Apartments should be legal to build
Apartments should be legal to build
A beginners thoughts on what YIMBY means
Over the last few years I’ve been learning more about the benefits and challenges of building denser housing. It turns out that buildings like apartments, condos, even duplexes, are illegal to build on most of the land in US towns and cities. Those pushing to change this are often called YIMBYs (an acronym for Yes In My Backyard) but there seems to be a lot of confusion on what this term means, and what self-described YIMBYs want. I can’t speak for the whole movement, but here I’ll try and explain what YIMBY means to me and the changes it’d entail for my town. If you’d like to have more affordable homes that impact the environment less read on.
Apartments Save Land
The most obvious benefit of apartment buildings is that they can house far more people than single family houses on the same land area. People sometimes look at densely built cities like New York or Paris and see concrete jungles, divorced from nature. But, what if all the people of those cities were living in traditional homes on quarter acre lots? Lets do some math on that. Manhattan is 14,000 acres with 1.6 milllion residents. In the US the average household size is 2.5 so we’d need 640,000 detached homes for all of these people. Put these on quarter acre lots and you’re talking 160,000 acres, and that’s not including the space for streets, stores, parks, etc.! The residents of Manhattan are likely saving well over 150,000 acres of land just by living more densely. By not using this land for housing we can do other things with it like farming, solar and wind production, heck we could even just let it be wild.
The environmental costs of sprawling like this are real. I just have to look a mile from where I live in State College to see an example. The Yards of State College was built on 44 acres of land that used to be a mix of farmland and wild areas. There was a lot of protest when it was constructed because they were building on top of a source of our drinking water, but it got built anyways. It provides housing for 1,000 people, which is great, but it uses a lot of land to do so and puts its residents so far from campus that many are likely to drive (just look at how much land has been paved for parking). A single 12 story building going up downtown now will house nearly 500 people on around 10,000 square feet of land. The Yards residents could fit into 2 such buildings on less than an acre of land, but sadly our borough council just effectively banned such developments. That means that sprawl like The Yards which replaces farmland and wild areas with asphalt and buildings will continue (like this new development by our airport). This sort of development may include a bit of green grass but it is not green in an environmental sense because it destroys farms and wild lands and increases commuting distances.
The single family neighborhood that I live in is even worse than The Yards in terms of land use. It uses about 200 acres to house under 1,000 people in under 500 homes. We do have a senior living facility that houses another 300 some people, but still we’re far from dense. This is largely because State College’s zoning outlaws density here. Each home is legally required to be on at least 10,000 square feet (sqft) of land by our zoning (.23 acres). You are allowed to build duplexes (aka Two-family dwelling) here, but they require 20,000 sqft of land so there are no land savings which amounts to a de facto ban. Changing this law to simply allow denser building if people want to do so is the heart of YIMBYism to me.
Apartments Save Money
The big misconception about dense building is that apartments/condos cost more than detached homes. An apartment may require some things a home doesn’t, like an elevator, but it also massively cuts other costs, like land. My town has very few buildable lots left, so you’ll be paying $150,000-$250,000 just for land to build a home. The land alone for 6 detached homes here would cost over a million dollars, and in reality there aren’t even 6 vacant lots left here. A 6 story apartment building on 1 lot here would save at least $750,000 in land costs. That $750,000 could easily fund a nice elevator and other additional costs of building taller with money to spare.
The issue again is zoning, with Floor Area Ratio (FAR) limiting the square footage of a building as a multiple of the area of the lot it’s built upon. This means that as a building becomes taller it must legally become narrower as well. That rule, along with other rules (like parking minimums) adds a lot to the price of a building. Loosening or eliminating these requirements is another YIMBY goal. If people want to live without a car they should be allowed to buy a unit without the added cost of parking. If they don’t want a yard they should be allowed to buy a home without one. The more people we can put in a small area downtown the less area we waste building sprawl housing and the less fuel we waste commuting to that. It’s that simple.
Density Helps Towns
Density is also key to making a town a great place to live. A frequent complaint I hear about State College is that our restaurant scene is weak. This is largely due to our zoning laws preventing dense building and limiting where restaurants can be built. Before moving here I used to live in Ithaca. Its downtown has buildings on far smaller lots (my house was on a 0.04 acre lot), along with many apartment buidlings. This dense building provides a customer base that could support many good restaurants, coffee shops, etc. These businesses are built right into the neighborhoods too, so people can actually walk there from their houses. My own house there was about 300 feet from a sports bar and it was great to be able to just walk over to watch a game and have a beer or two. In State College we limit the places such bars can be built and require that they have huge, expensive parking lots, then wonder why we have a weak restaurant scene and a serious drunk driving problem.
Beyond allowing a better restaurant scene and saving on construction costs, dense building also saves towns money. The miles of local streets used to connect homes are paid for by property taxes. Most people are blissfully unaware of how much roads cost to build and maintain, but once you see the numbers you can’t ignore what a huge cost they are. State College budgeted $19 Million for Capital Improvement projects in 2022 and well over half of that was earmarked for roads and parking. Sewer costs are another big ticket item, and though dense building requires bigger, more expensive pipes, it requires far fewer miles of them resulting in a lower total cost.
The Not Just Bikes Youtube channel partnered with the Strong Towns non profit to do a great job of explaining how dense development saves cities money check out their whole video series if you’re still confused. The short version is that denser homes require fewer miles of roads and pipes, and so they require government spending to maintain. The money for these projects comes out of residents pockets in the form of property tax, so anyone who cares about saving money should care strongly about this. Even if you don’t personally live in a condo, having them in your town adds to the tax base while only marginally increasing government spending. That results in lower property tax, and/or better government services for all residents.
But all new apartments are luxury!
Another argument against new building is the claim that new units will all be luxury units and drive up prices. This makes some sense in that new developments are often marketed as being luxury, but what does that really mean? Generally it’s just higher end appliances, and potentially amenities like gyms or pools. When you look at the total cost to build a new apartment it becomes clear that the extra cost of these things is just a small fraction of the cost of a whole building. If making a unit “luxury” only adds 10% to its total cost, but lets a developer sell the unit for 50% more then they’d be fools not to build it. That will continue to be true until the market for “luxury” housing is saturated and people aren’t willing to spend so much more to buy/rent them.
America has built so little housing over the last few decades that the pent up demand is so huge that we literally have to build millions more homes before we see truly affordable homes get built naturally by the market, and even that is dependent on low enough material/labor costs. Until the demand for luxury units is met the main way to ensure that “affordable” units are also built is with laws that require X% of new units in a building be affordable.
State College originally tried this with the luxury student housing it was building, but it quickly found that adults with families didn’t want to live in a building full of college students, even if the rent was low. The next option they tried was called fee in lieu. This allowed developers to pay a fee that the borough would use to build/improve low income housing rather than building new units directly. I recently saw an example of this in action near my house when I noticed that a dumpy old motel nearby had been converted to affordable apartments with efficient heat pumps added to all the units. It turns out that this upgrade was done with the help of the fee-in-lieu funds the borough had collected.
More affordable housing is greatly needed in State College and other popular cities in the US, but our regulations must walk a tightrope. If we require too high a fee-in-lieu or percentage of affordable apartments then new developments will become unprofitable and builders simply won’t build them. We often see anti-development NIMBY’s pretend to care about affordable housing by advocating for all new buildings be 100% affordable homes. This is a front because these NIMBYs know that 100% of 0 new buildings is still 0. These same people will scream that their neighborhood doesn’t need affordable housing, or will actively be destroyed by its existence if a developer actually tries to build some there.
Supply and demand is real
The other reality with luxury units is the law of supply and demand. Landlords and realtors look at the balance of supply and demand in an area by calculating its vacancy rate. This is what percent of homes in the area are currently vacant. As long as vacancy rates are low rents will continue to rise. There are studies that show this, but you can also just look at landlord forum posts to see how rent price is tied to vacancy rates. There are 2 ways to increase vacancy rates, either have fewer people or build more homes.
In high demand areas like my town, we are not seeing population drop. Well, if you look at our recent census results we did, but those in the know will tell you that this is the result of poor census taking methodology. This may have been deliberately done to reduce our electoral power, but that’s a topic for another blog. We have built thousands more units downtown in the past few yearsand these new units are almost all rented out, but they’re not increasing our population or decreasing our vacancy rates much because their renters are often college kids who would have been crammed 2-4 kids into a single room in the past. These students (or their parents) are willing to pay over $2,000/month for a single room. That is a LOT of money and until we build enough housing to fit everyone willing to pay so much all new development here will likely be focused on meeting their needs because it’s so profitable. Who would build an apartment to rent for even $1,000/month when there is a waitlist of students ready to pay $2,000/month? Pretending this demand is not here does nothing to fix our housing issues.
Why State College Bans Dense Housing
My local government has kept the demand for student housing from totally inflating the price of single family homes here by legally limiting which homes can be rented to students. Go to any gov event where student housing is discussed here and you’ll hear a lot of anti-student sentiment. Some arcane state law prevents this limitation on multi-family homes which likely explains why my local gov has banned construction of multi-family homes on most of our land. That doesn’t mean it’s a good choice though.
My town is named State College because Penn State is the reason for its existence. PSU is the economic engine of our town and we benefit by allowing housing for students to be built right next to it. The alternative to this is that apartments are built further away and students commute in by car or bus. It is true that the university could be building dorms on their own land, but residents should remember that PSU is tax exempt and such buildings would add costs to our community without adding revenue. That is how many college towns find themselves in dire financial straights despite the presence of a wealthy university in them. Until we end tax exemption of universities, college towns are better off having buildings built by taxable entities than by the schools themselves.
My YIMBY Dream for State College
State College is currently the 13th most populous city in Pennsylvania. We could easily be in the top 10 and the top 5 is possible. Most of these potential new residents already drive here daily for work and we’re budgeting millions to provide roads and parking to enable this. Instead we simply have to build enough housing for them to find an affordable place to live here, reducing traffic and improving borough finances. We don’t have to force everyone to do live in an apartment here, but we should at least make it legal to build enough housing for those who want it and to build it all throughout the borough and not just in a tiny sliver of land by PSU.
The best solution I can see for State College is to allow super dense housing for students on land that pays property tax to the borough, land that is directly adjacent to the university. Allow enough of this to be built to meet all of the demand for $1,000+/month rental units so other buyers/renters can compete for new builds. Along with this we should update our zoning code to require even greater energy efficiency, durability and sound proofing so the new buildings will be assets to the town for decades to come and not liabilities. We should also update zoning to allow even more dense housing beyond just student housing so the many employees of the university and the borough can actually live here and not 30+ miles away. Our zoning should also not require huge amounts of parking for each apartment so people who choose to live without cars don’t have to pay for those who do. We should create a vibrant food scene by allowing coffee shops and restaurants to open up right in our neighborhoods and get most of their business from foot and bike traffic from all the dense housing that is built. Finally, use all the fee-in-lieu payments and property tax from this to fund affordable housing and improved city services like a truly safe connected bike network and electrified bus or tram service.
State College could be a truly world class town. There are plenty of rural places in PA where misanthropes can live without much interaction with other people so we should not allow them to limit our future here. State College is one of the few places where thousands more people actually want to live. We should embrace this by making it physically possible for them to do so. It’ll improve both their lives and ours and we can all profit greenly together.