skip to Main Content

 
episode # 277

The West Coast Housing Crisis with NY Times’ Conor Dougherty

The New York Times’ Economics Reporter Conor Dougherty’s book, “The Golden Gates: The Housing Crisis and a Reckoning for the American Dream” charts the history and politics of the West Coast housing crisis and its dire consequences. Sound familiar and highly relevant? You are not alone. It was a Time 100 Must-Read Book of 2020, a New York Times Book Review Editors’ Choice & one of Fortune’s 10 Best Business Books of 2020. Conor sits down with Matt & Adam to discuss his groundbreaking research and it how it applies to Vancouver. How did we get here? What are the stakes? And, most importantly, how can we make significant changes in Vancouver and beyond? A must listen!

Vancouver Real Estate News, Market Updates, Insider Tips, Stats, & Analysis

Sign up for insider real estate news & tips from our podcasting team.

Are you a realtor? Click here
Selling Your Home? Click here

  • Reload
  • Should be Empty:

Episode Summary


 

Please tell us about yourself.

I’m a reporter at the New York Times and wrote a book about housing. I grew up in the Bay Area and then moved to New York after college. I moved back to the Bay Area after 10 years and the housing here was so crazy. We started having protests over gentrification and everyone felt so angry. Housing has permeated every aspect of life. And I wanted to write something about that. 

I grew up skateboarding and I think when you do that, you spend a lot of time thinking about spaces. It brings out an urbanism in you and makes you attuned to how cities work. I’ve always been inclined to write about cities, and housing became my most relevant way in. 

If you have a two-lane street, it’s always so much more pleasant than a four-lane street. No matter what they do, the four-lane street feels more like a highway. Skateboarding also allows you to interact with more people. People come and talk to you, and you get this wider view of city experiences. 

Skateboarding became more diverse when street skateboarding became the dominant style of the sport. Ramp skateboarding is traditionally more high-end and more white because you would need the land and some sort of pass to use the exclusive park. You can see how the price of land dictates so many things. 

Why do you want to write about the housing crisis?

When I came home to the Bay Area, housing was everything. Even if you talked to someone about their breakup, it was about the rent-controlled apartment they shared together. I’m also an economics reporter and economists talk about California’s stunted economy. People talk about living in the Bay Area as some sort of luxury – but that was not the same in LA or Detroit when they were the top cities. So it’s a new thing that we have these prosperous cities that are impossible to access. That’s troubling. 

I want to write about people. But I could never find a person to talk about in economics or housing; it was always about the data. I was talking to Jeremy Stoppelman, the CEO of Yelp, one day about housing in the Bay Area. He told me that he had given money to Sonja at the San Francisco Bay Area Renters’ Federation. I interviewed Sonja for the New York Times and her mantra was YIMBY, yes in my backyard. 

Not long after that story ran, I got a call from a guy in Colorado who was going to make Sonja his keynote speaker at a YIMBY convention. So I went to the convention and there were people from everywhere: Vancouver, Boston, Austin, Seattle, etc. There were 200+ people talking about zoning policies and the lack of housing. It fascinated me that these were all local problems but they all amounted to the same thing: not enough housing and a tremendous affordability crisis. That was the moment when I thought I might have a book.

The book heavily focuses on the Bay Area but I knew this wasn’t a Bay Area problem. I could have picked any place – however, I did have to pick a place. So the book follows a few different people in the Bay Area and their specific housing problems. I wanted to share a range of experiences to show that we need to accommodate all of these people. 

How did we get to a perpetual housing crisis?

We have a different structure in our economy now. Over the last 40 years, the economy has split into the knowledge sector (generally high-paid like software engineering, finance, etc.) and service work (generally low-paid like retail, childcare, etc.). What we thought of as middle class, like factory work, has been greatly diminished by automation and off-shoring. So our economy has centred around these very high wage and very low wage professions. High wage people want to be in the city and low wage people have to be in the city in order to do their jobs. Cities have had a lot of growth and even though service work pays more in bigger cities, it doesn’t make up for the high cost of living. 

Before, you could have a small town built around a factory and it could accommodate housing for everyone. There wasn’t as much intensity for land. 

The other factor is we haven’t changed how we build. We don’t have a good way to rebuild our cities. This isn’t a new thing. It’s not a coincidence that massive redevelopment is usually done by a dictator or through large-scale disasters. It’s hard to rebuild cities. How we rebuild cities in an organic way is the big question of our time. 

The first time I went to Vancouver, I wanted to write about laneway homes. At the time, these weren’t as popular in the States, but now they are. So things like laneway homes are opening the way for the redevelopment of cities. We’re starting to see ways to intensify our use of cities. But we’ll have to figure out how to do that, or else build new cities. 

Does gentle density solve this problem?

I think it can work. You probably need some cultural shifts, but maybe those will naturally happen. But if you truly started building laneway homes in 50% of the properties, that moves the needle. As those industries mature, it will become less artisanal and more production-oriented. Production will get faster. If you start to get large numbers of units and do them in a more industrial-like fashion, you can make headway. Doubling the density is not a small thing. 

Are there villains and heroes in the housing story?

I think it’s a collective action problem; the only way to solve the problem is for everyone to do a little bit. For example, if we had more compact cities and drove less, we could make a huge impact on climate change. But it doesn’t work unless everybody does it. 

To have a big effect, it needs to be widespread. Housing is a classic collective action problem. 

In my book, there is an investor who was buying affordable housing, upscaling it and evicting people along the way. I think that person came off as a villain. I tried to make it clear that the idiotic policies had encouraged his business model. But that investor is not portrayed particularly well. I don’t see this investor as productive as the guy who is building modular housing in the next chapter. However, the modular housing business is a huge risk. 

That’s not to say that investing is bad. But the “buy and evict” model is what makes people hate the business. So there are other ways to do it, like the modular housing route. 

If we don’t solve the housing crisis, what’s at stake?

A lot. Having a cohesive society means having a broad middle class. A sense that everyone has a shot at having a decent and comfortable life is important. If we don’t solve the housing crisis, we make ourselves more unequal. We create neighbourhoods that are off-limits to all but the very richest. It creates a lot of social problems and it becomes toxic. We’re already seeing this. 

You also end up with a less well-functioning economy. People are spending so much on housing and they’re not saving, investing, etc. You’re forcing people to spend more money on land that is artificially scarce, which leaves us all worse off. 

There’s a rebirth that happens when cities change. We’ve stunted that process. It doesn’t all have to be loss; this can be exciting. NIMBY-ism is always talked about in such dire language. But change can be fun. 

What’s interesting is that there aren’t political associations with NIMBY or YIMBY. At the local level, people’s national political identities crumble. If I were to profile a YIMBY person, they’re always just chill. They don’t imagine the worst possible outcome. But I can never peg the person’s political identity. Housing goes deeper than a political association. 

On Vancouver’s uniqueness:

Foreign buying is an issue in every prosperous city in the world. It’s part of the economy. Vancouver seemed like it had a legitimate empty housing problem. You seem to be building a lot of housing and yet still have a housing crisis. Maybe you’re not building enough of the right type of housing; there are lots of single family homes. But it didn’t feel like the same supply issue as I see in the Bay Area. I’d love to hear more about Vancouver from you two.

Matt & Adam on Vancouver’s housing issues:

It takes a very long time to get housing online; our zoning is highly regulated, building costs are expensive, land costs are expensive, and there are a lot of risks. The numbers suggest we are under-built based on the demand. We’re a landlocked region so sprawling is a challenging thing.

But if you come here from somewhere else, you always notice the number of cranes. We’re building, but just not enough. You can see that in the vacancy rate on the rental side. For years, we were under 1%.

A lot of the building happening is for mixed-use, strata, residential condos. Whereas in Seattle, developers are incentivized to build market rental. That has been a big challenge in Vancouver. 

We’ve had the foreign buyer’s tax since 2016, an empty home tax since 2017/2018 and a speculation tax. The government has taken a lot of measures to try and rectify the situation. But during covid, housing has gone crazy, even though investors were not buying. Foreign buyers are not talked about anymore. It’s local people moving through the market. 


We’ve had policy induced shocks as the government introduces demand-side measures. The market retracts for a couple months but it picks up again. It has never felt like an oversupply, that’s for sure. 

Find out more & get in touch: 

https://conordougherty.com/ 

https://twitter.com/ConorDougherty

This Post Has 0 Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

Back To Top