Markets are the third way to affordable housing

Boston, with 53 units per acre of pure character and almost nothing over 4 stories. Image from Google Maps

Boston, with 53 units per acre of pure character and almost nothing over 4 stories. Image from Google Maps via Placemakers.

It’s no secret that the cost to buy or rent a home in the Bay Area is extremely high and rising. Thanks to a regional economic rebound and renewed interest in the kind of walkable living that defines San Francisco, demand for Bay Area housing is at a high.

Unfortunately, this means that only the most privileged can afford to purchase a home in our inner-ring suburbs. Blue collar workers, service workers, and young professionals making less than astronomical sums are having an increasingly difficult time finding homes they can buy or even apartments they can rent. And so a debate over how to accommodate affordable housing swirls around every planning meeting and town council election.

Advocates rally behind nonprofit housing and the state’s regional housing needs assessment (RHNA) process, which assigns each municipality and county a certain number of units they must accommodate. Others, especially in Marin, say cities and counties are managing their affairs just fine and resent anything that could be construed as meddling from Sacramento or ABAG.

Yet both perspectives neglect the economic underpinnings of our housing cost. Fundamentally, we have a shortage of housing for any income. Until either side begins to address this fact, we’ll continue to face deadlock and continuing cost escalation.

Market urbanism

Our housing shortage isn’t everywhere. Stockton and Vallejo can attest to that. Rather, the cost hikes have been in the walkable areas that have come into vogue over the past 10 years. Downtowns both large (San Francisco, San Jose, Oakland) and small (San Rafael, Napa) have seen their prices rise since the end of the recession.

While some of the demand in the big cities may come from name recognition, the principal reason for the price spike is that the supply of housing in walkable neighborhoods has not grown with demand for it. We have a classic housing shortage, and the only way out is to boost supply of walkable housing for all incomes, from luxury to low-income, by making it profitable to build such housing.

To some, this will sound like nonsense. We need affordable housing, not luxury housing. But the theory that increasing supply will stabilize prices has been borne out in at least one market.

Washington, DC, has seen a massive population boom. Since 2000, it has grown by nearly 10 percent, and now is adding 1,300 new residents every month. Though housing costs have increased (partly due to a lack of financing in 2007-2008 and partly due to a lag between demand for apartments and their completion), this year they are expected to be stable despite the continuing influx of people. Regionally, nearly 40,000 apartments are coming online in the next year, with another 30,000 the following year.

No government program could have forced such broad rent stabilization without direct price controls. Next year’s stable rents will only have come about because the region’s governments have worked with demand rather than against it. In the central city, DC is working on a revised zoning code that will promote high- and moderate-density walkable living. In the suburbs, counties are converting drivable retail centers into walkable mixed-use areas, sometimes far from the Metro rail system, relieving some of the demand in the central city.

The Bay Area could join DC and stabilize its housing market only by stepping back from the dysfunctional No Development vs. Affordable Housing debate. We must boost the supply of housing for all incomes or we’ll never get a handle on the problem.

Reform the laws, boost supply

Bay Area developers face a potent mix of restrictive zoning and anti-developer sentiment. We fear that any changes to our much-beloved downtowns will destroy their character, and that rapacious developers just won’t care.

Arguably, they didn’t care in the 1950s or 1960s. Ugly concrete replaced beautiful Victorian. Grassy hills became rolling tract homes. Governments helped by marking poor neighborhoods “obsolete” and tagging for them for demolition.

The laws put in place to stop this kind of idiocy worked, and developers now try to work within a city’s character rather than against it. Developers now face strict design review to ensure developments work with local character and architecture, or are built on characterless strip malls and dead zones.

Still, some of those laws hold back development to an undue degree. Take density limits, put in place to maintain neighborhood character. These ensure that only, say, 30 units per acre can be built in a given acre. While that seems like plenty of density, they encourage the largest units instead of the most rentable mix of units. A developer can’t charge as much for a studio apartment as he can for a two-bedroom, but since both count as a “unit” he’ll build a bunch of two-bedrooms. In Marin, this has meant continuing undersupply of studios and a rent hike of 14 percent since 2011.

Other constraints, such as parking minimums and inclusionary zoning, squeeze even more money from a project, rendering small infill developments unprofitable and impossible.

Cities should reform their zoning codes to make attractive and character-rich development profitable again. Density could be substituted with height limits, which would allow cities to keep a low-rise or mid-rise character while also adding housing units. Parking minimums, too, should be abolished in favor of alternative means of transportation and neighborhood parking plans.

Even in large cities, this will encourage dense development beyond BART stations. Though BART-oriented development is useful, there aren’t enough BART stations to make much of a dent in the housing supply. More importantly, these developments are often islands of walkability in a pedestrian-hostile sea if infill development is restricted to the BART station. Real cities are integrated fabrics, with buses, walking, and biking dominating short trips. Most of the walkable centers in the region follow this pattern and aren’t anywhere near rail transit. There’s no reason not to expand those town centers into the retail strips that dot the region or the vast office parks that dominate swathes of the East and South Bay.

Matthew Yglesias has written extensively about the need for infill development and upzoning. It is simply not tenable to prevent first-wave development from being redeveloped. Our land is simply too valuable to remain parking lots for offices and strip malls.

If the Bay Area is serious about affordable housing, its governments must tackle laws that keep supply from catching up with demand. We cannot rely upon nonprofits or government largesse to solve this economic problem effectively, nor can we freeze our cities and rents and call it a day. Only the market can fix the market.

The blog Sightline Daily has an 11-part series on legalizing real affordable housing, from zoning to density to rooming houses. It should be required reading for anyone involved in affordable housing policy.

 

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Microblogging, expanded

gum wall

by 1yen, on Flickr

Yesterday, I realized I have more ideas for blog posts than I have time to do them. I’m in the middle of a series of posts on Larkspur Landing – I have two more to go – and the issue of affordable housing has reared its ugly and nonsensical head once again in Marin. I’ve also started blogging about the broader region at our sister site, Vibrant Bay Area. Unless one of you wants to pay me, you’re probably not going to get as much analysis as you or I would like to see.

Thankfully, I’m on a microblogging site you may have heard of called Twitter, so I condensed them down into a series of hypotheses. Though I’m confident there is enough data to back up these statements, I haven’t investigated them to confirm that my hunches are correct.

Pardon the swear here. Bicycling, if it’s going to take off in the US, needs to be more than some paint on the side of the road. Known in California as the Class II bike lane, the bike lane is far better than nothing but far worse than ideal. To me, if you’re uncomfortable riding a cargo bike on it, or if you wouldn’t send your 8-year-old to school on it, then it’s not good enough to put cars and bikes at parity.

Cities are not isolated pockets around subway stations. They are integrated fabrics. San Francisco is walkable even far from BART stations, when the only transit is a bus. Since most of the Bay Area is designed around retail strips like El Camino Real, upzoning plans need to take that into consideration. Bubbles of walkability, like Santana Row in San Jose or the BART transit villages, don’t encourage people to live car-free lifestyles, only a car-free commute. By connecting high-density rail-oriented areas with moderate density bus-oriented areas, the Bay Area could improve its mode share mix immensely.

The term “hipster” has become so over-used it’s lost what little meaning it once had. Hipsters are supposed to save the city (a simplification of Richard Florida’s theory of the creative class) and destroy the city (a simplification of Joel Kotkin’s opposite theory). They’re poor and unproductive one moment, rich and entitled the next. The latest in this devolving debate has Richard Florida positing that a lot of creative class types in a single city lowers income inequality. Joel Kotkin responded with a glorified, Told you so, which led to a Florida response of, No, idiot.

Through it all, I just wish people would leave the poor/rich/entitled/gentrifying/unproductive saviors of our society alone. Income inequality is more complicated than theories of cities, and no single class of people is the salvation or damnation of our society.

And stop calling them hipsters.

Actually, it probably won’t. In occurred to me that urbanism was the pursuit of maximum efficiency of access within the constraints of the age. In our age, those constraints are principally about preservation of land, character, history, and preexisting residential neighborhoods. In other ages these were sunlight and fresh air; defensibility; or access to water.

I define access as the number of destinations within a given travel time by a given mode, and I define efficiency as minimizing negative externalities and maximizing positive externalities in the course of one’s daily routine. That’s too technical. In other words, how much does our urban design pollute? How much does it make us healthier or sicker? How much land does it use up? How much does it cost? And so on.

My definition could be rephrased. Urbanism is the pursuit of the most access at the least cost to ourselves and to our environment within a community’s chosen or necessary constraints. Decisions from transportation to zoning hang from this.

The East Bay has a wealth of rail infrastructure. It has two parallel passenger rail lines running from Richmond to Fremont and branches going in all directions, while the Peninsula has only one rail line going north-south. The Peninsula’s rail capacity will be constrained by the blended Caltrain-High Speed Rail plan, while the East Bay’s capacity will not be.

Rather than pursue BART expansions and inefficient ferry service to San Francisco, it should bolster its Amtrak and ACE service to be true rapid transit in parallel to BART and Caltrain. It should restructure its zoning to encourage new neighborhoods to develop for San Franciscans fleeing ludicrous rents. And it should invite tech companies to build new neighborhoods around their train stations instead of new office parks in the middle of nowhere.

Each of these ideas should be pursued, but I fear I must decline the call. That shouldn’t stop you from heeding the call, of course. If you agree, or even if you disagree, pitch me a story on one of these themes. I might end up running it.

The Larkspur ferry crunch, part 2: Bring back the shuttle

Larkspur Ferry Terminal

Larkspur Ferry Terminal by Matt The Ogre, on Flickr

It’s impossible to discuss the access crunch at Larkspur Ferry Terminal without the subject of shuttle buses. It seems like an easy solution to the seemingly intractable problem of how to get people to the ferry, but history shows it’s not so straightforward.

As mentioned Monday, the shuttle was a monumental failure with riders, principally thanks to free parking. Though ridership would spike to 10 percent of ferry patrons during promotional periods, it would drop back down after the promotion was over. It’s tough to compete with free and convenient.

Pay parking eliminates this concern. Thanks to a quirk in Clipper, riders will get a free transfer while drivers will not, replicating the situation during promotions. It is not unreasonable to assume that 10 percent of riders, the same number who used it during promotions, would use the shuttle. At that rate, the shuttle would actually make a profit, but not like a normal bus may.

Normally, fares paid directly for the bus service goes towards the route’s bottom line. Greyhound makes a profit on its buses, while GGT wants to recover no less than 20 percent of its operating costs with fares. A ferry shuttle, however, would be a loss leader. The real money isn’t in the fare paid for the shuttle ride; it’s in the much higher fare paid for the ferry ride.

Since demand for the ferry already outstrips the ability of people to get to it, every ferry rider who switches from car to shuttle frees a parking spot available for someone new. If 10 percent of ferry riders switch to the shuttle, another 275 people can drive to the ferry. Our drivers would take round-trips, so GGT would earn $12 per day in fares from them. And, since they’re driving, they’d pay out another $2 per day as a parking charge. Add it up and GGT gets nearly $3,000 per new passenger per year, a total of $785,000 in new revenue.

A simpler shuttle program

The shuttle program used in the past was a complicated and vast thing, with shuttle routes overlapping existing routes inefficiently while running long distances.

There’s no need for that. While most ferry riders come from Central Marin, nearly all bus traffic runs through the San Rafael Transit Center. It’s impractical for a shuttle to replicate all these routes, and why should it? If it wants to pick up more passengers up 101 or down Miracle Mile or out in the Canal, it has ceased to be a ferry shuttle and has become part of the wider bus system.

As well, running the shuttle outside of a very restricted 6-minute Transit Center-Ferry Terminal circuit opens the route up to delays from traffic or crash. Given the often long waits between ferry departures, a delay could force a long wait on riders. If ferries are held to wait for the bus, it would add delays for the rest of the commute hour.

Unfortunately, a dedicated shuttle would be rather expensive. At $660,000 per year, it would make a $125,000 annual profit, but there’s a lot of waste. When ferry headways are long – up to 95 minutes – the shuttle wouldn’t have anything to do. GGT could realize significant cost savings by extending an existing route to the ferry terminal instead.

By extending a short, frequent route, like Route 35, GGT would be able to operate a shuttle for only $340,000 per year. When ferry headways are long, the bus would be able to continue on its normal route and head to the ferry terminal for shuttle runs. When ferry headways are short, every run would hit the ferry terminal.

It’s important to point out that, since GGT will charge for parking no matter the outcome of its parking expansion, it must implement a shuttle to take up the slack of those who don’t want to pay the charge. If GGT rejects the shuttle but institutes the parking charge it will face a decline in ferry ridership rather than an expansion.

This kind of shuttle is not on the radar of GGT officials. They cite the old system’s high cost, poor response, and ferry riders who said they want a shuttle for other people but not themselves. Though they want to time Route 29 to the ferries – a fantastic idea – they may miss an opportunity to add revenue to the system. Staff should draw up some shuttle options with projected ridership and combined ferry/bus revenue. The Board needs to see its options.

If reorganizing neighborhood parking is the “organization” side of ferry access, the parking charge is the “electronics” side of ferry access. The modest investment would add efficiency by segmenting the access market into those who really want or need to drive and those who would prefer to leave their car at home.

As we discussed Monday, there is no reason to invest in parking garages for Larkspur Ferry. Not only can GGT provide 520 more parking spaces for free but it can free up 275 parking spaces with a profitable shuttle service.

So we can accommodate plenty of Marin commuters, but GGT’s ferry faces other problems, namely severely underused afternoon and reverse-commute capacity. And if the aim is to boost ridership, there’s no more efficient way than increasing the number of people who walk. The next installment will tackle these issues with transit-oriented development.

 

The Larkspur ferry crunch, part 1: There’s already enough parking

All the parking lots in Larkspur Landing. Image from Google Maps.

All the parking lots in Larkspur Landing. Image from Google Maps.

There’s no question that Larkspur Ferry has an access problem. If you drive, there’s a vanishingly small chance you’ll get a parking space after 8:30am. If you don’t drive, your options are to live in the neighborhood, walk for almost a mile along the freeway, bike for 15 minutes from the Transit Center, or take the miserably slow GGT Route 29 bus.

In response to this perceived lack of access, GGT is again investigating some exceedingly expensive parking garages paid for by a new parking fee. (They had last discussed a parking solution in 2007, when ridership was about what it is today.) While this would expand access, this solution fails to take into account the breadth of options available, including 520 unused parking spaces in Larkspur Landing that already exist.

Organization before electronics before concrete

An old adage marks best practice for facilities design: organization before electronics before concrete. The first, organization, rearranges existing resources to maximize their utilization. The second, electronics, upgrades the systems you already have so you can make even better use of your resources. The third, concrete, adds resources to your now-optimized pool. By prioritizing cheaper solutions before expensive ones, organizations can save a lot of money.

In the case of Larkspur Terminal, GGT’s supply of access to the ferry (the parking spaces, bus seats, bicycle racks, housing units, and office space in the vicinity) is the resource. As currently designed, there is a shortage of access, but GGT doesn’t need to add more garages just yet.

The Larkspur Station Area Plan revealed that, during the day, 520 parking spaces in the neighborhood went unoccupied. Though GGT does have a parking problem on its own property, the area’s parking supply is more than ample to meet the demand.

Graphic and data from City of Larkspur.

Graphic and data from City of Larkspur. There’s a lot of demand for parking, but a lot of unused space, too. PDF here.

These spaces aren’t being used because the parking supply isn’t well-organized. People driving to the ferry have the option of parking for free on the street, for free in the ferry parking lot, or for $4 per day at the Marin Airporter. The other lots aren’t an option to them, as they’re reserved for more office workers than exist and patrons of Marin Country Mart who mostly come on the weekend.

Through a reorganization of the neighborhood’s parking supply, GGT could expand ferry parking by 520 spaces essentially for free.

GGT, Larkspur, and the businesses in Larkspur Landing would need to work together to figure out the precise rules, but the core of any plan would be pricing: a $2 charge per day for anyone parking in the area who doesn’t get parking validated by a retail store or who doesn’t have an employee parking pass. The owner of each lot would get income from their charge. Larkspur would earmark on-street parking charges to neighborhood improvements.

Coincidentally, 520 spaces is nearly the same number of spaces GGT wants to add in a large, 969-space garage. Since it would be built on 400 existing parking spaces, the garage would net 569 parking spaces. Unlike the essentially free 520, however, the 569 spaces would cost an astounding $44,000 apiece.

No need for concrete

Organization before electronics before concrete means other options should be explored before investing in costly new infrastructure. An examination of the neighborhood finds that parking already exists to meet demand, if GGT can harness it.

Of course, if the politics prove impossible and those open spaces can’t be used for ferry riders, GGT will need to turn to the parking equivalent of electronics: a shuttle from the Transit Center. We’ll tackle that question next.

The vibrant Bay Area

barareasopace

Image from NASA.

The Bay Area is quite a tapestry. We have people from around the world trying to make a living here and even more pounding at our doors. We are a global economic force in industries both ancient (wine) and contemporary (tech). From a hilltop above rural Bolinas you can spy the western symbol of urbanism, San Francisco. And over it all, we have over a hundred governments and even more elected boards and semi-independent agencies shaping policy.

The Bay Area is a vibrant, fascinating, diverse, and interconnected place in ways we hardly ever stop to think about. And so, I’m starting a new blog today, in addition to this one, called Vibrant Bay Area.

For the past two years, I’ve written The Greater Marin, an exploration of these themes for a single county. Yet the deeper I dug into local concerns, like the SMART train and affordable housing, the more I understood that policies in Marin shape the region, and vice versa.

And so, a group of like-minded activists and writers gathered to create a new platform to explore the region’s urban affairs from the bottom up.

Vibrant Bay Area is a collaborative attempt to peel back the region’s layers to find the lines that connect our communities and the lessons we can learn from one another. Though each writer has his or her own perspective, we all approach the region from a decidedly urbanist perspective. We believe the future of the Bay Area lies in vibrant town centers accessible by biking, walking, and well-designed transit.

The challenges faced by the Bay are substantial and as diverse as our cityscape. While Vallejo struggles with the financial consequences of unsustainable sprawl, Windsor wonders whether its character can survive an apartment building boom. While VTA runs nearly empty, BART’s commuters crush through the Transbay Tunnel. From crime in Oakland to education in San Francisco, transit in Napa and development in Contra Costa, we want to explore this whole great, fascinating region of ours.

And we can’t do it alone. Have a tip? Want to write a post? Get in touch with us: info [at] vibrantbayarea.org. We’re also on Twitter at @vbayarea. And by all means, if you see that your community or issue isn’t receiving the attention it deserves, step up! Our all-volunteer corps can’t be everywhere at once, so lend your voice.

The Bay Area is vast, but it is not inscrutable. Join us in shedding a light on the dark corners of our fascinating, vibrant region.