Building the Skyline

The Birth & Growth of Manhattan's Skyscrapers

by Jason Barr 2 Comments

Long Live the Skyscraper

Jason M. Barr             June 12, 2023

A few weeks ago, I received an email from an acquaintance with a link to an article about my research. I was naturally intrigued, but when I started reading it, I realized that the author was using my research against me, rotating the findings to suggest they meant the opposite of what they actually meant.

The article is “Death to the Skyscraper,” and the author paints a very dark—dystopian even—picture of the skyscraper. She is not alone, to be sure. Her article is part of a long-running genre of skyscraper-as-destroyer-of-cities.

Her focus is on the environmental impacts of tall buildings, particularly their greenhouse gas emissions. It’s true that tall buildings tend to produce more through operational and embodied carbon than their diminutive counterparts. And this observation is, correctly, worrisome.

For those who see these “towers of power” simply as carbon-spewing Godzillas, the natural conclusion is that they should be banned from existence. But as I teach my students in Economics 101, you can’t draw conclusions without evaluating the costs relative to the benefits. Unfortunately, the whole article reads as an exercise in bad economics.

The Enduring Skyscraper

The author’s key thesis is that the skyscraper requires more of society than it gives in return. This claim puts her within a century’s-long tradition of those who have shared that view. In fact, her words (which are factually dubious at best) that “Even at the city level, the huge carbon cost of skyscrapers fails to outweigh any potential benefits that they might achieve from restraining urban sprawl” echoes one of New York’s key reformers, Edward Bassett. He sought to eliminate the skyscrapers in Manhattan by focusing only on their construction costs while ignoring their benefits. In a 1913 report that led to New York’s 1916 zoning resolution, he wrote:

Few skyscrapers pay large net returns. Most of them pay only moderate returns….However, the very tall buildings demand many things out of proportion to their increased bulk. All piping has to be made disproportionately heavier; special pumps and relays of tanks have to be provided, foundations often call for special construction, wind-bracing assumes an important place, long-run elevators are more costly than short-run elevators, the extra space taken up by the express run of the elevators is an additional cost. Thus in the aggregate the total cost per cubic foot of a very tall building may be 60 to 75 cents per cubic foot where a low building of the same class would cost only 40 to 50 cents per cubic foot.

But just because something has higher costs (either to the builder or society at large) does not logically lead to the result that it should be eliminated. To evaluate the claims more fully about tall buildings, we need to take a step back—or up—and put them in context to view the skyscraper trees within their economic forest. One should not make pronouncements about urban real estate without more widely considering how cities function.

The Manhattan Skyline from Central Park.

Why Do Cities Exist?

Since the skyscraper is one species within the urban environment, we need to begin with the question: Why do cities exist? Or flipping the coin, why does the majority—and growing—of the world’s population live in cities? The fundamental answer is “markets.”

Cities are, first and foremost, labor markets. They are where people find jobs, and, in this sense, cities are the engines that power our economic lives. To take a simple case in point, the three most productive counties in the U.S.: Manhattan (New York County), Los Angeles County, and Cook County (Chicago), together generate 9% of the United States Gross Domestic Product (GDP), yet they use 0.18% of its land mass.

People come for the jobs but stay for the opportunity to experience all that a city has to offer, like restaurants, museums, or large urban parks. Even working from home will not drive us out of the city. It might cause some relocations and adjustments, but in the end, the city will maintain its roles.

Hivetropolis

And, as Jane Jacobs has argued, cities are inherently problem-solving machines that draw their power from density itself. Ideas and hive intelligence are in the urban ether, and if we allow cities to function as they should—if we allow people to live and work where they see fit—then cities can continue to provide both the income from our labor and the goods and services that we want as consumers and citizens.

Now, if you concede that the purpose of the metropolis is to be the center of what is necessary, right, and good, then we must ask, how is the city to organize itself to function for maximum efficiency and gain? The answer is through the land market.

Allocating Geography

As nicely summarized by urban planner and author Alain Bertaud, the land market

sends strong signals though prices when land is underused or the use is unsuitable for its location;…provides a strong incentive to users to use as little land as possible in areas where there is a strong demand, in particular in areas well served by transport networks; and…stimulates innovation in construction.

This means that to understand what “should” go where, land prices are the most valuable signal. But high land values are really a signal of the value of geography—that more people and businesses want to be in the same place at the same time. Thus, the skyscraper is a geography-shrinking machine. It pinches the land to squeeze out new land—land in the sky—which allows hundreds, if not thousands, of people to be in the same place at the same time.

Good Communities

But what are we to make of the author’s conclusion that:

High land prices, of course, are not good for ordinary people and communities: they segregate societies along socioeconomic lines, with high costs of homes and rent pushing people into low standards of living, and risking their health, development and life chances. A city birthing new skyscrapers is likely to be unaffordable for many of its residents.

I have a few responses. First, a trip to Hong Kong, Singapore, or any mainland Chinese city, for example, would reveal that high-rises are not just the province of the rich—rather, high-rise after high-rise is home to Asia’s burgeoning middle class. So, there’s nothing inherent in the economics of tall buildings that precludes their use by many across the income spectrum.

Second, the segregation of uses is only partly the result of land markets. Tall buildings in the center are economically rational because they satisfy the need for people to be closer to each other. They make businesses more productive and allow more residents to enjoy the fruits of the city by saving on commuting and travel times. And the empirical evidence strongly supports this conclusion.

But even in the most central locations, there’s ample opportunity for a mix of building types and income levels. A quick stroll down Wall Street—the center of global finance—will reveal short buildings next to tall ones and old buildings next to new ones.

Zoning

The more important issues, however, are planning and zoning. While Jacobs argued in the 1960s that planners ought to get out of the way and let cities be, the opposite has occurred. Bassett and those who followed him could not stomach population density and mixed uses. They created zoning arrangements that made mixed uses illegal. Even today, it’s impossible to have a tall building in New York that contains one-third for shopping and restaurants, one-third for offices, and one-third for apartments, despite that office buildings remain largely underused.

Regarding hyper-segregation, the evidence strongly suggests it is due, in large part, to the historical planners’ fear of mixed uses and their desire to surgically separate all land use types regardless if people wanted them or not. They aimed to keep factories away from residences and single-family homes away from apartment buildings. Zoning was meant as a backdoor to means to create the ideal cities according to planners’ view that workers should all live in Garden Cities, and the center should be designed according to the highest City Beautiful ideal.

Once zoning took root in the first half of the 20th century, wealthier residents used these restrictions to limit housing, which made access to these places nearly impossible for a vast swath of society. The concomitant redlining of neighborhoods was a product of racism and the Federal government’s desire to protect white people’s home values.

Nimby Nation

Because of the tight restrictions in suburban areas, nearly the only place in the city today where builders can provide needed housing is in the center, where the land values are the greatest and zoning tends to be less restrictive. The irony is that renters have made common cause with single-family Nimbyists because they see the “greedy developer” and the “greedy landlord” as “ruining their neighborhoods” and driving up housing prices, even though renters stand to gain the most from new construction, which will lower rents.

And the Nimbyists preaching the “Gospels of Saint Jane” to limit building heights in the name of the “human scale” are, in fact, making it harder to build new housing and causing land values and rents to rise. So, the very people who rail against tall buildings are incentivizing them by their very actions.

But taking a broader perspective, tall buildings are not causing the affordability problem. Using New York as an example, the city has 3.6 million housing units, and 77% are in buildings that are ten stories or less, and 2.7% of units are in buildings 40 stories or taller. Taking a global view, in the developed world, 86% of its structures are 25 meters (8 floors) or less, 94% are less than 15 stories, and 99% are less than 100 meters (25 stories). The supertall part of the spectrum represents only a tiny fraction of the world’s buildings.

Are There Too Many Skyscrapers?

So, with this in mind, we turn to the question of what’s to be done. There’s a valid argument that cities are getting too many skyscrapers because of restrictive building regulations in the suburbs and GHG emissions.

Skyscrapers produce a lot of CO2. No one disputes that. But this fact does not mean they should be banned from existence. Banning something that makes cities function properly is a bad idea. Density is what powers cities, and density should be encouraged rather than discouraged.

More broadly, there’s an extensive literature in economics demonstrating one simple fact: If you put draconian restrictions on what a city can build, the outcome is more sprawl and traffic congestion, and higher housing prices. Similarly for GHG emissions, Manhattan has far lower carbon footprints per household than its suburbs.

Using a data set with estimated average household carbon footprints for every zip code in the United States, we can conduct a thought experiment. Imagine we “Manhattanized” the two suburban counties adjacent to New York City—Nassau and Westchester—by having all their residents live at the same density. Those two counties would see a reduction in their residential carbon footprints by 41%.

Do We Really Need More Paris’s?

And yes, 5-story buildings are the best in terms of minimizing carbon emissions, but again it does not logically follow that we should require by fiat that every city be built like Paris. It is worth noting a few facts about the place. First, officials created a skyscraper district in La Défense because they knew they needed tall buildings for the economic health of the city. Second, if you look at Paris’s global ranking, in terms of its importance in the world economy, as measured by the size and number of international firms, it’s falling. Paris in 2000 was ranked 4th, and by 2020, it was bumped down to 8th, losing out to skyscraper cities. Is it because of Paris’ lack of tall buildings? The data are strongly suggestive, though more research is needed.

In the last decade, Paris has shrunk by 122,000 residents. As reported in Forbes.com, “Many of those leaving are choosing either the suburbs or countryside around Paris, or they are relocating to France’s smaller cities such as Bordeaux, Lyon, and Toulouse.” By limiting its building stock, Paris is driving up housing prices, pushing out residents, and causing suburban sprawl—hardly something worthy of emulation.

Average Household GHG Emissions by Zip Code for New York City. Note how the outer fringes of the city with free-standing suburban homes have much higher carbon footprints than dense Manhattan. Source: Map based on data from Jones and Kammen (2014).

Think Externalities

Critics love to blame tall buildings for destroying the environment, but they (like us all) think little of turning on the air conditioning when they are hot, charging their laptops when they want to check Twitter, or hopping on a jet to go on vacation. But we would hardly say these should be eliminated from our lives.

To offer another illustration, where I teach, most students commute to class. Every semester, I informally poll them by asking them to raise their hands if they decided not to drive to class that day and took mass transit instead because they knew their car would emit some carbon during their commutes. I don’t think I’ve ever had a student raise their hand in the affirmative. They decide to drive or not based on whether they have access to a car and on the availability of parking.

The point is that CO2 is what economists call an externality, an unintended by-product of our actions that generates a negative effect on society. Greenhouse gas emissions are the mother of all externalities and should be treated as such. Since no one is willing to give up their comfortable lifestyles, that means we must rely on carrots and sticks to generate technological improvements that replace our current products and energy production with carbon neutral alternatives.

Tax Carbon

As I teach my students in Economics 101, the key to solving the externalities problem is for producers to “internalize” them so they pay for the costs that they would otherwise impose on others. The most effective ways to do this are to tax carbon emissions or create a cap-and-trade scheme. Cities around the world, like New York with its Local Law 97 and London with its carbon taxes, are generating penalties for GHG-heavy building owners. This is good.

I would argue, however, that New York’s law, for example, does not go far enough. All households—not just those in large buildings—should face a carbon tax. If cities charged all household “over producers” and gave credits to “under producers” based on their emissions, it would not only be fair—the rich would pay more in taxes—but would also benefit those living in efficient buildings. A household carbon tax and a gasoline carbon tax, would also encourage denser, less-car-based lifestyles, which would lower GHG footprints that much more.

Federal Policies

Help must also come from the Federal Government, which should penalize CO2 creation and reward alternatives that use less or no CO2. For example, steel and cement producers need to pay for the carbon they generate, while R&D credits should be given to businesses that develop low-carbon products or production methods. Electricity providers need subsidies and incentives to switch to wind, solar, and other clean energy forms, as well as to upgrade the electricity grid.

And globally, the developed nations must help the developing countries to produce their skylines with low-carbon methods. They want American lifestyles and feel that they should not make the sacrifices that the West never made. At the end of the day, solving the global climate crisis must be an international effort.

Towers of Power?

Towers of Power—the supertall buildings for billionaires—are a result of booming cities, but they are not the cause of gentrification. Gentrification is due to the gummed-up nature of cities. It is largely driven by overly restrictive zoning and price controls enacted to save the city from itself but has served chiefly to inflict more harm than good.

Since the restrictive zoning is driving up land value in the city centers, we should eliminate the outdated zoning rules and replace them with a rational plan that more carefully weighs the costs and benefits to neighborhoods. By allowing more moderately taller, mixed-use buildings throughout the city, we would decrease the bottlenecks that make land prices skyrocket in the center, thus reducing the incentive for developers to build supertalls.

Affordability

It’s important to reiterate that if you ban tall buildings, it does not logically follow that you would get affordable housing for lower- and middle-income households. Banning skyscrapers will make the affordability problem that much worse because tall buildings, in fact, are helping the affordability problem by providing more housing on less land. However, it does so in a rather indirect way–by “greasing” the moving chains from the top to the bottom of the housing spectrum.

Money seeks its highest return. So, the question is, why doesn’t more real estate money flow to lower-income housing? Despite what many people think, the real estate market does not operate according to some made-up rule that either we get skyscrapers or we get affordable housing. Money is not flowing into middle-income housing because it is illegal to build it in most parts of big cities, thanks in large part to stringent planning and zoning regulations, and other frictions that need to be addressed by policymakers.

If people were really concerned about gentrification, they would demand their leaders enable builders to flood the market with middle-income housing in the suburbs. This would cool land values in the center and provide units for those who need them the most.

Skyscrapers and Cities

Skyscrapers don’t belong everywhere and are not for everyone. But policy discussions are severely harmed when people use loaded rhetoric, poorly-defined concepts, and buzz phrases to make grand pronouncements based on little more than casual observations. Skyscrapers have spread like a wave over the planet in the 21st century because they help cities grow and succeed.

But yes, we need to carefully consider their costs and benefits to evaluate where policy changes can offer improvements. And there’s room for disagreement, but we can all agree that cities should be open and accommodating to all who want to call them home.

 

Thanks to Troy Tassier for his editorial comments on an early draft of this post.

by Jason Barr 6 Comments

Saint Jane and the Moses Myth: Revisiting the Robert Moses-Jane Jacobs Debate

Jason M. Barr              April 18, 2022

Gotham is haunted by a gg-ghost!! The ghost of Robert Moses that is.

Whenever a large public project is announced, there’s always a kneejerk reaction against it, with the naysayers shouting, “Remember Robert Moses!”

Moses was the Master Builder of New York who, from the Great Depression to the 1960s, oversaw the construction of most of the city’s highways, bridges and tunnels, and slum clearance and public housing projects.

Toward the end of his career, he lost public favor as his plans became increasingly controversial. Then in 1974, Robert Caro published his 1,300-page biography, The Power Broker: Robert Moses and the Fall of New York. The book is a page-turner, a mix of awe about how Moses could accomplish all that he did and shock about his abuse of power.

Gotham Noir

Caro’s book and Moses’ run-ins with urbanist Jane Jacobs have produced a residual mythology: That his anti-democratic, heavy-handed methods destroyed New York and its bustling neighborhoods, leaving it a worse place as a result (hence the “Fall of New York”).

The story goes that his slum clearance was really people of color clearance. His highways scattered the middle class and left the subway system sinking under its own weight. His building program led to hyper segregation, the hollowing out of the Big Apple, and the destruction of once-vibrant tenement neighborhoods. All the while, his roads were choked with congestion.

His archenemy, who took him down, was none other than the Patron Saint of Good Urbanism, Jane Jacobs. Jacobs argued that Moses and his ilk should leave neighborhoods alone, and let the “slums” unslum themselves naturally. Rather than building highways, the city should invest in good design strategies and user-friendly parks and let diversity do the rest. Density works for the people, not against them.

When Moses wanted to build a highway through her beloved Greenwich Village, things became personal. She led the protests that stopped Moses in his tracks. Good triumphed over evil.

Myth Damage

The myth of Jacobs-cum-David defeating the villainous Moses-cum-Goliath remains pervasive and influences our thinking about urban policies to this day. Both, however, were in their prime during post-World War II New York, when the issues confronting cities and the beliefs about good urbanism were very different.

Their mythification and deification (one for Olympus and the other for Hades) are preventing us from having real debates about the best way forward regarding the problems facing us in the 21st century. The Moses-Jacobs Myth is now harmful. It’s time to move on.

The Legacies of Jacobs and Moses

One cannot underestimate the legacy of Jane Jacobs. Her book, The Death and Life of Great American Cities, is a classic that has inspired countless urbanists. It makes a seductive argument that vibrant urban neighborhoods can magically spring to life if we simply focus on allowing people to find each other and go about their daily lives without much hindrance from the state.

Over time, however, her ideas have transmogrified. In the name of preserving neighborhoods from the wrecking ball or banning the construction of luxury high-rises, residents have used her words to prevent urban re-development. The Gospel of Saint Jane has become the rallying cry of the Nimbyist. Greenwich Village, for example, has become preserved in amber. In 1969, thanks in large part to Jacobs, it was designated as a historic district, and none of its buildings can be torn down.

The result: the bohemians, artists, factory workers, and immigrants who once made it so special can no longer afford to live there. Jacobs’ leave-it-alone philosophy has turned Greenwich Village into an urban country club for those who can afford to pay the membership fee.

Resurrecting Moses

Simultaneously, there have been attempts in the last twenty years or so to revive Moses’ legacy by putting his actions into a larger context. While not condoning his anti-democratic and elitist behavior, “apologists” acknowledge his vast portfolio of accomplishments and note that he was not omnipotent, having been defeated many times throughout his long career, even before Jacobs was on the scene. When compared to “building czars” in other industrial cities, like Chicago, Boston, Detroit, and Newark, his projects were not all that different.

Nonetheless, it’s clear that in the public consciousness, Moses is still the villain, and Jacobs is the hero. He is an example par excellence of big government gone awry.  On the other hand, Jacobs is the urbanist of the people, who taught that government can’t and shouldn’t be trusted.

Moses v. Jacobs. Robert Moses (left), the “Master Builder” of New York, built most of the city’s highways, pools, and public housing and slum clearance projects. Jane Jacobs (right) argued that governments should encourage local policies for neighborhoods to thrive on their own.

Welcome to the 21st Century

But it’s time we take a step back and put Moses and Jacob in a historical context. They were both fighting over their version of the 20th-century city. Moses was trying to eradicate the old city in the name of progress. Jacobs was trying to preserve the old city in the name of progress. In some sense, both visions were correct.

The automobile was a technological tour de force that had to be dealt with. To ignore the car in post-World War II planning was impossible. But the density so hated by early and mid-20th century reformers is now celebrated. Our thinking about density is the opposite of what it was in 1960.

In this sense, Jacobs won the debate. A whole body of literature in economics has measured the value of “agglomeration.” It shows that density can generate higher incomes, a more diverse economy, and easier access to goods and services.

But we can’t simply say, “get government out of the way so that we can get on with our lives.” The world we live in is very different than theirs, and we are facing a host of issues that they could never have imagined.

End of the Extensive Margin

In 1950, when Moses started building out the highway system in New York, about 74% of the population in New York and immediate counties lived inside the city boundaries.[1] The suburbs were ripe for development. By 1980, only 56% of this population resided in the city. Moses’ program allowed the city’s territory and economy to expand.

But Moses was out of power by 1970, and road construction stopped. Today, the highway system is virtually identical to the one that existed when he retired. Additionally, as the suburbs filled in, towns and villages used their power over zoning to restrict what could be built. These towns have erected virtual moats or walls around the big city. Thus, by circa 1980, the New York City region became de facto “closed.”

When Jacobs was writing, people were fleeing the city, as it was in rough shape from years of decay and deindustrialization. Jacobs tried to stop planners from encouraging (or requiring) urban flight. But even if neighborhoods like Greenwich Village and East Harlem remained vibrant for the working classes, the middle classes wanted to live in the suburbs. Rising incomes and highways allowed them a castle of their own.

But the debate about in-fill versus expansion became moot forty years ago. Expansion stopped because people wanted it stopped. They wanted to circle the wagons and preserve what they had. The suburban homeowners wanted to protect the value of their houses and keep out “the other.” The urbanists wanted to preserve their neighborhoods from the wrecking ball or change more broadly. And the city and state had no will to improve mass transit or make driving more expensive.

Today, the city can’t expand outward because zoning and transportation limits won’t allow it. The necessary densification within the city is difficult because residents won’t allow it.

The New York Renaissance

While New York City has always been home to immigrants and a part of the global network of trade, commerce, and finance, today, globalization has radically changed the nature of cities. In 1960, the world population was three billion, and today it is nearly 7.8 billion. Over the same period, per capita income grew by 67%. Thus, world income has grown faster than the world population. That’s a lot of disposable income.

Thanks to technological improvements and growth in productivity, the global population is more mobile, richer, and interconnected than ever before. Correspondingly, there has been a massive change in the nature of work, and we are increasingly dependent on computers and computer networks. In 1960, when Moses and Jacobs were duking it out, there was no such thing as personal computers; music was still enjoyed exclusively on vinyl records, and people read the daily news on printed paper.

Our economic, technological, and sociological changes have profoundly impacted New York City in the 21st century. First is that its importance in the global economy has increased. New forms of work and production are taking place in big cities, be it software and computer tech, finance (and fin-tech), biotech and healthcare, and the supporting system of universities, banks and venture capitalists, business services, and so on. In 1960, one out of every four employed New Yorkers worked in manufacturing, but today that number is 2% (and much of that is probably artisanal foods and craft beers).

Funtown

Second, New York is a haven for fun and consumerism for locals and tourists alike. With greater mobility comes greater engagement with the city. In 1991, New York had about 23 million visitors. In 2019, it was up to 66 million.

Besides the day and week trippers are those who pour in for a year or two or three. It’s reasonable to say that New York is experiencing gentrification on a scale unimagined by Jane Jacobs. Her aim was the deslumming of the tenements, not turning central city neighborhoods into hot spots for the global elite and their offspring. As international money has poured in and the workforce has expanded, the city has been unable to build housing fast enough to accommodate this demand.

While housing costs were always high in New York City, the current housing affordability problem is a historical anomaly. Housing was relatively affordable in the decades after the War because the central city was emptying out while new housing was being built along the suburban fringes (in addition to strict rent controls, but which likely did lots of harm in the big scheme of things). There was plenty of supply to go around.

But the larger point is that the city’s economic resurgence is taking place in a “closed” city, generating higher housing prices, greater income inequality, and massive traffic congestion. These were not issues facing urban America in 1960.

Climate Change

There’s little need to dwell here on climate change beyond saying that rising sea levels and damage from more frequent and devastating storms and surges were a non-issue in 1960. While environmentalism was gaining traction, there was virtually no notion of climate change being a major force. So, the Moses-Jacob debate is silent on this point.

Highway Planning. Left: A 1929 plan for a highway system proposed by the Regional Plan of New York and Its Environs. Right: The highways, bridges, and tunnels built by Robert Moses, which implemented much of the Regional Plan. His two highway proposals through Manhattan south of Central Park were defeated.

Policies

If residents of the past had the same attitude about infrastructure and public works as today, we’d never have gotten Central Park, the subway system, or any number of the great projects that made New York what it is. Big problems require major government investments and wholescale changes in housing and transportation policies. There is no way around this.

We cannot build a seawall in the harbor and claim that the city is protected from climate change. We cannot upzone a handful of neighborhoods (while also downzoning other ones), give developers tax breaks, and claim we are doing something about housing affordability. We cannot build a Brooklyn-Queens express rail and say we’ve solved the city’s transportation woes.

Making neighborhoods function better means more housing everywhere, greater geographic mobility for all, and sufficient protections against climate changes regionwide. Since a city is inherently an interconnected system of systems, we must recognize that changes in one area inherently affect the others.

The government needs to take steps to move New York into the 21st century. Ideally, these steps should be regional, as the New York metro area is a megacity of 20 million people. But given the municipal fragmentation and the bitterness of the debate, Gotham must take the lead. So here, I propose a broad agenda to get things started.

Restore Trust in Government

We need to restore trust in our government. The first thing is for politicians to recognize that the Depression and Post-War era policies had mixed results. Some produced a better Gotham, and others made it worse. But these policies have generated a vast database of knowledge about what works and what doesn’t. These lessons can be applied to the present. Additionally, we have a mountain of science and social science research that has emerged in the last 50 years that can be applied to the looming crises.

Politicians need to admit that past mistakes engendered mistrust. And they need to restore trust by being open and listening to residents’ input while being honest and direct about the necessary large-scale changes. All this begins with leadership.

Government policies need to create open, transparent, and fair mechanisms that ensure that people harmed by changes are compensated and made whole. To get buy in, all policies must come with a carrot and stick, and they must help reduce the anxiety of change. Policies must be seen as not targeting only one community or neighborhood.

A Master Plan

Along with building trust is the need for a new master plan, not one that tries to tame or control the city, but one that lays out the mechanisms by which neighborhoods will get needed housing, services, and infrastructure upgrades.

What does the plan include?

Transportation

First, it must make driving more expensive. Too many cars choke up the highways and streets and take up too much space for parking. An automobile-oriented lifestyle encourages sprawl and discourages the use of more efficient (and environmentally friendly) mass transit. The way to do this is to set congestion pricing on all the highways, bridges and tunnels, and parking meters. Let the cost of driving reflect the harm it imposes. When the streets and highways are flooded with cars, jack up the prices. Encourage people to use alternate forms of transportation or wait till the roads are under-utilized.

Second, once we can cut down on the number of cars, you can devote significant street usage to mass transit, be it dedicated bus lanes or streetcars. With fewer cars on the streets, more people will take up biking or electric scootering.

Housing

Improvements in transportation without encouraging more housing will only wind up making housing prices more expensive in places that become more accessible. We need a wholesale rethinking of our current zoning rules and affordable housing policies. The key to housing is to let the market decide how much housing is demanded in a neighborhood.

Land values are the best indicator of demand, and when land values rise, it means more people want to live in that neighborhood than are being accommodated. When housing construction is truly able to follow increases in land prices, all neighborhoods, not just central city gentrifying ones, will get their fair share of construction. This new construction will help keep prices in check. But housing markets must be much more fluid for this to happen.

Climate Change

Currently, the city is trying to sneak its way to resiliency—an expansion of the shoreline here, a resuscitation of wetlands there, fixing drainage pipes over there, and so on. But the truth is the problems caused by sea-level rise and more damaging storms and surges cannot be fixed with a few tweaks. The city needs to create a citywide mitigation plan that prepares Gotham for the 21st century and that also considers that climate change damages will make housing more unaffordable, either from lost units along the shorelines or from the costs of mitigation born by property owners.

The city is not using systematic planning now. For example, plans are afoot to build a seawall in New York Bay to protect against surges. During torrential storms, the sewage and rainwater pipes hit capacity forcing waste into the city’s waters. We can imagine a scenario during a hurricane where the seawall is raised and sewage pours into the harbor simultaneously, turning it into a giant toilet bowl. So, surges and storms impact the city in both vertical and horizontal directions at the same time.

The Future

New York has always managed to survive in the face of adversity. It is an economic engine, a home for immigrants, and a cultural dynamo. There’s every reason to believe that it will power its way to the future.

But ultimately, the question we must ask ourselves is: Don’t we prefer a city that works better for everyone rather than one that descends into tribalism and dysfunction? The policy answers to a better city are there. But the social and political will remain a stumbling block.

The myths we tell ourselves are powerful tools that can propel or block us. Thus, the first step forward is to abandon the tiresome tales of old that keep us locked in the past. Let’s develop a new set of stories about the resurrection of Gotham–one about how its residents came together to collectively slay the beasts that were harming its people, and how the city triumphed in the 21st century.

 

Thanks to Julia Sinitsky for her editorial assistance.

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[1] In New York, these countries are Nassau and Westchester, and in New Jersey are Hudson, Essex, Middlesex, and Bergen.

by Jason Barr 2 Comments

Skyscrapers and Housing Affordability: Debunking Misconceptions

Jason M. Barr (@JasonBarrRU)            March 23, 2021

Erin go Tweet

On March 9, 2021, Professor Ronan Lyons, an economist at Trinity College Dublin, tweeted about one of my research papers on global tall building construction.[1] Dr. Lyons has 24,000 followers (two orders of magnitude more than me, but you can follow me on Twitter here). His tweet mentioned the paper’s findings for Ireland. This set off a tweetstorm, with no shortage of opinions—mostly against—about skyscrapers in ancient Dublin town. This post is my response to that tweetstorm.

The Paper

Before I get to Ireland, let us turn to the research that started the whole kerfuffle. The paper is “Cities without Skylines: Worldwide Building-height Gaps, their Determinants, and their Implications” (by Remi Jedwab, Jan Brueckner, and me). The study attempts to understand the causes and consequences of building height restrictions around the world. It is the first to measure global differences and attitudes towards tall buildings.

We estimate the degree to which skyscrapers are “missing” from every country due to stringent building height regulations. To do this, we come up with a prediction of how much building height a nation “should have” if its real estate market was relatively open, and then compare this to the actual total building height. We call the difference the “building-height gap.” Higher gaps mean more “missing” buildings, given the income levels.

No Free Lunch from the Fear of Heights

The paper shows that the building-height gap is highest for richer countries and is driven mainly by stringency in the housing sector. The evidence also suggests that wealthier countries with higher gaps have older cities and are more interested in preserving their national heritage. Just as importantly, we also find that the gaps are positively related to sprawl, air pollution, and higher housing prices. In short, we see that countries with more restrictive building height regulations are imposing a degree of economic harm on their residents. One might say that there is no free lunch from the fear of heights.

Irish Developer Johnny Ronan Seeks to Building Ireland’s First Skyscraper. The 45-storey residential tower in the Dublin docklands would be the tallest building in the country Source: The Times.

The Tweebate

When we crunched the numbers and came up with the country that had the largest height gap per million urban residents, it turned out to be Ireland, which has no skyscrapers (100 meters or taller), though one is seemingly in the works. Across the world, there is a strong correlation between national income and building heights. Richer countries build taller, on average, because they are more urbanized. However, Ireland—and Dublin, in particular—is both relatively wealthy and has robust business services and financial sectors, which tend to promote tall building construction for both office and residential purposes.[2]

Professor Ronan argued that Dublin should not be so afraid of heights if it is genuinely concerned with housing affordability. Building upper-class high-rises can help, albeit in a small way, to reduce housing prices more broadly. This comment set off a flurry of responses about tall buildings’ impacts on affordability and urban form. Common among them were the typical tropes about skyscrapers and cities. I want to take this chance to rebut some common misconceptions. It is better to do it in long-form than on Twitter with endless 280-character back-and-forth jabs—peppered with personal attacks—which I find emotionally stressful and ultimately a poor vehicle for fruitful discussion.

 

Heights versus GDP. This graphs shows a country’s total tall-building height per thousand urban residents versus its gross domestic product (on log scales). Given Ireland’s relatively large GDP, it has fewer tall buildings than expected. The line gives the average tall-building height intensity for each GDP level. Source: Jedwab, Barr and Brueckner (2020).

Revisiting the Myths

Myth #1: “Building up is pricing up”

Because skyscrapers are expensive to build and operate, people believe that, by their very nature, they increase the price of housing, or as one Tweeter put it, “building up is pricing up.” But the opposite is true. The idea that building up is pricing up confuses correlation with causation.

Skyscrapers are a response to high land values. When land is expensive, it signals that the demand for that location is high and that people are willing to pay more to be there. As a result, developers respond to the demand by building tall. A high-rise building in a low-density suburb makes no economic sense. The prices of land do not justify the expense of going tall. This is why the vast majority of tall buildings around the world are in central metropolitan areas.

Anytime a building comes online, it slightly increases the supply, which reduces prices. This impact is often hidden in large cities with relatively little new construction because the demand side–which pumps prices up–swamps the supply side. However, if you dumped many high-price units on the market at the same time, it would push prices downward. Would it reduce prices all around the city? No, but it would certainly help in, say, a one-kilometer radius around the new construction.

Myth #2: “Skyscrapers cause gentrification” 

Gentrification is caused by high demand relative to low supply. When a new high-rise goes up, it has two effects. First is the supply-side effect, which reduces neighborhood prices, ever so slightly. However, because the tall building now allows for a denser neighborhood, it increases the demand for neighborhood services, such as coffee shops and pubs, which can draw more people in, further raising real estate prices.

But in a smooth-functioning market, rising prices due to increased amenities will be met with more housing, which would reduce the number of people who feel pushed out by the neighborhood’s increased attractiveness. Gentrification is caused by frictions or barriers to new construction, including tight building regulations and high construction costs. These barriers generate “fixed-pie” neighborhoods: those who can afford it can get a slice of the pie. The rest need to go elsewhere. More housing increases the size of the pie.

Myth #3: “Hong Kong has lots of skyscrapers. Hong Kong is expensive. Therefore, skyscrapers must make Hong Kong expensive.” 

While I will have more to say about Hong Kong in a future post, the opposite of this idea is true. Hong Kong is expensive not because of its skyscrapers, but despite them. Hong Kong’s problem is due to its unique land and housing markets.

The first is land scarcity. A large swath of the city has mountainous, steep terrain and is unsuitable for building. More importantly, the government owns all the land and doles it out in varying amounts. While the precise nexus between land supply and housing supply remains debatable, developers’ ability to quickly adjust the housing stock based on demand is highly constrained.

Additionally, Hong Kong has a dual housing market, which tends to lower affordability. 45% of housing units are owned by the government. The rest is free market. This two-tiered system encourages high-prices in the free one because no one leaves the cheap public housing (once you apply, the average waiting time is 5.7 years to get a public housing apartment), forcing the rest to seek out scarce market-rate shelter.

When big cities have two-tiered systems, the lower and middle-class residents who cannot get into the subsidized units are the ones who invariably suffer. Because new construction in the unregulated sector is limited, it will mostly be dedicated to high-priced housing accessible to the upper classes, leaving the rest to bear the brunt of the shortages.

Myth # 4: “Developers want to build skyscrapers everywhere.” 

Skyscraper construction is only profitable in locations where land values and real estate prices are high enough to incentivize construction. Because of their size and their occupants—upper-income folks—they tend to be viewed as agents of income inequality and gentrification.

But in any city with many building restrictions, developers find a way to provide new housing where there are the greatest profits—in the city center. There are many low-rise, middle-income neighborhoods throughout a city where new construction at slightly higher densities—for example, replacing one-family homes with four-story apartment buildings—could be profitable. But residents do not want new construction in their neighborhoods.

They shout, “Not in my backyard!” and then complain when skyscraper developers build high-rises in other people’s backyards. If you limit construction throughout the city, skyscrapers appear in the central pockets where developers can “squeeze” them in and make money satisfying the demand. They cannot satisfy the demand elsewhere because restrictive zoning or building regulations prohibit them from doing so.

Myth #5: “Goldilocks density should be imposed throughout the city” 

Jane Jacob’s 1961 classic book, The Death and Life of Great American Cities, sparked a debate about the ideal urban neighborhood. Jacobs wrote about her Greenwich Village street in virtually utopian terms. Recent research has confirmed that dense, low-rise mixed-use neighborhoods have all sorts of desirable characteristics: They have a diversity of people and amenities, their carbon footprints are lower, and they “feel” warm and cozy. These historic, pre-automobile neighborhoods represent in the minds of many a Goldilocks neighborhood—not too hot, not too cold, but just right.

The Goldilocks supporters rail against the “plutocrat” developers destroying neighborhoods with their elitist skyscrapers. The policy implication of this view boils down to “Not in my backyard!”—preserve the historical communities in amber to keep them precisely as Jane Jacobs described them six decades ago and ban tall buildings in urban centers. In essence, take the Paris route to urban land use policy: Forbid anything that does not conform to their notion of the perfect city.

In the Balance

Do not get me wrong: I love Greenwich Village and old New York, and historical preservation is vital! But we must also recognize the costs of these positions—historic preservation limits new construction, which raises prices. Additionally, the notion that there is one ideal density that should be mandated by law is absurd.

Skyscrapers in the center represent the demand to live in dense central areas, and if people demand more density, then tall buildings fulfill a need.[3]  Areas farther out from the center should be leafier and less dense—that is the benefit of living farther away. True Goldilocks density is a moving target, and land-use policies should reflect this by being flexible.

Having said this, if New Yorkers, like Parisians, want to “vote” to preserve their city as it existed a century ago, they should be clear that they prioritize aesthetics and historic preservation over affordability and that the closed city is to be only for the rich who can buy million-dollar studio apartments in low-rise Greenwich Village and let everyone else fend for themselves.

 Myth #6: “Skyscrapers destroy the ‘human scale‘” 

The perception is that tall buildings next to low-rise buildings or tall tower-in-the-park style high-rises destroy the “feel” of the city. This is an issue, aside from the economics of housing supply, that merits serious discussion. The fundamental question we face in the 21st century is how to create cities that are both affordable and enhance life satisfaction.

Detractors of tall buildings say that towers make the city “feel cold” and dampen the vitality of the streets. True, not all tall buildings fit within the urban fabric, and glass boxes can be alienating to passersby, but two important points need to be made.

First is that human scale and quality of life are more directly harmed by dependency on automobiles. Dense urban neighborhoods are inherently more vibrant than those with, say, sprawling suburban tracts and strip malls, or big cities that build six-lane highways directly through the center. If the aim is to create more livable cities, we should focus on creating critical densities that promote diverse populations, various uses, and more mobility.

Automobiles are a bad way to move people. They take up a lot of urban land for roads, parking and storage, and they are too easily subject to congestion. Four automobiles will, optimistically, carry eight commuters during rush hour. For the same length, a bus or streetcar can carry perhaps 50 or more people. Cars also promote sprawled-out, low-rise living.

If cities are really concerned about the quality of life, the focus should be on improving non-car-based mobility among urban residents first and then allowing neighborhoods to densify up based on where people want to be. Increasing density along subway lines and commuter rails is a great way to start.

Urban Umami

Secondly, as I have argued elsewhere, if we want to improve the feel of cities, we have at our disposal new methods and technologies that allow us to better understand human preferences and the psychology of streetscapes. Once we know this, municipal regulations can incentivize good urban design—to make new construction feel less oppressive in people’s minds, and blend better with the historical urban fabric.

Imposing low-rise density in the city center is inherently exclusionary since it generates housing shortages in the name of “human scale.” We all want to live in a city that feels nice, but only the rich can build cities that uphold their notions of ideal beauty but ignore economic realities.

The Manhattan Skyline from Central Park. Photo by Jason M. Barr.

Guiding Principles

While I will have more to say in future posts about urban policies that get us to cities that are both affordable and high-quality, we need to begin by clearing away the misconceptions about tall buildings. So, at the risk of repeating myself, let me summarize.

Supply and Demand

First, real estate markets operate like all markets—according to the laws of supply and demand. The more these laws are subverted, the more they wind up harming residents, usually in the form of unaffordable housing due to excessive building regulations and other frictions. All cities need to find the right balance between regulation and growth, and the current global affordability problem is driven, in large part, by the desire to guard and preserve the present and past city against fears of the future city.

Tall Buildings are Efficient

Second, skyscrapers are built in central areas where demand for housing is high. As such, they represent an efficient use of land. The fact that skyscrapers are more visible and tend to be for upper-income residents should not distract us from the fact that more housing is needed at all income brackets and at locations where cities experience an extreme “shortage” of housing.

A look at New York, for example, shows that about 50% of the entire residential land area is currently used for one- and two-family homes. This is inefficient. We should spend less time worrying about Manhattan skyscrapers and more time getting neighborhoods with four houses per acre (10 houses per hectare) to add more units.

Skyscrapers do not Belong Everywhere

Third, skyscrapers do not belong everywhere. They are not economically rational or practical outside central areas. In suburban districts, densification should entail converting smaller buildings to those that are a bit denser. People should have the right to convert one-family housing to two- or three-family housing or convert garages to rentable apartments, for example.[4]

More housing, regardless of the occupants’ income, can help reduce the price of housing. The key is that for a city to remain affordable, it must increase its supply faster than prices rise. When this happens, housing prices moderate. Tall buildings can help, though by themselves, they are not sufficient.

Missing the Forest for the Trees

Fourth, getting angry about one high-profile project each time it crops up is missing the forest for the trees. Focusing on one building or neighborhood at a time is not only inefficient but harmful for residents more broadly. Policies need to be citywide, and they must ensure that every neighborhood gets its fair share of housing based on the demand for those neighborhoods.

Livable Cities

Fifth, livable cities must begin with sound economics. If we want livable cities, we should abide by three principles.

  • Let density naturally arise where people want to be and let mixed-uses and diversity emerge along with it. High-rises should go where high-rises should go, and low-rises should go where low-rises should go.
  • Excessive automobile dependency subverts quality of life more than tall buildings. Simply creating central-city congestion pricing is not the answer. Any transportation system needs to maximize mobility and access, including pedestrian routes and bicycle usage.
  • Modern social science methods can now be used to better understand what kinds of building and street designs make people feel more at ease and encourage people to come out onto the streets. But implementing good design practices while ignoring the economic and transportation issues is insufficient to produce better cities. If we limit new construction, we wind up getting better-designed cities for rich people.

The Future City

All cities—ancient and new alike—must find the right balance between preserving the past and promoting the future. New York is New York and Dublin is Dublin because, historically speaking, these cities had the flexibility to add housing as the demand arose. Of course, the process was messy and led to a whole suite of building regulations to slow down cities’ ability to change. That is where we are today; the result is an affordability problem. We forget that the historical city was a much more dynamic place, and this dynamism created the magical metropolises we have today. We have nothing to fear but the fear of heights.

 

Thanks to Maria Thompson for her help with proofreading editing.

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[1] In the interest of full disclosure, Professor Lyons and I are research collaborators, though he did not work on the research paper discussed in this post. His Tweet was not discussed with me before he posted it. Professor Ronan has no relationship with Johnny Ronan, the developer proposing to build a 45-story tower in Dublin.

[2] Ireland has 4.9 million people, and the Dublin metro area has 1.23 million—nearly 20% of the population. Relative to other European nations, its urbanization rate of 63.41% is relatively low. But given its high income and Dublin’s successful economy, it under-produces tall buildings relative to similar countries.

[3] I also want to be clear that luxury high-rises should not be used by shell corporations to hide or launder money. I have written on this debate here and some policies that can address the negative externalities that might arise from billionaire condo skyscrapers.

[4] When I was in college, my friends and I rented the bottom floor of a large Victorian house near campus. Legend had it that was occupied by Vladimir Nabokov when he was teaching at Cornell. The top floor was converted to a separate two-bedroom apartment. All told, that house was able to comfortably accommodate at least six college students (and their dating partners). Today, such a conversion would be illegal in many cities and would mean that a small household living there would need to keep otherwise usable space unoccupied because the law requires it.

 

by Jason Barr 3 Comments

Skyscrapers, Housing, and Cities: A Q&A Interview with Ingrid Gould Ellen (Part I)

Jason M. Barr       June 17, 2019

Ingrid Gould Ellen is the Paulette Goddard Professor of Urban Policy and Planning at New York University, and a Faculty Director at the NYU Furman Center for Real Estate and Urban Policy. She is the author of Sharing America’s Neighborhoods: The Prospects for Stable Racial Integration and editor of The Dream Revisited: Contemporary Debates About Housing, Segregation and Opportunity.

On Skyscrapers and Housing

JB: One of the vigorous current debates regarding tall building construction is about luxury residential towers in places like New York, San Francisco, London, and Vancouver. Detractors argue they exacerbate gentrification and income inequality, while harming the quality of street life, and throwing shadows on the street and in parks. What’s your view on the effect of tall luxury residential buildings on cities? Should they be taxed or regulated? Or should they be encouraged?

IGE: The luxury construction boom is a very visible symbol of the inequality that characterizes our nation and our cities.  But it is a consequence of inequality not a cause. Rising inequality is helping to drive demand for this type of housing, but that doesn’t mean that limiting construction will do anything to reduce inequality. In fact, local regulations that add cost and risk to permitting and building may exacerbate affordability challenges and only further incentivize developers to build luxury housing.  So, it is really important to think rigorously about the potential effects of proposals to regulate the housing market and limit development.

With that said, building more market-rate housing under current conditions will not on its own fully solve the very real affordability challenges in the cities you mentioned, as there is a more fundamental problem that the cost of building and operating decent-quality housing outstrips the ability of many households to pay.  If we care about economic diversity in our cities, inclusionary zoning programs that require market-rate developers to build some affordable units or contribute to a housing trust fund can be effective in strong markets in helping to maintain economic diversity and the vitality that it supports.

On Skyscrapers and Street Life

JB: Related to this, when it comes to tall buildings for housing more broadly, there’s a strong belief that they diminish happiness, are bad for vibrant street life, and generate too many negative externalities. In a recent CityLab.com article, Richard Florida, writes:

When buildings become so massive that street life disappears, they can damp down and limit just this sort of interaction, creating the same isolation that is more commonly associated with sprawl. As Jane Jacobs aptly put it: ‘in the absence of a pedestrian scale, density can be big trouble.’ Skyscraper canyons of the sort that are found in many Asian mega-cities, and that are increasingly proposed in great American cities, risk becoming vertical suburbs, whose residents and occupants are less likely to engage frequently and widely with the hurly-burly of city life.

Would you like to offer your thoughts on this? Are tall buildings for housing antithetical to quality of life and the notion of the “good city”?

IGE: Jane Jacobs got a lot of things right when it comes to cities, and I fully agree that “in the absence of a pedestrian scale, density can be big trouble.”  But I don’t think that tall buildings are antithetical to a pedestrian scale. Tall buildings can be designed with attention and sensitivity to the pedestrians, with engaging street-level facades that house retail and other inviting uses.

Further, we have to consider the counterfactual.  In high-demand areas, the choice is to build up or to build out.  Building up helps to create high-density, walkable neighborhoods that are amenable to public transit.  Building out creates low-density, automobile-dependent areas, which are clearly antithetical to street life.  It’s possible that buildings might get so tall that costs outweigh benefits; but given the zoning restrictions that govern building in cities around the U.S. and many cities in the world, I think we are far away from that point.

Rise of the Superslim Luxury Towers along Central Park South. Photo by Jason Barr.

On Gentrification

JB: Gentrification in the 21st century is a hot-button issue. The conventional wisdom is that it causes widespread displacement of low-income residents. And cities like Newark, New Jersey, are now actively seeking to prevent it. Based on your research, what are your thoughts on the impacts of gentrification in cities like New York and San Francisco? Do you see, on net, more harm than good coming from gentrification, or the other way around, and if so, why?

IGE: Gentrification is a complicated process, with many potential effects.  Most of the discussion around gentrification focuses on direct displacement of existing residents and low-income renters in particular.  Yet most of the research that has been conducted on gentrification (including work I’ve done recently in New York City) finds little evidence that low-income renters are more likely to be displaced in gentrifying neighborhoods.  To be clear, this research doesn’t say that no tenants are displaced; rather it suggests that turnover rates for low-income renters are no higher in gentrifying neighborhoods than they are in other poor neighborhoods.  Low-income renters are unfortunately at risk of displacement in all types of neighborhoods.  It’s also true that gentrification tends to come with rising rents, which make it more difficult for new low-income households to move into a neighborhood over time.

While few acknowledge any good that comes from gentrification, we might see a glimmer of hope if we look at gentrification through the lens of integration.  The moves that higher-income, white households make into predominantly minority, lower-income neighborhoods are moves that help to integrate those neighborhoods, at least in the near-term.  The key is whether this integration will last, and what policies can help to sustain it.

On Gentrification Policies

JB: If you were advising a mayor who was worried about gentrification, what policies would you suggest? What might be the best way to help people who are negatively or unfairly impacted by neighborhood changes due to gentrification? Would you tell the Mayor of Newark that his fears about Newark turning into the next Brooklyn are warranted?

IGE: Most policy discussions surrounding gentrification center on efforts to protect individual residents at risk of displacement through legal representation or tenant-based vouchers. Policies to protect existing tenants from harassment and unjust evictions are critical. But if the mayor cares about diversity and integration, I would also encourage her to consider policies that keep neighborhoods open to a diversity of in-movers, since it is the people moving into a neighborhood who ultimately drive neighborhood composition. For example, creating and preserving place-based, subsidized housing in gentrifying neighborhoods can help to lock in diversity over the longer term and help to affirmatively further fair housing. While New York City may be an outlier, more than 10 percent of housing units in most gentrifying areas of the city are public housing units, and a significant share are subsidized through other programs.  If preserved over time, these units can assure some level of economic mixing, and potentially racial mixing too.

It’s also worth noting that while gentrification is a real phenomenon in many cities, far more households around the country live in neighborhoods with persistent poverty.  Mayors should not ignore the challenges faced by these neighborhoods and their residents.

The High line Park in Manhattan. While the park is a rare urban gem, it is blamed for gentrification in the surrounding neighborhood. Photo source: NY Observer.

On Homelessness

JB: Large cities in the U.S. are also seeing terrible increases in homelessness.  Based on your research, what has been the driving factors behind this?

IGE: I’ve learned most of what I know about research on homelessness from Brendan O’Flaherty, of Columbia University.  His excellent book, Making Room, argues that homelessness is caused in part by growing income polarization and the disappearance of the middle class. Specifically, the reduction in the number of middle-income households has meant less housing built for them that can filter down to the poor.  This has also meant higher rents for the little low-quality housing that is available.

More recently, he has published a very useful review paper in the Journal of Housing Economics. While he highlights a lot of advances in our understanding, he also argues that we really don’t understand why New York and Los Angeles have seen such large increases in homelessness in the past decade, at a time when homelessness across the country appears to have declined.  In general, weather, high housing costs and poor labor markets contribute to homelessness, but they do not explain all of the variation.

On Reducing Homelessness

JB: Relatedly, what kinds of policies should mayors and governors be implementing to reduce the homeless population?

That requires a very long answer!  But let me focus on prevention policies, which have been found to be promising if they are well-targeted.  Studies of New York City’s Homebase program have found that it successfully reduces entries to shelter.  The challenge is identifying the households most at risk of homelessness. Many of the families who seek assistance from Homebase would not become homeless in the absence of assistance.  There is considerable randomness in which poor families actually become homeless, but individuals likely have some private information about their risk.  Prevention programs should figure out creative ways to elicit this information and thus target their services more effectively.

You asked about what mayors and governors can do, but there’s a lot that the federal government can do too. Currently, only one in four income-eligible households in the country receives federal rental subsidies, which significantly reduce the risk of homelessness.

 

Keep Reading: Part II of this Q&A Interview with Ingrid Gould Ellen can be read here.

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Building the Skyline can be purchased through Amazon or Oxford University Press.

Credits

The New Amsterdam map on this page was sourced here, and the atlas image is from the 1891 Atlas of City of New York by GW Bromley & Co.

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