Affordability: Economics vs. Politics

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Illistration by Barry Blankenship. Provided by Seattle News Weekly. http://archive.seattleweekly.com/home/958100-129/documents-reveal-tensions-in-the-mayors

 

In this blog I aim to examine the conflicts that arise between political activists and the so called “invisible hand” free market developers and try to shed some light on why these two schools of thought seem to be constantly in conflict with each other. It’s important to note that I am neither an expert on this subject matter nor do I have a background in urban planning. I am simply trying to organize my thoughts in an effort to better understand why this issue is so difficult to resolve.

The Players:

  1. Developers: This group is interested in providing space to markets with demand at competitive pricing determined by the market for space. In markets with high demand, topographical constriction, and forecasted demand growth developers have no problems providing additional space by building taller buildings at as an efficient price as possible (competing among themselves). Inherent in the principles of efficiency is a natural disdain for costly time intensive regulation.
  1. Historical Preservation Activists: This group is interested in maintaining a somewhat intangible “soul” of a given space with historically significant structures acting as a highly important aspect to a cities identity. This group wages its war on the “chicken vs. the egg” battlefront arguing that a major part of what drives market demand is its preservation of its historically significant architecture / layout (despite there never being anything worth preserving if not for new development in the first place).
  1. Housing Affordability Activists: This group seems mostly interested in figuring out how to make living in cities more affordable for members of the entire income / wealth spectrum. They believe that socioeconomic diversity plays a significant role in making cities attractive spaces to live in.
  1. The Market: This group is composed of the space users. Most of these people are interested in occupying space that works for their needs from a cost / utility perspective.

Now that I have loosely defined the stakeholders it seems to me like groups 1-3 are all interested in providing similar benefits to group 4 but with dramatically conflicting approaches. The Historical preservation activists and the housing affordability activists seem to share a similar romantic idealism regarding “diversity” and feel the need to butt heads with the evil profit driven developers. Meanwhile the developers see themselves as a highly efficient and sensible solution to housing affordability and in some regards historical preservation.

For the life of me… I simply cannot figure out how these groups are so entrenched in blocking each other’s interests. If the housing affordability group wants housing to be affordable, blocking supply by means of regulating out capitalistic forces is a surefire way to make housing a whole lot more expensive. If the historical preservation people want to preserve historically significant structures that aide in the healthy growth of a city (rather than maintain a giant structural museum) they would be shooting themselves in the foot by blocking developers from creating new architecturally significant structures that down the road might fall under the blanket of historical preservation under their own criteria. They would also be driving up the cost to inhabit any space in remote proximity to historically preserved areas creating a quasi “club” like setting where only the wealthy can afford to enjoy the spaces they are preserving. Note: if the affordability activists had their way, maybe there would be a handful of lower income lottery winners that get to be a part of this club.

To be totally honest, the two activist groups (housing affordability and historical preservationists) claiming to be advocates for the future inhabitants of cities, come off as selfish idealists, ultimately protecting a handful of fortunate land owners living in close proximity to spaces that could otherwise provide significantly more utility to a larger majority.

The only solution to this problem, that I can think of, is to convince the affordability / preservation activists that increasing density was actually their idea in the first place, placing limited regulations on a handful of historically significant structures and ensuring fair leasing practices. This would provide a sensible approach to resolving the housing affordability problem and would provide a sustainable flow of historically significant structures worth protecting. For this to work developers would need to pretend that they aren’t interested in higher density because (fill in the blank bogus excuse why not) to fully emphasize that a victory has been attained by the vigilant advocates of the people protecting the market from the evil doings of the private developers. Yes, I have gotten to the point where this issue seems this childish to me.

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