Written By Eric Kronberg & Phil Veasley

I. Backstory

In 2019, Kronberg Urbanists + Architects was approached by the owners of two houses in Atlanta’s Edgewood neighborhood that had long been rentals. They liked what we had been up to around the corner at our 2017 pocket community development at La France Walk, and they were curious if we were interested in buying their lots before they put them on the open market.

As urbanist architects, we dug in to see if we could come up with a solution to two vexing problems we’d been wrestling with:

1. What type of project could deliver workforce housing options, without subsidy, and do so without requiring rezoning, variances, or other forms of community approvals—all while retaining the existing houses and as many trees as possible?

2. Could we create a by-right cottage court development that incorporated existing housing and trees—and hit the rent levels targeted?

Enter Finley Street Cottages. Design started, as it always does, with sketching out a site plan and running a project pro forma to determine if we could achieve a feasible project while providing workforce housing rents. We had to analyze the site design and cost implications in tandem to determine a viable path forward. Our diligence revealed that there wasn’t one within conventional approaches; this essay outlines what we did to make the math work and deliver on our commitment to affordability.

DEFINITIONS

DEFINE: BY-RIGHT DEVELOPMENT
A by-right project complies with existing zoning standards, removing the need for discretionary review.

DEFINE: PRO-FORMA
The term pro-forma means “for the sake of form” or “as a matter of form.” When it appears in financial statements, it indicates that a method of calculating financial results using certain projections or presumptions has been used.

DEFINE: AREA MEDIAN INCOME (AMI)
The area median income is the midpoint of a region’s income distribution, meaning that half of households in a region earn more than the median and half earn less than the median. A household’s income is calculated by its gross income, which is the total income received before taxes and other payroll deductions.

DEFINE: WORKFORCE HOUSING
Most cities define workforce housing as housing attainable for folks making somewhere between 80 and 120 percent of AMI. The City of Atlanta defines workforce housing as costing between 60 and 80 percent of AMI for rental dwellings and 80 and 120 percent for for-sale dwellings. At the time of writing, a studio or efficiency apartment in Atlanta renting at 60 percent of AMI would cost just over $1,000 per month. In contrast, affordable housing is typically associated with various forms of subsidy for people making 30-60 percent of AMI.

II. The promise of Finley Street

In Atlanta, as elsewhere, citizens are suffering due to a lack of attainable housing. Options that do exist are farther and farther away from public transit, which is making housing less affordable at twice the rate. Advocates are often shocked to learn that building low-cost housing is functionally illegal. Still, Southern cities are gradually changing that, and Atlanta is making incremental steps toward better outcomes. Finley Street Cottages is a development that such efforts made possible.

As a pilot project that started brewing in late 2019 and that is quickly nearing completion,* Finley Street demonstrates the attainable rental housing possibilities that are achievable through incremental zoning reform. Specifically, it was made possible via modifications to Atlanta’s zoning to allow accessory dwelling units (ADUs). Reduced parking requirements were also critical to maximizing housing opportunities in this existing two-family zoning district. The savings achieved by providing no off-street parking will be passed on to the residents. These savings are a key piece of the affordability puzzle, because even when rents are set through Inclusionary Zoning (IZ), parking mandates on workforce housing make the total cost of living unaffordable. Currently, the cost of car ownership in Atlanta averages over $1,000 per month. In this context, mobility-rich projects like Finley Street have an obligation to maximize housing options that leverage transportation alternatives—and capture the true costs savings they provide.

How does Finley Street stack up? The Cottages are located just outside of Downtown Atlanta and within walking distance of two MARTA stations, multiple bus stops, and the Edgewood Retail District.** Not only that—nearby bike paths allow for a 15- to 20-minute ride to Ponce City Market, and the ride to Trader Joe’s comes in at 20-25 minutes. The location of this project allows residents the freedoms needed for a car-free lifestyle. These freedoms are vital, and although they are rare throughout the South, they are not unique to Atlanta. Similar developments can succeed anywhere the right neighborhood ingredients are present. Let’s look at what those conditions are, how they are intertwined, and how they contribute to affordability.

III.  What makes a neighborhood?

A healthy neighborhood is an ecosystem. One critical component of that network is the ability to access amenities. Whether someone is buying groceries, going out for tacos, picking up beer, enjoying an ice cream, attending a house of worship, looking for a place to exercise or play, utilizing the library, going to school, or seeking out something else entirely, the key is this: In thriving neighborhoods, people can comfortably access such amenities without having to get in a car.

We’d need approximately 23 units of housing per acre for stores to have enough customers living in walking distance to support them.

There’s a lot to unpack within the idea of mobility. It means streets with dignified sidewalks and street trees. It means slower traffic so that people feel safe riding a bicycle, without fear of death. It also means enough households living within walking or cycling distance of goods and services, reducing the need for outsized parking lots to serve commercial amenities. If businesses want to rely on the surrounding community for a sustainable customer base, single-family-only housing fails to provide the level of density required.

DEFINITIONS

DEFINE: STREETCAR-STOP NEIGHBORHOOD
A streetcar-stop neighborhood is a first-ring suburb developed in the US in the years before the automobile with electric trolley or streetcar-based travel in mind, allowing residents to move beyond a central city’s borders.

DEFINE: PLATTING
Platting means the filing of the drawing, map, or plan of a site or a replatting of such, including certification, descriptions, and approvals with the proper county or city officials.

To put this into perspective, we can reference some basic math from urban retail development expert Bob Gibbs. Speaking in terms of units per acre can be intimidating, so we’ll introduce some examples in a moment.

1. A typical commercial convenience center in a streetcar-stop neighborhood typically tops out at 30,000 square feet. These centers tend to get larger if anchored by a grocery store, and it takes approximately 2,000 households to support one at the size of 30,000 square feet.

2. Although the standard distance for walkability is a half mile, a quarter mile is a much more realistic distance to walk for groceries. In a map with the Finley Street Cottages at the center, much of the Edgewood Retail District fits within a quarter-mile circle. This circle has an area of 125 acres. Assuming 30 percent of that is public, 88 acres remain private development. If all that land were dedicated to housing, then the math would be simple: We’d need approximately 23 units of housing per acre for stores to have enough customers living in walking distance to support them.

How easy is it to reach this target? A single house with an ADU on a 7,500-square-foot lot is 11 units per acre. If that house had two ADUs—one basement ADU and one detached—it would be 17 units per acre. If we can provide a duplex and two ADUs, we get to 23 units per acre. That’s on track. Ultimately, though, if you have a minimum lot size of 15,000 square feet, a single-family home, and no ADUs, the best you’ll ever get to is three units per acre. With typical Southern densities, our goal of 23 is nowhere in sight.

WHY DON’T WE SEE MORE COTTAGE COURTS?

In our experience, lots of community activists, planners, and city leaders gravitate toward the idea of cottage courts. They don’t look too big, the cottages are cute, and they seem like the kind of development that could and would integrate into a neighborhood development pattern with more single-family homes. But municipalities often make the mistake of only allowing cottage courts in the same zoning districts that allow townhomes. We argue this is a mistake, because a townhouse development can typically fit about twice the density as a cottage court. Twice the density tends to mean you can pay at least twice as much for the land and potentially make twice the profits on the development. As long as these circumstances persist, developers will not be likely to build a cottage court on land zoned for townhomes, and they’ll miss an opportunity to offer more attainable housing.

To overcome the development math challenges listed above, cottage courts need to be explicitly permitted in single-family districts. There are specific cottage court ordinances that can be pursued, but Finley Street demonstrates what you can do with an effective two-family zoning district layered with accessory structures permissions. For instance, you can start to assemble a cottage court out of a couple individual lots. The biggest shortcoming of this approach is that the cottage court is limited to being a rental community, as single-family zoning typically does not allow for separate platting of individual cottages that do not conform to lot frontage and area requirements. Durham has passed a zoning update called Expanding Housing Choices (EHC) that provides more ways to tackle cottage courts with more ownership opportunities, largely through small lot codes and reduced pole flag lots.

When the Finley Street Cottages were approved, the reaction of neighbors was to downzone the whole area so no one could duplicate this type of project in the future. Finley Street is one of the few new-construction, non-IZ workforce housing options in Atlanta, but the hope is that it will reduce “not in my backyard” (NIMBY) angst, encourage more cottage courts, and allow for further zoning reforms in mobility-rich portions of the city.

In practice, not every lot will maximize all the available units. There will (and should) be a range of densities. Having a six- or twelve-plex on a corner lot at a higher density can help balance out multiple lots with only a house—or a house with an ADU. When you look around older neighborhoods (built 1880-1929), you might see the image above as a typical development pattern.

By eliminating unwanted-but-often-mandated amenities, Finley Street rents are 20 to 60 percent more affordable.

Amid all this math, it’s important to remember a more qualitative ingredient all thriving neighborhoods need: connectedness. Traditionally, porches and vibrant streetscapes have helped facilitate connection. Another way to achieve this type of space is to design cottage courts. These developments are typically an arrangement of differently sized cottages around a private green—a setup that provides more opportunities for porches and stoops. In other words, cottage courts offer more chances for human interaction. As a result, they help build better neighborhoods.

IV. Why cities need to recalibrate their neighborhoods

Like most other major cities across the country, Atlanta is facing a steep housing crisis. Early in 2022, Dan Immergluck, Professor of Urban Studies at Georgia State University, told Axios: “In the last year or so things have gotten much worse, both in terms of rents rising a lot and home prices getting increasingly out of reach for modest-wealth families, especially many Black and Latinx households.” This situation has a few contributing factors. One, simply, is that we have built far less housing than needed over the past decade. This is easily blamed on the Great Recession and its aftereffects. According to FRED, at no point in since the Great Recession has Atlanta built nearly as much housing as it did during the early 2000s.

A second component to this crisis deals with modern household structures. Currently, over 70 percent of American households are not nuclear families, but the bulk of households only have one or two members in them. Meanwhile, the bulk of our housing stock offers three to four bedrooms, and the average Atlanta apartment is nearly 1,000 square feet. We need more smaller homes. This housing mismatch decreases affordability, forcing people to either rent more house than they need or bridge the gap with roommates. The solution is clear: Rightsized housing options mean that people can choose their housing size relative to their budget. So, why is accessing that choice so hard?

One natural design fix would be to provide smaller units, such as studios and one-bedrooms.*** These unit sizes are easy to envision in larger-format, multi-family complexes, but they’re harder to slot into existing neighborhoods. Traditional project types are readily understood by zoning officials and the financial markets, and they’ve become the main alternative to single-family housing. Although we see such projects as one critical piece of addressing house supply, we also see many people hoping for an alternative housing choice. For instance, they may be fine with the lower square footage, but they might not want to live in a complex of 200-300 units or be able to pay a premium for its amenities. Others simply prefer a more neighborhood scale.

“Missing Middle Housing” has become a prevalent topic over the past few years. The term, conceived by Daniel Parolek in 2010, encompasses all the housing options that exist between a detached house and a large apartment building. NIMBYs still argue against Missing Middle Housing, but the mismatch discussed here shows that these options are urgently needed. What’s more, these smaller-format buildings better integrate into the more compact lots typically present in existing residential neighborhoods. As such, Missing Middle Housing tends to be comprised of infill projects with fewer total units. But that shouldn’t minimize those projects’ potential. Designed well, they can become communities unto themselves while also connecting residents with the surrounding area.

A key goal of creating more Missing Middle Housing is to offer more rental dwellings for a lower cost to the tenants. That invites an obvious question: How can we maximize development savings? One answer lies in parking. On average, it costs developers over $25,000 per parking spot to build a decked structure and $5,000 to $10,000 per spot for a parking lot. And yet, the choice to provide a dedicated, off-site space to store cars isn’t just about the cost of building a parking lot (or garage). It’s also about the lost opportunity cost of land dedicated to vehicle storage. This choice means fewer housing options, of course, but the tradeoff is more complex than that. By not providing dedicated parking, those funds can instead be used to construct more units, leading to even lower rents. Parking adds costs and reduces revenue. Both make attainable housing less viable.

To put these savings into perspective, we keep an eye out for rental rates at nearby larger format apartment complexes that offer the amenities described above. The cost of providing those amenities translates to a rent increase of approximately $300-$600 more per month, per unit compared to the rents at Finley Street Cottages. In other words, by eliminating unwanted-but-often-mandated amenities, Finley Street rents are 20 to 60 percent more affordable.

These savings amount to a significant benefit for residents. But what Finley Street Cottages offers is greater than that. Yes, it’s lower-cost housing with access to amenities and mobility options to employment. But it’s also dignified housing. It’s community. And it’s part of a better future for Atlanta.

For more detail on the relationship between workforce housing and workforce transportation, check out this Explainer.

Eric Kronberg is a zoning whisperer. He uses his skills for good as a principal at Kronberg Urbanists + Architects, leading the firm’s pre-development efforts by combining skills in planning, development, architecture, and zoning. @EricKronberg

Phil Veasley is a multimodal transportation engineer working on projects throughout the Southeast that build places for people to move and thrive. Follow him on Twitter @Urban_Connector

*The Finley Street Cottages ribbon cutting happened in December 2022—shortly after this piece went to print.

**At Edgewood Retail District, area residents can find just about everything—groceries, restaurants, home goods, banking options, medical care, pet supplies, cleaners, professional services, and more.

***For example, the R-5 District in Atlanta allows for attached single-family homes—i.e., duplexes—plus an accessory dwelling unit per duplex unit and a guest house unit per duplex unit. At least in theory, that translates to 6 units of housing per lot.

All images courtesy of Kronberg Urbanists + Architects. This piece was originally printed in Issue 1 of Southern Urbanism Quarterly.

Written By Kristina Pollard

Although I am proud to be a Texan, I cannot ignore the decline of this great state. The affordability crisis, in large part due to housing affordability, has reached an unacceptable zenith.

I am a preschool teacher who teaches toddlers Monday through Friday while also working at a restaurant Saturdays and Sundays, doing my best to make ends meet. I struggle to make a living as a college-educated Texan, wife, and mother, working two jobs with no homeownership in sight. But Texas legislators have the opportunity to change that by voting yes on historic workforce housing legislation to allow for homes I could comfortably afford, like smaller-lot homes and “granny flats,” a.k.a. accessory dwelling units (ADUs).

I work as a lead guide at a prominent Montessori academy. My father, a Texas native and Marine Corps veteran, often told me of the wondrous opportunity the state of Texas offers to industrious individuals. My salary, after the deduction of vital health insurance necessary for my husband and son’s asthma care, barely covers half my rent. Because of this, I work on the weekends at a restaurant and take occasional financial help from my parents, as little as possible and only as much as my pride will allow.

By allowing smaller kinds of housing, this homeownership fantasy can become a reality for teachers, nurses, and young professionals.

Unfortunately, mine is not an uncommon story, and I have seen a number of hard-working, talented teachers leave my school simply because Austin is too expensive to live in. I have mentally calculated how much I can spend on lunch (trust me, it’s not much) so that I can make the long commute to work, sometimes two hours round trip to my home in Cedar Park. I have offered to share what little I have with assistant guides who cannot afford gas to make it to work. I have looked into the eyes of parents worried about the high turnover rate and told them it will surely get better, knowing that it will not because housing prices keep climbing.

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I, and many teachers like me, are doing all that we were told would grant us simple but autonomous lives. I work seven days a week, every week, and still homeownership is beyond my grasp, save in my most ludicrous fantasies. My husband and I care for a nation’s disabled veteran and my handicapped mother, and still we calculate exactly how much we’ll have after paying rent. But by allowing smaller kinds of housing, this homeownership fantasy can become a reality for teachers, nurses, and young professionals.

Now, being from a military family and having immersed myself in the idealism of Texas, I am strongly opposed to the notion of handouts. But what I’m asking for is not a form of charity. I ask simply to cash in on the American promise of stability through hard work and unfailing optimism. This is a plea to Texas legislators to cast votes for the ADUs and medium-size lots that teachers like me can actually afford. 

As Texas legislators cast votes for housing affordability bills, I respectfully ask for deep consideration of the Texas middle class—public servants and workers. A group that is dwindling, drowning, and dying. A group that the community depends on to perform such lofty work for our society. Educated and hardworking people like me who make in the $40,000 - $50,000 range and hope to afford homeownership at some point in their lives. 

While lawyers, legislators, and business owners are busy working, there are teachers like me watching your children and grandchildren, your nieces and nephews. There are servers to bring you your food. There are nurses to support life-critical surgeries. Please, help us, so that we can continue to serve our Texas communities. Please, help us, and protect the dream of the hardworking Texan by voting yes on landmark ADU and Minimum Lot Size laws.

Kristina Pollard is a Montessori teacher/guide in the Austin area as well as a restaurant host.

Written By Eric Kronberg & Phil Veasley

The following is intended to accompany the article “Tackling Atlanta’s Housing Crisis” from Issue 1 of Southern Urbanism Quarterly.

It isn’t possible to address affordable housing without tackling workforce housing. And we can’t do either without also attending to workforce transportation. Workforce housing is a primary focus of our efforts at Kronberg Urbanists + Architects, and this animates a question we often ask ourselves: For a city in a housing crisis, why does Atlanta accept the preponderance of single-family-only zoned neighborhoods around transit stations in the most mobility-rich parts of the city?

When most people discuss attainability and affordability, they often use the benchmark of AMI. Federal government guidelines determine that a household is housing cost-burdened if they are paying more than 30 percent of their income toward housing. With costs spiking, a significant number of people in the U.S. are housing-cost burdened.(2)

But housing costs are only one piece of a household’s budget. The other big component is transportation. Federal targets state that the combined cost of housing and transportation should not exceed 50 percent of total income. Because we know from above that housing should not exceed 30 percent of income, this means that transportation costs should not exceed 20 percent of income. Taking our studio example (in the print journal companion piece, see the pop-out definition of workforce housing) with a rent of $1,000 per month, a person making 60 percent of AMI should not be spending more than about $670 per month on transportation.(3)

We can weigh this guideline against the true cost of owning a car. How realistic is a figure of $670 per month? It’s not enough to mention that the cost of used cars has increased 45 percent in recent years. With Metro Atlanta being the car-choked and crash-prone area it is, drivers also pay more in gas, waste more time in traffic, and pay higher insurance premiums.(4)

If the absolute best-case cost for an affordable, fuel-efficient sedan is $8,850 per year, that translates to $735 per month. That’s already well past the cap of $670 per month recommended by federal standards. This math reflects the numbers we’ve seen from AAA, the biggest pro-car group we know. Even if we take a middle-ground figure from their studies and estimate that $10,000 per year is reasonable given the dynamic factors in our present economy, that’s $833 per month—even farther past the $670 target. The calculated rental cap for a 2-bedroom apartment at 60 percent of AMI is $1,300. Clearly, this is not double the cost of a studio. But if you have a household with two vehicles, these costs can double.

Put this way, workforce housing located in drive-only locations is already a losing proposition. The most important thing we can do as a city is promote more compact, workforce-inclusive housing close to mobility options. We feel it is essential to explicitly state mobility options instead of transit options: To us, mobility includes a built environment with functional sidewalks for pedestrians, slower streets that are safer for cyclists, reasonable proximity to bus stops, and, ideally, less than a half-mile walk to a MARTA station.

Finley Street Cottages places residents within a half-mile walk on safer streets from two MARTA stations, along with ample options for shopping, dining, and other key amenities.

Eric Kronberg is a zoning whisperer. He uses his skills for good as a principal at Kronberg Urbanists + Architects, leading the firm’s pre-development efforts by combining skills in planning, development, architecture, and zoning. @EricKronberg

Phil Veasley is a multimodal transportation engineer working on projects throughout the Southeast that build places for people to move and thrive. Follow him on Twitter @Urban_Connector

NOTES

(1) Using AMI has a range of challenges associated with it. Because this is an approach defined by the federal government, it’s the Department of Housing and Urban Development (HUD) who determines the catchment area to track and analyze. They also provide this data for metro areas across the country and the City of Atlanta AMI catchment area includes Sandy Springs and Roswell. These Northern suburbs pull the income higher than it might otherwise be for just the City of Atlanta. Under this rubric, the 2022 median income for an individual in Atlanta is $67,500. There are tiered amounts for two-, three-, and four-plus-person households as well. Invest Atlanta posts the 2022 official rent and for sale limits here.

(2) Recent data shows that this measure went up to 30 percent of all U.S. households in 2020. The proportion goes up to 46 percent when we look specifically at renters, and the largest upticks were seen among Black households and those earning $30,000-$49,999. See more here.

(3) If the figure of $1,000 in rent reflects 30 percent of a household income of $40,000 per year, to find the federally recommended cap on transportation costs for that household, we’d look at 20 percent of $40,000: $667.

(4) We like to reference AAA for these costs, because they tend to be exceedingly pro-car and represent the floor of a cost estimate. 2021 costs from AAA range between $8,200-$11,000 per year for a national average. If we assume 8-percent inflation for 2022, the range becomes $8,850-$11,880. When factoring in the higher cost of being an Atlanta driver, this cost of owning a car is over 10 percent more. For some people, an even wider range of cost factors must be taken into consideration. For example, if your current rental housing has a parking lot or deck, those costs are passed through in a form of higher rent. This is part of the cost of vehicle ownership. One example of a more inclusive cost study from 2019, long before used car prices spiked during the pandemic, placed the true cost of Atlanta vehicle ownership somewhere between $11,000-$14,000 per year. Inflation has bumped this range up to $12,000-$14,700. Throw in the gas prices we’ve seen in 2022, and the pain only increases. We’ve also run the math on a monthly mobility budget for someone who is car-free. We calculate $95 for a MARTA pass, $500 for rideshare and scooters, and the remaining budget going toward a bicycle. This calibrated mobility expenditure can put someone within reach of a lot of housing (and employment) options if located in the right place.

Written By Luca Gattoni-Celli

Many question whether the housing affordability crisis in the US and other countries is really caused, at root, by a shortage of homes. This skepticism defies the observable reality of long waiting lines to view apartments in New York City and 300-plus people bookmarking a new home in DC-proximate Fairfax County, Virginia, only a day after it has been listed online (ask me how I know). Critics view YIMBYs and other housing supply advocates as either useful fools or rotten liars. So how can we possibly believe that market-rate (unsubsidized) housing or “luxury” apartments or condos make housing more affordable for even the poorest of the poor?

I could question the premise, since “luxury” as a real estate term appears to be pure marketing. The photo below speaks to that idea. Of course, new market-rate housing is inherently expensive relative to the equivalent home (e.g., in the same location) that is not new. But let us imagine a luxury condo building so opulent that it has gold toilets. Only the wealthiest of the wealthy could live there, sipping Acqua Panna and spelling the word crudités correctly without having to look it up. Adding such luxurious homes to the local housing stock would actually take pressure off the economic drivers of homelessness. Allow me to explain.

Ask yourself, where did the people now sitting on those golden thrones live before? Probably in less expensive homes, right? After all, we are talking about the nicest condos and apartments imaginable. One living room (obviously, there would be a few in each unit) has a fountain with those peeing boy statues. If Donald Trump is a poor person’s idea of a rich person, then the people living in our imaginary building are a rich person’s idea of a rich person.

Too much money is chasing too few homes. That demand is what is truly trickling down, squeezing the most socioeconomically vulnerable individuals and families—sometimes out onto the street.

To fully understand how our building would impact the housing market, we would have to add a final element to the thought experiment: Consider what would happen if we demolished our building. The gold toilets would be melted down for fixtures in a new structure, perhaps the world’s largest Hermès store. Our residents, assuming they chose to maintain a home in the same area, would move to less expensive homes. They would outbid or buy out marginally less wealthy residents. And the folks who were, in the most benign sense of the word, displaced would, in turn, move to marginally less exclusive homes and neighborhoods. This basic dynamic would continue to ripple through the local housing market. And in that way, a few more of the working poor might find they cannot quite keep up with this year’s rent increase.

The term “filtering” was coined to describe how even new high-end homes relieve pressure on the low-cost end of the housing market. Critics derisively call this “trickle-down housing policy,” but under the status quo, too much money is chasing too few homes. That demand is what is truly trickling down, squeezing the most socioeconomically vulnerable individuals and families—sometimes out onto the street.

I founded a grassroots pro-housing group called YIMBYs of Northern Virginia. The Tuesday before Thanksgiving of 2022, a member of my team and I were invited to tour a homeless shelter in Alexandria, the city where I live. The staff member who gave the tour was excited to meet us. She drew a direct connection between the systemically discriminatory zoning and land use rules our group is working to dismantle and the families her shelter helps get back onto their feet and into permanent and stable housing. She has seen a recent increase of folks experiencing homelessness in our area, not only because the COVID-19 eviction moratorium ended, but also because rents keep rising. And the shelter battles low vacancy rates to find new homes for its clients.

There is an unforgiving, all-too-real relationship between low apartment vacancy rates, high rents, and the crisis of homelessness in American cities. New homes with gold toilets will obviously not solve the problems in our housing market, but they would genuinely help. We must think big about ending the housing shortage and find ways to say yes to new housing in our backyard. Rejecting housing that does not fit a preconceived ideal is a luxury no one should be entitled to.

Luca Gattoni-Celli is a fast-learning urbanist and (social) entrepreneur. He founded YIMBYs of Northern Virginia (yimbysofnova.org) in 2021. He is a Catholic former federal tax reporter with an economics background.

This piece was initially posted on Medium.com on November 26, 2022.

Written By Magatte Wade

Texas’s business boom continues to draw eyes across the country: From Samsung’s $17-billion manufacturing facility to the new Goldman Sachs office that plans on hiring 4,000 employees in Dallas, the key component in this attractiveness is the ample availability of reasonably priced housing for employees. However, year after year, our housing market experiences a dangerously large shortage in supply, leading to skyrocketing prices and fewer and fewer options for employees seeking a place to live.

With about 1,000 people moving to Texas each day, a new job for a new Texas resident cannot mean one less house for a lifelong Texan driven out of the market.

As a small business owner myself, I’ve seen how the housing shortage continues to be a major hurdle for those  looking to prosper in Texas. Rising housing prices have made it difficult for businesses to attract and retain employees, with their employees struggling to afford housing. When employees are unable to find reasonably priced housing, they eventually move away, leading to high turnover rates for Texas businesses. Some are driven out of business entirely, like Baby Greens.

Due to sky-high housing prices, Baby Greens’s Founder Sharon Mayes, a beloved Austin-based healthy fast food restaurant owner, shut her doors because their employees could not afford to live in the area. Before closing, Baby Greens even tried to hire new employees by offering a starting wage of $17 an hour, $5 higher than the industry average in Austin. With rent in the city sitting at a whopping median of $2,930, Baby Greens could not find new employees willing to stomach the outrageous cost of living. With housing and rental prices now increasing in San Antonio, too, I have no doubt restaurants and other small business owners are facing the same problems.

While Austin is the fifth most expensive city in the country, Texas’s other cities struggle with housing supply problems as well. The median renter in San Antonio, Fort Worth, and Dallas makes far below what is required to afford a starter home. For Texas to continue to be a desirable location for businesses to operate and expand, it is imperative that we increase our supply of free-market workforce housing for the middle-class Texans who are the foundation of our communities, as well as our state’s flourishing economy. With about 1,000 people moving to Texas each day, a new job for a new Texas resident cannot mean one less house for a lifelong Texan driven out of the market.

There are a few meaningful ways in which we can solve Texas’s housing crisis. One option is to encourage the development of units that are within reach of people, like entry-level professionals, firefighters, and teachers, such as townhomes and garage flats. These types of homes can be more affordable than standard single-family units while also offering the added benefit of being far more energy-conscious due to their smaller size, low use of resources, and proximity to where employees work and play.

Another way to increase the housing supply is to ease onerous obstacles deterring builders from constructing new homes. Streamlining the permitting process and reducing regulatory barriers, which can be time-consuming and costly for builders, have proven successful tactics before.

One study found that 45 percent of housing construction did not even get off of the ground in over-regulated markets. By making it easier for builders to get started on new projects, we can increase the number of homes being built, add to the overall housing supply, and decrease housing prices, benefiting our workforce and, in turn, our businesses.

Increasing the housing supply in Texas is key for the state to continue to add jobs, innovate, and thrive economically. By providing more housing options, we can make sure our Texas businesses and residents can flourish. By encouraging the development of housing that is accessible to our workers and streamlining the permitting process, we can make a meaningful impact on the state’s housing market and sustain our impressive economic growth. Reasonably priced housing will be felt by everyone in our community, both employers and employees alike.

Magatte Wade is a serial entrepreneur, inspirational speaker, visionary business leader, and advocate for African dignity and prosperity. Her TED talk, "Why it is too hard to start a business in Africa—and how to change it," has been seen by more than 600,000 people. She has written for The Guardian, HuffPost, and Barron’s and spoken at numerous high-profile venues, including the UN, the Clinton Global Initiative, the Aspen Institute, and dozens of universities. Follow her at and @magattew

Have you heard about the best city in America? Everyone is super chill, each business is locally-owned, the cost of admission to the coolest concert in town is the price of a cheap beer, and the houses are all affordable. There’s something different in the spring-fed waters there that makes it distinct, unique, more interesting than some run-of-the-mill Midwestern metro or coastal-elitist megalopolis. It’s the vibe, you know. Some folks like to say this place is a little weird—and we ought to keep it that way.

I’m talking about Old Austin. We’d love to have y’all for a visit sometime—just hop in your time machine and you’ll be right on your way.

Old Austin is the city that used to be; it doesn’t exist anymore. Mourning the Austin of yore is a popular pastime for long-time Austinites who have watched it change before their eyes. The city’s unofficial motto, “Keep Austin Weird,” captures both a lamentation and a plea.

The slogan sprung fully-formed from the head of librarian Red Wassenich in the Year 2000. Though it seemed like an off-the-cuff remark on a radio program, it reflected Wassenich’s more deep-seated nostalgia for a lost past. A New York Times profile captures both the longing and disdain of the phrase’s creator: 

He had watched unhappily as Austin, his funky, once affordable hometown, had been transformed into a high-tech boomtown. Suddenly, people in expensive clothes driving expensive cars were buying houses at ridiculously expensive prices. Restaurants held wine-tasting parties at $50 a glass.

It was a common sentiment. The phrase caught on and really stuck when a group opposed to the expansion of a Borders Bookstore adopted it as a rallying cry—“Keep Austin Weird” meant “Keep Out.” What began as a lament for the way things were has been invoked ever since to protest things that might be. 

For a city that has seen such transformative growth, it’s easy to understand the appeal of a motto that speaks to a romanticized notion of the past. But Austin’s past, going back to its founding in 1839, is one of near constant change. 

The old streetcars of Congress Avenue gave way to passenger cars—and, against the protests of more than a few Old Austinites—will in the future make way for light-rail cars. South of Fourth Street, the gambling dens and brothels of Guy Town made way for less lubricious and licentious activities, lamentably requiring future politicians to do their misdeeds elsewhere. Moontowers used to be the sole source of electrified light over huge swathes of the city; today they are totems to an alien past. Fourth Street itself is a more-modern appellation, for Austin’s east-west streets originally bore the mellifluous names of Texas trees: Fourth used to be Cedar. Cesar Chavez replaced First Street which replaced Water Avenue, and MLK Boulevard replaced 19th Street which replaced Magnolia—and you can bet when Austin’s black community sought that renaming, a certain subset of Old Austin lamented that change, too. Not everything in Austin’s past should be remembered fondly.

Old Austinites eventually came to accept the street name changes, but not the ballooning prices of the homes along those streets. In a later interview, Red Wassenich again lamented the loss of affordability. “[W]eirdness requires cheapness,” the interviewer explains. “The kind of folks who can produce the city's unique culture—the live music, the oddball art—need to be able to afford to live there.” But, as Wassenich bemoans, “‘Now we have the highest cost of living in Texas. Most weirdos don't have a lot of money.’”

And that’s because of something that didn’t change in Old Austin: the land development code.

For nearly a century since the city implemented its first code, just like almost every other American city, Austin prioritized large-lot single-family homes to the exclusion of smaller, more affordable ones. And just like every other American city, Austin is experiencing the consequence of that policy: a surge in home prices that has driven lower-income people away. The housing shortage is now commonplace in nearly every place. 

In that regard, Austin is not particularly weird. If the city has failed to keep its weirdness, it’s because Old Austin failed to transcend the crippling banality of its land use policies for so long.

The policymakers of yesteryear mistakenly sought to preserve the form of the city as it was—with its neighborhoods of low-rise, large-lot houses—missing the point that it was the people, and not the shape and size of the houses, that made the city weird. They chose to ossify a suburban housing model—one typically associated with The Stepford Wives and American Beauty—and were surprised to find that Austin eventually became as interesting as, well, the suburbs. To preserve the neighborhood character, Old Austin made it illegal to build the kind of housing that the characters in the neighborhood could have afforded. Nobody should be surprised that, priced out, the weirdos took the weird with them.

The weird thing is that Austin is trying to fix it.

Austin City Council got a belated start on some major policy reforms this year. Of course, “Keep Austin Weird” has been invoked at times in protest of these changes, which cumulatively will allow for more affordable home options to be built for the first time in generations. But there’s still a subset of resistance from the denizens of Old Austin who fail to recognize that their opposition to unstoppable social and economic changes has only made the consequences of that change worse. No one knows if the special sauce that once made Austin weird can be concocted again. But we do know that standing in the way of necessary reforms will not stop the city’s growth or bring back the creative weirdos who can no longer afford to live off of free beers and door money.

So rather than attempt to resurrect an Old Austin that no longer exists or never really did, Austin could try to do something truly weird: it could dispense with the exclusionary and often racist land use policies of the early Twentieth Century and try to build a New Austin for the Twenty-First. And one day in the future, the word might get out:

Have you heard about the best city in America?

It’s an eclectic crowd of teachers and techies, makers and musicians, artists, assembly-line workers, and rocket scientists. They live in vibrant neighborhoods, in homes affordable at a range of price points—townhouses and sky palaces for some, triplexes and tiny homes for others. It’s family-friendly, single-friendly, child-friendly, senior-friendly—hell, it’s just friendly. It’s got funky shops, corner stores, and yes, some big chains, too. But the streets are safe and clean, transit runs on time and often, and property taxes are reasonable. It’s still growing, of course, but they’re making room for everyone and solving problems as a community.

They say there’s something different in the spring-fed waters there, something about the vibe, you know. See, the people of New Austin—they look forward to the future and are building their city accordingly, and together.

How weird.

Written By Satchel Walton

When people in the U.S. are looking to relocate, they typically have a lot of stuff to move. Some have figured out how to exploit this fact to get a live pulse on the direction of domestic migration. And the trend is clear: People are moving to the South.

The “U-Haul Growth Index,” makes use of the company’s internal data, and it clearly indicates that Southern metros are posting strong growth, while the biggest, most expensive cities of the North and California are declining. The trend shouldn’t come as a surprise to anyone who has been paying attention to the recent demographic shifts. The South has been growing faster than the Northeast and Midwest for around fifty years.

While U-Haul’s data is proprietary, we conducted a much simpler mid-year metric by directly comparing the rental prices between cities. We call it the MOVES Index (Mid-year Observations on Vigorous Emigration Southward). For instance, it’s possible to estimate the cost of renting a U-Haul from Philadelphia to Miami and then compare those numbers with a reverse trip. This allows us to see where higher demand exists across markets. The prices will only be the same if an equal number of people want to go both ways. Otherwise, U-Hauls would start to pile up in the city everyone wants to move to, and the trucks would never go back to the places those people want to move away from. For all intents and purposes, whichever direction of movement has a higher price for a U-Haul rental is the way more people want to go.

So, where do people want to go today? Check out these figures calculated on September 15, 2022:

On average, it costs $1,251 to rent a U-Haul going from Houston, Atlanta, Nashville, or Raleigh to New York, San Francisco, or Chicago. But a U-Haul going to one of the Southern cities will set you back $2,777. Going from Houston to San Francisco will cost you $1,643—from San Francisco to Houston, $5,002.

There are a variety of causes here: People like warmer weather (or, perhaps erroneously, think that they do). U.S. manufacturing began moving from the Rust Belt to the south in the 1950s—a shift that continues today. And the cost of housing is substantially lower in the South than in New York City or San Francisco. With the pandemic allowing more white-collar workers from those areas able to work from home, moving somewhere where they can afford a home office becomes an attractive option.

It’s important not to generalize too much. Looking at the 2020 census, areas around Minneapolis, Indianapolis, and Columbus, Ohio, have posted a lot more growth than those around Memphis, New Orleans, or Jackson, Mississippi. Much of the rural South continues to lose population. The Southern boom is a real trend, but it is heavily concentrated in the major metro areas of Florida and Texas as well as around Atlanta, Nashville, Raleigh-Durham, and Charlotte.

Interestingly, this shift to the South is undermining the region’s competitive advantage in housing costs. Southern metros continue to construct housing at a faster rate than their Northern counterparts, though not fast enough to keep up with growth. But as long as Southern cities are building housing faster than their more expensive competitors, expect the U-Hauls to keep driving South.

Satchel Walton is the Mencken Publishing Fellow on Urban Development.

Written By David Berger

One often hears that the laws of supply and demand do not apply to housing markets. As an economist by trade, I may be biased, but I believe that nothing could be further from the truth. The Triangle can benefit from this knowledge—if we enact zoning reforms that push supply in the right direction.

What is the supply and demand framework?

At its core, the supply and demand framework is way of understanding how buyers and sellers interact in a market. If the price of a good is high, people are willing to supply more of that good (if they can), while buyers demand less of it. We can use this framework to understand how prices will adjust when supply and demand change. If more people want to purchase something (demand increases), or if it becomes more expensive to make more of something (supply decreases), we would expect prices to rise. This immediately gives us two possible reasons why housing might be expensive: Either many people want to purchase it (high demand), or there are not enough homes for sale (low supply).

Do you have any data to back this up?

Yes. Consider housing markets around the onset of COVID-19 in early 2020. As people locked down and many jobs went remote, some left dense downtowns (like New York City, San Francisco, and Chicago) for more space in the suburbs and smaller towns. A recent paper by Stanford Economist Nick Bloom and his co-author Arjun Ramani explored the implications of these events for rents and house prices. The supply and demand framework makes multiple predictions, all of which are borne out in the data. It suggests that rents should have fallen in the most dense city centers where demand fell the most (left panel), and they should have risen the most in the suburbs and smaller metro areas where demand increased (all panels). 

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Zillow rental data from Arjun Ramani and Nicholas Bloom, “The Donut Effect,” from the National Bureau of Economic Research (May 2021). Largest twelve cities are New York City, Los Angeles, San Francisco, Chicago, Dallas, Houston, Miami, Philadelphia, Washington, Atlanta, Boston, and Phoenix.

Closer to home, we can examine the relationship between supply and demand directly in the Durham housing market. The figure below plots the relationship between the amount of housing inventory available in a given month (a key measure of housing supply) and median sale prices over the period 2018-2022. As is clear, when there is less supply (i.e., inventories are below average), houses sell for more than they would typically. Once again, the supply and the demand story is confirmed by the data.

Why are housing prices rising so quickly in the Triangle?

Now that we can agree that the laws of supply and demand apply to housing markets, we can use this framework to understand why house prices are growing so rapidly. First, there are a lot of demand-side pressures: The Triangle is one of the fastest-growing areas in the country because there are plentiful jobs and nice weather. Second, at least until recently, mortgage rates were low, allowing people to afford more expensive houses. Third, we did not build enough homes, so supply was limited. All of these factors came together to make prices increase. 

Can building actually help? It seems that more building just leads to higher house prices.

Yes, building can really help. The best evidence comes from Tokyo.  Despite it being a world-class city, on a par with New York City and London, you might be surprised to learn that since 2000, house prices in Tokyo have been roughly constant, while they have more than doubled in New York City and San Francisco. Tokyo is able to maintain affordability by removing local restrictions that limit new building (e.g., local planning commissions, rent control measures, and height constraints—all of which are pervasive in America), ensuring that enough new housing is built to satisfy demand. By some estimates, the Japanese build at twice the rate we do. The net result is that prices in Tokyo remain affordable, while prices skyrocket in the U.S.

The cautionary tale of Chapel Hill reinforces the danger of not building enough. In the 1990s, NIMBY-leaning neighbors got control of the Chapel Hill City Council and put into place zoning restrictions that made it much more difficult and costly to build new housing. As of now, average price of single-family home in the town is over $625,000.

Conclusion

How can we make housing more affordable in the Triangle? As this article has made clear, there are two alternatives for lowering prices. On the one hand, we could increase supply by removing local zoning restrictions, making new construction cheaper and allowing for more housing to get built. On the other hand, we could lower demand to live in the Triangle by somehow convincing people to not want to live here. Hopefully, the choice is clear.

David Berger is a Professor of Economics at Duke University. His research interests include Macro/Monetary, Housing, Labor and Finance.

Written By Gwen McCarter Nagle

Sarah Sanborn and her family began house-hunting in early 2021. She did eventually buy a house, and in that sense, she was lucky. But her story also reflects the collapse of the affordable home market in the South. That story repeats for thousands of families across the region.

By March 2022, Sarah told WRAL TechWire that “we were blown away with how high prices had risen.” In the end, she said, “It just wasn’t possible for us to find anything in Durham.” The house she ultimately purchased was in Sanford, around a fifty-mile drive from Downtown Durham. This affordability problem would be bad enough on its own, because prospective homebuyers like Sarah get priced out of where they want to live, forced to reside outside existing communities and saddled with longer commutes. But the situation isn’t that simple.

According to Calculated Risk, over the past twenty years, new homes selling for under $200,000 went from 60 percent of sales to nearly 0 percent. The limited availability of the most affordable homes creates a crunch, of course. But another factor is more insidious, and this is where long-term alarm bells should be going off: The raising of this entry point means that more families never attain homeownership. It’s a one-two punch.

Although it’s possible to save and create wealth while not owning a home, the data is overwhelming: Homeowners have wealth, and renters do not. Because most people enter homeownership at the lowest price points, the more households who get shut out of their first opportunity for homeownership, the fewer citizens who hold literal equity in society.

If the current state of the affordable housing market feels bleak, that’s because, for many, it is. But something can be done. 

This market’s collapse won’t be reversed overnight, and the solution will be multi-pronged. Still, cities can act to make it easier to build smaller homes. One of the primary challenges here is regulatory. If cities can change their stance toward issues such as parking, lot size, density standards, and re-zoning procedures, we can begin resurrecting the market for smaller and more affordable housing.

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Gwen McCarter Nagle was Editor In Chief of Southern Urbanism Quarterly. She has earned degrees from the University of Virginia and Harvard and has been writing or editing one thing or another forever. After a lengthy stint in brand strategy, she now enjoys helping thought leaders turn their ideas into powerful pieces of content that can have a positive impact on the world.