When looking at how housing prices are changing in a growing city, average rents can be misleading—especially you're concerned with pre-existing units.
Read MoreBanks Can Play a Major Role in Promoting Smart Growth, If They Want To
I've been limited on time lately so rather than come up with something totally original I'm just gonna riff off of an interesting post I read today.
Over at Streets.MN they're discussing
the connection between transportation and housing costs
. A well-worn subject to be sure, but the main focus of the post is actually about how banks, not consumers, interpret information about how housing affects transportation costs. And the punchline is that they basically don't interpret it at all; they have all the data they need about where their customers live and work, but choose not to use it when determining mortgage eligibility or lending rates.
This is totally insane, of course, because where you live has a
huge
impact on your odds of foreclosure, as does where you live relative to where you work and how you get between the two. (If you don't believe me, just type "home foreclosure" in Google Images and see what type of homes come up.) Streetsblog wrote about a study earlier this summer that found
adding ten minutes to average commute time increases the risk of mortgage default by 45%
. Large numbers of people walking or taking rail to work lowers default rates, as does a greater retail presence in a neighborhood, and so on. Banks should obviously care a great deal about this since the balance between "foreclosure" and "not-foreclosure" is how they make their money. And these low-risk communities are exactly the type promoted by organizations like Congress for the New Urbanism and Smart Growth America (and me).
It seems to follow that since walkable, mixed-use communities tend to have lower foreclosure rates, they should also be eligible for lower mortgage interest rates. Fewer people defaulting on their home loans means fewer losses to account for, so the profit that banks need to earn on each individual mortgage can be lower. In turn, those lower rates would increase the appeal of choosing safer, healthier, more sustainable communities in which to live (i.e., walkable urbanism / smart growth).
Advocacy's great—necessary, even—but nothing can make the case for urban living like a sub-3% mortgage interest rate.
Downtown Marquette, Michigan; photo from
.
---
A little supplementary information/commentary:
Part of the reason why banks
haven't
figured this out yet is hinted at by the author at Streets.MN: "your small neighborhood bank plans to sell your loan to a larger financial corporation that will either sell it again or make mortgage sausage with it." He's kind of dismissive of this, but it's actually crucially important. It's true that small neighborhood banks are often the ones making the loans for mixed-use buildings and smaller projects, but these banks are by definition capital-constrained. They need to offload those loans to free up capital for additional loans, but if the big banks see the loan as risky or non-standard they may not be as interested in buying them. It's easier to package a thousand cookie-cutter McMansions into a mortgage-backed security than a hundred mixed-use projects of varying heights, masses, retail compositions, neighborhood characters, levels of accessibility, etc.
I admit to being only cursorily knowledgeable about the subject of bank finance so I can't do much to propose a solution, but it seems like there's a place for both government and the private financial industry here. On government's side, the availability of Fannie Mae and Freddie Mac mortgage guarantees needs to be
at least
as strong for developments in robust walkable areas it is for suburban, single-family home developments (this could either take the form of more support for mixed-use or less for single-family, it doesn't really matter which). Besides the direct benefits, this would also signal to private banks the appeal of this type of housing. On the private side, mostly they just need to be more sophisticated. There are economies associated with standardization, to be sure, but with the amount of talent in the financial industry it seems relatively trivial to develop a standardized means of assessing urban developments for their likely foreclosure risk. From there they just need to assign mortgage rates that reflect the relative safety of these investments and wait for the buyers to flood in.
It's Not Just Crazy Drivers: LA Streets Are Designed For Road Rage
Still shot from
of a man seriously raging on an LA freeway.
One of my fellow classmates moved to Los Angeles recently, and this was how she summarized her experience thus far: "People here are all so laid back, but as soon as they get in their cars they go insane!" She's from New York, so I'm sure "laid back" is relative, but she's right: people change when they get in their cars here, becoming more aggressive, easily (and visibly) frustrated, and meaner. Highway congestion tends to get the brunt of the blame for this, and that's understandable, given that
.
Often overlooked, however, are the local and arterial streets in the region, which seem to be designed with the specific intent of frustrating drivers, pedestrians, and bicyclists alike. They often encourage dangerous, aggressive behavior and breed animosity between those in vehicles and those on foot. I've been in LA a month; here's what I've seen so far.
Left-turn signals
This was by far the most surprising difference between LA and other cities I've been to. In most cities, if left turns are allowed at major intersections they have left-turn arrows that turn green for a few seconds, then they turn red and the forward-traveling traffic is given the green. Here, when you need to take a left turn at an intersection, you are usually given a turn lane, but no light to accompany it. You wait until all the traffic in the opposing lanes clears out, then you go. Or, if it never clears, as is the case at hundreds if not thousands of intersections across the city, you wait until the light turns red and then you go, as do one or two people behind you. If you
don't
run the red light, expect to be honked at vigorously and angrily, because obeying the traffic signals while making a left turn in LA is
just not done
.
I'm kind of making light of the situation here, but make no mistake, this is an incredible dereliction of duty on the part of city traffic engineers (or whoever is ultimately responsible). Not only does it make drivers needlessly anxious and angry with one another, it's also ridiculously dangerous. The city has given drivers literally no alternative but to blatantly ignore traffic laws, at great peril to themselves, other drivers, and pedestrians. I've already seen several
very
near misses as a result of this—it's just a matter of time before someone really slips up and gets themselves or someone else killed.
I assume the reason this is so common is throughput: several lanes of traffic can travel at once with a catch-all green light, rather than giving an extra signal turn to a single lane of left-turning drivers. It probably does have some positive effect on traffic. (At least, if you ignore delays caused by collisions with other cars or people.) But—and I really shouldn't even have to say this—encouraging people to illegally drive through several lanes of green-lighted cross-traffic
and
a crosswalk that people may have already started moving through is
not
the way to improve traffic flow.
Push-button crosswalk signals, aka beg buttons
People may not give much thought to these since they show up all over the city, even very pedestrian-heavy areas like downtown and Koreatown. If you don't walk often, or don't really think very hard about how these buttons work, as a pedestrian you might think these buttons are in place for your benefit. In truth, they exist to optimize vehicle travel, not that of pedestrians. (Gary Kavanagh at Streetsblog LA has
a good recent writeup on the subject
.)
In cities with good walking infrastructure it's taken for granted that there will be pedestrians waiting to cross the street, so they're automatically given a turn when traffic moving in the parallel direction is given the green light. This does have an impact on traffic. Since pedestrians cross the intersection slower than cars, the green light for cars may often stay green longer than it takes for all the cars to get through. This slows things down for cars waiting in the perpendicular directions, but it gives pedestrians sufficient time and safety to cross the street.
By comparison, at many intersections in Los Angeles there are buttons you must hit if you want to be given the walk signal. If you don't manage to hit it before the parallel traffic gets a green light, you're out of luck. The green light will be shorter for cars, and you're instructed to wait for a whole new light cycle. The thing is, there's no functional difference in the way traffic is moving through the intersection when you don't get to the button in time—the difference is that you have less time to cross, cars see you have a red "don't walk" signal at the crosswalk, and they don't necessarily expect you to walk. I and many others still do because it's completely safe, so long as we're aware of what the cars around us are doing and we're across by the time the cross-direction traffic is given the green. But drivers who see a pedestrian walking against a stop signal may get angry that they're being blocked from turning since they're unlikely to understand how the signal works. Combine this with a busy intersection with no left-turn arrow for cars and you've got a recipe for road rage. And that's to say nothing of how unnecessarily dangerous this can be.
As a side note, getting rid of all of these crosswalk buttons would also be cheaper in the long run, as no more would need to be installed, nor would they need to be maintained any longer. And when they
do
break, what are pedestrians to do? In those cases they're left with no safe means of crossing the road.
Right turns on red
This is by no means unique to LA, but in tandem with other street design problems in the city, right turns on red just add to the madness. They don't belong in big cities, LA or otherwise.
If you're waiting in your car at a red light in Los Angeles you can take a free right as long as the crosswalk and the lane you're turning into are clear. This causes a huge amount of collisions with other drivers and with pedestrians, which is problem enough, but it also causes endless annoyance and frustration to drivers in pedestrian-heavy areas.
The reason is that rather than just wait 20 seconds, drivers are encouraged to try to inch through the intersection when a gap in pedestrian traffic shows up, but anyone who's tried to navigate this delicate maneuver is familiar with the heart-in-your-throat feeling you get when someone seems to jump out of nowhere and you have to stop abruptly (or when someone just
needs to hurry the hell up and get through the crosswalk)
. Now there's a pedestrian angry with you—and rightly so, since they probably feel like you could have seriously injured them—or you're angry at the inconsiderate ped, or both.
It may sound counter-intuitive that limiting the rights of drivers would make them better off, but in this case some paternalism is warranted. The time savings you get from threading the needle through a group of pedestrians is meager, of course. More generally, this fits with a street design ethos that seems to expect professional-level driving skill from the entire population—as does the lack of left-turn signals at intersections. If the
90% of drivers who think they're above average
were actually correct, this might be okay, but in the real world building your roads so that only the most skilled can use them safely is a recipe for disaster. (As a side note, this might also discourage people from "cruising" in high-traffic areas looking for parking—
estimated to be responsible for as much as 74% of downtown traffic
—since the penalty for constantly circling around the block taking right turns would be much higher if you had to wait at every light.)
In either case this just adds to the stress of driving. If you've tried driving in an area like downtown you've almost certainly been yelled at by a pedestrian; it was probably as you blocked the crosswalk and they flipped you off and walked around your car. It wasn't intentional, and you felt appropriately contrite, but I can almost guarantee you ended up in that position while trying to take a free right turn. Once again, the city's design pitted you against the pedestrian and the results were predictable.
These are mostly easy fixes in the grand scheme of things, both in technical difficulty and expense. Maybe some of the congestion savings yielded from the
massive traffic light synchronization effort
can be used to improve safety and reduce the tension and stress of commuting.
I'm still a new resident to Los Angeles and sure to have missed some things. What other street design problems have you seen here, or in other cities? Have you seen any particularly innovative solutions?
What Do Solar Power, Affirmative Action, and Urban Planning Have in Common?
A clean slate isn't enough for housing and transportation policy.
A Bronx development with rooftop gardens shaded by solar panels, photo from
.
Debating the merits of more sustainable forms of energy, some people claim to be supportive in theory but disagree with the idea of government intervening to pick winners and losers. "Let solar, wind, nuclear, coal, and oil duke it out in the free market, and may the best man win," they say.
Opposition to affirmative action relies on a similar strain of thought—i.e., government, stay out of it. Blacks and other historically disadvantaged minorities have all the same legal rights as whites now, so we shouldn't let race play a role in our hiring practices. The days of explicit employment discrimination based on race and/or ethnicity are behind us, so our goal should be a purely merit-based system.
These arguments may sound reasonable and even-handed, but they share an (often) willful ignorance of the enduring power of institutions, and the role past policies played in constructing them.
In the case of solar power and other forms of renewable energy, there is no
tabula rasa
for competition with coal and oil. Oil extraction and production has been
subsidized by the U.S. government for nearly 100 years
, and the industry has been able to build an incredible portfolio of land rights, capital goods, and political and human resources. Even if the government immediately withdrew the
it spends in support of oil extraction, production, and shipment, the physical and logistical resources amassed over the past century would remain. Demanding that relatively new sustainable energy industries compete on equal footing with an oil industry established over generations, and with trillions of dollars of taxpayer money, is both unrealistic and dishonest.
Huntington Beach oil field/beach in 1928, photo from the
.
Affirmative action is a more controversial issue, and one which reasonable people will disagree about, but the argument in support of it is similar. It starts with the idea that there's more to finding and securing a good job than the qualifications you can put on a resume. Everyone seems to be aware that connections are important—"it's not what you know, it's who you know!"—and the reality is that, largely due to the systematic racism of previous generations, disadvantaged minorities tend not to know the kind of people that can put in a good word for them, get them a foot in the door, etc. A black man who was qualified to go to school for engineering in the 1950s might instead have been forced to take a job as a janitor, and his children would grow up with less money and fewer connections to people in more prestigious, higher-paying positions. When they reach adulthood they're unlikely to have the same "ins" as those who grew up in more socioeconomically advantaged families.
And so it is with urban planning and development.
When I wrote last week that
some Millennials will move back to the suburbs and that's okay
, one criticism I received was that (paraphrasing) "No, actually it's not okay. Suburbs are economically and ecologically unsustainable, and there's nothing good about more people living in them."
My response was that it's not our goal to decide where people should live, and that we should focus our efforts on eliminating the
various subsidies that make suburban sprawl artificially cheap
. Without those subsidies, people are free to make whatever decision they like as to where they live, but with full awareness and responsibility for the costs of that choice.
But that's not the whole story. As with sustainable energy and affirmative action, history matters. Removing the current incentives for building and living in sprawl-type housing does nothing to change the character of previous developments; freeways built through city centers for the benefit of suburban commuters aren't going anywhere (
); and lenders will continue to be most comfortable with single-family, greenfield-type development after many decades of being conditioned to it. Even the pop culture appeal of "the house with a white picket fence" will likely persist, despite
a massive shift in the desirability of smaller, mixed-income, transit-accessible housing
.
No money for repairs, or for lacrosse gear. :(
In other words, suburbs are like the kid with the rich parents—or the rich Uncle Sam, as the case may be. You know, the ones that sent him to the best schools and prep courses, paid his way through college, got him his first internship, and paid his rent until he got on his feet at his first real job. Cities are the janitor's kid who was begrudged by wealthy families for being on the reduced-price lunch program, even as they spent thousands of dollars affording their child every possible advantage. Just because your parents cut you off when you turned 25 doesn't mean you're now on equal footing with the janitor's son.
Cities have been abused and neglected by the policies of our federal government over the past sixty-plus years, and they've overcome a great many challenges to finally begin truly thriving. Whether you live downtown or in the most rural exurb, you should be encouraged by that. But despite the recent success of cities, we can't ignore the fact that they're not working for lots of people. Exactly because of their incredible success they've become unaffordable to many lower-income households. As the great suburban experiment unravels, the demand for smaller, closer-to-work housing is only going to grow, and the pressure on low income families is going to grow with it. To capture that growth in cities without placing further burdens on the most vulnerable will be difficult.
To do so, the response needs to go beyond ending the wasteful subsidies for new suburban development. We need a rebalancing, one with much greater support for existing communities, both for urban neighborhoods and suburbs that commit to more economically and ecologically sustainable infill development. Simply wiping the slate clean of subsidies entirely does little to solve the growing affordability crisis for low- and middle-income families, and will result in more displacement than new urban housing. Unlike with sprawl, there are
to make it easier for people to live less car-dependent lives (or at least encourage shorter commutes), so this should be a no-brainer. The same goes for our overbuilt network of urban highways and
. Communities affected need support, not indifference. The Federal Highway Administration took a tire iron to the kneecap of cities it built these highways through—promising not to build anymore isn't enough when the neighborhoods surrounding them now walk with a permanent limp.
On the bright side, there are plenty of underpasses
for all the newly homeless people to sleep under.
We can help cities and their residents adapt to their growing populations by taking
the money we're using to pay wealthy families to buy homes
and using it to boost our affordable housing programs,
, and
Community Development Block Grants
,
. This can be done in both cities and suburbs. With that money alone, we could quadruple the budgets of both programs. The money we spend on the suburbs should be used to make them
, not just bigger. Five-mile bike rides and one-mile walks should be treated as at least as valuable as car trips and our federal expenditures should reflect that, instead of representing the
less than 2% of transportation spending
they do today. Federal transit spending should do more than keep the lights on; it should build for the future, as highway spending did sixty years ago.
The suburbs have been and continue to be coddled with incredibly expensive road projects and tract developments, neither of which pencil out economically without federal and state support. All the while, cities have mostly been forced to go it alone, and even the major highway projects within their borders have been in service to suburban commuters and those just passing through. It's time for us to invest some money in the people who choose lives of sustainability, greater economic efficiency and productivity, and more consistent physical activity, and to stop spending it on the opposite.