Study: Homelessness Rate Correlated With Median Rent, not Rates of Poverty or Mental Illness

[Ana the Ist]

I don't think the issue is that economists haven't been able to crack the code - the issue for economists is that the problems lay outside the relatively narrow scope of their discipline. Homelessness tracks with median rent. Median rent is high when demand is high and supply is constrained. Demand is high when jobs are plentiful and lucrative. Supply is constrained by a lot of things, but in many urban cities, a big factor is NIMBYs preventing changes to zoning laws and NIMBYism is outside the bailiwick of your run-of-the-mill economist.

I was just in San Francisco a couple weeks ago (for the first time in 5-7 years) and was struck by how flat and not built-up everything was outside the downtown core. DC's layout is a bit tighter, but even flatter and less built up - by ordinance IIRC. Compared to NYC, which is almost oppressively tall in places (e.g. walking out of Penn Station).

Here in Baltimore, the Roland Park Country Club (i.e. the country club that admitted it's first black member in 1995 and was originally part of a planned community that literally pioneered racially exclusive real estate covenants) sold off 20 acres of former gold course surrounded by affluent housing, high schools and commercial areas. Original plans were to use it to build affordable housing, but no - the supposedly liberal locals can't have that. No, they banded together and bought it to turn it into a park, in a neighborhood that already has loads of green space.

How is an economist supposed to convince an urban liberal NIMBY that their notion of "maintaining the character of the neighborhood" is little more than gold-plated hypocrisy?

I've been a big fan of Ezra Klein, The Weeds, and other technocratically-minded Vox people for a while and housing policy and nimbyism come up in their work a lot, so if anybody's interested in the subject, they've got a ton of material.

I've read about the phenomenon.

I get that you see hypocrisy there. A lot of liberal issues are like this...

Reparations? A huge number of liberals in favor of it. What's stopping them from paying? Nothing. It's not something that the government has to approve. How about trans issues? The feminists were pretty much in favor of that at one point....till trans women started showing up in the locker room. Diversity and Inclusion? White men are increasingly complaining about job discrimination. Who did they imagine was going to lose their jobs? Some other white guy I'm certain.

At some point either the population levels off....or housing prices go up. It's that, or we start living in those expensive closets they call apartments in Japan.

 

[RDKirk]

At some point either the population levels off....or housing prices go up. It's that, or we start living in those expensive closets they call apartments in Japan.

Is that really either/or? All three things are happening simultaneously in Japan.

 

[RDKirk]

Reparations? A huge number of liberals in favor of it. What's stopping them from paying? Nothing. It's not something that the government has to approve. How about trans issues? The feminists were pretty much in favor of that at one point....till trans women started showing up in the locker room. Diversity and Inclusion? White men are increasingly complaining about job discrimination. Who did they imagine was going to lose their jobs? Some other white guy I'm certain.

Some black people are pointing out those are fights that are actually within the white community. The trans issue is really white men against white women, and so is the diversity and inclusion issue.

Black people might get put out as the face, but our numbers are realistically too small to make a significant impact. If white men feel they're being pushed out or pushed to the side, it's by white women, not blacks.

Same thing with the transwoman issue.

Here's an interesting thing I see as a military guy: It's been a "thing" for some time for the Air Force to display "all woman" aircrews in multi-seat aircraft types. There were never, ever, any displays of "all-black" aircrews. But there is a big push to have as many all-woman crews as possible, and it's unlikely this is happening by random assignments. (As a side-note, multi-engine aircraft don't have the upper-body strength requirements that fighter aircraft have.)

 

[Ana the Ist]

Some black people are pointing out those are fights that are actually within the white community.

Oh?

The trans issue is really white men against white women, and so is the diversity and inclusion issue.

I'm not sure what you're saying here...

Are you saying that black women and trans black women get along?

Black people might get put out as the face, but our numbers are realistically too small to make a significant impact. If white men feel they're being pushed out or pushed to the side, it's by white women, not blacks.

From what I've seen the pattern typically goes like this....
1. Company wants to show racial sensitivity, hires "diversity and Inclusion" specialist. I'm sure some of these are white, but every article I've read about they are black or latino.
2. Diversity and Inclusion specialist proposes changes....including hiring discrimination.

Same thing with the transwoman issue.

Again, I'm not sure what you mean.

Here's an interesting thing I see as a military guy: It's been a "thing" for some time for the Air Force to display "all woman" aircrews in multi-seat aircraft types. There were never, ever, any displays of "all-black" aircrews. But there is a big push to have as many all-woman crews as possible, and it's unlikely this is happening by random assignments. (As a side-note, multi-engine aircraft don't have the upper-body strength requirements that fighter aircraft have.)

Yeah it's bizarre. What used to be called tokenization is now the preferred option.

 

[RDKirk]

Oh?



I'm not sure what you're saying here...

I'm saying that blacks are not the demographically significant "threat" to white men in any of these areas that white women are. Or white transwomen...who are white men, after all.

Are you saying that black women and trans black women get along?

They do, more often than not.

From what I've seen the pattern typically goes like this....
1. Company wants to show racial sensitivity, hires "diversity and Inclusion" specialist. I'm sure some of these are white, but every article I've read about they are black or latino.
2. Diversity and Inclusion specialist proposes changes....including hiring discrimination.

HR departments have become a haven for women in general, but white women are always the demographic majority who usually run HR departments.

 

[civilwarbuff]

What if investors and developers were given special perks by the government in the form of grants, for new construction projects? Wouldn't the market resolve itself?

"Had reasons for people to come there" you say... What about grants based on geographical zoning. IOW, that would be a reason to develop a currently undeveloped area - for the grant money.

And where would all the money for these 'grants' come from? You realize a grant does not get repaid, it is 'free' money given to a person or organization. Can you even imagine the rampant corruption as people tried to grab all they could?

 

[Landon Caeli]

And where would all the money for these 'grants' come from? You realize a grant does not get repaid, it is 'free' money given to a person or organization. Can you even imagine the rampant corruption as people tried to grab all they could?

I'm thinking 15% of building costs paid in government checks directly to investors interested in starting building projects of 10 million dollars and above. 7.5% for investors with projects of 1 to 10 million. I don't see how corruption fits in, considering that investors tend to be very cautious with their money, and wouldn't typically invest in something that wouldn't naturally bring returns.

A panel of real-estate professionals could be hired to determine which areas would be most suitable, and then lawmakers could enact the grants and the tax adjustments as a two-part benefit for those interested.

 

[civilwarbuff]

I don't see how corruption fits in, considering that investors tend to be very cautious with their money, and wouldn't typically invest in something that wouldn't naturally bring returns.

You don't get out very much, do you? The corruption part is the 'returns'.

A panel of real-estate professionals could be hired to determine which areas would be most suitable, and then lawmakers could enact the grants and the tax adjustments as a two-part benefit for those interested.

You mean those people who only make money when someone they represent buys or sells property? Those are the one you want in charge?.......Sheesh........

 

[Landon Caeli]

You mean those people who only make money when someone they represent buys or sells property? Those are the one you want in charge?.......Sheesh........

Who would we select, if not real-estate professionals?

 

[Ana the Ist]

I'm saying that blacks are not the demographically significant "threat" to white men in any of these areas that white women are.

I don't know what this means.

They do, more often than not.

Yeah?

HR departments have become a haven for women in general, but white women are always the demographic majority who usually run HR departments.

I'm not talking about HR. I'm talking about DEI or anti-racist specialists.

Sometimes, they come from the same business and get promoted into it ....more often it seems that they are hired from outside.

 

[essentialsaltes]

'I'm saying that blacks are not the demographically significant "threat" to white men in any of these areas that white women are.'

I don't know what this means.

I think the idea is that, if we're asking who is 'taking' jobs away from white men, there are just more white women than black people. Women are a larger pool of competition.

 

[durangodawood]

I'm thinking 15% of building costs paid in government checks directly to investors interested in starting building projects of 10 million dollars and above. 7.5% for investors with projects of 1 to 10 million. I don't see how corruption fits in, considering that investors tend to be very cautious with their money, and wouldn't typically invest in something that wouldn't naturally bring returns.

A panel of real-estate professionals could be hired to determine which areas would be most suitable, and then lawmakers could enact the grants and the tax adjustments as a two-part benefit for those interested.

I cant get on board with this. Dissemination of public $ brings huge accountability costs to prevent corruption. That would eat into any subsidy significantly.

Why not instead just allow denser development? Land / road / infrastructure costs are huge. 12 small units per acre can cost waaay less that 5 big units per acre without any subsidy..... in terms of both land and construction cost.

 

[RDKirk]

'I'm saying that blacks are not the demographically significant "threat" to white men in any of these areas that white women are.'


I think the idea is that, if we're asking who is 'taking' jobs away from white men, there are just more white women than black people. Women are a larger pool of competition.

If you look at the stats, that's apparent.

Moreover, when we look at the trends of the types of jobs being created and trends in education between males and females, that's going to become even more apparent. We're heading for a point that the so-called "wage gap" will be reversed.

 

[essentialsaltes]

Why not instead just allow denser development? Land / road / infrastructure costs are huge. 12 small units per acre can cost waaay less that 5 big units per acre without any subsidy..... in terms of both land and construction cost.

This is being allowed in California in general and Los Angeles in particular. However, the remaining problem seems to be that, the 12 small units cost less to make, but they also sell for less. The builders are focusing on the higher end of the market where they make larger margins. At best, high-end condominiums. But the economics of it does not make it profitable to build high-density.

Unless, of course, We The People put our thumbs on the scale in some way.

 

[durangodawood]

This is being allowed in California in general and Los Angeles in particular. However, the remaining problem seems to be that, the 12 small units cost less to make, but they also sell for less. The builders are focusing on the higher end of the market where they make larger margins. At best, high-end condominiums. But the economics of it does not make it profitable to build high-density.

Unless, of course, We The People put our thumbs on the scale in some way.

We can zone for minimum densities just like we've done for maximum.

I'm not against zoning in principle. I just find the way we've implemented it is a huge cause of unaffordability.

(Plus I like watching libertarians and small govt people squirm when they admit how much they love zoning.)

 

[essentialsaltes]

We can zone for minimum densities just like we've done for maximum.

Right, but that doesn't build any houses. And if all it does is make developers go elsewhere, it may actually make the problem worse since nothing new is being built.

 

[durangodawood]

Right, but that doesn't build any houses. And if all it does is make developers go elsewhere, it may actually make the problem worse since nothing new is being built.

Theres usually still plenty of money to be made, especially in a high demand market.

 

[essentialsaltes]

Interesting to compare these pro-density (YIMBY) and anti-density (NIMBY) documents. Despite being diametrically opposed, they both agree about certain facts of the current situation.

Con: The density-seeking measures such as state Sen. Scott Wiener’s highly contested SB827 seek to dismantle local zoning to boost densities, allegedly to address state’s housing affordability crisis. High density housing is far more expensive per square foot to build than townhouse or single-family construction. Nearly all the new market-rate housing built in the state is “luxury” by middle-income standards, and more expensive than what it replaces. [I understand this is absolutely the case, and so currently, left to their own profit-mindedness, the developers are just not building affordable housing. So it has little impact on homelessness]

Pro: Myth #1 - High-density housing is affordable housing; affordable housing is high-density housing.

This myth expresses an essential truth: more units per acre mean lower land costs per unit, especially if local governments allow builders meaningful density bonuses; smaller units cost less to build than larger ones. To encourage housing affordability, California cities do need to promote higher densities.

But we also know from experience and observation that not all high-density housing is affordable to low-income families. San Francisco’s Nob and Telegraph Hills, Los Angeles’ Wilshire Corridor, and high-rises in
downtown San Diego are all examples of upper-income areas where housing densities are quite high.

[From my own experience, yes I see the new high rises on Miracle Mile along Wilshire in Beverly Hills Adjacent, but that's not affordable. Even closer to me, the new buildings don't really have that affordable Section 8 look, now do they?
Cumulus District | LA's New Residential & Retail Community
]

So what's the solution?

Pro: Density is not always enough, however. To ensure affordability, local governments must intervene with programs and additional concessions if the new high-density units are also to be affordable.

Con: Finally, if we want to build more affordable housing, we look at non-profit organizations — including churches and charitable groups — to build housing without the need to create high returns or raise rents on their market-rate customers. Hahaha.

 

[durangodawood]

Interesting to compare these pro-density (YIMBY) and anti-density (NIMBY) documents. Despite being diametrically opposed, they both agree about certain facts of the current situation.

Con: The density-seeking measures such as state Sen. Scott Wiener’s highly contested SB827 seek to dismantle local zoning to boost densities, allegedly to address state’s housing affordability crisis. High density housing is far more expensive per square foot to build than townhouse or single-family construction. Nearly all the new market-rate housing built in the state is “luxury” by middle-income standards, and more expensive than what it replaces. [I understand this is absolutely the case, and so currently, left to their own profit-mindedness, the developers are just not building affordable housing. So it has little impact on homelessness]

Pro: Myth #1 - High-density housing is affordable housing; affordable housing is high-density housing.

This myth expresses an essential truth: more units per acre mean lower land costs per unit, especially if local governments allow builders meaningful density bonuses; smaller units cost less to build than larger ones. To encourage housing affordability, California cities do need to promote higher densities.

But we also know from experience and observation that not all high-density housing is affordable to low-income families. San Francisco’s Nob and Telegraph Hills, Los Angeles’ Wilshire Corridor, and high-rises in
downtown San Diego are all examples of upper-income areas where housing densities are quite high.

[From my own experience, yes I see the new high rises on Miracle Mile along Wilshire in Beverly Hills Adjacent, but that's not affordable. Even closer to me, the new buildings don't really have that affordable Section 8 look, now do they?
Cumulus District | LA's New Residential & Retail Community
]

So what's the solution?

Pro: Density is not always enough, however. To ensure affordability, local governments must intervene with programs and additional concessions if the new high-density units are also to be affordable.

Con: Finally, if we want to build more affordable housing, we look at non-profit organizations — including churches and charitable groups — to build housing without the need to create high returns or raise rents on their market-rate customers. Hahaha.

Depends on what youre comparing.

Yeah, high rise and even mid rise can be really expensive compared to single fam or townhomes. But a lot of progress can be made in the area between low density and mid density, like up to 40 units per acre, where there's just about no difference in per SF construction cost.

Obviously that doesnt solve the problem in downtown San Fran or Manhattan. But many other places.... even elsewhere in the San Fran bay area. Not as familiar with the LA market, but I picture a lot of legacy low density single fam development with crumbly old homes - in the poorer areas.

 

[civilwarbuff]

Who would we select, if not real-estate professionals?

How about we don't hire anyone and just let individuals make their own choices of whether to buy or rent; how much to pay; where to live, etc. I think that is a cross between free market and individual responsibility.