Housing Generates Jobs, Revenue
Cities face brutal budget cuts. Layoffs, hiring freezes, and cutbacks in capital projects and ongoing services are inevitable. And with the tourist, restaurant and entertainment industries far from recovery, these revenue engines for urban America are not going to solve the crisis.
It’s time for cities to double down on housing. Building housing creates jobs and spreads revenue throughout local economies. Housing demand in high-housing cost cities remains strong as the extreme jobs/population/housing imbalance still exists.
Yet political opposition to housing has not disappeared. A barrage of false and powerfully disproved narratives about a nonexistent density-COVID19 connection shows that the usual suspects opposing housing are not going away (@aaronAcarr on Twitter consistently destroys anti-density stories. The NY Times editorial board does so as well).
But one key factor has changed. Advocates can use housing’s role as an economic engine to get political support lacking in prior housing fights. Housing’s role as an economic engine has been downplayed in recent years; now it must be at center stage.
Downplaying Housing’s Economic Role
Advocates downplayed housing’s economic role because “progressive” high housing cities already had an overheated economy. With opponents of housing blaming the economic boom for rising rents and displacement, advocates stayed away from economics and focused on housing’s role in solving the affordability crisis.
But cities now have an affordability crisis and a jobs and economic crisis. And essential measures such as extending unemployment benefits and cancelling rent and mortgage payments are no substitute for creating new jobs. Nor will they reduce city budget deficits.
Housing creates jobs in the planning stage, construction, the leasing up or sales process and in all the goods new residents purchase for their new home (blinds, furniture, appliances etc). A 2018 report found that investment in affordable housing alone generates $11.7 million in local revenue and 161 jobs. Community Change also found that every dollar invested in city housing trust funds leverages an average of $6.50 in public and private funds. This is consistent with the longstanding view that every dollar invested in new housing leverages $7 in other funds.
But for housing to make a difference it must get built soon. And that requires cities immediately changing their approval processes to allow “by right” housing approvals.
If cities responded to the economic crisis by allowing housing approvals “by right”—meaning that all projects consistent with zoning are automatically approved—-we could see a building process like Seattle’s. As I detail in Generation Priced Out, Seattle approved a 43-story apartment tower following an eight month approval process. I cite critics of Seattle’s process saying that the process could even be faster. Fine by me!
“By Right” approvals require most cities to change existing laws. San Francisco’s Mayor Breed announced plans for a November charter amendment to expedite housing approvals, but the coronavirus killed the ability to gather signatures. The Board of Supervisors could still put the charter amendment on the ballot but the majority favors the glacial process that prioritizes “neighborhood input” over housing needs.
It’s a good time to remind San Francisco supervisors that they are preventing voters from deciding whether they want a faster housing approval process. The Board’s majority supports exclusionary zoning and opposes increasing density on transit corridors; we’ll soon see how these policies raise housing costs and reduce city revenues, slowing the city’s economic comeback.
Advocates in all cities should use economic arguments to push expedited approval processes. I’m told that Massachusetts’ essential Housing Choice legislation—which simply allows zoning changes for housing to be approved by majority rather than super-majority vote—-has been included in an economic development bill to increase chances of package.
Those impacted by city budget cuts are looking for new revenue strategies. Public employee unions should see expediting new housing as critical for keeping their members employed; the building trades have long made this argument for their workers.
COVID19 has exposed a failed housing delivery system. A system relying on long, pollution-causing car commutes. A system whose artificial lack of supply benefits existing homeowners and speculators but hurts nearly everyone else.
Everyone is talking about how we need to forge a new path after the coronavirus. Housing must be at the center of this new future.
Randy Shaw’s recent talk on how COVID19 has expanded opportunities for housing can be seen here.Filed under: National Politics