You Fight Gentrification By Building More Housing, Not Less

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This land grab plan from the Philadelphia Redevelopment Authority is by far the most insane idea for fighting gentrification I’ve ever seen:

Walking through the area now, the transition is evident in its mix of older two- to three-story rowhomes, sleeker modern construction and corner stores, punctuated by an ever-diminishing supply of vacant land, as infill construction continues to flood the neighborhood. In recent months, the area has become symbolic of city-wide tensions over changes that many longtime residents see as gentrification and others see as needed development. But while Mayor Michael Nutter has remained silent on the issue, the state redevelopment authority has now quietly stepped in with a plan that the authority says will, through seizing private property using its power of eminent domain, create affordable housing and ostensibly, lessen pressures on homeowners and renters who fear being priced out.

The attempt to seize large amounts of privately held land is a peculiar reversal for an agency that has nominally made strides towards offloading the backlog of properties it has accumulated over 67 years of urban renewal activities. Over the past decade, PRA and the city have faced broad criticism for creating blight by holding on to land for decades without development and not maintaining their properties. In recent years, the Nutter administration has pushed the PRA and other city agencies to start selling off some of the nearly 12,000 vacant, city-owned properties to stimulate development […]

[Developer Ori Feibush] claims the land grab is a result of the PRA being politically pressured by affordable housing developers who have the ear of the local councilman, Kenyatta Johnson, to increase the pool of land they could develop. Feibush says this move could squeeze out future private development opportunities in a section of the neighborhood that has seen a building boom. “They’re strictly condemning parcels in the most desirable part of Point Breeze,” Feibush said. Other owners did not return calls for comment.

As Ryan Briggs helpfully points out, the increase in development pressure on Point Breeze is the result of rising land values. More people want to live in the neighborhood, and that’s pushing up rents and creating profit opportunities to build new housing.

There’s only two things you can really do in response to this. You can either let developers build as many housing units as people want to use, or you can actively try to make the neighborhood crappier so nobody wants to live there.

The PRA plan appears to be the latter – keeping the neighborhood full of ugly vacant lots to make it unpleasant to live there, in hopes that land values don’t rise more. But land values will rise more. The proximity to Center City is what’s creating the development pressure on Point Breeze.

Keeping valuable land off the market is just going to drive Point Breeze rents up more, by making the remaining non-government owned parcels even more expensive. The PRA is never going to own the majority of land parcels in the neighborhood. Even if a few dozen people get sub-market units in the neighborhood, everybody else is worse off because this is going to make the market rates on the remaining land even higher.

The only way to keep the neighborhood affordable over the long term is to allow developers to meet the demand for housing. Lots of people are unduly skeptical that this works, but the fact is that we hear the terms “buyer’s market” and “seller’s market” all the time, when developers have built either too much or too little housing, respectively.

City land use policy should be focused on trying to maintain a permanent buyer’s market that always has a little too much housing. The affordable housing policy can’t just be carving out some sub-market rate units for some people – it has to be about pushing down the market rate so that housing is cheap and plentiful for everyone citywide.

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6 Responses to You Fight Gentrification By Building More Housing, Not Less

  1. Working Class Philly says:

    “There’s only two things you can really do in response to this. You can either let developers build as many housing units as people want to use, or you can actively try to make the neighborhood crappier so nobody wants to live there.”

    Right, those are clearly the best two options. I also cannot possible fathom any form of neighborhood planning other than PRA sabotage. What an insightful article, predicated on a wonderful sound polemic if I do say so myself. I infer from it that the lone alternative of allowing OCF to have an unmitigated stranglehold on Point Breeze is preferable to bureaucratic obstructionism?

  2. Jon says:

    Whatever “neighborhood planning” you have in mind, if it involves building fewer housing units than people want, it’s going to lead to rent increases. Full stop.

    • Working Class Philly says:

      Right! Exactly! What the hell is a “rent control”? Never heard of it, but in my opinion real estate development is a free market activity best left unfettered by pesky “representatives” of “the community”. I mean, how else could we apply 101-level real estate models to the situation? What’s a “nuance”?

  3. Jon says:

    So you think there is some way to restrict housing construction amid rising land values that won’t increase rents? What is this magical policy?

    • Working Class Philly says:

      This “magical” policy is the one that actual cities actually use — rent control, rent stabilization, and rent-to-own programs. Programs that are predicated on specific community input delivered through their representatives. Programs that preclude the unfettered development of generationally impoverished areas.

      Programs that continue to increase the property value of a neighborhood while maintaining extant community structures. This “magical” policy might not be preferable for property developers and their bottom line, which is, I’m assuming, why you view it as untenable, or, “magical”?

      Though the boilerplate mode of thought you’ve managed to transcribe in your own words from a real estate textbook and loosely apply to Point Breeze is appealing, it’s simply inapplicable. To adopt it is to destroy extant notions of Point Breeze and their associated communities, and to allow a few property developers with first-mover advantages to wholly reshape the neighborhood. To suggest it would “fight” and not abet gentrification is laughable.

      Philadelphians don’t much care for the cult of the free market. We’re working people who don’t want to be displaced from our communities with no say — this is something the public sphere has glossed over when covering Point Breeze.

      Please remove this idea from your head — “There’s only two things you can really do in response to this. You can either let developers build as many housing units as people want to use, or you can actively try to make the neighborhood crappier so nobody wants to live there.”

      It’s destructive to Philadelphian communities and serves only to benefit property developers. It is an idea that needs to be eradicated from policy, ridiculed in journalism, and angrily rebuffed in person. It is wrong; it is morally abhorrent in its implications.

  4. Jon says:

    I strongly disagree that what’s needed is more rent control. The idea that rent control is somehow broadly beneficial is beyond stupid. It benefits the few people who are lucky enough to get rent controlled apartments, and drives up prices on everybody else. That is not a strategy for bringing down *market* rents, which is what the goal of affordable housing policy should be. I’d be all for longer-term rent contracts where people who plan to live in an area for a long time can lock in a certain rate for the duration of the contract. But in general, the best affordable housing policy remains growing the supply of housing in areas where there’s increased demand for housing. I personally think the price increases are the only bad thing about gentrification, and that’s the thing we should be trying to fix through public policy. We need to be trying to keep rents as close to construction costs and possible, and not let land price inflation drive up rents and force people out.