5 Cities And Their Housing Cost Solutions

Next City’s article “Five Extreme Models to Combat High Rent” is an interesting read simply because it lays out solutions to housing price problems that have actually been put into practice. It also illustrates (intentionally or not) why some of those methods aren’t actually solutions.

Methods That Aren’t Working

The first method discussed is inclusionary zoning, which Next City argues is a success story in Monaco:

But one city has made it work: The tiny principality of Monaco. There isn’t much room left for building in the less-than-one-square-mile city-state on the French Riviera, but when a new development comes around it includes — or at least funds — a lot of affordable housing.

The author claims inclusionary zoning has provided more affordable housing in high-rent Monaco, but the city hasn’t done anything to make the city accessible to everyone that wants to live there. The author hints at this, first saying:

For one, it takes incredibly high housing prices to sustain that ratio of affordable housing

and then later saying:

anyone without obscene wealth or the good fortune to be born there would be shut out of the city.

This example illustrates how easy it is to confuse the goals of providing a certain number of affordable units with the goal of having an affordable city. Just because a city has affordable units, doesn’t mean the city is affordable; if a city is truly affordable, anyone with a reasonable amount of income should be able to move there.

The same issue is seen when the author talks about rent control in Stockholm. The prices of apartments are affordable, but it can be almost impossible to actually get an apartment. The city has a wait list for apartments because there isn’t enough housing. Statistics from Stockholm’s municipal housing queue show average wait times of 8.5 years (up to 17 years in the central city). There is no point in having low rent if you can’t actually get an apartment. Neither inclusionary zoning nor rent control in these two case studies offer actual solutions.

Actual Solutions To The Housing Price Problem

The article does show three examples of cities that have managed to keep the price of housing low while also providing accessibility. Two of the cities, Houston and Tokyo, basically allow developers to build as much housing as they like. In Singapore, the third city, nearly all the housing is built and provided by the government. The key characteristic to note with all these examples is that enough housing is built.

With each of these three examples, the author points to problems caused by these solutions. First with Singapore, the author complains about the housing aesthetics:

The downside of ubiquitous public housing, though, is that it looks like public housing. HDB flats aren’t as bad as the towers-in-the-park that went up in U.S. cities after World War II, but they’re not a whole lot better.

That may be a downside of housing in Singapore, but we should applaud the city for actually putting accessible housing above aesthetics. Furthermore, if the housing is publicly owned, it seems likely that people could encourage the government to build more diverse and attractive housing.

The author offers a similar critique for Houston: Unregulated development has created an ugly city. It’s inaccurate to describe Houston as completely unregulated. The city does a number of things to regulate how land can be used, including design review. Since I’ve been to Houston, I would concur that it’s sprawl and highways are ugly. Again, this is a small complaint compared to accessible housing. It also misses a more important complaint about the Houston model. The price that people pay for rent is not the only price paid for housing. It is nearly impossible (and dangerous) to live in Houston without a car and car ownership is expensive! According to a Consumer Reports study, the absolute lowest paid per year for a car was $5,000. If average rent in Houston is $881 per month (as this article claims), owning the cheapest car possible could make rent over 50% more expensive.

Lastly, the author discusses Tokyo. Supposedly Tokyo is unique in that it doesn’t zone for density. Tokyo is a fascinating example because it is a huge city that has managed to actually have much more affordable housing than other cities. In fact, buying a home in Tokyo is similarly affordable to Sacramento or Providence Rhode Island (page 16).

The author’s complaint with Tokyo is interesting. While the city is known for its public transit, the author posits that Tokyo has extremely long commutes, citing a blog post as proof. Take note that this citation is a blog post from 2008 by a random person on the internet, who himself is only making a rough estimate. If people live densely and housing is affordable, why wouldn’t people move closer to where they work? I remain skeptical that Tokyo has much worse commute times than other cities, but if that is true, it is a real concern and should be considered in an evaluation of housing cost.

What To Take Away From This

Like we’ve said before, when we talk about housing cost, what we’re really talking about is accessibility to housing. Housing is accessible when you can answer “yes” to this question, “Can you move where you want?” A city in which you have to wait eight or more years to get an apartment has not solved the housing price problem. Lastly, housing is intimately tied with other costs that need to be taken into consideration beyond the listed price of rent.

Seattle has a real opportunity to offer a unique solution to the housing cost problem. In both Houston and Japan, additional costs like transportation may add significantly to the affordability of housing. In both of these cities it appears that some smart planning and a focus on density could be a solution. Seattle is unique because the city actually encourages density and the state of Washington attempts to restrict sprawl. The only thing missing from our housing accessibility is a serious attempt to building more a lot housing.