Housing shortage

Newsflash

Human beings living in LA, San Francisco, London, Vancouver, Boston, Portland, Sydney, Seattle, Toronto, and many other places where home prices are surging have forgotten how to build homes and apartments. They’ve lost their hammers and saws. They are short of nails and screws.

It’s a national, indeed international, crisis.

We need new national housing policies right away!

We need to pass more laws!

Like the MAKE HOUSING AFFORDABLE AGAIN VIA SOURCING MORE HAMMERS, NAILS, SAWS AND SCREWS ACT.

This new MHAAVSMHNSAS Act will join other government initiatives to render housing more affordable like:

-implementing rent control, which reduces the availability of new housing and hurts the very people it is meant to help by making rent-controlled units primarily available to those with the best credit ratings and good jobs

-restricting supply of available lands for development in many cities across the planet

-artificially limiting building height, density and intensity (mixing together of different types of uses to produce walkable live-work-learn-play-entertain-make-create-earn communities)

-imposing additional taxes on development such as dreaded development charges supposedly to pay for off-site infrastructure

In Canada, prime minister Justin Trudeau announced a new $40 billion, 10-year national housing strategy (https://www.cbc.ca/news/politics/housing-national-benefit-1.4413615) whose centerpiece is a $2,500 per year rent subsidy, which is as likely to be effective as all of the above programs and policies, that is to say, totally ineffective.

I would guess that clever landlords will find a way to circumvent whatever bizarrely complex rules Mr Trudeau’s government will enact around this subsidy so that a tenant who currently has a bachelor apartment they are renting for $700 a month will end up paying $900; ie, the bulk of that money, I believe, will end up in their landlord’s pocket. Basically, on the pretext that their rent is actually not increasing–it’s still $700 with the balance being graciously provided by Canada.

If governments everywhere and anywhere want a real housing policy, one that is guaranteed to work, all they need to know is this: Unless there is a dramatic increase in housing supply, prices in desirable cities will continue to skyrocket to unimaginable levels.

For example, you too can own a 5-bed, 9-bath (as to why anyone would need nine bathrooms in a 5-bedroom home is unknowable unless they have really tiny bladders or poor bladder control or both) 14,213 sf home in LA for $45 million USD. What a steal/deal!

If you pierce the veil of baffle-gab that governments in all nations and at all levels put out, the real reason they introduce policies that are actively designed to protect and, in fact, increase housing prices is that they are playing to their base–their political base, that is. You see existing homeowners tend to vote a lot more assiduously than renters do, and there is nothing they like better than policies that enhance the value of their properties.

Makes sense, right?

From their POV.

Then they enact sops to those they’ve hurt like the $2,500 voucher program referred to above in a bread-and-circuses (panem et circenses) move worthy of a Juvenal satire inspired Roman despot circa the second century AD.

If they really want to fix the underlying causes, federal, state, provincial, municipal, township, and country governments are going to have to:

a) face down CAVE (citizens against virtually everything) people so that they can get more homes and apartments built sooner

b) defang their zoning codes so that artificial limits to building heights, land supply, densities and intensities are kaput

c) increase the supply of land available for new housing.

Now that’s a real national housing strategy.

Everything else is window dressing.

If national governments find local opposition to new supply too tough to overcome, well, there’s a solution for that as well.

Open up lands they already own to longterm land-leases–let developers lease federal lands (usually not subject to local municipal bylaws and ordinances otherwise known as artificial-land-supply-shortage generators) for 65-years and build millions more microsuites and small apartments for lease or purchase.

I have clients that I coach in Ottawa and San Francisco. One of them is building a 15-unit microsuite project in Ottawa. His land cost for an infill site close to downtown?

Around $270,000 for a 50′ by 100′ lot. That’s in Canadian pesos, err dollars.

The cost for an almost identically sized piece of land in San Fran?

$2,199,000 USD.

And that’s zoned for just 6 units so the cost per unit in San Francisco ($366,500 USD) is even more lopsided when compared with Ottawa ($18,000 CAD per door).

Here’s the mls listing for that infill lot on 28th avenue in San Fran:

And here’s a google street view of the tear-down that the current owner has put up for sale on that site:

In my latest learning outcome novel (Jenna’s Story, https://brucemfirestone.com/product/jennas-story/), Jenna McConnell leads a (future) rebellion of homeless and impoverished people (basically, everyone who is not already an equity lord). Here’s what they do (as described by Ms McConnell’s friend, San Francisco-based Tom Hatch)—

There are a lot of changes happening in his neighborhood, and around the nation as what everyone has taken to calling “pod people” invade cites and towns across America.

They’re not exactly the same as the aliens who invaded the US in Jack Finney’s classic 1955 novel, the Invasion of the Body Snatchers, but might as well be as far as equity lords, police and Homeland Security Squad are concerned.

Immigrants, illegal aliens, people of color, the poor and homeless as well as a surprising number of middleclass people are riding in on long wagon trains of mobile pods—quantum tunnel generated micro homes that are sleek, jelly bean shaped, canvas-colored places on wheels. They are self propelled by small EMP engines so they don’t move very fast, but they are quicker than 19^th century Conestoga heavy wagons that, when fully loaded with up to 6 tons of cargo and people, could only travel a maximum of 4 mph.

In his neck of the woods, these pods have colonized almost every green space in San Francisco—Golden Gate Park, Lands End, Lake Merced Park, Potrero Hill, Lafayette Park, Gleneagles Golf Course at McLaren Park, Presidio Golf Course—and when these places filled up, pod people who came in later waves have taken to parking them on streets, in squares, even in backyards, front yards and side yards of private homes and buildings.

They’ve also crossed the Golden Gate Bridge invading Sausalito and surrounding zones including the Golden Gate National Recreation Area.

Millions of Americans are giving notice to their landlords, electing instead to buy a pod from Federal Unincorporated Company Kabooses, a not-for-profit manufacturer of these homes run by…

The working poor with their mobile pods are obviously inspired by today’s tiny house movement what with its tagline being: less house more life although I sort of changed that to less rent more life.

I had visions while I wrote Jenna’s Story of millions of modern versions of Colorado-based Sprout tiny homes colonizing the public realm including the White House’s front lawn and the Parliamentary precinct in Ottawa.

And then I saw Tesla’s newest truck and realized it wouldn’t take much for Elon Musk to turn it into a self-contained, energy self-sufficient mobile pod for the masses:

Go Elon!

In fact, I’m working on a design for a pushcart home to help with homelessness…

Want to see my sketch?

Here it is:

Anyway, City Lab concludes that “by 2025 it is estimated that 1.6 billion people—a fifth of the world’s population—will lack access to secure, adequate, and affordable housing.” [https://www.citylab.com/equity/2017/07/solving-the-global-housing-crisis/533592/]

So, my goal of millions more microsuites and small apartments for lease or purchase needed might actually be out (on the low side) by a factor of 1000.

Here’s another excerpt from Jenna’s Story. In this part of the learning outcome novel, a group of of people including Jenna, Tom, Tom’s former high school teacher, Nate Rebich, Paco, a band-mate of Tom’s and others are sitting around in a local diner talking about what is going on around them–as the pod invasion gathers steam.

Mr Rebich sets out to prove to his audience that homeowners, investors, cities and towns should not fear the influx of tiny homes or the densification and intensification of their neighborhoods. In fact, Nate argues, property values will go up not down as long as public order is maintained:

“How do you know, Mr Rebich, that equity lord property values will go up not down if there is a pod invasion?” Paco asks.

“Well, I can prove it to you.”

He boots up another field.

“In the table below, we calculated the cap rate on a theoretical tiny house at 10.9% pa, which is quite a bit higher than your “normal” residential rental (around 6.4% pa).

how in-fill, tiny houses, coach houses, in-law suites add value to a neighborhood

“If you apply a “normal” cap rate to the total annual net operating income for both the bungalow and tiny house, you get an increase in property value of $170,833. But the tiny house only cost $100,000 in this example to build and install (or buy and install or field generate[1]), which means this proud equity lord made a capital “profit” of $70,833 on her/his investment.

“In other words, her/his property’s fair market value went up an extra $70,833 over and above their costs, as long as public order is maintained…

“They will also, in my view, make our cities and towns more interesting and animated.

“Some people are banding together to try to change these anti-tiny house views and regulations,” here Nate looks directly at Jenna, who already knows that he has an A on him because hers vibrated noiselessly when he first came in the room, and flashed at her as did hers at him.

[1] Real buildings have the advantage over field generated ones that, once they’re erected, landlords or owners only have to worry about paying repair and maintenance costs as well as expensing depreciation and amortization (if they have a mortgage on the property) on their accounting statements. Field generated buildings must pay monthly platform access fees; failure to do so results in revocation—your building simply disappears. Before vanishing, the Aye will cause your structure to ring scarily; it actually sounds a lot like the bells of the Cathedral of Saint Tryphon in Kotor, Montenegro, which have been in continuous use since being consecrated on June 19^th, 1166. If you don’t leave immediately, you’ll simply fall out of an empty sky. If you are hearing impaired, no worries… the Aye also pulses then strobes the structure before zeroing it out so you should have plenty of warning that now would be a good time to evacuate. Lastly, equity landlords have no trouble evicting tenants who don’t pay their rent these days since the Aye can also selectively dematerialize individual apartments. Lastly, the capital cost of a field generated building is simply the present value of an infinite series of monthly platform access fees, which can be found by dividing annual Aye payments by an appropriate cap rate. Equity lords take the same approach when estimating the value of a human life to them—they straightforwardly take the expected value of a person’s annual earnings and divide it by the relevant cap rate. Currently, those values are 3,000,000 Euros and 2.75 million USD, in Europe and America, respectively, and dropping as both national and global economies falter.

Prof Bruce

Bruce M Firestone, B Eng (civil), M Eng-Sci, PhD, Ottawa Senators founder, Real Estate Investment and Business coach, ROYAL LePAGE Performance Realty broker, 1-613-762-8884 bruce.firestone@century21.ca twitter.com/ProfBruce profbruce.tumblr.com/archive brucemfirestone.com

MAKING IMPOSSIBLE POSSIBLE

postscript: music to play while reading this article, Everything Now by Arcade Fire, https://youtu.be/zC30BYR3CUk

Every inch of sky’s got a star
Every inch of skin’s got a scar
I guess that you’ve got everything now
Every inch of space in your head
Is filled up with the things that you read
I guess you’ve got everything now
And every film that you’ve ever seen
Fills the spaces up in your dreams
That reminds me

(Everything now
Everything now)
…

postscript 2: during my time teaching at Carleton University’s Azrieli School of Architecture and Urbanism, I put together a list of urban catalysts and anti-catalysts. Here’s an excerpt from Real Estate Handbook, https://brucemfirestone.com/product/real-estate-handbook/:

Catalysts and Anti-Catalysts affecting Urban Growth and Development

Catalysts

Common traits found within cities, boroughs and communities that are experiencing prosperity

Here is a list of urban catalysts/anti-catalysts put together by the author during his time at Carleton University’s School of Architecture–

• Education

• Employment

• Honest City or State Government (a precondition for economic take-off)

• De-Regulation of Zoning By-Laws- use of ‘performance zoning’, reliance on building code, health code, fire safety and ‘do no harm’ rules

• Mixed Use Development (i.e. Commercial, Residential, Recreational, Educational, Markets, Cultural and Entertainment)

• Adequate Public Transit System- big time people movers allowing higher densities

• De-Segregation of Social Structure

• Distribution of populations- mixing of income groups and socio-economic strata, dispersal as opposed to concentration of ‘unwanted’ uses such as shelters, halfway houses, rooming houses, duplexes, triplexes, jails and other ‘less desirable’ development amongst many communities to create less threatening environments

• Mixing together of building forms to produce a variegated skyline and individuation of address

• Requirement for architectural intervention to give building forms individualized expression and design promoting civic pride and a sense of self worth while avoiding tract housing look and feel as well as inferior construction and materials

• Renewed Civic Presence

• A Visible Police Presence & (On-the-Beat) Interaction Within the Community

• A General Respect for Public and Private Property and quasi public spaces (the ‘public room’)

• Zero Tolerance Towards Acts of Vandalism, police on the beat and out of their police cruisers

• Investment by Public and Private Interests- encouragement of gentrification through tax holidays and other special assessments including reconstruction of public infrastructure including roadways as beacons (initiators) of economic development

• Strong Public Interest & Motivation

• Supportive Political Advocacy instilling a sense of hope and civic pride back into the community

• Land Growth Potential

• Establish and Maintain Basic Social Infrastructure (i.e. Health, Education, Sanitation, Day Care, Recreational Facilities etc.)

• Municipal and Collective action re. Funding and Tax Incentives with Respect to Civic Reform and Urban Renewal.

• Involvement of various Community and Urban Interest Groups (i.e. C.N.U. or Congress for New Urbanism etc.)

• Build UP not Out! (minimum densities not maximums!)

• Look to ‘Smart Growth’ Solutions and innovative design to exploit underdeveloped sites

• Home Ownership and belongingness (identification by the people with their surroundings giving them mental, physical, spiritual and, eventually, financial stake; a feeling of possession)

• Mixing of uses, variation in housing types and dispersion of ‘less desirable’ uses leaves a buffering role for the single family home

• Sense of ownership cause people to remain in the same neighborhood even as their financial situation improves

• Institutions (cultural, educational…), domains of shared values and interests, neighborhood participation and programmatic ideas and themes (festivals, street dances, mural art, …)

• Gardens, market gardens, urban farms

• window-on-the-world architecture (retail and residential uses at grade emptying onto the street with zero frontyard setbacks)

• use of glazing and portals at grade

• presenting your buildings to the street (+.5 to 1 metre to road grades)

• o sideyard and frontyard setbacks

• traffic calming including on street parking, left turns permitted

• gridded streets and connectedness between neighborhoods

• connected open space, conservation subdivision design

• parks need active recreation to act as a hub for the community- passive recreation is not sufficient to improve community safety

• uniform transition lines (eg., retail at grade with different treatment transitioning to offices and residential above at prescribed height above grade)

• parking underground or at rear or on-street

• vertical windows

• golden section design

• steep pitched roof lines with eaves

• complete roof treatment

• consistent street planting and uniform tree placement

• boulevard design instead of collector streets or freeways

• front porches

• granny flats, in-home apartments, above garage apartments, duplexes, triplexes, brownstones, row housing, rooming houses permitted

• work from home, in home businesses permitted with employees- increase in use of expensive infrastructure including housing stock and increased daytime block safety

• Civil dialogue between urbanists and environmentalists

• Consensus or, at least, a process for reaching civic consensus (eg., charettes) amongst community groups, urban planners, municipal politicians, developers, residents, conservationists and other special interest groups

• clear legal title

• legal process for obtaining clear legal title through power-of-sale process

• sanctity of contracts

• protection of private property rights from confiscatory policies restricting uses including building form and type of use, rent control, density limits, downzoning, signage, wind rights, air rights, riparian rights, subsurface rights, grazing rights, …

• protection from arbitrary expropriation

• broadband access

• adopt-a-cop programs- direct community interaction with police

• higher density residential communities using low rise, street oriented housing forms instead of high rises, encouraging development of ‘theatre of the street’ and block safety

• home grown solutions, local initiatives, taking matters into ‘your own hands’, community ‘buy-in’ supported by appropriate public policy

• enterprise zones

• government supported micro-loans to local entrepreneur start-ups

• tax abatements (realty taxes, excise taxes, duty free zones, …)

• mortgage availability for purchase and renovation of derelict, abandoned and deficient buildings and homes

• repopulation of downtown

• repopulation of abandoned sites

• replacement of parking lots and unsafe parks with residential buildings

• Feng Shui- letting the light in, managing building pressures and the wind, respecting the top of the mountain and high places and views, nestling structures into hillsides, locating windows and doors and people spaces so they relate to inside and outside realities

• Constructing welcoming buildings- bringing the outside in and the inside out (tropical climes and northern climes too)

• ‘Organic’ architecture- structures that seem to have grown on their sites rather than having been constructed

Anti-Catalysts

Common traits found within cities, boroughs, and communities which have experienced serious urban decay

• Corruption in city or state government

• De-Industrialization

• De-Population- flight to gated communities and suburbia

• Property taxes levied on improved values instead of unimproved land values (a tax on renovation)

• Racial, Social and Economic Segregation

• Crime (“Value can only be created when social order prevails”)

• Neglect- ‘holes’ in the urban fabric

• Abandonment- land and buildings achieve negative value (rent curves are negative)

• Tax sales- city repossessions for unpaid taxes

• Obsolete, Oppressive and overly specific Zoning By-Laws

• “Broken Windows Syndrome”

• Rent Control

• Homelessness

• Neighborhood Pollution (i.e. litter, air, water, soil, etc.)

• Suburban Exile/Suburban Apartheid

• Lack of Adequate Public Transit System

• N.I.M.B.Y. Mentality

• Building OUT instead of UP

• Social/Economic Dependence

• Lack of Public Resonance, Concern or Civic Pride

• Low Development Density

• Shortage of Urban Infill

• Dis-Investment by Public and Private Interests

• Lack of Basic Social Programs (i.e. Health, Education, Sanitation, Day Care, Recreational Facilities etc.)

• Tenements (a.k.a. “Towers In The Park”) and derelict and abandoned buildings

• Unemployment

• Home invasions

• Criminal and disruptive elements living in neighborhoods and the ‘next door’ apartment

• absentee ownership

• failed renovations

• fraudulent speculators

• mortgages in excess of FMV (fair market value)

• shoddy workpersonship and incomplete work

• mortgage defaults

• tax liens and foreclosures

Defining Characteristics of Urban Deterioration*

(* North American Physical Clues that distinguish areas of urban decay)

• Overgrown, derelict sites

• Street lights out.

• Peeling Paint

• Broken windows

• Numerous “For Lease/For Sale” signs

• Prostitution

• Drugs

• “Panhandlers”

• Homeless

• Roaming Gangs

• Absence of police, or excessive police presence

• Graffiti

• Ports

• Heavy industry

• Air pollution

• Noise Pollution

• Abandoned cars

• Defended institutions and homes

• Razor wire, barb wire, security fencing, video surveillance

• Large recent immigrant population and those just starting out.

Bounding Characteristics of Urban Class Distinction

• Highways and freeways

• Railroad tracks

• Racial Segregation

• Parkland

• Waterfront access

• Elevations (higher elevations imply higher rents except where access to water and waterfront takes priority)

• Wind Directions… west side is usually the prosperous areas are located, while depleted areas are more commonly seen to develop on the east side. (“Go west young man, break bread in the new land…” First immigration began from the east and as people began to prosper, they generally moved west.)

• Car traffic directionality (well-to-do people live in the west end, drive to work later and drive home later to avoid glare from sun; industrial workers in the east end leave for work earlier and leave for home earlier)