Fixer-Upper Chapter 2: Build More Homes Where People Want to Live

The chapter’s title is entirely descriptive of its contents. Key takeaways are:

  • Land is more expensive in places where people want to live
  • To make housing in desirable locations more affordable, use less land per home. Schuetz uses an example from Wellesley, MA to make the point. A typical residential lot costs $850,000. A single-family home would cost $1.2 million to build, so all-in it would cost $2 million. On the same lot five side-by-side townhouses would be $800,000/unit and a four-story multifamily building with 11 condos would be $500,000.
  • Local governments exercise tight control over how much housing can be built and where. Schuetz makes the very important point that the way that local governments regulate housing supply has social and economic costs, and those costs are borne more heavily by younger, lower-income, and nonwhite households. This is done largely by zoning the majority of housing for single family detached homes, and prohibiting higher-density housing options like townhomes, duplexes, condos, etc.
  • Measuring “excessively strict” zoning is difficult. If state and federal governments want to incentivize less restrictive zoning, it will be essential for them to develop accurate, fair, transparent metrics.
  • Exclusionary zoning exists everywhere, but it creates the most damage in large coastal metros. My note here: as some who works on housing related issues in a non-coastal, smaller metro area in North Carolina, I can tell you that exclusionary zoning practices have had a significant impact here as well. That’s because the area is growing increasingly rapidly in population, but housing production has not kept up. The current regulatory environment is hampering development and the growing supply-demand gap is reflected in skyrocketing housing costs, including rent – not just homeownership.
  • Not building homes in the right places has economic, environmental and human costs.

In this chapter, and subsequent chapters, Schuetz offers solutions. To address the issue of building homes where people want to live she says policy solutions need to address two separate sets of questions: “First, what do better land use policies and better housing incomes look like? Second, what kind of fiscal, legal, or political levers could be used to nudge local governments to adopt better policies?” In this chapter she addresses the first question, and she addresses the second in chapters 6,7, and 8.

To begin she says that “there are two clear principles for better land use policies, but many variations in implementation. First principle that each jurisdiction should allow a diverse range of residential structure types and home sizes. Second, the development process should be simpler, shorter, and more transparent.”

Her other primary point is that “localities should target better housing outcomes, not just better policies on paper.” Here she offers a great thought:

“Defining better outcomes and setting concrete benchmarks would help local governments, housing advocates, and potentially state and federal agencies to measure progress. Mayors and county supervisors often run for office promising vague or unrealistic improvements (“ending homelessness” or “making housing more affordable”), but campaign statements are rarely helpful in measuring day-to-day improvements.”

I definitely recommend buying the book so you can get the full benefit of Schuetz’s full analysis of the challenge and detailed solution proposals. You can buy it here.

Link to Chapter 1 of Fixer-Upper post.

Link to Chapter 3 of Fixer-Upper post.

Link to Chapter 4 of Fixer-Upper post.

Link to Chapter 5 of Fixer-Upper post.

Link to main Fixer-Upper post.

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