I was alerted that in my first post this morning, the link to my piece in the LA Daily News was broken. The link below should be fixed. Thank you for your patience!
My latest op-ed was published in the LA Daily News last Friday and took on a familiar topic: housing in Los Angeles. The premise of the piece is that while homeownership in Los Angeles has become incredibly difficult, it might become a little bit easier by embracing a simple, older form of housing: the townhouse:
Interestingly enough, the piece made some waves on the Los Angeles subReddit, where it became the top story on the site, with commenters having a mix of reactions:
To be clear, the main thrust of my article was not arguing that everyone in Los Angeles lived in a townhouse: but rather that the option to live in a townhome should be more widely available by legalizing the building of townhouses across the city:
When I moved to Los Angeles, I was instantly struck by the look and feel of the city — the sunny skies, the beauty of the mountains, and the beach — LA is genuinely awe-inspiring, especially to newcomers. Yet over the last few years, I’ve experienced some of the city’s harsher realities — namely, the near impossibility of homeownership. Average home prices in LA are currently over $950,000, leading families to leave in search of lower costs.
If policymakers are interested in keeping LA the captivating paradise we all remember, they should start by reforming our zoning laws. Specifically, the city should revisit its costly obsession with detached homes.
Three-quarters of residential land in Los Angeles is zoned only for detached single-family residences. For most of LA, this means that these lots are mandated only to have one unit while having at least 5,000 sq ft in size. That might sound nice, but this bans anything but the most expensive and luxurious type of housing, the majority of which costs over $1 million — $300,000 more than your average condo. It’s simply too expensive for middle-class families.
Here is a visual of what single-family zoning looks like in LA:
LA City, while the focus of my article, is far from the most restrictive city in the region. Here is a map of what the broader Southern California region looks like, where 78% of residential land is restricted to single-family homes:
This contextualizes the fact that the median home prices in Southern California are crazy across the board, not just in LA City:
And here is Cerritos, where my wife grew up, where 90% of residential land is mandated to be single-family homes with a minimum of either 5000 or 6500-foot lot, and the median home price is over 954,000:
Related fact: Cerritos dedicates 125 acres of land to zoning for “Cerritos Auto Square,” which the city designed in their zoning code to ensure that the land is used for car dealerships and office buildings that support auto dealerships. Who says America doesn’t do industrial policy?
In many ways, the lack of townhouses came as a bit of a shock to me when I moved here. In the mid-Atlantic and northeast, cities are generally older and have a more traditional urban form. However, cites like DC, Boston, Baltimore, Philadelphia, and New York all have numerous townhouses (or rowhouses as they are often called in the region) as a staple of city living; and are often just as desirable as single-family houses because of their location! Thus I cite DC as an example LA can look to:
The good news is LA can learn from other American cities that have succeeded in building middle-class housing. Consider Washington DC, which has a similar density to LA, but half as much land reserved for detached homes. DC’s population grew four times faster than LA’s in the 2010s, yet housing prices in DC increased at half the rate, with the cost of DC’s condos increasing at one-fourth the rate.
Some may object to DC as a model for affordability; home prices there are still unaffordable for low-income families. I agree; having grown up in northern Virginia, I know the DC metro area needs more homes! If you agree, you should check out the YIMBYs of Northern Virginia, whose leadership I have had the pleasure to talk to, and they are doing good work!
But not all affordability crises are created equal. When you look at the price appreciation in LA and DC, you see the two cities had virtually identical median prices in July 2014 (536k in LA, 516k in DC). Still, things in LA have diverged sharply in the last eight years (with prices peaking around 1 million this summer:
In many neighborhoods in DC, it’s still possible to buy a house under $500,000, something not true in a single zip code within the city of LA.
Here is the underlying data showing the difference in how prices have appreciated, explicitly breaking out single-family homes and condos:
Furthermore, its worth noting that in a environment of scarcity, prices have risen the fastest in low-income neighborhoods in both cities, but much faster in LA (note Lincoln Heights with prices more than doubling) versus DC (with Anacostia rising 58%). So in many ways, even though low-income residents cannot necessarily afford townhomes, there absence has a disparate income on the ones that do exist in their community, leading to gentrification and displacement
But lets step back for a second: why is the townhouse more affordable? Its actually pretty simple: cheaper constructions costs and less land cost:
What’s DC’s secret? Much of the city’s housing stock is in townhomes. These homes offer ample private space for a family, easy access to sidewalks, and often a yard. But because they share walls, they are more affordable to construct than a detached home of the same size.
Most importantly for LA, they represent a way of making the most of scarce land. Take the typical 5000-square-foot lot, where Los Angeles currently only allows a single home. If we lower the minimum lot size to 1250 square feet and allow townhomes, four homes could take the place of one. When you make this change across a whole block, a block with ten single-family lots could provide 40 families with more-affordable homeownership opportunities.
But you might object: DC’s townhomes were built many decades ago. Would starting to build townhomes in LA really help housing costs in the near future? Well, the example of other cities shows that it can help in a 10-20 year time horizon:
Many cities have already embraced this approach. Houston saw a boom in townhome construction after dropping minimum lot sizes to 1,400 square feet in 1998: over 25,000 homes were built between 1999 and 2016, mainly in the city’s desirable inner-ring suburbs. These homes have helped keep fast-growing Houston affordable, with median single-family home prices around $275,000. Likewise, Seattle has seen 16,000 units built in its “Low-rise Multifamily” zones since 2000, mostly taking the form of new townhouses on small lots. These townhomes often have the same square footage as detached homes but with prices that average 40% lower.
So what can LA actually do? I outline a simple pathway, building on an existing housing program in the city:
LA could follow this pathway by making three important changes to our existing, successful Small Lot Subdivision program, which has allowed more townhomes in LA. First and most importantly, the program should be expanded to include all residential areas instead of just multi-family neighborhoods. Second, the city should give total flexibility in the number of required parking spots, as Culver City did. Finally, the city should ensure that builders are given the flexibility to build up to 3 stories while eliminating all subjective design reviews.
Let me provide a little more context here: the cities small-lot subdivision program allows for taking large lots of land, and splitting them into smaller parcels where homes can be built. The ordinance also waives setbacks, which mean that properties could share walls or have very narrow gaps between their walls, to keep costs down. Lot-spliting allows for people to own their townhome and land (as opposed to a condo where you only own the structure) which is generally popular with families. The program allows lot sizes as small as 600 ft, which given the experience of other cities, is small enough that it would make financial sense for builders to actually split lots.
My proposed changes to the program to maximize the number of townhomes that can be economically feasible are pretty straightforward:
The most important change would be allowing single-family land, both because its the most common type of residential land in LA (74%) and because that land is the space where builder likely will have the biggest incentive to redevelop, given that the difference in density between the existing use and potential use is highest
Second, the city should ensure that townhouses do not have a minimum number of required parking spaces. Right now, small lots developments have two required spaces per unit, which in LA, could mean over $100,000 in costs. LA should trust the housing market to do its job: other cities experience shows that the majority of townhomes will come with a garage on the bottom unit, because families really like having parking, but requiring two spots likely makes townhouses infeasible
Third, the city should ensure that the minutea of planning rules cannot block their construction: to be economically viable, townhomes need to actually be tall enough (3 stories) to make up for the smaller land footprint. And they need to not be conditioned on subjective design review on their architecture, which allows any community to block their construction by inserting arbitrary rules into the process
Realistically, this will not lead to townhouses appearing everywhere all at once; what we are aiming for is the create the conditions where when housing is redeveloped, that redevelopment drives down the price, instead of the current equilibrium where the investment, redevelopment and home-flipping in single-family neighborhoods drives up prices, because developers are banned from building new units. Legalizing these homes across the city also means that most of the development will happen in wealthier neighborhoods, not gentrifying neighborhoods on the Eastside, because that is where it will make economic sense to put this housing:
Even with these reforms, most communities will only see incremental change: research shows that 10-15% of Los Angeles’ land now zoned for single-family houses could feasibly see redevelopment over the next decade. Yet this could make a large impact: almost all these new units would provide homeownership opportunities for young families in desirable neighborhoods.
LA will always be a destination for those seeking their dreams. Homeownership will remain an insurmountable challenge if we keep our supply of homes strictly limited. Instead, we must find room for newcomers. Townhouse development could be the crucial first step.