to the money associated with the building proposed.
A passage from a Forbes article …..”….The new tax law both protects some crucial breaks and provides new ones. Some of these give real estate investors great advantages in building wealth and passive income and keeping tax liabilities down. For those already feeling the pressure of filing income taxes and who may be cringing in anticipation of meeting with their accountants, there is hope — especially for those who expand real estate investments or get started with real estate investing in 2018…..” link to full reading…https://www.forbes.com/sites/forbesrealestatecouncil/2018/03/27/the-advantages-of-investing-in-real-estate-for-big-tax-savings-in-2018/#2b06e33b4b95
I need to apologize for earlier statements I’ve made: I said that the Been study Theo referred to had not been published in a peer reviewed journal, I was mistaken. It has in fact been published a peer reviewed journal. Here’s link to that article:
https://www.tandfonline.com/doi/full/10.1080/10511482.2018.1476899
Sorry Theo, my mistake.
Rather than join in the sound and the fury this time (been there done that) consider one minor tweak to the plan: Require at least one unit of any triplex or fourplex in an upzoned area to be occupied by the owner of the building. More absentee landlords are not the solution. More commitment to the neighborhood would help.
I also think we need to pay more attention to the distinction drawn by some of these commenters, between urban node upzoning and the the 2040 plan’s spaghetti network of thin corridors.