The challenges of adding housing in single family neighborhoods

Too often, news articles on housing prices fall into easy traps and cliché, whether in discussing gentrification or city vs. suburb tropes. But Conor Daugherty’s piece in the New York Times (The Great American Single Family Home Problem) hits all the right notes.

In it, he tells the tale of a modest redevelopment proposal to redevelop a single family home into three units on the same lot. The political opposition is fierce, leading to years of delay and legal proceedings. And this is for a parcel already zoned for additional density; this particular saga doesn’t even touch on the challenges of rezoning an area currently occupied by single-family homes.

A couple of things stand out to me:

The missing middle: The author frames the cost trade offs well. Lots of cities allow downtown and highrise development, but this requires expensive construction techniques, and thus requires pricey rents to pencil out. Smaller-scale development (low-rise apartments, duplexes, townhomes, etc) can pencil at much lower prices – the thorny issue is the politics of building in existing single-family neighborhoods.

The problem is that smaller and generally more affordable quarters like duplexes and small apartment buildings, where young families get their start, are being built at a slower rate. Such projects hold vast potential to provide lots of housing — and reduce sprawl — by adding density to the rings of neighborhoods that sit close to job centers but remain dominated by larger lots and single-family homes.

Neighborhoods in which single-family homes make up 90 percent of the housing stock account for a little over half the land mass in both the Bay Area and Los Angeles metropolitan areas, according to Issi Romem, BuildZoom’s chief economist. There are similar or higher percentages in virtually every American city, making these neighborhoods an obvious place to tackle the affordable-housing problem.

“Single-family neighborhoods are where the opportunity is, but building there is taboo,” Mr. Romem said. As long as single-family-homeowners are loath to add more housing on their blocks, he said, the economic logic will always be undone by local politics.

Capital-A Affordable, vs. affordable: The three units proposed for the lot wouldn’t be cheap, but (crucially) they’d be cheaper than a re-habbed SFH on the same lot – and there’d be more of them.

They are estimated to sell for around $1 million. But this is an illustration of the economist’s argument that more housing will lower prices. The cost of a rehabilitated single-family home in the area — which is what many of the neighbors preferred to see on the lot — runs to $1.4 million or more.

The “economist’s argument” might be sound, but it’s a hard sell for the neighbors.

This kind of evolutionary redevelopment would’ve been completely natural and non controversial before the advent of zoning.

It’s always worth remembering how different the Bay Area’s housing market dynamics are. Daniel Kay Hertz notes that many of the same issues are in play in weaker regional markets, though the way things play out is quite different:

Aaron Renn doesn’t think much of the Bay Area’s strategy of generating affordability through redevelopment of single-family housing:

First, it’s hard to say this is a cogent strategy; the vast majority of single family homes aren’t going to be rezoned anytime soon.

Second, Renn is correct, historically – at least since the advent of zoning. This was true for the Bay Area, too – suburban development offered a then-cheap and cost-effective way to add housing to the region’s supply. But that was decades ago (the NYT article includes maps showing the expansion of the suburbs over the recent decades), and the region has run out of room for new/expanded suburbs within a reasonable commuting distance.

Renn’s implied regional strategy isn’t going to work well in the Bay Area, either. Consider the recent articles on Bay Area super commuters. Relying on Stockton to be San Franscisco’s bedroom community has severe costs, after all.

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