Planners place too much emphasis on single-family homes and the large apartment buildings
The housing affordability crisis of Silicon Valley and the Bay Area has finally gone beyond the complaint stage.
It’s become so well-known that San Jose’s market requires the nation’s highest median income ($216,000) to afford a home — in many cases, a modest one — that it’s no longer necessary to sound the alarm.
The constructive new stage — represented by the YIMBY (Yes in My Backyard) movement and state Sen. Scott Weiner’s efforts to spur new housing development through state-mandated upzoning — focuses, rightly, on how to increase supply, not merely to lament prices and to call for yet more subsidies and market controls.
At the same time, the new focus on increasing housing supply has fallen into an unfortunate trap — the assumption that the low-density housing of the past (as in south San Jose) must be supplanted by a new generation of high-density housing: mid- and high-rise small apartments built in “transit-oriented” zones.
There’s a middle way to be followed. I call it the “missing middle” in the housing market. It’s a phrase that’s often used to refer to the problem of middle-class households who are priced out of markets they once were able to afford.
But I use “missing middle” in a different way, referring to a mid-range of housing types — especially two- to four-family homes — that fall between the single-family and the large apartment building.
In the pre-World War II era, it was commonplace for new housing developments to include a full range of what I call rungs on the housing market ladder.
“The new focus on increasing housing supply has fallen into an unfortunate trap — the assumption that the low-density housing of the past [must] be supplanted by a new generation of high-density housing...”
For instance, Shaker Heights, Ohio — the San Jose of the 1920s in terms of its wealth — was planned specifically to include small apartment buildings and entire neighborhoods in which two-family homes predominated. (There were mansion districts, as well.)
In the 19th century, affordability similarly followed density: Boston built 15,000 three-family homes; Chicago built duplexes. Such small multi-family and attached buildings can be thought of as naturally affordable. Owners can start small and move up — or can finance their payments with rental income.
The postwar planning obsession wiped away this healthy tradition. It’s time to revive it. Doing so does not require revolutionary change.
In San Jose, for instance (where two-family homes comprise just 1.7 percent of the housing stock), “missing middle” housing could be erected on neighborhood commercial streets currently marked by underutilized retail space. Office parks, with large underutilized campuses, could also host missing-middle housing.
They don’t have to encourage more automobile use. New residents can rely on ride services or, in the future, pick-ups by self-driving cars. One sign of “missing middle” success has already emerged in San Jose: the increase in accessory dwelling units — commonly known as in-law units or granny flats — and their encouragement through state legislation.
San Jose’s Department of Housing reports that ADU permits in the city have risen from 15 in 2013 to 92 in 2017. ADUs bring with them a modest “densification”— along with community benefits. They allow seniors to age in place but realize rental income, or young households to use such income to purchase homes, perhaps while helping out older ADU renters.
Filling in housing’s “missing middle” can create new classes of housing winners — and diversify the housing portfolio of cities such as San Jose that need a new generation of residents. Modest zoning changes can get the ball rolling
This piece originally appeared at the The Mercury News
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Howard Husock is Vice President for research and publications at the Manhattan Institute.
This piece originally appeared in The Mercury