The debate over housing densities versus housing equities

Pew Charitable Trusts housing expert Alex Horowitz.
Pew Charitable Trusts housing expert Alex Horowitz.

Kit O’Connell’s recent article on Austin’s recent land-use-code revisions included thought-provoking comments by Alex Horowitz, who directs housing policy at Washington-based Pew Charitable Trusts, and Rich Heyman, who until recently was an urban geography professor at the University of Texas at Austin. Heyman disagrees with Horowitz’s belief that embracing greater construction densities will rein in housing costs. Heyman does recognize that dense cities do deliver benefits. Horowitz encourages local governments to carefully consult with citizens to broaden political support for these often-divisive policies. 

The Austin Free Press publishes these short interviews to present the ideas of Horowitz and Heyman in more detail. The interviews have been edited for clarity and brevity. This is part of an occasional series on the land-use revisions that the Austin City Council passed on May 16.

Alex Horowitz: Building Denser Lowers Housing Costs

Pew Charitable Trusts housing expert Alex Horowitz.
Pew Charitable Trusts housing expert Alex Horowitz.

AFP: What are the major themes of your research?

Horowitz: Historically, housing costs rose more slowly than incomes, leaving people more money for other things. As housing shortages have gotten worse, housing consumes more of each paycheck. Renters are most affected. When rents rise as quick–or quicker–than incomes, paychecks can’t cover everything else. 

Studies by the U.S. Department of Housing and Urban Development and Harvard’s Joint Center for Housing Studies show that both rents and homelessness in the U.S. are the highest they’ve ever been. Half of renters now spend 30 percent or more of income on rent. A quarter of them spend at least 50 percent. So it’s no surprise that homelessness has hit an all-time high. To reverse that we need to improve housing affordability.

AFP: How can we boost affordability?

Horowitz: The places that have improved housing affordability the most are those that have allowed more housing to come online, especially lower-cost housing. Townhouses, apartments, and multi-unit buildings typically have the lowest rents…and cost less than single-family, detached homes. Affordability also means reining in transportation costs. In cities that have sprawled farther outwards, people have to go everywhere by car and transportation costs eat up bigger chunks of household budgets.

Minneapolis made big changes to encourage many more homes, making it easier to build apartments near commerce and transit, trimming minimum lot sizes, and eliminating parking requirements. They’ve added a lot more housing than the rest of Minnesota, keeping rent growth almost flat for seven years. Because most of the new housing is near commerce and transit, vehicle miles traveled have dropped even as population increased. 

AFP: What barriers prevent homeowners from expanding their properties?

Horowitz: There are two main obstacles to building accessory dwellings. First, are off-street parking requirements. There may not be room for it and a tenant may not even have a car. Then comes owner-occupancy requirements that make it harder to get a building loan. The value of collateral is undermined if–when lenders have to foreclose on properties–they cannot rent out both the house and the accessory dwelling. After California got rid of such requirements, it experienced sharp growth, building more than 100,000 accessory dwelling units.

AFP: Do you have any advice about giving community stakeholders a voice in these policies?

Horowitz: Jurisdictions that update zoning must have a full discussion to give residents a chance to weigh in. Research suggests that more-affluent residents have an outsized impact when input is gathered on a project-by-project basis. A more effective way is to get input when cities are considering revising their zoning or comprehensive plans. 

The right measure is really about outreach and using methods for feedback that aren’t dominated by groups that traditionally have outsized input on land-use regulations. Research has found older homeowners have disproportionate influence and those who tend to oppose allowing more homes are much more likely to give feedback. The most comprehensive research on this is in Katherine Levine Einstein’s book Neighborhood Defenders.

Rich Heyman: The Market Won’t House Austin’s Poor

Former UT Austin professor Rich Heyman wrote a report on housing displacement for the City of Austin’s Equity Office.
Former UT Austin professor Rich Heyman wrote a report on housing displacement for the City of Austin’s Equity Office.

AFP: How did you come to write a report on housing equity for the City of Austin? 

Heyman: I’ve been with the University of Texas at Austin since 2006. Recently I’ve researched urban inequalities, especially the 1928 redlining plan that pushed Black residents into East Austin. That research responded to a 2021 City Council resolution seeking to quantify the cost of anti-Black policies and practices. 

AFP: What are the barriers to building more affordable housing in Austin today?

Heyman: It depends on what you mean by “affordable housing.” That used to refer to income-restricted, subsidized housing or old-fashioned public housing, which we don’t have much of anymore. When the Yes-In-My-Back-Yard (YIMBY) movement came along 10 or so years ago, it drew on Libertarian economics to redefine “affordable housing” as middle-income or even upper-middle-income housing. 

Housing has gotten a lot more expensive relative to other things in the last 20 years. Market-rate housing won’t provide for everyone, especially poor people. Density-bonus programs are only marginally effective, producing such a small number of units. Relying on developers to produce 5 or 10 percent affordable housing units under certain conditions is ineffective. 

A lot of the housing codes and regulations, such as minimum-lot sizes, were first put in place to prevent abuses. Those included piling too many shacks onto small lots, which Austin allowed in the 1910s. Unfortunately, wealthy people also used zoning and regulations to keep out poor People of Color.

AFP: What’s the relationship between density and affordability?

Heyman: Density has tons of benefits. Many people, including me, are interested in living in a dense urban environment. Increasing density gets people out of their cars and facilitates mass transit, walkability, and bikeability. That is great for people’s health and reduces climate change. 

The problem is that in a high-demand city like Austin, if you increase densities you’re going to make the land more valuable. So prices are likely to go up. And new construction is more expensive than older houses. So you’re going to build more for the luxury market, which isn’t going to really help lower-income people. 

AFP: What changes would promote both density and affordability?

Heyman: Some community organizations proposed what’s called an “equity overlay” on certain neighborhoods. Those would ensure that certain levels of affordability are built into vulnerable neighborhoods. When Houston reduced minimum lot sizes, it allowed city blocks to opt in or out of the changes. Austin has not provided adequate time for these changes to be fully discussed by the public or for meaningful public feedback on zoning proposals, especially regarding anti-displacement measures.

AFP: What else can we do to make the city livable?

Heyman: Housing affordability has to do with how much people earn and how much they pay for rent. Working people’s wages have been flat over the last 40 years. Some cities have done things like institute a $15 minimum wage. Increasing earnings makes housing more affordable. 

Editor’s Note:

The Texas Department of Public Safety charged Rich Heyman with a misdemeanor on May 8, alleging that a cussing Heyman grabbed a trooper’s bicycle at a pro-Palestinian campus protest on April 29. Heyman’s attorney told the Austin American-Statesman that his client grabbed the bike to avoid falling after an officer pushed Heyman. The University of Texas fired Heyman in response to the charges.

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