Solutions Sidebar: Fifty-four ways to make or keep housing affordable with Shane Phillips

Shane Phillips says we’re not building as much housing as we did in the 1960s when we had 120 million fewer people. He says the scarcity has caught up with us and offers up 54 ideas to tackle the housing crisis. In The Affordable City Phillips suggests everything from letting renters decide what they value to prioritizing the three S’s: Supply, Stability and Subsidy. 

Interview guest: Shane Phillips, urban planner, policy expert, podcast host and author of The Affordable City. 

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Ann Thompson:

Want to know how to tackle the housing crisis? Shane Phillips has 54 ideas and counting. He drills down on the most important.

Shane Phillips:

We really need some kind of state level guidance and a kind of holding everyone to some minimum standard. And perhaps that's going to be a next step in Ohio as it has been in 6, 7, 8 other states already in the past several years.

Ann Thompson:

But according to his book, The Affordable City, we have a long way to go and to make meaningful change. Groups that are often at odds have to work together,

Shane Phillips:

Get these different groups on the same page, and make sure everyone has their interests met, their needs met to some extent, and we're not ignoring one group or another entirely.

Ann Thompson:

On this episode, we break format from our typical show for something we call a Solutions Sidebar. Brick by Brick sits down with author podcaster, blogger and urban planner, Shane Phillips, my colleagues Hearns Laguerre Jr. And Emiko Moore join me at the end for some takeaways. Let's get into it. This is Brick by Brick: Solutions for a thriving community.

Ame Clase:

Brick by Brick is made possible thanks to leading support from t e Debra and Robert Chavez and Greater Cincinnati Foundation. With additional major support from AES Ohio Foundation, Laurie Johnston; Susan Howarth Foundation, the George and Margaret McLane Foundation, Diane and Dave Moccia, The Robert and Jean Penny Endowment Fund of The Dayton Foundation, the Robert & Adelle Schiff Family Foundation, and more. Thank you.

Ann Thompson:

Shane Phillips, author of the Affordable City. Welcome to Brick by Brick.

Shane Phillips:

Thank you for having me.

Ann Thompson:

You have 54 ideas to help solve the housing crisis. How did you come up with them?

Shane Phillips:

Well, the book itself was sort of a brain dump for me in a way. It was just having worked in housing policy for a long time. There were just so many options that people needed to consider were considering, and my goal with the book was really just to enumerate as many as I could that actually had some promise. And so it was just picked up from research, picked up from practice, picked up from reading others' experiences and trying to find a way to fit them all together as best as possible.

Ann Thompson:

At the beginning of your book, you stress the ideas can only happen if certain key groups of people work together. Who are those groups and what are the three S's that should be their focus?

Shane Phillips:

I mean there's a whole range of groups and it's going to vary by community because different interests and constituencies will be more or less represented, but you need renters and homeowners. You need affordable housing builders and market housing builders. You need architects, labor unions, faith groups, environmental groups, businesses. It's the whole picture really. And so my goal with the book in part beyond just listing a whole bunch of policies and what cities and planners should think about when implementing them, was to come up with a framework to as much as possible, get these different groups on the same page and make sure everyone has their interests met, their needs met to some extent, and we're not ignoring one group or another entirely. And so the framework I came up with for that was the three S's, supply stability and subsidy supply ultimately is just a recognition and really the point of the three Ss is these can sometimes be in tension with one another and yet they're all important and so we have to find a way to make them work together.

And so the supply part of this is just really a recognition that you have to have an abundant supply of housing and diverse housing choices to be affordable because scarce housing is always unaffordable housing. There's no real exception to that rule. You have to have stability because even housing that is affordable has kind of limited value if the residents don't know if it's going to be affordable next year or if they have to worry about being evicted for reasons beyond their control among other things. And then we need subsidies because a well-regulated market can serve most people and we see in places where the market functions much better that housing tends to be more affordable, but it's never going to provide for the needs of everyone in every situation. Inequality is real. People's lives can be volatile and sometimes you're just going to have people who need assistance to put some solid ground under their feet and not everyone has the social or family networks to reliably provide that assistance.

Ann Thompson:

When you created the list of the 54 ideas, it sounds like one of your motivations was that you noticed not a lot of housing has been created and maybe you were wondering why or you thought that was the reason for some of these problems?

Shane Phillips:

Yeah, it absolutely is. Frankly, the reason that the United States has an affordability crisis and it's a crisis that has really started in places like Los Angeles and New York and Seattle and cascaded down into places with secondary levels of demand and tertiary, it's just a problem that has now affected essentially the entire country. But I think especially if you live in a city, you might see what feels like a lot of development and think like, wow, look at this housing boom and yet housing prices keep going up. This clearly isn't the solution, this isn't working. Part of the reason it feels that way is because we limit where you can build multifamily housing to such a small area and because we limit it to such an area to so few neighborhoods, so few parcels, the housing that needs to be built on them needs to be really dense because it has to provide for everyone for the next decades.

But if you actually look at building permits at housing starts at all the data on the housing we've been building over the past, let's say 60 years, it has been in a steady, consistent decline year after year after year. It goes up and down with a business cycle, but let's say decade after decade, it's just less every single decade. That follows to the point where we are building not just less housing per capita, we are building less housing period each year in the United States today and over the past decade than we were in the 1960s when we had about a hundred, 120 million fewer people in this country. This is the hole we've been digging ourselves into the housing crisis for 30 or 40 years, and given the long life of housing and how long it takes to change the built environment, it is going to take perhaps just as long to fully dig out of the hole, but it's at least a 5, 10, 15 year process to really start to make real progress.

Ann Thompson:

In terms of your 54 ideas, you have prioritized some. The first two on your do without delay list, Brick by Brick did a deep dive into one eliminating density limits. That was episode three and eliminating parking requirements episode six. You can check those out at cetconnect.org and thinktv.org. Number three on the list is let renters decide what they value. What do you mean and how do renters do that?

Shane Phillips:

Yeah, that was a little bit of an indirect title for the policy, but that was essentially about micro units, smaller housing in general as I recall, and it's essentially, it's really a recognition that a tenant cannot judge whether their building is earthquake safe or whether the electrical system is going to burn their house down. And so it is very important that we have strict building codes that mandate specific safe practices and that we have inspections and these kinds of things. The same is not really true for making sure that the minimum unit is 600 feet square feet. For example, if a tenant wants to live in a smaller unit and pay less for the privilege, then I think we should allow them to do that. There are obviously limits to that kind of way of thinking. You can't put people in a closet and call that a home, but plenty of people, especially in more urban areas, would happily choose to live in say a 400 square foot unit and really use the downtown or their urban neighborhood as their living room rather than have to spend hundreds of dollars more for a 700 square foot unit if that's what's available, or live with roommates or just have to move out to the suburbs.

Given all of those choices, the micro unit might actually be the thing that they prefer to do and people really are the best judge of whether that is the right thing for them or not. Again, we need certain kinds of regulations to actually protect people's health and safety. These very high minimum unit size requirements, the requirement that every home be a detached single family home that's making decisions for people that are best left to them,

Ann Thompson:

One of your big concerns is the projected loss of affordable rentals and the affordability restrictions on at least 1 million publicly subsidized homes, as you point out, started expiring in 2017 and is going to continue through 2027. That will require governments to pay more money to keep those units affordable. Diverting resources needed to grow the stock of affordable homes. Those that don't have their affordability covenants extended will then revert to market rate and no longer be affordable. How serious is this problem?

Shane Phillips:

It is a serious problem. I mean, again, it's going to depend a lot on the community and the rules around these affordability terms vary a lot. So I think the 2017 date that you're referring to is that's 30 years after the establishment of the low-income housing tax credit program, which produces most of the deed restricted below market affordable housing in the country nowadays about a hundred thousand units per year, and so the term generally expires after 30 years, and so something built 30 years ago is probably expiring right about now. Something built 10 years ago is probably expiring in about 20 years, so it's a consistent ongoing issue that you just kind of have to deal with. One thing that I have recommended based in part on my experience here in California and seeing in other cities and states is just increasing the term of affordability for a lot of these subsidized projects and sometimes unsubsidized projects if they're required to include some below market affordable units. I see.

Ann Thompson:

Well, we're covering a lot of ground and kind of jumping around unfortunately, and we can't cover all 54 of your ideas on your do without delay list. You have another idea, don't sell public land, just lease it. Are you seeing cities do this and how would that work?

Shane Phillips:

I see it a little bit. I think it's a growing trend. The example I use is Marina del Rey in Los Angeles, a big coastal kind of community that was built maybe 30, 40 years ago. But the general idea here is cities will sometimes, especially in a fiscal emergency like the global financial crisis for example, look to their assets including their land and just have a fire sale, sell 'em off, which is actually the worst time when it's least valuable. But I think actually any time is probably not a good time in part because I think in almost every case, if people were to look back 40 years from now, 50 years from now, a hundred years from now, they might regret not having that land available for some kind of public use. And frankly, we have a lot of private land all over the place that we can build a lot of the things we need, but I think if you can afford to just lease the land, let someone build on it, let 'em feel free, let 'em build on it, and just have them pay rent to you indefinitely, that's a more consistent stream of income that you can just rely on forever.

Developers have pretty short horizons. They're really thinking about 10 years from now when I want to sell my completed project, that kind of thing. In theory, the time horizon of a city is forever, and so this idea of even selling something and 50 years in the future, not having it anymore, that's something you've given up that might be around for hundreds more years and you're just never going to have that resource again. So I think there's real value in holding onto these things when you can.

Ann Thompson:

I hope you're enjoying our conversation with Shane Phillips. There's more still ahead following this short break. This is Brick by brick.

Ame Clase:

Brick by Brick is made possible thanks to the generous support of so many, including Murray & Agnes Seasongood Good Government Foundation, Rosmary & Mark Schlachter, The Camden Foundation, Patti & Fred Heldman, DeeDee & Gary West, The Stephen H. Wilder Foundation, Judith & Thomas Thompson... a donation in memory of Frank and Margaret Linhardt, and more. Thank you. We couldn't do this work without you.

Emiko Moore

Hey, it's Emiko Moore from Brick by Brick. Our new podcast is about finding solutions that will allow our communities to thrive. What does a vibrant and engaging neighborhood look like to you? Maybe it has more restaurants, coffee shops and art galleries, more multi-generational park activities, or a livelier music scene. We want to know. Please go to the Brick by Brick show page on cetconnect.org or thinktv.org. Just click on the green audience button and tell us what a thriving community looks like to you. You can also email us at Brick by@publicmediaconnect.org. Imagine big and wide, get creative. We can't wait to hear from you and thanks.

Ann Thompson:

Welcome back to Brick by Brick. I'm Ann Thompson. Let's get back into our conversation with Shane Phillips and Emiko, Hernz, and I will be back at the end for some reflections. What are the hardest of the 54 ideas and what are the easiest and which ideas create the biggest change?

Shane Phillips:

Oh, hardest and easiest. I think the thing that I get the most pushback on without question is rent control, rent stabilization. This is basically regulations that say once a tenant moves in, their rent can only go up some specific amount. Often it's just tied to the inflation rate, for example. So if the inflation rate is 3%, my rent can go up 3% that year. I think part of why this is so controversial is again, people have that New York City in the 1950s, 1970s idea of rent control in their head, but rent control can be a million different things, and that New York 1950s version was really bad. It had a ton of negative consequences. It really did not only deter new development, but actually encourage the conversion of a lot of existing rental housing into condos, which further constrained and put more pressure on the rental housing market.

I don't even know if I'll go into the easiest policy, but I will say the most effective kinds of things you can do. I think at the end of the day between supply stability and subsidy, cities really, really need to get supply right. I think if you don't have an adequate supply, again, if housing is scarce, it cannot be affordable. There's just no getting around that. And so policies to encourage an abundant supply need to happen. That can take a lot of different forms. I think the easier ones we've seen have been things like allowing accessory dwelling units, granny flats, backyard cottages, whatever you want to call them on single family properties, it's not nearly enough. And so you really have to go bigger than that. You have to allow not just duplexes, not just fourplexes, you have to identify significant parts of your city, and this can be more transit oriented areas and more job central areas that allow 10 unit buildings, 50 unit buildings, 3, 4, 7 story buildings. Again, it's going to depend on the community and the higher demand. The higher prices probably the taller you need to go, but I think that's really where cities need to focus, and it's the place that frankly, American cities have failed the worst at the past 50 years or so.

Ann Thompson:

Your book points to Tokyo's abundance of housing and Vienna's, tenant protections and egalitarianism. You suggest the US should aspire to this. What are those two cities doing and how has Oregon taken the first steps to do both?

Shane Phillips:

So I was actually just in Tokyo for the first time in April, and probably the most interesting place I've ever been, especially from an urban planning perspective. Tokyo is really interesting because it is a extraordinarily dense city that is also very market oriented in terms of its land use. In terms of the development activity, they build five times more housing per capita than California and housing prices there and rents have been basically flat for going on 30 years, and that's partly because they've had essentially no inflation during that time. But as anyone who lives in the US knows prices and rents have climbed much faster than inflation here and in Tokyo they have not. And so just from the perspective of what can just allowing a lot of housing and a lot of diverse types of housing do for you, I think Tokyo is the case study.

You don't have to be Tokyo density to be clear. You just have to build enough housing for people to live in, and I think people imagine that I have to turn my neighborhood or city into Manhattan. Nowhere has to do that, except Manhattan. Our problem right now is almost nowhere is building anything at all. And so we really end up having to concentrate our growth in a few places and it's really felt there and it engenders a lot of opposition. Another thing that Tokyo does really well is it allows multifamily housing and very small lot single family housing essentially everywhere on every single parcel in the city. You can build on a thousand square foot lot or you can build a small multifamily home, those kinds of things. And it means that no one is really bearing all of the costs and burdens of growth, which are real.

Vienna is really interesting for different reasons. They also build a lot of housing and in some ways they're still coasting on the massive housing production they did about a hundred years ago. But what they've been really good at is both building a lot of housing, but also encouraging a lot of what they call social housing, what we would just call affordable housing. And they have different strategies for doing it. They have just directly subsidized and very deeply discounted housing. They have these limited profit, sorry, limited profit housing associations rather that sort of operate like utilities where they spend a certain amount of money, they get a fixed amount of profit on it, just like a utility does with their infrastructure and the rents or prices are lower than the market, but not massively discounted, and they're only modestly subsidized. So there are a lot of models here and I think some combination of those things plus the tenant protections that actually both Tokyo and Vienna have are really are appealing.

Ann Thompson:

Are you hopeful that cities using some of the 54 ideas, and maybe you're still creating the list, maybe it's up to like 60 now or whatever you have, are you hopeful that they'll be able to create and maintain more affordable housing and how long will it take?

Shane Phillips:

I am hopeful. Sometimes things have just kept getting worse, and so in that sense it is easy to be pessimistic at the same time. I look back on where we were even just five years ago where we didn't have those kinds of protections at the state level anywhere in the country where nowhere had gotten rid of single family zoning, which prevents any other kind of housing and only allows the most expensive housing usually on 80, 90% of land in a city. And now Oregon, California, Washington, Montana, and one or two other states have effectively gotten rid of it. And these states have also effectively removed parking requirements near transit, which is not to say that parking doesn't get built, just we don't overbuild it like we used to. So day to day it can feel like we're not making much progress. But then you look back at the past five years and you really see how far we've come, and I think that progress needs to and will continue.

I think at the one thing that I've been really interested in and inspired by and trying to encourage in more places is Cincinnati should do everything it possibly can, but to my point about everyone needing to be in this game and everyone needed to contribute so that no one has to bear a disproportionate share of the burdens, it's really going to come down to states to make this happen. We really need some kind of state level guidance and kind of holding everyone to some minimum standard. And so perhaps that's going to be a next step in Ohio as it has been in 6, 7, 8 other states already in the past several years.

Ann Thompson:

Shane Phillips, author of the Affordable City Podcaster and Urban Planner, you can find his podcast called UCLA Housing Voice wherever you get your podcast. Thanks Shane, and thanks for being on Brick by Brick.

Shane Phillips:

It was great to be here. Thanks for having me.

Ann Thompson:

Remember, if you're interested in digging deeper into our conversation with Shane Phillips and want to learn more about Brick by Brick in general, there's plenty of web articles and videos. Go to  cetconnect.org and thinktv.org and we'd like to hear from you. Click on one of the big green buttons to share your feedback. Let's find out what the team thinks about the affordable city. It's time for takeaways and we say hi to Emiko Moore.

Emiko Moore:

Hello

Ann Thompson:

And Hernz Laguerre Jr.

Hernz Laguerre Jr.:

Hey everyone.

Ann Thompson:

Hernz, what are your thoughts?

Hernz Laguerre Jr.:

Yeah, I really liked your conversation with Shane and you asked a question that thought made the most sense. You asked him out of all his solutions, which one would have the greatest impact, the most immediate impact, and he said easily the supply of housing, increasing the amount of housing would have the most immediate impact and somewhere else in the interview. He also said, increasing the amount of areas where we could build those homes, that would also have a huge impact as well. And therein lies the two hurdles that we're dealing with, right? The first one is zoning. Approximately 75% of land in American cities is constrained by zoning practices that exclusively permit single family residences. That's from the National Association of Housing and Redevelopment Officials, and we covered that in episode three of Brick by Brick. The second is construction costs. There's a shortage of skilled workers, and there's a shortage of materials that those two are the reasons why we have a high cost of construction in the first place. So when you see those two hurdles, you understand why we still have this major gap. According to the Pew Charitable Trust, we are at a shortage of about 4 million to 7 million homes, and you can look at zoning, you could look at construction costs and see why we're still in this predicament.

Ann Thompson:

So let's get building.

Hernz Laguerre Jr.:

For sure.

Ann Thompson:

Hey, Emiko.

Emiko Moore:

Yes, and I think that Tokyo is an interesting case study, as he mentioned in diverse and density housing, they build and they have a huge housing supply, and they're not restricted by zoning. They have many buildings that are multifamily, single family high rises, all in the same area, so it's not restrictive, and it allows them to keep housing affordable. Right now, the housing and rental market there has been flat for over 30 years.

Ann Thompson:

Thanks for that. Emiko. Shane Phillips is making the case that groups often at odds with one another are not as incompatible as their rhetoric may sometimes suggest. For example, renters, homeowners, affordable housing builders, market housing builders, architects, labor unions, the list goes on and on, faith groups, environmental groups and more. The goal is to get these different groups on the same page and make sure that everyone has their interests and needs met to some extent, and we're not ignoring one group or another entirely. He says, I'm wondering, how easy is that? Maybe not very, but some cities probably have more success than others.

Hernz Laguerre Jr.:

So did he share what cities are doing a good job at having all those groups of people work together?

Ann Thompson:

He didn't really get into that, but I was thinking back to a previous episode, a Solution Sidebar, in fact, where professor in South Bend, Indiana saw a housing need, picked an area smaller than a neighborhood, got to know everyone, and initially there were some hurdles, but eventually was able to work with the banks, work with developers. So maybe the solution is to start out on a very small scale.

Emiko Moore:

And I think it's really important that we let the renters decide what they value. As Shane Phillips said, so much of this market is driven by what the renter needs and wants, and if we allow that to happen, I think the market will follow.

Ann Thompson:

You've been hearing from us, we want to hear from you. If you have thoughts on Shane Phillips' book or any of the other solutions we've presented, please email us at Brick by brick@publicmediaconnect.org. Thanks guys.

Emiko Moore:

Thank you.

Ann Thompson:

That's our show. If you like what you hear, please read and review our podcast. It helps make it easier to find. We hope you learned something, and if you did, please share it with your friends and family For Hernz Laguerre Jr. And Emiko Moore, I'm Ann Thompson. We'll be back soon with more solutions. Take care.

Our show is produced, hosted an edited by me, Ann Thompson with reporting and story editing from Hernz Laguerre Jr. and Emiko Moore. Our Executive producer of Mark Lammers. Our show consultant is Gloria Skurski. Gabe Wimberly is our audio engineer and mixer. Zach Kramer runs the lights and cameras. Derrick Smith is our production specialist and Jason Garrison is our production manager. Kellie May heads up our marketing and promotions, along with Mike Shea and Bridgett Dillenburger. Elyssa Stefenson handles the website and Steve Wright is our designer. Bill Dean and Andres Kruza are the engineers for the show and our Chief Content Officer is Colin Scianamblo. Our music is from Universal Production Music. Brick by Brick: Solutions for a Thriving Community is a production of CET and ThinkTV, Southwest Ohio PBS member stations.