 for the year. I just wanted to give you a quick rundown of the different talks that we plan for the semester. They're really exciting, starting with Pavo's talk today on land use regulations. There are other talks on housing and kind of larger processes of urbanization, including Devin Michele Bunton, who's gonna be talking about how neighborhoods are made gentrifiable, and Richard Rothstein is coming. He's gonna be talking about his book, The Color of Law, Redlining, and home mortgage discrimination in the US. And that's gonna be on a Monday, which I should note that, and Michael will also, when he sends out the reminder for that lecture, remind you guys that it's on a Monday, rather than the regular lifts Tuesdays. And then there's gonna be a lot of talks on maps and spatial data. In particular, collaborative mapping processes. Shannon Mattern is giving a talk on map washing. Chinpese is gonna be talking about collecting information and data on how we use public space and how to create those into maps. Erin McElroy in the anti-adviction mapping project, she is coming to talk about how the ethics around data collection, eviction data collection. What else? Spatial data. Seth Spielman is gonna be talking about data and data misinformation in urban planning. Levi Wolf is gonna be talking about understanding the boundaries of spatial segregation. And then lastly, but not least, we have a tried partite book panel featuring Lance, our very own Lance Freeman, Shannette Garrett-Scott, and Elizabeth Herbin Trent. We're calling the panel the double edgedness, Black, Life, White, Supremacy, and Property, Finance, and the City. So very exciting talks this semester. And with that, I welcome and introduce Pavel Monkinen, who's an associate professor at the UCLA Luskin School of Public Policy. Hi everybody, how are you doing today? Good? I'm doing great. It's really a pleasure to be here in New York. Thanks so much for thinking to invite me to this and for kind of to everyone who helped make the trip very easy and enjoyable so far. Thanks to Bloomberg for putting in all the bike lanes. People complain that they're not that good, but compared to LA, they're like heaven. Incidentally, this is my first visit to Columbia, which is a quite nice place, so that's nice. I actually only applied to Berkeley and Columbia as an undergrad and didn't get in here. So, ha, now I'm here, take that. Before I start, I'll just ask how many people here have been to California before? I guess how many people haven't been to California before? You don't have to, it's not that important. I just wanted to make sure everyone has some sense of context, kind of the contrast between an old industrial, dense Northeastern city and what I'm talking about today in California where five stories is usually called a tower by many people, right? In fact, one of our local council members from the city of LA called a five story project turning the neighborhood into Dubai. So, that's kind of what we're talking about in terms of height here. I'm gonna be talking about research with two colleagues, Michael Mandel and Michael Lenz. They both send their regards. We apologize, we don't have a finished working paper yet, but we almost do. So, if you want it in a couple weeks, let me know and I'll share it with you. I think we're getting somewhere interesting in this kind of subfield of research on land use regulation and housing markets which has been going on for several decades, but I think still needs work and nuance. Our original research question was to distinguish two kinds of regulation that are often lumped together, which is kind of regulation of process. So, how hard it is to get projects approved compared to regulation of kind of prohibitions, what you can even propose on a site in the first place. So, our hunch was that the prohibition type of regulation was much more consequential for the housing shortage in California and the housing crisis there. To spoil the conclusion a bit, I'll just say that during the course of our work, we realized that something that's been missing from this subfield is a focus on built out nests of cities, right? So, there has been a lot of measurement of different kinds of prohibitions of building, but not enough consideration of what already exists in a city. So, our emerging argument is that it's actually a lack of what we call zoned capacity. It's an idea that I'll talk about later, which is a combination of the prohibitions of what can be built, as well as what's already there in a city. It's this idea of zoned capacity and a lack of zoned capacity, especially in high demand parts of cities or in high demand cities themselves, that's kind of the main, one of the major, the main roots of our housing shortage. So, we get to this conclusion using a new data source on zoned capacity that we've carefully harvested from cities general plans. It's like a nicely timed moment of research synergy. There's a couple good papers out right now talking about surveys of land use regulation and all the problems that using these survey data entail. And at the same time, we've got this other data source that's not surveys. So, that's nice. I'm gonna talk about a lot of different things and in the end, I'm gonna conclude with kind of a challenge for the planning field. I think there's an ideological tension among planners where on the one hand, we have this idea of the growth machine as bad and then that gives us, that gives pass to kind of the slow growth movement as being something that's kind of okay and we don't really worry about too much. And I'm gonna argue that the slow growth movement in California has caused a lot of problems, right? And especially caused a lot of problems for low income households who are actually on net leaving the state. Okay, so towers. Last year, developer got permit to build a 250 unit project a pretty mundane set of apartment buildings in Santa Monica, California. They're already under construction now. This permission took five years to negotiate with the city of Santa Monica. We're trying to get a full page count of all the planning documents that they had to issue in order to get this permitted. The environmental impact report itself was 650 pages long. So in order to get the permission to build this project, it's a redevelopment of a former department store in Santa Monica, they made it lead platinum. They favored local residents in hiring. They limited the number of afternoon peak period vehicle trips. They paid a fee to the city for every trip that exceeded those limits. They built four level deep basement parking, 200 car parking, a community meeting space. They bought and entitled a separate piece of land to build affordable housing on, right? So this long series of process kinds of regulations that they negotiated. And this is what many people think about when they think about the kind of very regulated building environment in California. Let's go 70 miles south to the city of Rancho, Santa Margarita in Orange County. It's a master plan city adjacent to the giant marine based Camp Pendleton. It is an emblematic of a built out city. According to the city's general plan, it only has space for 12 units left, right? It's almost totally built out. But on an index of land use regulation, it scores very low. So apparently it has a very low level of regulation, but it is not adding much new housing. I don't have time to do full justice to Beverly Hills, but I just wanna say that it's kind of emblematic of another kind of city that combines kind of this built outness as well as pretty high procedural regulations. In addition, it's a city like many cities in California that is adding a lot of high paying jobs and is basically stagnant in terms of the amount of housing it's added since I was born, right? So it hasn't grown by people, but it's grown by jobs and now has five times as many jobs as houses. So we've got these three kinds of expensive cities that don't build much housing, but they don't build much housing in different ways, right? So some of them, like Santa Monica, have space left in theory, but each project is this complex negotiated, onerous process to get it built. And some other cities have very easy rules to get things built, but there's no space left. So perhaps it's not surprising that we're the least building of housing state in the country, second to least. But you wouldn't think that from talking to people in Los Angeles, for example, where frequently people talk about the building boom, right? Because they see one building being built near them. It's amazing, we're actually building a third less than we did in the 70s and 80s, kind of other periods of building booms. These are not totally updated, but don't worry, it hasn't gotten much higher than 100,000 in recent years. In fact, in 2019, on average, we're building less than we did in 2018. This is all of California. This is all of California, but LA is similar. Okay, so today I'm gonna talk, I've already talked about how California is bananas. I'm gonna talk about the motivation and contributions of our paper, a little bit about the literature on land use regulations and housing markets, our analysis. I have two cool graphs at the end. They're very exciting, I'm very excited about them. And then I'll end with some conclusions about what can be done and kind of challenges for the planning scholarship and planners active out there in terms of getting housing built in expensive neighborhoods. Okay, so we had a kind of policy motivation, I'm not sure how aware you are of California's housing politics, but it's fast and furious, right? We're arguing all the time about what to be done. There's some ambitious proposals that have basically come to nothing to date. We're really building a lot of ADUs. People love granny flats and backyard cottages because they're kind of the least offensive, seeming solution to this situation. LA is very excited that last year it permitted something like 4,000 or 5,000 accessory dwelling units in a city of four million, right? And zoning reform kind of notably top down, state level zoning reform that says cities, we're taking away your zoning powers near train stations and we're gonna allow four story, five story buildings to be built has kind of caused a lot of controversy there. So there's this policy motivation, but there's also an academic motivation kind of to push forward this subfield on land use regulations and housing markets in three ways, right? One is figuring out which are the regulations that matter the most. Two is where do they matter, right? So we have a lot of zone capacity in the desert cities kind of out near Palm Springs, but it's not being built. So regulatory reform there probably doesn't matter. And the third one is what can we expect under different kinds of zoning reform? So we're at this interesting turning point, I think in American urban history where we have mostly built out cities, we don't have a lot of vacant land left and we're at this point where we need to maybe think about zoning reform and adding multifamily buildings in single family neighborhoods is something we've never really done, even though it's kind of from a top down perspective the most obvious and beneficial way to add housing to a city, right? But we've never done it, so we don't have models to tell people, don't worry, the sky won't fall when we do this because it's just not been done. The other motivation was that we got some funding from the UC Berkeley Turner Center, so thank you UC Berkeley Turner Center. And the funding was part of an effort to have scholars use their new survey of land use regulations in California. So as I mentioned, so we use that survey but as I mentioned earlier, I think the data that we harvested from city's general plans is much more beneficial for this work. Okay, so I'll show some covers of this source of this zone capacity data that we've harvested. The city of Encinitas, I like it because it's just like ultimate California kitsch. And I think it's, I mean, it's cute but it's kind of important too because as I mentioned, this kind of slow growth, kind of hippie environmentalist mentality seems quite nice and kind of we kind of agree with the idea of it but unfortunately I think it has severe negative outcomes for, especially for low income families and environmental sustainability kind of in a big picture. So we can appreciate it. In the 2015 they had people on it and then in the 2016 revised they didn't, I don't know what happened. The state of California has this thing called a housing element law starting in 1969. And I'll give you the short version. Every eight years, the state government along with councils of governments which are kind of regional bodies of municipalities, they project population growth, they project household formation and then they have a number that's the housing need based on that projected household formation that we must accommodate in our zoning, right? So then the regional governments give each city kind of housing production target. It's technically not a housing production target but people view it as one. So they say this city you need to zone to accommodate growth of 1,000 households, right? So they do this every eight years and the cities must provide their housing elements of their general plan and send them to the state to be approved. They do this also by income level. So not only must you zone for 1,000 new housing units, 250 of those must be for low income housing units. What they really mean is 250 of those must be in some kind of high density, California high density, over 20 units per acre, right? So they've created this idea of a zone capacity and they tell cities you must have some amount of zone capacity to accommodate future growth. I use the example from the city of Martinez because it's a clear example, right? So in the green part, what the city of Martinez has done has done a sites inventory, right? So they've gone through all the parcels in their city and they said, look, we've got all these vacant parcels they can accommodate 500 units. We've got these underutilized parcels zone for housing they can accommodate another 500 units and we've got some potential redevelopable, you know, mixed use parcels or whatever and together they cumulatively have, we cumulatively have a space for 1,156 new units, right? And that is more, right? The red section is what the regional government has told them the number of housing units they must accommodate in their zoning, right? So the regional government says you have to have space for 469 new units and the city says, look, we have space for 1,156. Therefore, we meet our regional housing needs goals. This seems like a good idea, right? It seems like a kind of way to do some top-down standards with some local input. They decide where they put the new housing. The state says you need to accommodate for some new growth. They figured out it's kind of this balance of state priorities and local control. Two problems with this system to date. One problem is that there was basically no punishment for not complying and no reward for complying. So many, many cities were totally out of compliance. That's bad. Second problem is the way they decided on what a city's housing goals would be was this totally perverted political process. Basically they asked every city, how much housing do you think you're gonna add in the next eight years? And they say, I don't know this much. And then they turn around and give them that number as their goal. So the city of Beverly Hills famously got a rena goal of two. Over eight years, Beverly Hills had to add two units. And they did very well. They added more than two units. At the same time, the city of Coachella, which is in the Coachella Valley, you might have heard of it. It's about the same size. They got a housing goal of like 1,500. Because they said, yeah, we're gonna probably add 1,500 houses on all this vacant land we haven't sitting here. So the regional goals were allocated in this perverse kind of more to the sprawling poor areas at the edges of the region. The state fortunately has reformed this law kind of with two other laws in the recent years. One is to create some kind of punishment. So now we have something like a Massachusetts 40B system where if the cities are not meeting their goals, then developers can get a by-right permission to build things that, buildings that have some affordable rights kind of complicated. Basically they can get, they can avoid some of the discretionary planning reviews if they're gonna build a housing that has some affordable set-asides. So there's some kind of punishment, although it's not really a punishment to build housing actually. There's some kind of punishment. And not only that, currently, last year a law was passed to do the allocation of housing units within regions to cities in a better way, in a way informed by kind of measurable standards of sustainability and social equity, et cetera. And that's what I've spent most of the summer doing in the regional committee for Southern California on this housing needs allocation and it's been a very enlightening experience to learn how bureaucracy at the regional level in California does not work. If you wanna get involved, let me know. I'll tell you, like, send you more information. You can still send public comments. Okay, so moving to the academic field of research, looking at the impacts of land use regulation on housing markets, I'm gonna talk about three dimensions quickly. One is the geographic scale of this work. One is kind of a basic theory and, sorry, that's two, and three is how scholars measure land use regulations. So these are the cities of Southern California by population size. There's this tension in the study of how land use regulations impact housing markets because land use regulations in the United States are carried out by municipalities, but housing markets operate at the regional level, right? So housing markets don't respect municipal boundaries within a metropolitan area. Housing markets are labor markets, right? They're metropolitan. So I won't talk about that much. So here's, I'll give you the basic theory, right? So you've been seeing this before, perhaps it's the supply and demand curve, right? So we have the price on the y-axis, the quantity on the x-axis, the downward-sloping demand curve. The impact of land use regulations on housing markets is always predicated by an increase in demand, right? It's always conditional on an increase in demand. So we have demand at time zero, and then we have in the city an increase in population or an increase in incomes or a combination of both, and we see the demand curve shift outwards. And what happens in this unregulated Atlanta or Houston, right, this is a very simplified version of it, right? Obviously there's no unregulated city. We have the demand curve shift outward, people move to the place, the quantity of housing increases by a lot, the price of housing increases by a little bit. Now if we contrast that with San Francisco or Los Angeles, we have a more regulated city because of the complexity of production, because of the lack of land zone for multi-family, right? We have the same demand shift, right, happening, so the same amount of people or incomes going up happening. We have a little bit of quantity increase and a lot of price increase, right? So this is the basic kind of theory underlying how people look at this. One interesting thing that in this body of research is that there's a lot of work looking at the price impacts. I mean, they happen at the same time effectively, right? Because this is a two-equation system, but there's a lot less work using output or permits or new housing as the dependent variable in the empirical analysis. There's something like 13 papers, right? So I think it's interesting, I mean, obviously price is what we care about the most. We don't really care about quantity going up, independent of price changes, but it's interesting because the impacts of regulation on quantity is to make them go up by less. The impacts of regulation on price is to make it go up by even more. So I think to some extent you get an easier measurement when you look at quantity and actually doing both I think would be the right thing to do. So as I said, there are over 100 papers on this topic, kind of the upshot of this body of work, mostly by economists, but also by planners, is that there is a strong correlation between regulations, right? The basic model seems to be true in the empirical reality, right? So cities that are more highly regulated have higher rents, the rents are going up by more, et cetera, than cities that are less heavily regulated. We can talk maybe in the Q and A if you wanna talk about kind of the indaginating issues, this is obviously a correlation. And if you remember one thing today, correlation is not causation, right? So there are potential concerns where if a city is adding a lot of new housing, they're going to regulate more, right? So you might see more regulated cities producing more as we'll see later because of this indaginating. Okay, so quickly on to the measurement challenges. So land use regulations are a complex, multifaceted thing, right? And so how people have tried to measure them is important. It is a big challenge, right? So one way that people often have tried to measure them and synthesize them into one number is through an index composed of many kinds of aspects of regulation. So combining these kind of process elements with these prohibition elements, doing a factor analysis and getting a number. San Francisco's five, Rancho Santa Margarita's three and Rancho's, Coachella's minus two, right? So you have this kind of one number that summarizes the city's land use regulation environment. This is a problem as I may, you may already be thinking why this is a problem. There are a number of places where with one regulation you can block all development, right? So Rancho Santa Margarita has a very low score on this index but it's full, it has one zoning rule, right? The minimum lot size is one acre and you can't build anything more, right? So it's gonna appear to be low regulated but it's gonna have very high prices and low production. Similarly, the city of Berkeley was a great example because that progressive city that it is, it shows up as a very low regulated city but it has a city council that likes to block things, right, so it has a very heavily discretionary process that allows it to prevent production. So, okay. The second challenge is that a lot of, the second challenge is we don't have a good objective database on land use regulations in the United States, right? So cities regulate land use, cities all have different zoning codes or development standards are different. They use different words to mean the same thing, right? And no federal government has ever attempted to get kind of one synthesized set of measures for cities and that's a big problem. So what researchers do is they use surveys, right? And survey data are, maybe we shouldn't be surprised but I was surprised to see these two recent papers just show just how bad they are. So this is the forthcoming paper in Jebber from Paul Lewis and Nick Morance and they found, so California has had eight or nine surveys of land use regulation done over the last 30 years and they're very inconsistent. So I found the most egregious example. So they found in 1988, two different groups of researchers surveyed the same set of cities about their land use regulations. According to one survey, nine cities said, yes, we have urban growth boundaries. According to the other survey, five cities said, yes, we have growth boundaries but no, those were different cities, right? So the nine cities that replied to that survey we have urban growth boundaries to the other survey replied no and the five cities that replied no replied yes to the other survey, right? So there's like very inconsistent responses from planners in these survey data, unfortunately. Another working paper funded by the UC Berkeley Turner Center recently out authored by some fantastic Columbia scholars, Moira O'Neill, Julia Guelgo Nelson and some other guy from Berkeley. It does a really good treatment on understanding the issues with survey data because it ground truths some of the survey responses using case studies and actual data on project entitlements, right? So a set of the questions in the survey data is how long does it take to get something approved under this line of approval? How long does it take to get something approved on a different line of approval? And so these researchers have gone to those cities, gotten all the approval histories of all the different projects and added up actually how long it took in that city to get something approved. And I guess not surprisingly, in most places it took much longer in reality on average to get something approved than the planners responding to the survey thought it did, right? So the planners said, I don't know, it takes five months and then they look in the data and it actually takes a year and a half, right? So there's this actual incorrect element to a lot of the survey data. Okay, so as I mentioned, our original plan was to create kind of two indexes, right? So to look at the regulation of process and the regulation, kind of these prohibition regulations and to assess which would, and to kind of distinguish their effects on housing production and to assess which one had a larger effect. So we set about that plan by looking, by creating a process index and a prohibition index, right? The process index, we kind of added up questions in this Turner survey about how discretionary our reviews for projects, how many, how much delay is there, how important are impact fees? What are kind of fees for building a, to get a permit to build a multifamily project, et cetera? Now with this process index, it's quite illuminating because first of all, there were a lot of missing answers. So for example, with impact fees, something almost half of the city surveyed by the Turner Center didn't give an actual number for an impact fee. So we couldn't use that in our index. Instead, what we could use was a planner responding to the survey's subjective opinion about our impact fees, a problem, a constraint to development in your city. One to five, right? So for a lot of these process index questions, they're basically a planner subjective opinion about whether this is a constraint to development in their city. Now this is an issue. This lack of an objective measure is an issue because you can think about low demand cities where there aren't very many applications to build and you ask a planner in that low demand city, are impact fees a constraint to development in your city? No, they're not, right? The constraint to development in my city is no one wants to build housing in my city. You ask a planner in Santa Monica are constraints to development a problem in your city or sorry, impact fees, a constraint development in your city, they say yes it is, right? So there's gonna be this endogenous correlation between places where there's actually a lot of applications to build and then high rankings on these subjective questions about is this a constraint to development in your city? And that's actually, I mean, that's what we see in the data. So the process index, I mean I think it's an interesting research exercise that ultimately is not telling us whether process is a constraint to development in the city. The prohibition index on the other hand is on the other hand, is actual objective measures. So what are the height restrictions? What are setbacks? What's FAR? What's parking requirements, et cetera. And fortunately for us, there were also missing data in the Turner survey, but like this is research synergy across this country in many ways, right? The Celine Firth and Olivia Gonzalez had done something that had created a prohibition index just as we set out to do before we did it. And not only that, they filled in the missing blanks by looking at cities general plans. Like so if the city didn't report its height restriction in the survey, they went in their general plan and got the height restriction in their survey, right? So we have a really good, complete prohibition index and a really bad and complete process index so far. I guess we can amend it later. So there's about 480 cities in California. We exclude kind of the non, the very rural non-metropolitan ones. We have zoned capacity data or from these housing elements that we've harvested. We have that for almost all of them. The prohibition in degrity of the Turner survey was about 240 cities. We have this prohibition index for about 230 cities and we have the process index for almost 200 cities. I guess I'll just note that greater LA is really big. Basically it's half the state in terms of population and underrepresented in the state government because it's far away as the theory goes. Okay, so when we start analyzing the data, first thing to note is there is a high correlation between process, prohibition, and housing costs. So expensive cities have higher rankings on this process index. Expensive cities have higher rankings on this prohibition index and expensive cities have less zoned capacity. So the prohibition and zone capacity, zone capacity is bigger if there's more space left so it's a negative correlation with housing costs. So the expensive cities are more likely to be built out. So the second thing to note is that the correlation in the case of prohibitions and zone capacity flips when it comes to production. So more expensive cities are more prohibitive but more prohibitive cities build less housing. That's what the economic model that I showed you earlier would predict. On the other hand, cities that score high on the process index build more housing. And I think what we're seeing here is actually kind of a reverse causation where building a lot of housing makes cities have more process index and this is where you'd need to do some more statistics to get beyond what are here simple kind of bivariate correlations. So we haven't done the fancier statistics yet. Right now we're just doing a simple naive regression model that's controlling for rents and some other city characteristics, density, jobs access, these other things in order to test kind of what are the relationships between these regulatory indexes and housing construction in these different cities. Later we will do what's called instrumental variable models where we look at things that are correlated with the regulations but not with production kind of past voting records on prop 13 is something we're gonna use, right? The problem is nobody really believes instrumental variable models and they're really hard to do. It's really hard to find an instrument that's good but that's our plan so far. If you have a better suggestion for us, we're open to it. So these are the early results of our regression models. Basically, so we're looking at two columns for each index for each treatment, right? So we look at two different outcomes. One is how many overall permits did the city do between 2013 and 2017 and how many multifamily permits did the city grant within that same time period, right? And to look at how these different variables affect or are correlated with this production of housing. So we see that not surprisingly, bigger cities build more. I mean basically population size is just a control variable although population size is just a control variable. Higher rent cities add more overall permits but surprisingly, and this is kind of one of these strange counter-attuitive California specific situations, cities with higher rents don't add more multifamily housing. Right, so you think if you're a developer, you go to where the rents are high, you build some housing, you make a lot of money. That's not what's happening with multifamily housing in California and the idea is this is our unique condition and the indication that something is wrong, right? With the housing development process there. I would be more worried about this but so there's actually another UC Berkeley Turner Center funded paper by some great scholars at Brookings, Cecil Murray and Jenny Shoots. Turner funded two projects that were quite similar. So their paper is kind of how do regulations constrain production of apartments in California and so they look at that specifically and they find the same result. So in terms of regulation, we see as we saw in the simple kind of not controlled by very correlations that cities that build more multifamily buildings have higher process index but we see that the role of prohibitions and the role of zone capacity is kind of as theory would predict, right? So cities that are more regulated in terms of what can be built in the city have lower production and cities that have less zone capacity, right? So less space left produce a lot less housing. So kind of a 10% increase in zone capacity results in a 3% increase in housing production, right? So that's the positive correlation because basically it's saying cities with more zone capacity build more housing, right? So cities with less zone capacity build less housing. And actually I didn't put the results here but if you include these three measures of regulation in the same model, the process and the prohibition indexes lose significance and really it's the zone capacity that dominates. Which makes sense, right? Because zone capacity kind of captures this prohibition sense as well as what exists there already. I'll just note, so the prohibition number looks bigger but it's actually kind of a different scale because the zone capacity is the log of zone capacity. The prohibition index is this index that goes from minus two to minus four. So I did their marginal effects kind of on graphs next to each other and we can see that their effects are pretty similar, right? So this shows kind of as you increase zone capacity, you increase multifamily production, as you increase restrictiveness, sorry, as you decrease restrictiveness I change the sign, right? You increase production. Okay, are you bored of statistics yet? I'm glad to hear that because I got my favorite statistics ever. So this is called a contour plot and I'll explain it. I mentioned that one of the areas of this subfield that studies land use regulations and housing market, one of the areas where they haven't done enough work in my opinion is kind of where changing the regulations matters more, right? So in the previous models, what they were telling us kind of controlling for rents, they were saying for a city with a given rent, how does production change as zone capacity changes, right? But I was kind of hinting at and hypothesizing based on evidence that in high rent cities, more zone capacity is gonna have a bigger effect than it would in low rent cities, right? So I ran the same kind of model with an interaction term, right? And so I interacted rents and zone capacity. So these colors tell us how much permitting we expect to see for different levels of rents and different levels of zone capacity interacted with one another, right? So at low levels of rents, zone capacity doesn't affect, right? You go up and down on the zone capacity variable, you don't get much more housing production. But at high levels of rents, you add more zone capacity, you get a lot more housing production, right? And so this is something that I observe actually just on descriptive data in Southern California, right? There's a lot of zone capacity in Palmdale. Palmdale has a ton of space left, right? There's this city called California City that's really out in the middle of nowhere. It has like 100,000 entitled lots ready to build, right? And in Beverly Hills, there's 700 spaces left, right? And if we added more spaces in Beverly Hills, they would probably get built. So these are logs. I did the math. So if you think about on the left side of this, kind of going up and down, adding more zone capacity in low rents cities, you go from 100 permits to 150 permits. Adding more zone capacity in the expensive cities, you go from 100 permits to 1500 permits, right? So it's an order of magnitude difference in terms of production. The effect is a little smaller for multifamily, right? This is the multifamily. Same thing. I'm not doing that in time. Good. So you go from 20 to 30 on the low rents and you go from 20 to 180 on the high rents. Okay. I think I have time to explain this a little bit. So I mentioned I'm on this regional committee about allocating housing demand under state law. And one thing I did to illustrate this fact, kind of, I actually did share this with the local electeds that make up this regional government, but I thought I would do a simpler version for myself as well, right? And so what I did is I ranked the cities in Southern, the 190 cities in Southern California by rents, and then I made kind of quartiles by population. So like four groups of cities of the same population size ordered by rents, right? So the lowest rent cities, the next lowest rent cities, the higher rent cities and the highest rent cities. Just to look at our situation in terms of how much space zone capacity we have in those cities and how much production actually happens in those cities. And what we see kind of the basic summary is we have a lot of zone capacity in the inexpensive cities, but we actually build a lot more housing in the expensive cities, in spite of the fact that we don't have a lot of zone capacity, right? Does that make sense? So this show is kind of the percentage of zone capacity in the lower rent cities well over 50, right? The percentage of zone capacity in these expensive cities is about 20% of the kind of regional total, whereas the multifamily permitting, right? Something like 45% of the permitting is happening in the expensive cities, and less than 10% of the permitting is happening in the cheaper cities. And just for fun, I took LA out, right? So Southern California is 20 million people, the city of LA is 4 million people, and the city of LA is a real outlier. So actually, here's the city of LA. The city of LA was like half of the permits in the state of California last month, right? So the city of LA really adds a lot of housing compared to the other places in the state. It doesn't really add a lot of housing. And the problem with this kind of damning statistic about what kind of housing is being built in LA right now. So somebody looked at the permits from last month, half of the permits were accessory dwelling units. The other half of the permits were in five projects, two of them were 100% affordable, five big projects, right? So five 200 unit plus projects, two of them were 100% affordable, one of them was senior living, assisted living, and the other two were like luxury towers in downtown, right? So we're in the situation where we have the kind of zone capacity we have left is the wrong kind of zone capacity in some sense. We have space for really tall expensive buildings or backyard granny flats. We don't have any space for like the most simple to build four story stick kind of apartment buildings, right? And so that's kind of the big argument in California is how do we change a zoning to allow mundane apartments that everyone in New York doesn't know about? You know what I mean. Okay, so I'm preempting my conclusions. Is it cool to use what is to be done? Who said that? Right. Lenin. I think it was Lenin, I don't know. I guess nobody knows it is Lenin, so it's okay. I like it, what is to be done? I think as I said, we're kind of at a turning point, at least in California, but I think in the United States of this challenge of kind of how do we add multifamily housing into single family neighborhoods? It's the most obvious way to do this short of decommodifying housing completely and overthrowing capitalism, which would be fine. But in the meantime, I think adding six flexes in single family neighborhoods is kind of cheap to build. You know, the cheapest to build, this is from Portland. Portland adds these things, they have no parking. They're great, they're way cheaper than the single family luxury house next door, right? So one of my pet peeves of the planning profession is the idea of a residential neighborhood. I don't think that's a problem in New York probably, but where I come from, every city's general plan says, here's what we're gonna do. Growth in the corridors and centers protect the residential neighborhoods, right? Growth of apartments that are houses that are residential over there, the residential neighborhoods link, we're gonna protect them, right? And I think it's a big problem and I think every planner should be calling it out all the time, right? I think no city should have, in America should have single family low density zoning. We have a JAPA commentary coming out, Manville, Lanz and I, to this effect. That's pretty good, check it out, coming soon. So you're probably already thinking about concerns with gentrification and displacement and I think those are crucial, right? I think they need, those kinds of concerns should be baked into any upzoning program, strong demolition controls, tenant protections, et cetera. I think SB 50 in California has gotten there pretty well, but I think kind of the important takeaway from this graph is that if we just increase zone capacity everywhere, the building isn't gonna happen in the poor neighborhoods. The building is gonna happen in Beverly Hills, right? If you could build sixplexes in Beverly Hills, you would, right, if you're a developer. In fact, in LA, kind of some of the debates about increasing allowed density in your transit, we looked at kind of unbuilt capacity and there's a lot of unbuilt capacity in the low income parts of the city, right? So the developers wanna build where they can make money. If we let them do that, they will. And if we don't do that, right, in the downzoned world, in a static zoning world, kind of that's totally built out, rich people are gonna live where they're gonna wanna live, right? I mean, you're not protecting necessarily low income households against gentrification by not building, right? So a lot of the gentrification in LA is parts of the city that didn't build any housing. It's just working class, single family houses that rich people couldn't find housing near where they work. So they go to the next neighborhood over, they push those people out, they go to the next neighborhood over, they push those people out, right? So I think the downzoned, statically zoned city is an unjust city. Not only that, I consider myself a progressive and a big advocate for progressive housing policies. Increasing allowed densities is very complementary to the other progressive housing policies, right? So subsidies to build multi-family subsidized housing go much farther when there are a ton of multi-family parcels where you can build. Right now, affordable developers are competing with for-profit developers for the same land and paying tons of money for that land, right? If you could build it anywhere, it would be much cheaper to buy it to build it, right? So these are kind of complementary to progressive policies. And maybe it's not a fully formed thought yet, but I think so extracting as much as we can from every development project is not progressive. I think what's progressive is taxing the rich and redistributing that to the poor, right? But we've kind of convinced ourselves that like, well, this is the best thing we can do in Senate. Like, Santa Monica's are very proud of the Fred Siegel redevelopment because they got childcare money, they got an affordable building, they got this stuff, they got this stuff. They're not taxing the rich people in Santa Monica, most 96% of the rich people in Santa Monica paid nothing into that, right? The people that are gonna be living in that mundane seven-story building in Santa Monica are well-off people, but they're not actually rich people in Santa Monica. Okay, so another thing we wrote, the mics and I was a response to this article by our colleague, Michael Storper and his colleague at LSE, Rodriguez Pose, you might have seen this, a city lab piece by Richard Florida that all the NIMBYs love and are waving it around saying evidence by eminent scholars that in fact, upzoning is bad. In fact, the mayor of Beverly Hills who hates me with a passion, if you wanna see a two-page letter he wrote about how I should be kicked off the Regional Planning Committee, I could share that with you, he calls it urban supremacism, right? The state would dare force Beverly Hills to have apartment buildings near train stations. If you're interested in, so we wrote a rebuttal, we have a better version of the rebuttal submitted to Urban Studies now, so hopefully you can read that in the presses, I'd be happy to share it with you earlier. Basically, their main argument is that allowing more dense, I mean they kind of admit, if we just upzone everywhere, the developers will just build in the expensive neighborhoods and then rich people will live in those houses. And that's not good. And our counter argument is actually that's good, right? Because if we don't allow that to happen, then rich people are gonna live in the places they can, which are the older houses, and they're gonna price out the poorer families, right? So then they say that's not gonna happen because it's housing submarkets. Have you heard about housing submarkets? So within a metropolitan area, there's all these different submarkets. And those submarkets are kind of impermeable, right? So there's only this submarket that poor people operate in and this submarket, the middle income and this submarket, but that's not true, right? Housing submarkets exist, but they are permeable. So when the city, I'm from Culver City, has Amazon studios come in and gets the 500 new high-paying jobs, there's no more houses in Culver City, they're awful. So those employees are gonna move east to Lamert Park and the people that we're gonna live in Lamert Park are gonna move east to West Adams and the people that we're gonna live in West Adams are gonna move east and we're pushing people out kind of to the edge of the city, right? And that's bad. Thanks. Of course, you're welcome. Why is zoning law, we must build two courts. Why, I mean, I personally think that in certain values, it's kind of that, but then it's almost that. Doesn't make sense. So I think it's, why are the zoning laws what they are? I think it's a combination of kind of history and a static view of zoning. So they built out the city at a density that made sense maybe for the time, right? Single family zoning back in the day as professors of history can tell us often was connected to kind of racist, classist, exclusionary goals of the time. And that was, you know, whatever, 60, 70 years ago. And I think upzoning is a real challenge for people because change is hard and people like the status quo and people are worried about a lot of different things. Happening if they allowed more housing in their neighborhoods. But I think if you were gonna start fresh, you would do it at a much different density given kind of the economic geography of the city. I mean, to some extent it's inevitable if you think about landmark, like demand for housing at different distances to jobs over time, right? So at one point in time, this parcel of land makes sense to build a single family house there, but then the region has grown 50 times since you built it. Now it makes sense to have a temporary building there. Mm-hmm, yeah. Yeah, there are a lot of inconsistencies. Yeah. Thank you. And I really appreciate the focus on that. Right, right. Yeah. Last year in my youth, I heard you talk about poking it from off and then I was randomized last year. Oh yeah, that was fun. So I'm wondering, not just what maximum terms of science, but what maximum terms of where would you mean, discourse, politics, et cetera. Right. And then secondly, talk about process, but you can really talk about the process. And we're going to be the prohibitions. So I thought you were going to have a very, you guys theorized that, but beyond the flaws and the survey. Right. Beyond the flaws and the survey. Right. How low can we get the process and prohibition inside of the same capacity? Isn't it 100% maximum? Right. So thanks for letting me put up this meme. I think, so we did this, we did this survey, like an experimental survey where we give different people arguments against a hypothetical project near them. We say, oh, there's developer wants to build near you and the neighbors are really aware there's going to be a lot of traffic. Do you support or oppose this project? And then we randomly change the argument against it. Developers want to build a building near you. The neighbors are really worried about like the strain on local schools and services. We had neighborhood characters going to get ruined. And then the last argument was developer or developers going to build something near you and the developer has got a variance and they're going to get rich. And that elicited as much opposition as the it's going to ruin your neighborhood. Quite like the catch-all it's going to destroy neighborhood. So I think people hate developers. You know, the president is hated by many. I think, but there's, Manville actually has an interesting paper about growth revolts and kind of how it's sort of planners fault, right? We've made developers into what they are to some extent. And it's because we have increasingly relied on discretionary review. So every project is a five year negotiated thing where the city's trying to get and it's not a standard product that you just like build this product and you're done with it. It's a complicated process of negotiation which favors people with a lot of money, people that break the rules, people that negotiate hard, right? And so we've kind of created them in some sense. And I think one of the things that we're pushing is like turning housing development, making it boring and like here's a standard product. You can build four story apartment buildings everywhere. They're kind of basically the same thing. The process to get it approved is really standardized. And then you could have like mom and pop developers that people don't hate doing it. I mean, I think when you get to a city like New York, I think every project to some extent gets more and more bespoke and you need, like at some point you actually need process regulation because it's just a complicated thing to build a giant building, right? So I think that happens and then you maybe are gonna inevitably have something where I don't really know what happens. All I see is there's this big flashy building that's calling itself luxury and I know someone's getting rich and damn it, I'm mad about. And like we're not mad at the oil. I mean, maybe we're mad at the oil execs. I'm trying to find, trying to think of like other similarly bad people. I mean, we hate lawyers, but they're also kind of similarly in this negotiating kind of context. So yeah, I think that that's a big issue. And I think planners, you know, we're part of the problem and I think planners should, you know, so getting over our hatred of the gross machine and like being okay. I mean, no radical 25 year old wants to go advocate for like luxury apartment buildings in Santa Monica to like help not gentrify East LA. But like actually that'd be a good thing to do. It's just not exciting, I think. So making that exciting would be useful. The other one, maybe I'll come back to it, process. Yeah. Pretty cool. Thank you. Second of all, two questions. How did you treat the unincorporated areas of everybody in the county? Right. And how would you like that data play out in actual results? Yeah, so we just ignore them in this. In some, so LA County is huge and has like a, it has like a million, more than a million unincorporated residents that are living in unincorporators and a lot of them are urban LA, but some of them are like towns in the north of LA County. We just include, it's kind of too messy to include them. So we just exclude them. I don't think, I mean the data points are cities in this. So if we added them, it would be 35, 40 more data points. I don't think it would make a big difference, but we should, we should do something. We should think about that. There are some growths going on in unincorporated areas. Yeah, there's a lot of growth. Well, I mean, and actually, if you look at this zone capacity number, they're not in here, but a lot of like the region's zone capacity, unincorporated areas like carry more than their weight because they have a lot of empty land. Mm-hmm. I have two questions about both kind of related to supply. One, I don't know, I envision this, these small, kind of modest, four-story buildings. You talk about mom-and-pop developers, and it is there, and you think about, remember what a business is, it has a lot of like, it's a community, it's small businesses. Right. They sometimes, you know, there could be an entire, put that into property development, turn one-story line into a four-story apartment building. Mm-hmm. Is there any of that going on in LA now? Is there any sort of population of the small developers that exist under the big corporate developers that might be, you could sort of enlist in this as a more progressive kind of project? And then the second one related to those big developers, I think another part of the story is talking to them, right? And understanding like what they, how they see the market, and how they see, they have their own plans and their own ideas of what's profitable, what's they can bring in return to their investment. And I was wondering if you were ever, thinking about it, this project, building any kind of major views or, Right. Hopefully, going to the developers. Right. The big fact of developers is actually talking to them, which might not be fun, but still, I think there could be a lot of insight into how they think about this market. Right. But if we are so, four-story, with all of Los Felons become four-story apartments. Right. Because it's just a man waiting to, it's just actually waiting to be unleashed. Yeah, so those are both good points. I would love for there to be like a vibrant, it's mom and pop immigrant developer community of four-story apartment buildings. It doesn't exist, because as I said, we don't build four-story, they're not legal anywhere. Where there are mom and pop developers in LA that are kind of developer contractors, are people building really expensive single-family houses. So we have a vibrant, like every, there's a lot of, tear down a 900-square-foot bungalow, throw up a 3,000-square-foot flashy single-family home of the pool, and that's where the mom and pop, I mean that's, I know a couple of them, and that's what they do. And some of them are immigrants. Yeah, and I was thinking that. Right. And so I think those people could be converted to the four-story building developers if those buildings were legalized, right? I mean, and it is interesting how you talk to the develop, I've talked to developers before, and I think that it's useful, but to some extent the ones that exist are building really big projects, so they're not kind of the perspective you want. Not only that, they're the ones that say, the most important thing is process, sequel, impact fees, right? They're really focused on the myopic, kind of what's happening on my project, what don't I like, are all the fees I have to pay, and they're never gonna say, you know what? I've been thinking about this big picture of making housing affordable, and we should have something like, they don't care about that. They care about like their project. So it's interesting, cause when you talk, like the Turner Center report on their survey pointed this out, like developers focus on process, planners focus on like land availability basically, and that's kind of the contrast. But you know, for the nuanced reform of different little things, that's the useful perspective, but less for the big picture. Yeah. You've noticed a difference between how people will respond to against the square footage and the units, it seems like they're pointing this as the size of a unit. Yeah. The problem is that it's a single pinnacle. Or an A unit. I think that they're looking at the reactions primarily about size, or is it about units, and they're trying to potential the grand bargain where the unit counts are a lot smaller, where units are allowed, but there aren't a lot of space. Yeah, it's a good question. It's something people will definitely talk about. I think it's both. I mean, I think if you said, okay, single family neighbors, we're not gonna allow more than two stories, but that 3000 unit, 3000 square foot building can now have six apartments in it. They would also not like that, right? So I think, you know, it's both. But I think the perception of density and the perception of building booms is important, especially in LA. I don't think it says true here, but as a person moving through the city of LA, you don't move through single family neighborhoods. So you don't realize just how much land is dedicated to single family neighborhoods, right? So you move through corridors, and that's where we've put, that's the only place we allow development to happen. So I think that is people do have a skewed understanding of how dense their city is, and it also caused a problem thinking there's a lot of development happening when really there's not. Yeah. We're kind of curious, what is the perception of people's perception of risk of natural disasters in California? Mm-hmm. If you're accepting, how do you kind of influence the quality of the situation against time? Right. Yeah, some of my colleagues recently brought that up. It's like upzoning would be a problem because of natural disasters, but I think it's the opposite. I mean, so there's like a, the LA Times editorial board came out against SBA 27, which was this first effort to force cities to allow tall buildings near transit, four-story buildings near transit, eight-story buildings near transit. The LA Times came out against it, but then later on, there's this thing called the Centennial Project, which is like a 40,000 home master plan community out in the middle of the Tate Home Pat, like really in the middle of nowhere. And I talked to the woman that writes the editorials for the LA Times, and she said, yeah, this is really bad, right? We need housing, but we shouldn't be building a new 40,000 home city right in the middle of wildfire country. And I'm like, yeah, that's why we should have done the infill thing that you guys have posed the year before, right? I mean, I'm not sure, in terms of fires at least, I guess earthquakes or what was the natural disaster the way you were worried about? Getting out? Earthquakes. Sure. Right. Yeah, I mean, I think the earthquake, you know, the building codes for earthquakes in California are good. I trust them. I mean, let's put it this way. Any new building is gonna be way safer than the old buildings. Right. I see. Yeah, yeah, yeah. Yeah. Right. Yeah, no, it's a good point. It's not something really I've really, I don't really know anything about it. Maybe it's dangerous. I know my building at UCLA is a very earthquake-prone and unsafe. Yeah. Right. Sure. Right. Yeah, yeah, actually we have a lot of, there are a lot of historic neighborhoods in LA that were mansions and are now six unit apartment buildings. So we have in the city old fancy mansions that have been converted to that kind of housing. So it's definitely possible. I mean, it's better just to start out as apartments, but I don't think you, I mean, the way the market works, you wouldn't ever convert something like the brand new single family. I mean, part of the issue is also income inequality. So, you know, when we talk about mild upzoning, like let's allow duplexes or threeplexes. It's not clear to me that that would be effective and San Francisco, Teddy again, had this interesting study about that. Because if you can sell a new single family home for $1.8 million, you know, could you sell two condos for $1 million each? Like maybe not. Actually, the economics of it might be, you know, there's a lot of very rich people. So this might actually be better, at least in the fancy neighborhoods. I'm not sure. You know, it's one of those things where we could worry about that happening or we could just like allow duplexes and see what happens. Yeah. Mm-hmm. We've been to turn ours at night time in attainment to offices and people who in the public comment session become very emotional about the old artistic services or training or something. Right. There are always like tax sectors and they're like, again, just building new tax offices and stuff. I feel like the perception of building all this new housing is things that it's not for them. Mm-hmm. It's for people or even the homeless people on the sidewalk. It's for them, right? There's a tax burden. The others. But as I tell them, and also like speaking of your speculator, speaking of your argument earlier about making it cool to be able to now the bridge to get in so that they don't push the pool further to the edge. But there's like, maybe say, in terms of like, for example, analogy in transportation would be we're waiting the road and there are more cars. That doesn't mean it will prevent traffic because it's just people getting cars. Right. So I feel like I do see, I see the argument that I agree that all this, like all of the Torian people houses there, but all these homeless people on the street, that's the problem that we need to fix. But I feel like without, we mentioned that again, without the complementary housing inclusion zoning, just building those four-story houses will give the local people the perception that we're just like, you know. Totally. No, that's a really great question. I mean, I think that's a lot of people's first instinct and it's a good instinct to have. A couple points on that. Well, I'll come to that in a second. One point is everybody hates new buildings and they always have throughout history. So there's a great book you should all read since we're here in New York called The Invention of Brownstone, Brooklyn. Especially the chapter about how when they built the Brownstones, everyone hated them. They were so ugly, tacky, and horrible. And they were mom and pop developers also. I mean, that story is kind of what I think we should be repeating in LA. But then now, guess what? They're the most treasured, iconic, you know, and like people hated the Eiffel Tower and people hated the Golden Gate Bridge, right? So one thing is like whatever basically you build now, everyone's gonna hate it and in a hundred years they're gonna love it. But that's not the important thing, I think. The important thing is this idea of, so two things. One thing is the buildings aren't for them and don't help lower income parts of the city. The other thing is induced demand. I think with the induced demand thing it's a little easier to show that it's not a real problem. You would have to kind of have like an endless supply of rich people not living in your metropolitan area that are all gonna live in all the new buildings for that to be a problem. And that's just not what we observe, right? So in fact, when you build a new building, there's a great, oh yeah, I recommend everyone reading this paper. It's quite good by a guy named Evan Mast. Basically, he looks at when you build a new expensive building, who lives in it, right? And he finds like a third of the people are from out of the metropolitan area. But a third of the people, the other two thirds are from that same city. A third of the people are from the rich neighborhood right around it and so basically they're just shuffling around in the rich neighborhood. But then there's a third of people that move into the brand new luxury building that are coming from a median income neighborhood. And then he traces back like what he calls a chain of migration. So then the people that move from the median income neighborhood into the expensive building, who moved into the building that they moved out of? And he finds that a lot of those people actually come from the next lowest income neighborhood. And so pretty quickly you get this chain of moves where building a new luxury building releases some of the demand for housing in the poorest neighborhoods of the city. So I think that's, I mean, basically that's the story, like the opposite of the story that I was telling where when Culver City adds a bunch of high-tech, high-paying jobs but doesn't add any housing, right? So the employees of those jobs don't live there, they live right there. The people that were living there have to live there and they get slowly pushed out into poorer and poorer neighborhoods. I think that this is this idea about kind of the permeability of housing in some markets. But it's an important concern. Yeah, the difference between induced demand in highways is real because highways aren't priced. Housing is priced. Yeah, sure. Right. Yeah, yeah. So the basic idea, I think I had a picture that might help. I had another better picture better than that. I think this one may, I mean, so basically in the US the zoning development standards say for every parcel, how tall can the building be? How many, what's the setbacks? How close to the edge? What's the FAR, et cetera. It sets the rules about what can be built. And up zoning is the idea that you increase the allowable density. So moving from, you know, you can build one unit on 5,000 square feet, to you can build 10 units on 10,000 square feet. All right, we're done. One more picture. Then I'll really quit. Sorry. This is really good. You should check out these maps by E.C. Roman. So basically he looks at census tracks in the LA region. He does this for all the cities in the US. You should check out buildzoom.com, blah blah. This is kind of what I was talking about. In most of the city, we're building nothing. What does get built is large buildings basically. Cool? Thanks very much.