Tag Archives: housing

Telecommuting and work travel in Australia

This might seem esoteric, but it is somewhat germane to some points I made recently. One part of a big-picture solution to housing supply challenges lies in, well, housing. But another angle (at least from an economic growth perspective) lies in transportation and telecommunications infrastructure allowing people to live in one place and work in others with less friction (i.e., travel time and cost.)

A tale of two cities: Patterns and drivers of Australia’s intercity non-local employment from an industry perspective

Under conditions of spatial mismatch between labor supply and demand, intercity non-local employment, including intercity-commuting-based employment and remote work, has become increasingly common worldwide. However, research examining intercity non-local employment from an industry perspective remains limited. Using census data from 2011, 2016, and 2021 for Australia’s significant urban areas, this study adopts an industry lens to examine patterns of intercity non-local employment and their associations with industry diversity, industry disparity, and the location quotients of different industries. The findings reveal that: (1) Intercity non-local employment in Australia intensified during 2011–2021, with Sydney, Melbourne, Brisbane, Adelaide, and Perth serving as key network nodes; (2) Although industry diversity is not significantly associated with non-local employment, work-residence connections are more likely to form between industrially diverse cities over longer distances; (3) Industry disparity between work and residential cities reduces the likelihood of non-local employment, reflecting a tendency toward employment self-containment; (4) Cities with higher location quotients in agriculture, mining, and manufacturing exhibit a stronger capacity to attract non-local workers. This study supports developing regional industrial diversity centers as hubs for labor mobility and interaction. Furthermore, it highlights the rationality of industry complementarity, particularly between capital and non-capital cities, as a strategy to balance labor supply and demand, and calls for further evaluation of the long-term impacts of non-local employment on cities reliant on specific workforce sectors. Overall, this research advances the understanding of Australia’s urban structure and offers valuable insights for targeted industrial development strategies aimed at fostering balanced and sustainable urban systems.

I did work and travel in Australia a bit about 10-15 years ago, and one thing that struck this American is that their cities are just really far apart, and there is not much in between. So I got the impression that a lot of their white collar business travel is by plane. What is blue collar business travel you ask – there I am thinking of long haul trucking. And no, if I am thinking about long haul trucking in Australia I can’t get Mad Max out of my head. One really hopes this is not our future.

July 2025 in Review

Most frightening and/or depressing story: In case we still don’t have enough feedback loops to worry about, loss of Antarctic ice could also trigger volcanoes under Antarctica.

Most hopeful story: The Great Lakes states, provinces, and cities may be the best climate havens North America has to offer.

Most interesting story, that was not particularly frightening or hopeful, or perhaps was a mixture of both: Policies to increase housing supply in the most economically dynamic cities can theoretically accelerate economic growth, since housing supply is not expanding fast enough and is therefore holding economic growth back. A lot of discussion has been focused around zoning, which is a local matter. But I offered some additional suggestions: investment in better transportation and communication infrastructure to reduce the friction of working across distances between homes and offices, effectively enlarging housing markets. And serious investments in construction productivity, which has been flat in the U.S. for decades. Ideas include more factory-based modular components. The U.S. has tried and failed at this before, but of course China is now leading the way. AI should also be pretty good at construction scheduling and logistics. The U.S. is somewhat successfully partnering with Korean ship-building expertise, at least on a small scale.

Mount Ngauruhoe, New Zealand, aka Mount Doom from Lord of the Rings (Guillaume Piolle)

the English-speaking world is sad

As an enrolled university student for about three more days, I have access to the Financial Times. The Financial Times did an analysis of World Happiness Index and found that young people across English-speaking countries (US, Canada, UK, Ireland, Australia, New Zealand) are sadder than people in Western Europe. Well, that was the headline anyway, but when I look at the graph it is really just the US and Canada that are the outliers, with the US far worse (of course). US people are very, very sad in their 20s and 30s, and then start to cheer up a lot in their 40s. Of course, this is a snapshot in time and it doesn’t actually mean today’s young adults will cheer up, or that today’s older adults were not cheerful when they were younger. Anyway, this author concludes young people are sad because they don’t own houses. I don’t know, I have owned and rented, and both caused me different forms of aggravation and sadness. But not being able to afford the lifestyle you feel you want or deserve, or conversely stressing yourself to the breaking point so your family can just barely afford it, is a recipe for unhappiness. So it may be true that housing affordability is a good indicator of happiness even if not the root cause. And as for old people, of course they own those high-value houses and that makes them happy! Sure, they have to pay property taxes on those houses, and they complain bitterly about paying taxes. They also go to those NIMBY meetings and complain bitterly about new housing construction that might create more supply for young people. But remember that complaining bitterly is also a thing that makes old people happy! (Sorry, I just got ambushed by a very grumpy older relative over something I have no control over, housing related in fact, and I am feeling grumpy myself as I sit here 44 days before my 50th birthday!)

what government policies ACTUALLY increase economic growth?

Wishful thinking and “starve the beast” ideology do not increase the growth rate of a national economy. There are some things that do, according to people who study the evidence (known as economists, although to be fair, some of them are also influenced by ideology if not wishful thinking). According to this Planet Money episode, policies that have been shown by evidence to increase economic growth include:

  • Building housing in cities with numerous and increasing jobs. I always thought of housing as more of a quality of life issue and not something that actually constrains growth, but this makes logical sense. Urban areas (central cities and their suburbs) are where most of the national economy’s growth happens, because they are where most of the workers and innovative ideas are. Available jobs attract people who want jobs, and this can happen faster than the housing market can grow, pushing up prices. At some point, constraints on housing can actually become constraints on growth. People seem to be focusing mostly on the federal government tail trying to wag the municipal government dog in terms of zoning codes, but I have a couple more thoughts to add. First, excellent transportation infrastructure effectively enlarges the housing market that provides access to a given job market. If I could buy a fixer-upper row house in Baltimore and take a bullet train to Manhattan, I would effectively be part of the Manhattan housing market. Our country does not have this (although Baltimore and New York City are connected by some of the best rail our country has to offer, the time and expense of that commute would not be reasonable.) Excellent communication infrastructure also helps, since many professional jobs are now remote or hybrid. Finally, there are technological advances to be made in the construction industry, which has been dead in terms of productivity growth for decades. The big one being talked about is much more factory manufacturing of modular components. Get this figured out, and you can either move some U.S. construction workers to much more productive factory floors, or you can consider allowing immigrant workers in to do these jobs at lower wages, or you can invest in factories in Central and South American economies, thereby relieving some immigration pressure on our borders. Then move it all by electrified freight rail. These are different political choices, but all economic wins. Beyond this technology, I think there are huge gains to be made on construction sites in more efficient risk-based scheduling and logistics, technology-assisted inspections of progress (with drones and cameras), and project controls (AI watching videos of the progress and comparing exactly what is happening on the ground to exactly what was planned, then advising humans on real-time adjustments to the schedule and logistics to manage risk and keep the project on track).
  • Cutting taxes on corporations generally increases growth, because the corporations will invest at least some of the savings in capital goods, work force training, and research and development. But my thought is, why not give them the tax breaks ONLY if they invest the savings in these things, which are also investments in our national economy.
  • Similar to housing, I have always thought of health care as more of a quality of life service and basic human right a benevolent government overseeing a growing economy should be providing to its citizens. But the podcast points out hard evidence that health care investments, particularly for children and low income people, have an economic payoff in terms of reduced health care costs and increased earning (and tax-paying) potential later in life.
  • Allowing in highly skilled immigrants benefits the economy.
  • Investing in the electric grid yields a greater payout in terms of lower energy costs than whatever is invested.
  • Research and development, in things OTHER THAN weapons and war, yields a big return to the economy. Investing in weapons and war crowds out more productive investments the government could be making.
  • The particular webpage covering the podcast doesn’t talk about education, but I know I have seen elsewhere that investments in childcare and education yield big benefits, particularly early childhood education.

So: housing and construction productivity; health care; childcare and education; research and development; incentives for corporate R&D, capital investment, and work force development; transportation and telecommunications infrastructure. Raise $1 in taxes, invest it in these areas, get back more than $1, and you could theoretically give the dividend back to the person who gave you the dollar, and everybody wins. Way too rational for our so-called political economy. And this doesn’t include rational risk management, like making sure those urban areas where most of the economic activity and housing are do not get destroyed by floods and fires.

why parking is the enemy of affordable housing

This article has a clear explanation of why parking mandates push up housing costs in cities.

Off-street parking mandates add hundreds of dollars a month to people’s rent, even for tenants who don’t drive, who then have to subsidize their neighbors’ parking in the building’s garage. One reason for this is that off-street parking is incredibly expensive to build, especially now that building material costs keep rising, and are expected to rise even more with President Trump’s tariffs.

But the other reason is that parking just takes up a lot of space in a building. All the space devoted to a garage and all the related internal building infrastructure takes up room that can’t be devoted to more homes and living space. Not surprisingly, when cities remove parking mandates, builders add more housing and less parking to projects.

In some cases, the cost of building an underground garage for the required parking spaces ends up being the real limit on how tall a building can be. On paper a builder might be legally allowed to add more units than proposed, but if providing the parking for them is too unaffordable, they’ll opt for a smaller building.

I still think self-driving (and self-parking) vehicles will solve this particular problem in the long term, because vehicles will be able to park themselves in very tight spaces. The technology has arrived in the world’s most advanced countries (not the U.S. sorry, we are behind and falling more behind.). But it might take a generation for laws to catch up, and we are going to be stuck with a lot of wasted space for a long time to come.

Planetizen’s top posts of 2024

There are a lot here. Quite a few have to do with housing, a topic I would be interested in brushing up on. A lot have to do with transportation, a topic I have just feeling complete and utter despair about, at least in the context of the United States and my particular city and state. One possible bright spot is congestion pricing in New York City. Congestion pricing just works, even though it is politically unpopular and counter-intuitive to many people’s “common sense”. Maybe people will notice that it solves some of the congestion and parking issues they like to complain about, and maybe it will slowly spread to other cities and states.

co-living – dormitories for grownups

Co-living “refers to buildings in which residents have their own lockable living and sleeping space but share a kitchen and other facilities”, according to smartcitiesdive.com. This would seem to make sense as an affordable housing option, but apparently is often prohibited by zoning.

These types of arrangements could also be set up by employers. In Asia, I get the sense that one reason unemployment and labor rates can both be low at the same time is that employers provide dormitories for workers who want or need them. It might not be glamorous, but if a relatively low-paying job comes with room and board, that could solve a number of economic and social issues that we don’t really seem to have much of an answer to here in the “western” world.

Zillow’s house flipping debacle

Since I mentioned Zillow’s attempt to use big data to profit on house flipping recently, here is an article on that.

The United States is in the midst of the biggest house price boom ever. The Case-Shiller National Home Price Index was up nearly 20% in the 12 months ended in August, the biggest one-year increase in the history of that index.

Yet one of the biggest real estate brands in the world has seen its stock fall nearly 70% since mid-February. Zillow has gotten hammered after bungling its iBuyer program just three short years after getting into the house-flipping business. The company announced it is shuttering the platform, selling the rest of its housing inventory, and laying off up 25% of its staff.

awealthofcommonsense.com

The housing market has huge inefficiencies, huge transactions costs, and is somewhat corrupt. The algorithms apparently couldn’t account for those factors. The only silver lining is that when you have a big chunk of wealth sunk in the family home, you typically don’t experience huge swings in value on a regular basis.

housing policy overview

A blogger on Planetizen has a good overview of what many professional planners and economists believe would make a real dent in the U.S. housing problem.

We support reforms to allow developers to build more affordable housing types (e.g., multiplexes, townhouses, and mid-rise multifamily) with unbundled parking (parking rented separately from housing, so car-free households are no longer forced to pay for costly parking spaces they don’t need) in walkable urban neighborhoods, including large-scale upzoning, eliminating parking minimums, reducing development fees and approval requirements for moderate-priced infill, plus subsidizing housing for families with special needs.

Most planners also support innovative home ownership models, such as housing cooperatives and co-housing, modest inclusivity requirements (not so high that they reduce housing production), subsidies for households with special needs such as disabilities and very low incomes, and, sometimes, special regulations such as rent controls to limit rent increases.

Planetizen

This sounds about right to me. There are a couple reasons it is hard to do in today’s U.S. The most obvious is the massive political corruption driven by the construction/road/auto/oil-industrial complex. It is hard for politicians, especially local ones, to resist these forces. The second is the consumer preference for auto-dependent suburban development. I would not take this choice away from anyone. I would just stop subsidizing it and make it no longer the only viable choice for most Americans. Many people would like to try out a walkable urban neighborhood, but assume that there is not one available that they could afford. And they would largely be right. There are just not enough of them, and even in the ones we have the public infrastructure (protected bike lanes, frequent/clean/reliable public transportation, parks and trees) lags far behind what the leading cities in Europe and even parts of South America are providing. (Asia is hopeless though.)

The final issue is that you just can’t combine widespread car ownership and use with a walkable urban neighborhood. You have to get the number of cars down, then use all that space you saved for more housing, open space, and other amenities. And obviously, you have to make sure people can still get around.

So the answer is pretty clear – remove density limits (upzone in the parlance) and parking requirements (actually these last two sound a lot like a “free market” to me), then offset some of the disadvantages of urban density with excellent public infrastructure and parks. You may still need some subsidies and non-profit options to help the poor, but ideally that needs to be done at least at the metropolitan area scale if not state/federal scale. It’s a fairly simple formula but a long game and a politically difficult one.

March 2021 in Review

Most frightening and/or depressing story: In the U.S. upper Midwest (I don’t know if this region is better or worse than the country as a whole, or why they picked it), electric blackouts average 92 minutes per year, versus 4 minutes per year in Japan.

Most hopeful story: I officially released my infrastructure plan for America, a few weeks before Joe Biden released his. None of the Sunday morning talk shows has called me to discuss so far. Unfortunately, I do not have the resources of the U.S. Treasury or Federal Reserve available to me. Of course, neither does he unless he can convince Congress to go along with at least some portion of his plans. Looking at his proposal, I think he is proposing to direct the fire hoses at the right fires (children, education, research, water, the electric grid and electric vehicles, maintenance of highways and roads, housing, and ecosystems. There is still no real planning involved, because planning needs to be done in between crises and it never is. Still, I think it is a good proposal that will pay off economically while helping real people, and I hope a substantial portion of it survives.

Most interesting story, that was not particularly frightening or hopeful, or perhaps was a mixture of both: One study says 1-2 days per week is a sweet spot for working from home in terms of a positive economic contribution at the national scale. I think it is about right psychologically for many people too. However, this was a very theoretical simulation, and other studies attempting to measure this at the individual or firm scale have come up with a 20-50% loss in productivity. I think the jury is still out on this one, but I know from personal experience that people need to interact and communicate regularly for teams to be productive, and some people require more supervision than others, and I don’t think technology is a perfect substitute for doing these things in person so far.