(The opportunity cost of) "Defining density down"

Another New York Times article, "Build, build build" or "California's Housing Crisis: How a Bureaucrat Pushed to Build," describes the difficulty of adding housing in communities because of resident opposition.

What often happens is that if a project can be built, to assuage opposition it becomes smaller or sometimes even more significantly different.

It's a few different kinds of actions:

-- reducing the number of floors
-- not choosing to build higher even if allowed
-- shifting from multiunit to single family
-- building too few units regardless, given existing supply and burgeoning demand.

For example, the site featured in the story went from 315 apartment units to 44 single family houses, a significant reduction in the addition to supply (if the project had gone forward, it did not).  From the article:

A developer had proposed putting 315 apartments on a choice parcel along Deer Hill Road — close to a Bay Area Rapid Transit station, and smack in the view of a bunch of high-dollar properties. This wasn’t just big. The project, which the developer called the Terraces of Lafayette, would be the biggest development in the suburb’s history. Zoning rules allowed it, but neighbors seemed to feel that if their opposition was vehement enough, it could keep the Terraces unbuilt.

In letters to elected officials, and at the open microphone that Mr. Falk observed at the City Council meetings, residents said things like “too aggressive,” “not respectful,” “embarrassment,” “outraged,” “audacity,” “very urban,” “deeply upset,” “unsightly,” “monstrosity,” “inconceivable,” “simply outrageous,” “vehemently opposed,” “sheer scope,” “very wrong,” “blocking views,” “does not conform,” “property values will be destroyed,” and “will allow more crime to be committed.”

In a metropolitan area short in housing supply by many tens of thousands of units, cutting 270 housing units is a significant loss, what economists call an "opportunity cost."

Other opportunity costs include not leveraging the multi-billion dollar investment in the transit system, foregone property tax revenues, etc.

In my 2017 piece, "The nature of high value ("strong") residential real estate markets," I called this process "Defining density down" when I wrote:

By severely limiting height and "defining density down" (e.g., "D.C. court rejects Brookland project for a third and possibly final time," Washington Business Journal) residents clamoring about housing affordability are eliminating opportunities to address the problem, albeit the results aren't discernable for multiple decades.

Clearly, I was referencing the concept expressed in Daniel Patrick Moynihan's article on social order in cities, "Defining Deviance Down."

It's a great term that I should use repeatedly.

Yimbyism.  Separately the article discusses a housing activist, Sonja Trauss, and her advocacy group San Francisco Bay Area Renters Federation, who argues in every case that housing should be built, regardless of the consequences.  Needless to say, she tends to be supported by people not living in the immediate area of proposed projects.

But her approach isn't nuanced either. And her lawsuit in favor of the project ended up costing the developer money too, and contributed to his walking away.

State proposals to mandate housing.  In any case, after this experience--a project that took 8 years and still didn't result in anything, Steve Falk the public official featured in the article, and a graduate of a Harvard class on negotiating, doesn't believe anymore that public processes for new housing construction can generate optimal results.

(See the past blog entry, "The Takoma Metro Development Proposal and its illustration of gaps in planning and participation processes," for a discussion about the flaws in planning processes that lead to such results, in this case a project that has been on the books for 20 years.)

That's why some states like Massachusetts and Maryland have created incentive programs to encourage communities to build housing.

But even then, it often doesn't work, which has led a California legislator to introduce legislation, Senate Bill 50, that mandates higher density in transit station catchment areas, but the legislation hasn't moved forward.

I think I agree that greater density should be mandated, given the disconnect between supply and demand, but I don't think the average state legislature is willing to take the heat and do so, even if real estate interests are primary donors.