Terner Center Blog: No Limits

How Housing Supply Shapes Access to Opportunity

Posted on by Elizabeth Kneebone

In the past few decades, as housing production has slowed, albeit unevenly, and new ownership production has shifted toward larger format, single-family homes, a tightening housing market has seen increasing price pressures, particularly for entry-level homebuyers and renters.

To better understand the impact of trends in housing production on who can buy a home, particularly at the entry level, and the barriers renters face in gaining access to higher opportunity neighborhoods, the Terner Center for Housing Innovation undertook an analysis of how characteristics of housing production have shifted over time in the nation’s 100 largest metropolitan areas.

Today, the Terner Center is pleased to release two new papers based on this analysis.

The first paper “How Housing Supply Shapes Access to Entry-Level Homeownership” shows that, against this backdrop, the availability of entry-level stock has diminished and typical bottom-tier home prices have increased in more than two-thirds of the nation’s major metro areas. As prices have climbed, the profile of recent homebuyers has shifted. In 2016, recent homebuyers had significantly higher incomes, were older, and were less likely to be Black compared to recent homebuyers in 2000. Yet, where available, homes in the bottom price-tier and new construction that provided smaller-format and multifamily options served a more diverse population of homeowners.

These production trends and how they play out at the neighborhood level also shape the kinds of communities renters, and particularly lower-income renters, can access. The second paper “How Housing Supply Shapes Access to Opportunity for Renters” shows that, as single-family housing dominated national production trends, it also spurred the spread of Single-Family neighborhoods in the nation’s 100 largest metropolitan areas. The number of Single-Family neighborhoods (tracts where at least 90 percent of the housing is 1-unit homes) in the 100 largest metro areas has increased by almost 40 percent since 1990, largely at the expense of neighborhoods with more mixed housing types.

While Single-Family neighborhoods score highest on a range of opportunity characteristics than other types of neighborhoods, new construction of affordable rentals, and even single-family rentals, has largely bypassed these areas of opportunities. 

Noting that demand-side strategies are also essential, the papers outline supply-side strategies that would help to improve access to entry-level ownership and to areas of opportunity for lower-income renters, including reforming restrictive zoning practices that constrain the amount and type of housing stock produced, and aligning subsidies, financial incentives, and state and federal regulations in ways that support production of more diverse and affordable homeownership and rental options.

Read the papers, and explore the supporting data resources, here.

Leading Housing Researchers Challenge Proposed Fair Housing Rule Change

Posted on by Terner Center

The NYU Furman Center and the Terner Center for Housing Innovation at the University of California at Berkeley submitted public comments today arguing that a proposed rule from the U.S. Department of Housing and Urban Development (HUD) ignores the demonstrated harms inflicted by segregation, fails to account for the basic structure of local zoning and land-use decisions, and imposes obligations on fair housing plaintiffs inconsistent with the basics of social science.  In light of these major flaws, the university researchers urge HUD to withdraw the proposed rule. Read the joint public comments. The “Disparate Impact” standard is a legal concept at…

2019 California Housing Legislation Round Up

Posted on by David Garcia

The 2019 California legislative season recently came to a close, and several promising housing bills have now been signed into law by Governor Newsom. But the road to this year’s “housing package” was not easy and, at various points, it seemed as if the legislature would fail to pass any key housing reforms.  The session started optimistically, buoyed by a new governor who made bold housing solutions a staple of his campaign. Sure enough, the session got off to a fast start, with the introduction of several sweeping and ambitious pieces of legislation, on issues as varied as land use reform,…

Land Use Politics, Housing Costs, and Segregation in California Cities

Posted on by Jonathan Rothwell

This paper is part of a working paper series that utilizes the Terner Center California Residential Land Use Survey to assess the implications of California’s state and local policies for housing. Read the full paper here. By Jonathan Rothwell, PhD, Gallup It is striking that, at a time when a lack of housing affordability is a highly salient issue for the public and elected representatives, California uses its land so inefficiently. While less than a quarter of the land in the state’s municipalities is zoned for multifamily housing, more than half is set aside for single-family detached homes. Density is closely related to housing affordability,…

Demystifying Development Math

Posted on by David Garcia

For many, the way that housing is built can be mysterious: a developer acquires the land and wins city approval, then at some point construction workers break ground, and eventually the new housing becomes a reality. But what about all of the steps in between? What factors go into whether or not something gets built? And what does it even mean to make a project “pencil”?  If you’ve ever found yourself wondering about these and other real estate finance questions, then our latest Terner Center publication is for you. In our new brief “Making It Pencil: The Math Behind Housing…

Residential Impact Fees in California

Posted on by Terner Center for Housing Innovation

As California continues to grapple with the devastating effects of the housing crisis, more attention is being paid to the rising cost of building new homes. The median home value in California has almost reached $550,000,(1) reflecting both the limited supply of homes as well as the high cost of development. In some cases, the cost of building affordable housing in California has topped $600,000 per unit, or more. Strapped for revenue, localities are increasingly turning to development fees to fund vital public services. In an effort to uncover paths to lower the cost of housing, the Terner Center has…

California’s Rent Cap Debate: Something’s Gotta Give

Posted on by Carol Galante

The Terner Center for Housing Innovation first became involved in discussions around rent control policy in California leading up to Proposition 10, the ballot initiative in 2018 (ultimately defeated) that would have repealed the Costa-Hawkins Rental Housing Act, the statewide framework put in place by the state legislature in 1995 to set limitations on local rent control ordinances. History tells us that the debate over Costa-Hawkins itself was a divisive and hard-fought battle. It’s no surprise that stakeholders and policymakers are having a difficult time finding a path forward today. In May 2018, after research and meetings with a variety…

California Needs to Build More Apartments

Posted on by Jenny Schuetz and Cecile Murray

This paper is part of a working paper series that utilizes the Terner Center California Residential Land Use Survey to assess the implications of California’s state and local policies for housing. Read the full paper here. California needs to build more apartments. By Jenny Schuetz, PhD, the Brookings Institution, Metropolitan Policy Program and Cecile Murray, MSCAPP, University of Chicago So much ink has been spilled over California’s persistently high housing costs that it has become a cliché. Nearly everyone agrees that high costs are a substantial problem – not just for families struggling to pay rent, but also for companies trying to attract and retain workers, and for…

Comparing Perceptions and Practice: Why Better Land Use Data Is Critical to Ground Truth Legal Reform

Posted on by Moira O’Neill, Giulia Gualco-Nelson, and Eric Biber

This is the third installment in a working paper series that utilizes the Terner Center California Residential Land Use Survey to assess the implications of California’s state and local policy for housing. The working paper series is published jointly by the CALIFORNIA ASSOCIATION OF REALTORS®’s Center for California Real Estate and the Terner Center for Housing Innovation at UC Berkeley. This paper series will examine a number of topics related to land use regulation; from the feasibility of ADU production to trends in segregation. Read the full paper here. Comparing Perceptions and Practice: Why Better Land Use Data Is Critical…

No Place Like Zone: Two Ways California Policymakers Can Encourage Housing Affordability Through the Opportunity Zone Program

Posted on by Terner Center

Ever since the federal government launched the Opportunity Zone (OZ) program, many questions about the potential benefits and drawbacks have been raised. The program has been touted as a potential game changer for economic development in distressed communities, and has enjoyed bipartisan support. But at the same time, the relative ambiguity of the program’s requirements and its broad applicability have left many to wonder if Opportunity Zones will actually lift up the communities it was billed as serving, or mostly prove to be a windfall to investors. As some critiques of this new program have noted, without specific guidelines that push…