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

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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.

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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.”

 

Repeating History But Innovating: Social Housing and Urban Policy in Latin America Blog post from Professor Paavo Monkkonen via Global Public Affairs @ Luskin

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By Paavo Monkkonen, Faculty Cluster Leader of Global Urbanization and Regional Development; Professor of Urban Planning

Although the major urbanization boom in Latin America occurred many decades ago, cities across the continent continue to grow rapidly and problems associated with adequate, affordable, and well-located housing are widespread. Housing policies designed to provide new, subsidized housing to low-income households still dominate (though the state no longer builds housing, providing assistance through the housing finance system instead), in spite of agreement among most experts that they are not the best way to ameliorate urban housing problems.

Unlike the inner-city public housing projects of the United States, public housing projects in Latin America are generally composed of small single-family homes located in far-flung outskirts of cities. They therefore suffer not only from problems associated with concentrated poverty, but more importantly a lack of urban amenities, poor public services, and a large distance from employment opportunities. Brazil’s most infamous peri-urban public housing development Cidade de Deus, portrayed in a film of the same name, was built in 1964 yet the new housing policy Minha Casa, Minha Vida is criticized for many of the same problems. Mexico has the largest finance driven social housing program in Latin America, and as a recent OECD report documents, faces major problems in new housing developments that lack public services, access to jobs, and as a result, among the highest vacancy rates in the world. In fact, scholars are framing the Mexican housing policy as a social interest housing planning disaster. Social housing programs in Chile and in Colombia face surprisingly similar criticism.

The philosopher George Santayana famously stated, “Those who cannot remember the past are condemned to repeat it.” Kurt Vonnegut’s more prescient and useful retort is that “we’re doomed to repeat the past no matter what.” Thus, perhaps the challenge to policymakers (and scholars) is simply to make sure our iterations of past approaches are innovative in some aspects. And there are innovations. Two notable areas are first, the application of inclusionary housing ideas in the design of public housing programs, and second, policies to promote densification of more accessible parts of cities with services.

Chile is the farthest along in taking seriously the idea of inclusionary zoning/housing – regulations that promote the integration of market-priced properties and subsidized properties in the same multi-unit buildings or within neighborhoods – in public dialogue and action. A notable example is the Project of La Chimba in the city of Antofagasta in northern Chile built from 2003 to 2005. In spite of shifting to demand-side housing subsidies in the 1990s, low-income homebuyers continued to be pushed into certain types of new housing developments that shared the same problems as those previously built by the public sector, including social segregation. To address this problem, a project was developed in Antofagasta that purposely had a range of housing types in the same neighborhood, including some market rate and some affordable to voucher holders. A case study of this project by Hector Vasquez Gaete will be available shortly from Lincoln Institute of Land Policy.

New policies to promote housing construction in central cities are also being implemented in Latin America, with the goal of adding housing where there are already services, amenities, and access to employment. For example, property tax rates on vacant land in Brazil are on average five times higher than on land that has been developed. More aggressively, Bogota (which also has higher tax rates for vacant land) implemented a policy that forces the sale of vacant land that is not developed within two years of being identified. Land is then developed for social housing.

In order to make progress in the design of housing policies so that they do not repeat past mistakes and improve the lives of those living in Latin American cities, comparative research on what works, what does not, and why, is necessary. Fortunately, this type of investigation is ongoing and several notable examples have been recently completed; for example an overview book from the Inter-American Development Bank, a paper by Eduardo Rojas, and an edited volume on the inner-suburban neighborhoods of Latin American cities by Peter Ward, Edith R. Jimenez Huerta, and Mercedes Di Virgilio.

Original post at http://global.luskin.ucla.edu/

Planning Professor’s Research Cited in Mexico Housing & Urban Policy Report

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Since 2012, Mexico has been working on an ambitious structural reform agenda across various sectors to boost the country’s competitiveness and economic growth. Housing and urban policy is considered a priority within this reform agenda as authorities are hoping to reduce a housing deficit that affects roughly 31% of Mexican households.

This attention to housing and urban policy, according to the Organisation for Economic Co-operation and Development’s (OECD) recent urban policy review on Mexico, is unprecedented for the country, and differs from past approaches to housing and urban policy in that it is focusing more on qualitative housing and the environment as opposed to quantitative goals. Over 200 Mexican political figures, policy makers and academics attended the launch of the report. Speakers included INFONAVIT Director General, Alejandro Murat; Governor of the State of Mexico, Eruviel Ávila Villegas; and Mayor of Mexico City, Miguel Mancera. They were accompanied by the Minister of Public Administration, Julián Alfonso Olivas Ugalde, and Mexican Ambassador to the OECD, Dionisio Pérez-Jácome Friscione.

Urban Planning Professor Paavo Monkkonen has conducted extensive research on housing vacancy in Mexico, including two projects in collaboration with OECD and the World Bank. His work was cited heavily in OECD’s urban policy review, which generated over 30 articles in the Mexican press. The policy review discusses the role of large housing lenders in housing policy for Mexico, priorities that will make the country create more competitive and sustainable cities, and various reforms to urban governance that will improve housing and development outcomes. The issue of vacant housing received particular attention in the media.

Last year, Professor Monkkonen delivered a presentation at the Institute of Social Research of the Universidad Nacional Autonoma de Mexico in Mexico City on the topic of housing finance in urban policy, which also received a lot of attention by Mexican media outlets. Monkkonen argued that the Mexican government’s support of urban infill and higher density development would only be achieved with larger and more comprehensive reforms of the Mexican housing finance system than those currently proposed.

 

 

 

UP’s Monkkonen Challenges Media View of Mexican Housing Crisis The Urban Planning professor recently presented new research in Mexico City talk.

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In the wake of the recent US housing market crash, images of abandoned homes on the urban periphery of American cities dominated international media coverage, and when Mexico experienced its own vacant housing crisis in 2013, media outlets such as the New York Times, the Economist, and the Wall Street Journal covered the story through this same narrative lens of half-empty developments and residents stranded in sprawl.

Yet while these pictures and stories make for compelling journalism, according to research by urban planning professor Paavo Monkkonen they capture only one aspect of the Mexican housing crisis, and more crucially, they serve to distract focus away from the most urgent problems confronting housing in Mexico, such as reforming the housing finance system and addressing vacancy in urban cores.

Monkkonen discussed his research and ideas in a recent presentation at the Institute of Social Research of the Universidad Nacional Autonoma de Mexico in Mexico City on September 8. The talk, entitled “Housing Finance is Urban Policy: INFONAVIT, Vacant Housing, and Urban Growth” in Mexico, was based on two ongoing research projects Monkkonen is conducting in collaboration with the Organisation for Economic Co-operation and Development (OECD) and the World Bank. Both projects are motivated by the housing vacancy crisis in Mexico caused by a finance system that hinders both the construction of new homes and the improvement of existing units in city centers.

As part of a series called the Ciclo La coyuntura nacional a debate, Monkkonen presented a vision of how the Mexican government could shift its approach to housing finance. He submitted four general areas for reforming urban policy in Mexico, including reforming the housing loan allocation system, increasing investment in the institutional infrastructure of the primary housing market (for example, property registries and cadastres), raising property taxes and placing more effort into collecting them, and encouraging urban density by promoting public transportation, eliminating parking requirements for new buildings and increasing the cost of operating private automobiles.

Monkkonen’s talk and research was picked up by several Mexican blogs and media outlets, such as Entrelineas and Impulso Informativo (in Spanish). Coverage in English can be found at the Mexico Daily Review.

Dr. Monkkonen first examined Mexican housing in his doctoral dissertation. According to Monkkonen, the Mexican housing vacancy crisis stems in part from housing finance policies that began in the 1990s, and the first of his current research projects focuses on vacant housing through analysis of rates of vacancy in the center and periphery of the 100 largest cities in Mexico, as well as their determinants. Findings show that although the high rates of peri-urban vacancy are a problem, there are a greater number of vacant units in the centers of Mexican cities. Additionally, there is a strong association between central city vacancy and housing finance, suggesting that the country’s housing policies have facilitated a suburbanization of urban populations.

Monkkonen’s second project focuses on urban growth patterns in Mexico and changes in the distribution of people and jobs within cities. Preliminary results reinforce the findings of the vacancy study, showing a loss of population in the center of 70 of the 100 largest cities in Mexico, concurrent with robust urban expansion.

Both of these research projects reinforce the Mexican government’s current shift towards the support of urban infill and higher density development. However, Monkkonen argues that the goal of urban infill will only be achieved with larger and more comprehensive reforms of the Mexican housing finance system than those currently proposed.

Luskin Assistant Professors Awarded UCLA Hellman Fellowship

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Urban Planning assistant professor Paavo Monkkonen and Public Policy assistant professor Randall Akee have been named 2014-15 Hellman Fellows for demonstrating a capacity for great distinction in their research. There are eleven recipients of the award in total.

The UCLA Hellman Fellows Program established in 2011 was created to help junior faculty pursue their research passions. The grant will act as seed money for assistant professors to fund their research and other creative activities that promote and enhance their career advancement.

Monkkonen, who teaches courses at UCLA Luskin in housing markets and policy and global urban segregation, was chosen as a fellow for his project “The Half-life of Childhood: How Economic Development Shapes Young Adults’ Household Position.” The half-life of childhood refers to the age at which half of the population is no longer a child. The goal of his project is to better understand how economic development affects household structure, especially the age at which children leave their parents’ home and form a new household. Monkkonen notes that household formation has a major impact on housing markets, and this information will be important to future projections of the number of households which influences housing policy.

“I am honored to have been selected as a Hellman Scholar,”he said. “The generous research grant will enable me to hire graduate student researchers to assist me with data manipulation and analysis, which for this project is very time-consuming. The study uses individual census records from over 70 countries in multiple time periods, which translates into hundreds of millions of observations! I have been trying to get this project going for a number of years but have not had the resources, so it is very exciting that I can get this research underway.”

Akee was awarded the fellowship for his project “How Do Changes in Unearned Income Affect American Indian Infant and Children? The Case of American Indian Casino Revenue Transfers.” The purpose of his research is to determine how the advent of casino operations and other large changes in household income of American Indians affects American Indian infants and children. According to Akee, preliminary data has shown that increased incomes have led to a reduction in behavioral disorders and substance abuse for American Indian adolescents. However, there has been no determination into what degree revenue changes have affected infants and younger children. Akee’s study will look at the effects of increases in unearned income on AI maternal behavior as well as educational outcomes for infants and children.

“I’m very excited and grateful for the award. It allows me to hire an MPP student over the course of the summer at full-time in order to work on the data,” Akee said. “It allows the research to get completed at a much quicker pace than I would otherwise be able to do it. Also, it trains one of our MPP students in data analysis. I’m very eager to see the research outputs that will come as a result of this fellowship.”

Global Public Affairs Opens New Student-Faculty Discussion Series

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By Adeney Zo
UCLA Luskin Student Writer

Learning can come in many forms, including class lectures, discussions and research, but the first Global Public Affairs salon aimed to combine these forms into one engaging multi-departmental, student-faculty discussion.

Put together by Urban Planning professors Michael Storper and Steve Commins, this salon created a space for students and faculty from widely varied backgrounds in Public Policy to discuss major global public affairs topics outside of the traditional lecture setting.

The main topic of the night centered around the Bill and Melinda Gates Foundation’s 2014 annual letter, titled “3 Myths That Block Progress for the Poor.” The letter aims to debunk the following three global affairs myths (through research and media examples):

  1. Poor countries are doomed to stay poor.
  2. Foreign aid is a big waste.
  3. Saving lives leads to overpopulation.

Once the debate commenced, students brought up points to defend or deconstruct each myth while faculty expanded on those ideas with information based on their own research and experience. Comments ranged from analysis of developmental markers to benefits of quantitative vs. qualitative data to dealing with corruption and misuse of foreign aid.

Professor Michael Storper led the discussion, emphasizing at the beginning that the goal of the salon was to take information learned in the classroom and apply it to engaging, intellectual debates. Other Luskin faculty members that participated included Steve Commins, Manisha Shah, Robert Schilling, Paavo Monkkonen and Susanna Hecht.