Thursday, December 7, 2023

Homelessness is a Housing Supply Problem

Imagine two games of musical chairs. In both, half of the participants are wearing blindfolds. However, in one, only one chair is removed when the music stops, while in the second, five are. In both games, those wearing blindfolds are more likely to be left standing, but in the former game, at least four will locate a chair, while in the latter, it is possible that all five will not.

Gregg Colburn and Clayton Page Aldern, authors of Homelessness Is a Housing Problem, use musical chairs to illustrate two aspects of homelessness. One is that those who are suffering from a disability (i.e., blindfolded), such as mental illness, substance abuse, and poverty, are more likely to become homeless (i.e., left standing). The second is that how many individuals become homeless is a function of supply. If there are enough chairs (homes), then even the blindfolded (disabled) will find a seat.

Colburn and Aldern show that cities and counties where the supply of housing keeps up with demand have much lower rates of homelessness than those that do not. Further, a lack of supply drives up the cost of housing, making “affordable” housing unaffordable for most.

Where has the supply of housing kept up with demand? In cities like Austin, Charlotte, Dallas, and San Antonio, where it is relatively easy to construct homes and apartments. Other cities, such as Chicago, Detroit, and St. Louis, also enjoy low homelessness rates, not because it is “easy” to build there but because the demand for housing has fallen in recent years. Where hasn't supply kept up with demand? In cities like Los Angeles, New York, Portland, San Francisco, San Jose, and Seattle, where various constraints make the construction of housing slow and difficult. It is not a coincidence that it is this latter category of cities with the highest rates of homelessness.

Numerous factors make the construction of homes and apartments difficult. Four of the more common are (1) geography (water and mountains), (2) long and expensive permitting processes, (3) low and no-growth policies, and (4) parking minimums. The first two are relatively intuitive. The supply of buildable land is greater in areas with few or no mountains, rivers, and oceans, so all else equal, the supply of housing will be greater while the cost will be lower. Similarly, the more difficult it is to acquire building permits, the longer it will take to respond to demand, and the more costly the resulting construction will be.

The impact of low and no-growth policies is also relatively intuitive. Growth limits keep the supply of available land low. What may not be apparent, however, is that these policies often limit how “high” buildings can go, and if builders can't go up, they will go out, eating up the supply of land and increasing the cost of housing. Notably, “building higher” is also good for the environment. People living in high-rises have a smaller carbon footprint than those who don't. This is documented in Edward Glaeser's book, Triumph of the City.

Finally, parking minimums limit how “high” buildings can go (see previous paragraph) and eat up land that could be used for housing. Researchers estimate there are three to eight parking places for every vehicle in the U.S. Henry Graber, author of Paved Paradise: How Parking Explains the World, notes, “More square footage is dedicated to parking each car than to housing each person.” However, not only does all this excess parking drive up the cost of housing and contribute to the homelessness crisis, but it is also bad for the environment. All that extra asphalt makes cities hotter and contributes to global warming. Also, when parking spots are plentiful, people are more likely to drive from spot-to-spot rather than walk, bike, or use public transportation.

The bottom line is that there are tradeoffs when addressing homelessness. High rises may not be as aesthetically pleasing as the alternatives, but they are better for the environment and can help reduce homelessness. Similarly, it’s nice when parking is convenient and free. But free parking comes with a cost: hotter cities, elevated home prices, and higher rates of homelessness. Take your pick. I vote for lower rates of homelessness.

If I've piqued your interest, watch this short video (17 minutes) by Gregg Colburn: 

Also, consider the following:

1 comment:

  1. Thanks, Sean. Nice summary and list of additional books! Susan