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Posts By Peter Tatian
Peter A. Tatian is a Senior Research Associate in the Urban Institute's Metropolitan Housing and Communities Policy Center. Mr. Tatian's areas of interest include housing policy, neighborhood indicators, and community development. He is one of the key staff on the Institute's National Neighborhood Indicators Partnership, which makes use of local data to promote community building activities in over thirty US cities, and is currently leading the Institute's NeighborhoodInfo DC partnership, a neighborhood data system and civic engagement tool for the District of Columbia. He is also directing the Urban Institute's evaluation of NeighborWorks® America's National Foreclosure Mitigation Counseling program, which provides counseling services to homeowners facing foreclosure. Mr. Tatian co-directed the Neighborhood Change Data Base project, which brought together comparable neighborhood-level indicators from the 1970 to 2000 Decennial Censuses. In 2005, he co-wrote a study on the neighborhood impacts of community development strategies in Richmond, Virginia. He has also done research for HUD on the impacts of public and supportive housing on neighborhoods, and has worked on housing policy reform in Eastern Europe and the former Soviet Union.Links: http://www.neighborhoodinfodc.orghttp://www.urban.org/expert.cfm?ID=PeterATatian
| Posted: January 2nd, 2013
The U.S. rental housing market has come under increasing strain recently. As homeowners with unsustainable mortgages have to leave their homes and fewer homebuyers are able to qualify for new mortgages, more people are looking for places to rent. As a result, rental vacancy rates have fallen from 11.1 percent in the third quarter of 2009 to 8.6 percent in the third quarter of 2012. With affordable housing already in short supply, there is growing concern that stronger protections are needed to prevent rents from rising too fast, pricing more low-income and vulnerable renters out of the market.
One idea to protect renters that may be getting renewed interest is rent control. Rent control policies have been tried in a number of cities, first during World War II and later again in the 1960s and 1970s. Relatively few places have rent control today though and most states have laws prohibiting the practice. Given the challenges in today’s rental market, does rent control deserve a second look?
A scan of the research literature revealed very little evidence that rent control is a good policy. Arguments against rent control go back as far as the 1970s and the RAND housing allowance experiments in New York City. More recently, a MIT study of the 1995 repeal of rent control in Cambridge, Massachusetts, found that investment in housing increased after rent control ended, leading to “major gains in housing quality.” A National Bureau of Economic Research paper also examined the Cambridge experience and concluded that “elimination of rent control added about $1.8 billion to the value of Cambridge’s housing stock between 1994 and 2004, equal to nearly a quarter of total Cambridge residential price appreciation in this period.” These findings have been used to argue for removal of rent control in New York and other places.
In a comprehensive overview of the research literature, Blair Jenkins examined studies of different aspects of first-generation rent control (strict price ceilings) and second-generation (limits on increases, also referred to as rent stabilization). The upshot is that, at best, rent control does little harm but probably not much good and, at worst, it has negative impacts on landlords and tenants. There is near universal agreement that strict price ceilings, such as the kind imposed in New York City in the 1940s, are always bad because they severely inhibit housing production and investment. Even those most sympathetic to rent control seem to agree with this.
That leaves the softer, rent stabilization policies, like those currently in place in New York City and Washington, D.C. These regulations place limits on how much landlords can raise rents on sitting tenants, but generally allow much larger rent increases for new tenants. They also often allow exceptions for landlords to pass along certain costs to tenants, such as capital improvement costs or utility charges.
On rent stabilization, the strongest finding in Jenkins’s overview appears to be that tenants in noncontrolled units pay higher rents than they would without the presence of rent control; one reason being that landlords need to make up the difference for lower rents in controlled units. Interestingly, one study found that New York City tenants in controlled units also had higher rents initially, because they were willing to pay more to get into a rent-controlled unit with the understanding that they would have smaller rent increases in the future. The net effect, however, is that tenants don’t save much in the long run—they simply trade higher rents now for lower rents later.
The conclusion seems to be that rent stabilization doesn’t do a good job of protecting its intended beneficiaries—poor or vulnerable renters—because the targeting of the benefits is very haphazard. A study of rent stabilization in Cambridge, for example, concluded that “the poor, the elderly, and families—the three major groups targeted for benefits of rent control—were no more likely to be found in controlled than uncontrolled units.” And, as noted earlier, those in uncontrolled units tend to pay higher rents, so they are actually hurt by rent control.
Given the current research, there seems to be little one can say in favor of rent control. What, then, should be done to help renters obtain affordable, decent housing? A better approach may be adopting policies that encourage the production of more diverse types of housing (different densities, tenure types, unit sizes, etc.), implementing strong regulations and practices to ensure housing quality and to protect tenants from abuses; and providing targeted, direct subsidies to people who need help paying their rents.
Filed under: Economy, Washington DC 4 Comments »
| Posted: August 4th, 2011
In a recent Housing Complex post, Washington City Paper reporter Lydia DePillis discusses whether people who opposed a women’s shelter in Anacostia or a school for at-risk youth in Truxton Circle should be offended by being called “NIMBYs.”
Anyone who works in community development knows that NIMBY, short for “not in my backyard,” often refers to what some would call knee-jerk opposition by current residents to plans to introduce a new housing development, shelter, or any other facility into a neighborhood. Some other colorful terms for the same reaction include NIABY (not in anyone’s backyard), BANANA (build absolutely nothing anywhere near anyone), and NOPE (not on planet Earth).
Understandably, some community residents object to having their concerns reduced to a snappy acronym. They would counter that they have legitimate reason to fear a new development’s impacts on their property values, safety, and quality of life. But are such concerns always justified?
Back in the 1990s, I worked with Urban Institute colleagues to determine whether there were any negative consequences when new public housing, housing voucher families, or supportive housing moved into Denver and Baltimore County communities. Except where concentrations of such housing were high, we found no evidence that it reduced property values or increased crime rates in nearby areas. In fact, single family and duplex public housing in Denver neighborhoods often raised property values relative to those in similar neighborhoods. This boost, we concluded, probably came about because the public housing was well-maintained and operated and because it represented an investment by the city in improving homes in these neighborhoods. (Check out our 2003 book on the findings, Why Not In My Back Yard?)
No good researcher would generalize these results to all circumstances, but they do show that well-designed and administered assisted housing programs don’t necessarily have negative consequences for neighborhoods or neighbors and can even have benefits.
That research confirmed that policy makers and city officials shouldn’t over-concentrate assisted housing in particular areas, a common NIMBY complaint. But if residents were better informed and programs better designed, maybe more people would say “Why not in my backyard?”
Filed under: Built Environment, Urban Culture, Washington DC 2 Comments »
| Posted: March 29th, 2011
The recently released Census 2010 data show quite clearly how the past decade has reshaped the District of Columbia. For the first time in about half a century, the city’s population is growing. During the boom of the 2000s, new housing, particularly high-rise condos, sprang up in the city’s downtown and along its waterfront. Investors and businesses competed for prime locations in once blighted and struggling neighborhoods. A new D.C. renaissance was under way.
The city’s face was also undergoing a transformation. In the once “Chocolate City,” African Americans now cling to a bare 51 percent majority. Whites, Latinos, and Asians are a growing presence in many neighborhoods where they weren’t seen a decade ago.
The new census data confirm what many knew all along -- the city is changing. And for some people, particularly long-time African American residents, this change is not at all comfortable. But how do these recent changes fit into the city’s longer history?
District of Columbia Population by Race and Ethnicity, 1800 to 2010
Since its founding in 1790, the District of Columbia’s story has been one of constant flux. For its first 60 years, the city grew slowly. By 1860, fewer than 100,000 people lived within its borders, almost all of them white.
The Civil War precipitated the first of several growth spurts. Between 1860 and 1910, the city added over 250,000 people. With the onset of the first World War, population growth accelerated and then took off again during World War II. By the 1950 Census, the city had reached its peak population of over 800,000.
But 1950 also marked the beginning of a white exodus. In only two decades, the white population fell by over 300,000 and D.C. became majority African American in the late 1950s. For the next few years, the black population continued to grow, but following the riots of the late 1960s, the black middle class began its own escape to the suburbs. From a high of 538,000 in 1970, the African American population declined steadily to 309,000 in 2010.
In the 1980s, the District’s white population stabilized, and Latinos and Asians became a growing presence. But their numbers weren’t big enough to make up for the outward flow of blacks, and the city’s total population continued to shrink. The real turnaround started in the last decade. Whites rediscovered the attractions of the city, and their numbers climbed by almost 50,000 between 2000 and 2010. At the same time, the city added 9,700 Latinos and 7,900 Asians and others. The combined increase was larger than the 38,000 drop in black population.
As Margaret Simms pointed out in her March 25 post, Washington, D.C., isn’t the only American city undergoing a shift from majority-black to something different. While some will welcome the diversity and the influx of residents to cities, these new data will do nothing to allay the fears of those who see poorer, primarily African American residents being pushed out to make way for the more affluent. Change happens continuously in urban communities. The challenge is how to manage this change for the benefit of cities, and all their residents.
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