Yes, building more apartments can stabilize rents

Good news from the Oakland of the North. Because the city (unlike the home of the NFC runner-ups) has not egregiously abused zoning laws to protect the financial interests of incumbent landlords, at great costs to both renters and the environment, rental costs’ previous upward trajectory appears to be stabilizing. It’s almost as if rental costs have something to do with changes to the ratio of renters to units available. While the trend of enough units added to the market to keep up with demand is likely to continue for at least another 1-2 years, in the long run there are good reasons to worry, as the city council is likely to become a lot more beholden to anti-density NIMBYs under the new districting scheme beginning in 2015.

In less good news, the latest news regarding the ongoing disaster of the deep bore tunnel is very bad: WSDOT is admitting the delay will last at least six months. While WSDOT is not forthcoming with financials, this almost certainly blows through the contingency in the budget and puts us well into cost overruns territory. Since the plan for cost overruns is “a bunch of different government agencies sue each other over who has to pay them” this could get ugly quickly. The contractor most directly responsible for this disaster is trying to fix this situation as best they can–they’ve hired a PR firm. But really bad news now could still be the best case scenario, if it leads to shutting this down sooner rather than later, if the relevant authorities can take a lesson from John Schneider and see the tunnel as he came to see Matt Flynn. Seven of the nine members of the city council and the new mayor were major champions of this project; sunk costs can be a particularly difficult concept to grasp when you’re the one who did the sinking in the first place. At some point the project is going to start losing political support in Olympia, as legislators begin to see the tunnel as a giant sucking sound taking money from planned WSDOT projects in their own districts.

Finally, thanks to the commenter who recommended Flyvbjerg’s “Megaprojects and Risk”. I’ve picked up a copy; won’t have time to read it properly for a while but on first glance it looks great and I’m looking forward to sinking my teeth into it.

Update: since this post has brought out some of the usual, “Why do you oppose all zoning laws, Mr. Yglesias?” silliness, I’m elevating a comment in which I sketch my general philosophy on zoning and its proper uses to the post:

I have local and global views on zoning. My “local” views will vary from locality to locality, but would tend toward more density. But I don’t think they are relevant here. What’s relevant here is my global views, which are, roughly, this: zoning policies across a city or region should be aligned with local economic and democgraphic trends. If our demographers and economists say “the region is likely to grow by X people in the next Y years” than a responsible, decent municipal government plans for that growth, by asking questions like “does existing zoning allow for housing for that projected growth? If not, how should we tweak or change it to allow for the necessary housing to be built?”

There are, of course, always lots of different ways to do that, with different consequences (in terms of aesthetics, displacement concerns, transit, etc etc). We could focus growth in a few neighborhoods or encourage it across the city in smaller ways, we could focus on adding units incrementally by allowing more mother-in-laws and backyard cottages, or try and do it through upzones on major transit routes, or develop a new area that was previously not developed at all, etc etc.

My concern here is much less about which of these routes to choose. My concern is the decision to say “fuck it, we’re not going to do any of these things, and not allow housing supply to grow at a rate sufficient to meet future demand, thus unjustly enriching some generally already wealthy incumbent landlords, impoverishing renters as a class, and contributing to environmentally destructive sprawl.” That’s the path SF has taken, and the while it’s great for the landlords collecting 4-5K rent on shitty apartments, it’s obviously a pretty big problem for the city.