DTLA Forum – Housing Costs and Scarcity

Too Much & Not Enough: Housing Costs and Scarcity

11th Annual UCLA Downtown Los Angeles Forum on Transportation, Land Use, and the Environment

Presented by the UCLA Lewis Center for Regional Policy Studies

The housing crisis gripping Los Angeles and cities around the country has two primary, interconnected causes: The rent is too damn high for most people to afford without cost burdens, and the politics of supply make building more housing extremely complicated. The 2018 UCLA Downtown Los Angeles Forum will explore how these two ideas interact with and contradict one another, and how finding solutions to the housing crisis can become a debate about the role of government, market forces, and community groups in society.

Lunch keynote address:
Kathy Nyland
Director, Seattle Department of Neighborhoods

Confirmed speakers:

  • Becky Dennison, Venice Community Housing
  • Isela Gracian, East LA Community Corporation
  • Jackie Hwang, Stanford University
  • Michael Lens, UCLA
  • Paavo Monkkonen, UCLA
  • Shane Phillips, Central City Association
  • Carolina Reid, UC Berkeley
  • Jacqueline Waggoner, Enterprise Community Partners
  • Ben Winter, Office of Mayor Eric Garcetti

AICP credits available.

Lunch Provided. RSVP at https://ucladtlaforum2018.eventbrite.com

Urban Development and Housing Expert Speaks at UCLA

A lecture titled, “Why there? Developers’ rationale for building social housing in the urban periphery in Latin America,” took place on Feb. 21, 2018, at the UCLA Luskin School of Public Affairs. Nora Libertun de Duren, who is an urban development and housing expert at the Inter-American Development Bank (IADB), was introduced by Paavo Monkkonen, associate professor of urban planning and public policy. Libertun de Duren has a PhD in urban planning from the Massachusetts Institute of Technology and a master’s in urban design from Harvard University.

View a Flickr album of photos from the lecture.

GPA talk: Nora Libertun de Duren

Can L.A. Fix its Broken Planning System? UCLA Luskin urban planners discuss the challenges — and possible solutions — to L.A.’s development woes

By Les Dunseith

“In Los Angeles, we do have a rather broken planning system,” Michael Lens, an assistant professor of urban planning, said during an interview after the defeat of a controversial ballot initiative, Measure S, that had sought to clamp down on Los Angeles development.

Lens and other UCLA Luskin faculty members with expertise in housing density, land use and the related issues of home affordability and transportation say Measure S reflected long-simmering dissatisfaction with how vital decisions about growth, density and housing affordability are made. And they hope increased public awareness will lead to positive change in the state’s planning process.

“L.A. has a very low-density zoning law,” explained Michael Manville MA ’03 PhD ’09, an assistant professor of urban planning at UCLA Luskin. “Its general plan is set up for the city as it was 40 years ago. The zoning never caught up with the fact that L.A. became much more urban.

“Now, as a result, in many parts of the city, to build any kind of housing that we actually need — multifamily housing — it’s illegal.”

That means that a zoning exception must be granted for large housing projects, which leads to often-protracted negotiations between developers and members of the L.A. City Council.

“There is a feeling — that is often true — that developers can get something built if they give enough money to the right council member in the right circumstance,” Lens said. “Then the developers build something big where the community never expected something big to go.”

The current process often frustrates citizens, but the benefits to select policymakers and large real estate developers get in the way of reform efforts, Manville noted.

“Developers who can afford to play the game like it,” Manville said, noting that although they must wait as long as a year to start building on land that is sitting unused during negotiations, the developers end up with the “right to build extra units in a very hot property market. And that probably means more profit.”

Associate Professor of Urban Planning Paavo Monkkonen MPP ’05 recently analyzed California’s ongoing housing crisis in a policy brief, or white paper, that provides a detailed look at why people are deeply troubled by the current process as outlined in California’s General Plan and various community plans that govern housing density decisions.

“One of the main things I learned in writing the white paper is that nobody likes new development near them,” Monkkonen said.

The result is a Catch-22 that squeezes the general public from both directions, leaving the average L.A. resident with a choice between paying high rent or seeking a risky loan to buy a home they really can’t afford.

‘A City Can Only Sprawl So Far’

A look at the population and housing numbers for Los Angeles clearly illustrates the problem, said UCLA Luskin’s Joan Ling MA UP ‘82, a longtime lecturer in urban planning who has deep experience in real estate analysis and affordable housing. She cited a study by Greg Morrow PhD ’13. “In 1960, there were 2 million people living in the City of Los Angeles, and the zoning capacity was set for 10 million people. In 2010, the city’s population was 4 million people, but the zoning capacity had been reduced to 4.3 million. So, in fact, we had enough zoning capacity for only 200,000 to 300,000 in additional growth.”

It’s a bad situation that is projected to get even worse. By 2040, Los Angeles is projected to grow by another 800,000 people.

“So where are these people going to go?” Ling asked. “That’s the real problem.”

California has enticing natural features. But most areas are unsuitable for human occupation, or the land is already used by industry or agriculture.

“A city can only sprawl so far,” Ling explained, noting that traffic in Southern California has become a daily nightmare for many people.

The NIMBY (not in my back yard) syndrome is an ever-present issue in California, Monkkonen said. When a new, higher-density project is proposed almost anywhere, neighborhoods rise up to block it. “So this is what happens when we have built horizontally to the fringes of the metropolitan area as much as commute times will allow — we get traffic jams and a lack of affordable housing,” he explained.

California’s flawed system of zoning effectively blocks housing affordability, according to several faculty members in the Department of Urban Planning. For example, Monkkonen noted that condos are much cheaper to build and thus much more affordable than single-family homes, but condos “are illegal in 75 percent of L.A. Effectively, using the power of the state, we have prevented the majority of the people in the U.S. and the majority of the people in L.A. from ever buying a home.”

The state’s love of automobiles and its idyllic notion of cul-de-sac suburbs — the California Dream itself — is part of the problem.

“People come here with a certain picture of Los Angeles,” Lens noted. “A place with yards. A place where you have the freedom to get in your car and go where you need to go.”

‘A Horrible Place to Walk or Bike’

It’s a belief system that also contributes to a popular “American idea that when you talk about density, you talk about high-rise buildings,” Manville said. “Not too many people understand that Paris is twice as dense as New York City, and Paris has no high-rise buildings. It’s just that it’s consistently four to six stories.”

Manville thinks that Los Angeles could get a lot denser, and yet remain livable, just by turning many single-story neighborhoods into two-story neighborhoods, especially along major boulevards.

“L.A. has pulled off this amazing trick, where you have a city in which large portions are relatively flat, where the weather is always nice, and it’s a horrible place to walk or bike,” Manville said.

Certainly, a denser neighborhood is going to end up with more congestion, Manville acknowledged. “But the thing that people forget is that most of their driving probably isn’t in their neighborhood. If [new housing] is not built in their neighborhood, then it’s going to be built somewhere. And they’re probably still going to encounter those cars somewhere else.”

If the density is done well, then people experience more opportunities not to be in their cars. “If the density isn’t done well, then you can get the worst of all worlds,” he said.

A denser neighborhood, if it’s designed carefully, becomes a more pleasant place to walk and live. Manville points to London, which embraced the idea that to manage its congestion, it needed to charge people to drive.

“If you actually do something that makes congestion better — which is what charging does and nothing else does — then you can knock down a lot of the concerns about more density. And a lot more good things can flow from that,” Manville said.

The congestion toll in London has added housing and allowed transportation authorities to “take back a lot of the space that had previously been allocated to cars,” Manville said. “There are just so many more sidewalks and bicycle lanes and lanes dedicated to buses that make the transit go much faster.”

Monkkonen points to Vancouver, Canada, as another potential model for Los Angeles. “It’s a place where single-family home neighborhoods have had the density increased without changing how it looks. In Vancouver, they have a basement unit, a ground-level unit and a second-floor unit. They look like single-family homes, but there are actually three households there.”

The only way to handle a constantly growing population, Monkkonen argued, is to set aside our neighborhood-based ideals and look at the region as a whole.

Like her colleagues, Ling sees the need to increase housing density in Los Angeles, but it is “equally important to require that this density be coupled with inclusionary zoning.
A proportion of this extra density must be built as affordable housing.”

In downtown Los Angeles, a boom in construction has brought gleaming new high-rises along with a handful of medium-density projects. Most people think downtown is better now, Ling said, but it’s not a model that works throughout the city.

A Tipping Point for California?

Where, then, should the new housing be built?

“That’s the question,” Ling said. “Where are we going to put it? If this planning was rational, we would put them where the density is most-suited, where people most want to live. But, in reality, issues like this are very much decided on the local level, neighborhood-by-neighborhood, district-by-district.”

In Monkkonen’s view, the best chance to solve California’s housing crisis lies at the state level. In his white paper, he says the state should take action by enforcing and enhancing existing laws, developing ways to make planning decisions at a metropolitan, not neighborhood, scale.

“As long as cities decide within their boundaries where to put the housing, it will work,” Monkkonen said of the idea. “The state would just say, ‘You must have housing,’ and enforce the rules if cities do not comply.”

The state has had rules on the books for 40 years to promote the creation of new housing, but they are rarely enforced. Perhaps California has reached a tipping point that would make state action more feasible?

“Oregon gets a lot of attention in planning scholarship,” Manville said. “They do have a very strong statewide land use program, where the state plays a very active role.”

California could do it too, even in places where resistance would be strong.

These ideas — stronger statewide leadership, looser zoning laws, smarter growth, improved transit, denser housing — are viewed by the UCLA Luskin faculty members as essential changes. Despite the disenchantment that spawned Measure S and similar outcries over growth, they remain generally upbeat about the region’s prospects for a more livable future.

In 20 years, Ling said, “I hope we would live comfortably and closely together, in a city were we don’t need to drive anymore because there will be autonomous cars that move us from our house to the transit station. I’d like L.A. to look like many of the arrondissements in central Paris, filled with six-story buildings in a walkable neighborhood.

“That’s what I would like to see. And we have to believe that it’s possible,” she said, pausing a moment to consider what may happen if the advice of planners like her continues to go unheard. “Otherwise, it could be very bad.”

A Case of Arrested Development UCLA faculty members join the discussion on an upcoming city ballot measure that could block big development projects in Los Angeles for two years

By Zev Hurwitz

The merits of an upcoming ballot initiative, Measure S, that would mean big changes for big development projects in the city brought together a panel of UCLA faculty members.

If passed by voters in March 2017, Measure S would impose a temporary moratorium on development projects that require changes to zoning, land use and building height laws in Los Angeles. In addition, the measure would restrict other changes and impose mandatory review procedures to the Los Angeles General Plan, while preventing project applicants from conducting their own Environmental Impact Reports (EIR).

“If you’re a developer and you want to do some affordable housing … it would be informally discouraged in wealthier areas,” said Joan Ling, a longtime lecturer in the UCLA Luskin Department of Urban Planning. “There’s a lot of talk about reforming land use laws in L.A., but there’s very little desire for actual results because the councilmembers want control of what gets built and that is tied to election campaign fundraising.”

In addition to Ling, the panel, which was produced by the Lewis Center for Regional Policy Studiesincluded urban planning faculty members Paavo Monkkonen and Michael Manville. Jonathan Zasloff, a professor of Law at UCLA School of Law, also joined the conversation, which was moderated by Rosslyn “Beth” Hummer, the chair of the Land Use Planning and Environmental Subcommittee of the Real Property Section of the L.A. County Bar Association.

Michael Lens, assistant professor of urban planning, introduced the panel and gave background on the ballot measure. Most panelists oppose Measure S, he noted, but the goal of the forum was to forecast both electoral scenarios.

“Measure S is something that urban planners should be informed about,” he said to an audience comprised mostly of master’s students in UCLA Luskin’s program. “Our goal here is not to push you in any one direction. We’re hoping to provide you with the best possible projections for what might happen if Measure S is actually passed.”

Ling talked about the housing regulatory infrastructure in the city, the leadership of which includes a planning director designated by the mayor and the 15-member City Council. She described the zoning and development realities for what she referred to as Los Angeles’ three cities, “the rich areas, the very low-income areas and the transitional areas.”

Monkkonen discussed a recent White Paper he authored in which concerns of residential leaders about construction in California were voiced. He identified several major reasons why neighborhoods and NIMBY (Not In My Back Yard) leaders opposed big development projects.

“Some people have concerns about the built environment of their neighborhoods,” Monkkonen said. “They’re concerned about strains on services, their roads, their schools. They have anger at developers for being rich and seeming to get away with things.”

Zasloff noted that the movement to put Measure S and similar initiatives on the ballot is not uncommon for residents who want to maintain the status quo for housing in their neighborhoods.

“When you consider that the vast majority of wealth for many Americans is tied up in their house … many people are scared for what this is going to do to their property values,” he said. “It’s a real concern for people when they set financial expectations for themselves and aren’t sure where to go with them.”

Opponents of big development projects are often concerned about increases in traffic resulting from new population density. Manville said he thinks Measure S would provide little benefit regarding congestion, however.

“It ends up being a very small and uncertain reduction in traffic, played against a much more certain cost in housing prices,” Manville said.

The measure is opposed by the Los Angeles chapters of both the Democratic and Republican parties —giving it a rare bipartisan opposition.

Asked to name one positive that is coming out of the Measure S movement, Zasloff replied that the threat of ballot items similar to Measure S keeps pressure on local elected officials to be more involved with constituency planning.

“If there were a way to scare the bejesus out of City Council on a regular basis, that would probably be helpful,” he said.

The forum was co-sponsored by the UCLA Ziman Center for Real Estate and drew more than 50 students, faculty and community members.

Students’ Visits to Mexico Produce Real World Insights Urban Planning fieldwork course taught by UCLA Luskin's Paavo Monkkonen completes its study of housing crisis in Tijuana

By George Foulsham

UCLA scholar Paavo Monkkonen teaches classes covering housing policy, applied microeconomics, and global urban segregation, but much of his research focuses on Mexico. He has been working in Mexico – and in Tijuana – since 2003 and has served as a consultant to the Mexican government on housing policy issues.

So when Monkkonen, an associate professor of Urban Planning at the UCLA Luskin School of Public Affairs, speaks about housing problems in Tijuana, people should probably pay attention.

“In the last 20 years, Mexico has built a lot of suburban housing and a lot of it’s empty,” Monkkonen said. “There is a major housing crisis right now.”

It’s also a teachable moment for this college professor, who created a course that took his students to Tijuana to examine the housing that federal policies have financed. The course provided the opportunity to offer real-world urban planning lessons to UCLA Luskin students.

“I had the idea of doing a case study of Tijuana’s housing system and how federal policy is played out in a local context,” Monkkonen said. “The course is different from many, though, because it’s a studio course that is a practice-based, problem-solving type of course. It’s not about me teaching; rather, I am working with students to actually do research and provide policy recommendations.”

The goal of the class, “Special Topics in Regional and International Development: Increasing Infill Development in Tijuana, Mexico,” was to determine how the institutions of Tijuana’s property market shape the implementation of the new federal urban policy designed to limit expansion and increase density in the central parts of Mexico’s cities.

With financial assistance from UCLA’s Urban Humanities Initiative and the Latin American Institute, Monkkonen put together the 2016 studio course in which students made two trips to Tijuana during the spring quarter.

“They were in five different groups, working on different aspects of the housing production system — infrastructure, planning, real estate development, the social culture around the consumption of housing, and formality,” Monkkonen said.

The students’ first visit to Tijuana included meetings with:

  • A representative of the government housing finance agency
  • A real estate broker who does consulting work for the government
  • A representative from a regional economic development consulting company, focused on industrial development
  • Local academics and graduate students

The students also did two site visits, including a tour of a new middle-class apartment building and of a new social-interest housing development.

“The focus of the class is the new federal policies that are trying to curtail sprawl and promote urban compact density,” Monkkonen said. “These policies were enacted in part because 30 percent of the new houses are empty. Despite the new message from the federal government to build more compact cities, they’re actually still building a lot of sprawl.”

The site visited by the students was a perfect example of the housing explosion in Tijuana. In an area that is miles from the edge of Tijuana, a developer is building about 50 houses per week, next to several developments full of abandoned houses.

“They have 5,000 built and the master plan of that company is to build 50,000 homes,” Monkkonen said. “The federal housing agency supports it, so it’s a strange system of bad decisions and government gone wild.”

Construction of new homes in Tijuana — and all over Mexico for that matter — is built on a system that encourages rampant development, Monkkonen said.

“Developers can make a lot of money building small, inexpensive houses in the urban periphery,” he said. “The vast majority — 70 percent — of housing finance comes from a federal government agency that operates like a pension fund, although the pension payout is very low. So every salaried worker has to pay into it, like a social security contribution, and then they are heavily pressured to get a mortgage. In many cases people use this mortgage even if they don’t want a house.”

The students also drove past two failed housing projects on the way back from Natura into Tijuana, developments of about 3,000 homes. “Some sections are half-built,” Monkkonen said. “There’s empty land, parts that are half-empty, covered in graffiti — not a nice environment, with a lot of trash around.”

It didn’t take long for the students to recognize the issues that led to two decades of overbuilding.

“The issue with Tijuana is that the institutions don’t really talk to each other,” said Katie Cettie, one of the students who authored the Real Estate Practice and Finance section of the report. “What the federal and the state do is very different from what actually happens at the city level. Everyone has their own agenda, so it’s really hard to get them to come together.”

Among the findings and recommendations in the recently released 131-page final report:

  • Local land use planning and development institutions are disconnected from federal housing policies.
  • Federal housing policies are designed more for the stimulation of the economy from the national perspective.
  • The flow of communication from local to federal and federal to local is unclear among agency employees, and the framework for this process is not well understood by officials or the public. The roles of federal, state and municipal agencies are largely distinct and lack effective coordination.
  • In Tijuana, the private sector has historically driven growth and economic development. Today, these actors continue to be overrepresented in the planning process.
  • The importance of political linkages and alliances at the local level continue to stifle the ability for sustainable urban development in Tijuana.

How to Build an Affordable Home: Start With the Framework UCLA urban planner provides recommendations for easing existing barriers to affordable housing, one of California’s most pressing issues

By Stan Paul

For UCLA Luskin School of Public Affairs scholar Paavo Monkkonen, making housing affordable in California starts with a vital building block: the state’s Housing Element framework requiring cities to meet existing and projected local and regional housing needs.

“This system performs an almost symbolic function at present,” said the associate professor of Urban Planning who also earned his Master of Public Policy (MPP) degree from Luskin in 2005. “Cities that do not meet their housing targets face no consequences, and cities that do meet them reap no reward.” Monkkonen delivered a lecture and white paper on the topic Dec. 1 at the UC Center in Sacramento.

Two other areas of focus on this pressing problem for the state are expanding public participation in the planning process and shifting some decision-making from local to state and regional levels, according to Monkkonen. His lecture, “Understanding and Challenging Opposition to Housing Construction in California’s Urban Areas,” was moderated by Ben Metcalf, director of the California Department of Housing & Community Development.

“The current planning environment is stacked in favor of better-off individuals and single-family neighborhoods at the expense of renters and multi-family housing,” Monkkonen wrote in an opinion piece published in the Sacramento Bee the same day as the lecture. On the neighborhood level, opposition has continually hindered housing needs. “When interests with time and money block or downsize projects in wealthy neighborhoods, it pushes new development into dense parts of cities and increases rents throughout the area.”

In urging that the state takes steps to “democratize” the planning process, Monkkonen explained that planners need to have input from a more representative group of citizens such as families, low-income renters and young people — groups that may not have ready access to public hearings and planning meetings.

In his white paper, Monkkonen included a section on understanding opposition to housing construction and density. The list shows how opposition focuses on three formal systems — planning, legal and political — as well as informal influences and tactics to “shape what can and cannot get built in California’s cities.”

Monkkonen outlined a number of ways opponents to new housing impede construction through the planning process. These include commenting in public meetings, letter writing, social media, petitions, appeals or filing historic designations for properties or districts.

Legally, projects may face lawsuits to invalidate a permit or policy or be challenged through the California Environmental Quality Act.

Politically, ballot initiatives can be used to place a moratorium on development, and efforts to recall council members may be initiated. Opponents can also lobby for state laws affecting specific city rules, Monkkonen observed.

In his presentation Monkkonen:

  • Outlined policy recommendations for land-use reforms concerning housing directed by the state.
  • Described how limiting the supply of new housing creates less-affordable housing.
  • And pointed out how the issue of housing supply is generally misunderstood.

Monkkonen emphasizes this in the abstract to his white paper: “The debate continues despite robust empirical evidence demonstrating that supply constraints — low density chief among them — are a core cause of increasing housing costs.”

Among his recommendations to the state on how to push back against local constraints on new housing is one favoring “by-right” approval of projects. Projects that comply with current zoning laws may bypass regular approval processes where these processes are a “persistent hindrance to regional housing needs.” Monkkonen cited California’s density bonus law — an example of by-right approval — wherein developers may be incentivized to include affordable units in exchange for an increase in density.

Monkkonen believes that his work may prompt state government action and provide a guide to addressing the affordable housing issue in California.

“I was excited to be able to present this work in conversation with Ben Metcalf,” said Monkkonen, adding that the state’s director of housing and community development was very receptive to his policy recommendations. “He said his department is releasing a state housing plan next week that actually mirrors a lot of my analysis.”

Monkkonen’s white paper is available online.

For more information on California’s Housing Element Law, please visit the California Department of Housing and Community Development web page.

Lending Obama Administration a Hand on Housing Study by UCLA Luskin Urban Planning scholars is cited in new White House Housing Development Toolkit

By Stan Paul

A recent study by UCLA Luskin Urban Planning faculty researchers is part of a new toolkit on housing development announced and published this week by the Obama administration.

The Housing Development Toolkit, now available online, outlines barriers to housing development but also includes a list of actions that state and local governments can use to “promote healthy, responsive, high-opportunity housing markets, despite the common and sometimes challenging political barriers to reform and improvement.”

The 2015 Luskin study, “Do Strict Land Use Regulations Make Metropolitan Areas More Segregated by Income?” — previously published in the Journal of the American Planning Association — is referenced in the toolkit addressing local barriers to housing development that affect affordability for working families. Authors Michael Lens, assistant professor of Urban Planning, and Paavo Monkkonen, associate professor of Urban Planning, urge that density restrictions be removed because they drive urban segregation.

“Inclusion in this publication demonstrates both the timeliness and relevance of the work our Luskin researchers do,” said Lois Takahashi, interim dean of the UCLA Luskin School of Public Affairs.

In their study, Lens and Monkkonen find that inherent local planning problems can be alleviated somewhat by regional and state efforts.

“State governments are well-positioned to push cities to build more housing — especially cities that try to exclude types of housing affordable to lower-income households,” Monkkonen said.

In addition, Lens and Monkkonen point out that “efforts to force wealthier parts of the city to build housing for low-income households, i.e., inclusionary housing, have a greater potential to reduce segregation than bringing higher-income households into lower-income parts of the city.”

“I think this is a remarkably informed document, and it is great to see that the Obama administration is thinking this way and is motivated to put this information out there,” Lens said. “It is complementary to HUD’s Affirmatively Furthering Fair Housing rules and work, and recent case law (Inclusive Communities v. Texas Department of Housing and Community Development) might nudge localities toward relaxing regulations and allowing more multifamily development.”

The White House publication cites restrictive zoning and land-use regulations — as well as a cumbersome approval process — as the causes for a slow response to demand for housing across the United States. It also highlights beneficial practices already in use across the country as well as potential starting points for bringing housing planning and development in line with 21st century needs.

Although encouraged by the report, Lens said that the Obama administration also has very little power, if any, over local land-use decision-making. He cautioned that “there are a lot of great ideas in here that for the most part” could be ignored by local governments.

However, “there is a growing movement in California advocating for changes in the way urban growth is accommodated with existing city boundaries,” Monkkonen said. “I hope that the endorsement of the White House in this regard will push these efforts forward.”

The Housing Development Toolkit may be found at:

https://www.whitehouse.gov/sites/whitehouse.gov/files/images/Housing_Development_Toolkit%20f.2.pdf

Perpetuating Cycles of Exclusion New study by UCLA Luskin professors Paavo Monkkonen and Michael Lens examines how zoning laws in the 100 largest U.S. metro areas reinforce socioeconomic divides

By Adrian Bijan White

A new study by researchers at the UCLA Luskin School of Public Affairs shines a light on how zoning law changes in the largest U.S. metropolitan areas are increasing inequality and raising concerns about social mobility.

One of the most influential factors in shaping metropolitan areas, according to the study, is the government’s use of land regulations and zoning laws, which determine building densities and land uses. “The playing field,” according to the researchers, “is far from equal.”

It is well known that zoning laws and land regulation contribute to racial and economic segregation through “exclusionary zoning” policies, but the new study by Michael Lens and Paavo Monkkonen MPP ’05, assistant professors in Urban Planning, examines these processes in depth. Their research revealed four patterns in zoning restrictions.

Zoning policies in metropolitan areas isolate wealth

“We found that more stringent regulatory processes are related to the segregation of the affluent,” Lens said. “What we see is their ability to self segregate and to pass laws and regulations toward that end.” Lens added that policies allow for the concentration of wealth, rather than the concentration of poverty, within cities. The self-segregating ability of the wealthy derives from socioeconomic status and influence, which manifests itself in exclusionary zoning policy. Some classes, as a result, are excluded from certain neighborhoods and congregate in less desirable neighborhoods. Restrictions such as single-family zoning as opposed to higher density apartment complexes, raise housing prices and perpetuate cycles of exclusion.

Zoning laws across the entire metropolitan area are relevant

Within metropolitan areas, individual cities retain high levels of autonomy in terms of their zoning policies. As a result, cities often tailor their restrictions to appeal to higher-income residents. “If we had land use regulation at a regional scale, we could reduce the tendency of smaller, wealthy cities trying to zone for a certain kind of resident,” Monkkonen said. “However, this would require a change which would greatly reduce the city’s individual power.

“If you have a strict enough regulatory regime, you can’t build enough units in city neighborhoods which are experiencing accelerated changes in demographics,” Monkkonen added. “In terms of gentrification, you have an influx of higher income residents, which raises the value of said neighborhood. In terms of building development, if you can build enough units to keep up with rising demand, then lower-income households could stick around, which would result in an integrating process and not an exclusionary one.”

Bureaucratic construction processes and density restrictive policies hinder the development of surrounding cities in metropolitan areas and stagnate the supply of housing, making housing prices highly sensitive to shifting socioeconomic trends.

Localized zoning policies contribute to the segregation of neighborhoods

“Maximum density restrictions (single-family zoning) are the way in which cities restrict multi-family housing. People often assume that places with lower density rules have less poor people, which we can confirm.” Monkkonen asserts that local processes of density restriction contribute to the concentration of wealth. “If we can speed up housing construction processes and adapt zoning regulations to allow for the densification of neighborhoods, we could stabilize housing prices and render neighborhoods more inclusionary.”

Local policies within cities indirectly promote the exclusion of lower-income populations by restricting multi-family housing, according to the researchers. By maintaining lower levels of population density, the forces of supply and demand raise housing prices. Furthermore, different policies play out in different ways in terms of their effects on segregation. Areas that demonstrate very bureaucratic construction processes are highly segregated because of the inability to provide new housing. Segregation is also correlated with stronger local government restrictions, which often restrict population growth. On the other hand, segregation is not strongly associated with open-space requirements, supply restrictions or delayed approvals.

Centralized policies can mitigate segregation across metropolitan areas

There is some variation across states in the extent of local control over land use. “When you see checks on city regulations in metropolitan areas by the state, we witness lower levels of income segregation,” Lens said.

Centralized zoning policies reduce the effects of local government policies, which contribute to the segregation of neighborhoods, according to the study. By reducing the autonomy of individual cities, metropolitan areas as a whole can work towards higher levels of density, inclusionary housing policies and integration. “The government has regulatory tools to promote integration between middle- and lower-class communities; however, wealthy communities retain their ability to self segregate. Our research shows that local government regulations help them do so,” Lens said.

The political and economic influence of wealthy residents renders certain neighborhoods partially immune to the effects of inclusionary zoning regulations; however, authorities can target the integration of lower- and middle-class neighborhoods. “When you see checks on city regulations in metropolitan areas by the state, we witness lower levels of income segregation,” Monkkonen said. By dismantling bureaucratic construction processes and restrictions on density levels, which is often witnessed by state level regulations, cities can work toward stabilizing housing prices and integrating communities.

The study was published in the Journal of the American Planning Association (JAPA). It can be found at http://www.tandfonline.com/doi/full/10.1080/01944363.2015.1111163#abstract

Cooperation May be the Key to Survival for Airbnb in the Sharing Economy UCLA professors project the future of Airbnb based off lessons from past startups.

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The short-term home rental company Airbnb seemed to have come out the clear blue sky, but this “disruptor” in the rental business may disappear just as fast into thin air unless it is perceived as a cooperator and “partner,” according to an opinion piece by Paavo Monkkonen, assistant professor of Urban Planning at the UCLA Luskin School of Public Affairs and research fellow at the UCLA Ziman Center for Real Estate.

Using as an example one of the original peer-to-peer disrupters of the music industry — Napster — Monkkonen and co-author and UCLA Urban Planning alum Nathan S. Holmes explain that Napster failed where iTunes, led by Apple’s Steve Jobs, found success because of a cooperative business model that worked with the music industry.

Monkkonen and Holmes, point out that the multibillion dollar (and growing) company based in San Francisco already is threatened by resistance and hostility from local governments, which the authors say has the potential to turn Airbnb into “the Napster of the short-term rental market.”

Monkkonen Examines Airbnb’s Impact on Housing Prices In a study commissioned by Airbnb, Urban Planning professor Paavo Monkkonen documents a limited impact on home values in L.A.

Urban Planning professor Paavo Monkkonen is attracting attention in the media for his work on a new report commissioned by the home-sharing service Airbnb.

In interviews with the LA Times and with “AirTalk” on KPCC-FM, Monkkonen has spoken about his analysis of an Airbnb study that documents the scale of the company’s impact on housing prices in Southern California. The study finds that short-term rentals occurring through peer-to-peer sharing on Airbnb make up a small portion of the region’s housing inventory.

Airbnb conducted this study in response to report written by Roy Samaan MA UP ’11 for LAANE. Monkkonen argues that the focus on the housing supply impacts of Airbnb distracts us from the more important causes of the housing affordability crisis in the city.

When asked about the recent coverage of the topic, Monkkonen mentioned his pleasure at engaging with an alumnus from the school on this topic. “The discussion that LAANE and other groups initiated about Airbnb is important to have at this moment given that the City of LA is crafting an ordinance to regulate short-term rentals.”