How Do You Build More Housing When No One Wants Neighborhood Change?
In this episode of the Strong Towns Podcast, Chuck discusses housing with Cullum Clark, director of the Economic Growth Initiative at the George W. Bush Institute. They talk about why there is so much resistance to new development, ways that officials and advocates could engage with the public to reduce that resistance, and what the incoming Trump administration could mean for housing.
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Chuck Marohn 0:09
Hey everybody. This is Chuck Marohn. Welcome back to the strong towns podcast he's been on before, and now he is back. Cullum Clark is the director at the Bush Institute, SMU economic growth initiative. He is a friend of mine. I've been able to hang out with him a little bit in his home in Dallas, meet a lot of people and have a really good time. I invited him back on the podcast because he's got a new report that's part of the bush Center's blueprint for opportunity series. This one is on housing column. Welcome back to the strong mounts podcast,
Cullum Clark 0:45
Chuck. It is great to be here. Thanks for having me. It is nice to see
Chuck Marohn 0:48
you again. It is now cold and chilly here in Minnesota. Snow is coming down. That's not, that's not what things are like in Dallas, though, right?
Cullum Clark 0:56
It's, it's cold by Dallas standards, which means I'm walking around in a sweater, and maybe the 50s.
Chuck Marohn 1:04
I'm interested in your take on the housing market in Dallas, and maybe we can start there and then expand out from there. I spent some time in Dallas in 2014 getting shown around different housing projects, different things going on. Talk to a lot of people as part of my book tour in the Dallas Fort Worth area. There's this sense from outside that this is a I'm going to use the word dynamic, more dynamic place than other parts in the country. I want to start with your take on that, and then maybe we can build from there. Sure,
Cullum Clark 1:37
absolutely well. So I've done a lot of writing about housing in particular recently, and lot of it's national, and some of it is is pretty local or about our state here in Texas, when we talk about the Dallas housing market, it's really important to make a distinction between the city of Dallas, which in itself, is a big place with different neighborhoods that we could talk about, and the metropolitan area, to put things in perspective, the city is 1.3 million people, City of Fort Worth. Second biggest city here is 1 million. The metropolitan area is 8.2 so roughly three quarters of the people don't live in the cities of Dallas or Fort Worth, which is a really important point when we look at the metropolitan area as a whole, it has experienced a gigantic boom. If we look at just net migration of people from different parts of the United States to other parts of the United States, the Dallas Fort Worth metropolitan area has been the number one net destination in absolute terms over the last decade and in most individual years over the last decade, including the last couple individual years. So there's a giant flow of people into here, and that's always going to be a challenge for the housing market, right? I mean, when there's a huge number of people going in, there's only so much labor around. There's only so much materials you can secure. The all the people trying to build the housing supply can struggle to catch up at the metropolitan area level, we've done a better job than a lot of places probably would have done, because there's a lot of very, very pro growth new housing friendly municipalities around the metropolitan area. But even so, we struggle to catch up. So we've seen pretty big increases in home prices relative to incomes, more than the average American city. For sure. However, what we've seen most recently is actually maybe a little bit of a slowdown in demand, probably because of interest rates. And actually, the supply has done a pretty good job of catching up. So we've actually seen prices stop going up. They've actually gone down a decent amount in Austin, in the Dallas area, maybe gone down imperceptibly. All in all, the place is pretty good at creating something like enough supply over time to keep up with even enormous growth in demand. So that's the metropolitan area. But as I said, the city is a different story. We are in danger of becoming something of a kind of a donut with a donut hole in the middle, a really booming place with a not very thriving core city. I don't believe that's long term a sustainable or healthy situation, but we see it in the housing markets. We see that home prices have gone up far more in the city of Dallas than in essentially any suburban area. It'd be nice if you could argue that there's some kind of demand driver that is pushing that, but there just isn't. I've looked very carefully at this, and it is just way harder to build any new housing in the city of Dallas than in most surrounding cities in this area. It's well recognized. Our mayor has again and again said that the way the permitting office works is notorious. Got to be solved. We haven't been able to solve it. We are behind a lot of other cities in doing various kinds of reforms. There's kind of a standard tool kit of reforms that probably every city should be looking at. I don't think there's any one city that's nailed it, but in any one category. Area of reform, there's someone who's the leader some handful of places who've been kind of following in their in their footsteps. The city of Dallas just hasn't been a leader on any of those fronts. I'm sorry to say, the people trying to reform it are all my friends. We're a pretty tight knit community, and we're all kind of trying to push the ball in the right direction, but it really hasn't happened, and that's very visible in our in our housing market. So new supply has been fairly weak, whereas it's been absolutely enormous in places like Frisco, Allen McKinney and the city of Fort Worth is a huge outperformer by the standards of big city. Let
Chuck Marohn 5:33
me ask this nuanced question about that, because I've, I've been to the house many times. There's a lot of cranes. There's a lot of stuff being built in the core. Kind of man. I've got a good cousin that lives in one of the towers in the downtown. He's a he's a young millennial and enjoying, you know, the early years of his working life out of school. Dallas itself is a regular, large geographic city. Most of the city is not the kind of what we think of as downtown Dallas, or the picture that you get of the the cityscape. It is what I'm just going to say, normal single family neighborhoods, or neighborhoods that would look very similar to kind of what you would see, maybe even in the surrounding cities, and what have you, it feels like the tension is maybe not over building in the core, but is there tension in other places? Like in other words, if we were going to point to the things that Dallas could do better, because I suspect there are things that other cities could do better, where and what would those things look like? Yeah,
Cullum Clark 6:38
gosh, you and I have had some good conversations about this over time. Chuck, I think, you know, maybe we're representative of a lot of places. Let's consider three different kinds of neighborhoods, okay, yeah, one where all the all the high rises are going up. It's all in one area called uptown, and to a certain degree, kind of on the edges of what we have historically called Downtown. Downtown used to be all white collar office towers, nothing else, monoculture. It was dying like downtowns all over America. And then in the early 21st century, developers started figuring out that people would actually live there, if you you know, could actually get the land under contract and build a pretty decent apartment building that's gotten started now we have 20,000 people living in the in the traditional downtown Dallas, but uptown is a place that was once on the whole relatively low income neighborhoods, mostly black and Hispanic people. It would be the one place in Dallas that experienced what you might more or less call 100% gentrification and displacement. So it's got a lot of painful history and this and that particular neighborhood, but the result today is today that it is a booming mixed use area. A lot of apartment towers going up. It is where the kind of the fanciest office buildings are going up, like sort of right on the edge between downtown and uptown. Is where Goldman Sachs is building a new building that will be their second biggest headquarters in the United States, after Lower Manhattan. So you've got all this action. It clearly lots of cranes, lots of activity. If that's the only place you visited, you might think, oh my gosh, Dallas is that housing Mecca. It's totally nailed it. The truth is, we have actually figured out how to turn that uptown area into a relatively high density, pretty great mixed use area, albeit one that's only going to house relatively high income people. Second kind of neighborhood is the very wealthy single family neighborhoods that mostly are in the northern part of the city. These places essentially have been fully built out for probably 50 plus years. There's essentially no conversion of single family lots to anything else. And the total number of people per housing unit, like all over America, has been trending down. So essentially, the the human density, you know, per square mile, has been going down. Mostly what we do is turn older single family homes into much bigger, nicer, single family homes on the same lot. Very good at that. That's kept plenty of developers very, very busy for a lot of years. So, you know, kind of the pretty nice neighborhood where I grew up now. There's almost no houses still standing that were there when I when I grew up there. So that area is fine. It's prosperous, it's very high income. Then you have about three quarters of the land mass of the city that we haven't talked about, three quarters of the land mass of the city at least, is dominated by single family zoned areas that mostly house low to moderate income people. And in those areas which you know, unless you made a real point of going there, is pretty good chance you could visit Dallas time and time again, and not go there. But what you would find is an extremely old single family housing stock, extraordinarily low density, built out at low density in the first place now, with many lots where the how the long ago built house has since been demolished and nothing built in its place. You would find a whole lot of publicly. Own land, city, school district and transportation authority that's just been essentially treated, you know, as you would have treated land. And I don't know, 100 years ago when land essentially had almost no value, and it's still sitting there, basically empty. There are sites that have or organizations that have looked at how much raw land is there in different cities. On one of those studies, the city of Dallas ranked first, even though we're not by physical extent, the biggest city in America. We're up there, but we were pretty easily first for raw land. So you see all kinds of empty land all over the place, and you see very few grains, no no multi family going up and only in very few small corners of the of all of these areas do you see kind of what you might call relatively well off neighborhoods going up at very small scale, in areas that are surrounded by enormous amounts of basically old single family homes that are just deteriorating in place, and that is most of the land area of the city. And by the way, those old, old homes on a pretty large lot, the value has been, kind of continuing to go upwards. There's a lot of stress for low income families. It's pretty big issue here. I've just been part of a, kind of an advisor on an effort to develop an anti displacement toolkit that's kind of a hot topic. But at the end of the day, not much is being built in most of the city.
Chuck Marohn 11:24
I don't want to say, I mean, we wrote the book The housing trap. I feel like this is almost like a different kind of trap, right? You you've set up. And I'm going to say this, and I want you to push back on it, you've set up kind of the big development money going in in the the newer splash year, uptown, downtown, adjacent area, you've got the and I'm, I'm going to call them the the NIMBY area, or the area where, like, this is stable. It's working. Don't change it. There's no real push to change it. There's no real constituency for change. I know NIMBY is touted as a bad thing. I'm I'm saying it more as, like a a mindset here, of like, all right, this is not the high this is not the low hanging fruit for building in this area. But you've got the this broad swath of a city where it feels like there are just very simple things that could be done or should be done. And I'm even going to go a step further. And it feels like the people who live there today could do a lot of those things, or maybe would benefit themselves. Not in a, okay, let's gentrify this neighborhood. These people will be moved out, and, you know, figure that out. But actually, the people who are there in a house that's declining, where there's a lack of investment, they themselves would actually benefit from seeing some of this done. What do you make of that analysis, and what is preventing the capital from flowing into these neighborhoods in ways that the people there would embrace and want to see, want to see put to work.
Cullum Clark 13:01
You were saying, push back a little bit. I think maybe we might be agreed on this. Actually, I don't really like to use the word NIMBY. I think it's kind of an ugly word, but I think there's a couple of aspects of nimbyism that I kind of note. One is, seems to me like it's a very human characteristic, that it's typically present in every neighborhood, every place you know, this kind of desire of people to not see too much change too rapidly in the area immediately where they live. I think comes pretty naturally. When taken too far, it paralyzes cities and causes a lot of problems. But it's, you know, I would, I would generally argue, you know, if policy makers are trying to deal with it, rather than one thing I say a lot, rather than try to shame people into not having that very human reaction, how about work with them and try to convince them that some moderate pace of change might actually be not just, you know, take one for the team. It'll be good for somebody else, but that it might actually make the neighborhood a better place to live for them as well. I tend to think that way. Now turning to the the actual, the three quarters plus of the city that I talked about, I think they're two really powerful forces that keep new money from coming in, very much one force, which is, you know, I think Dallas is kind of like the classic. It may be the the prototypical example of this in America, if a metropolitan area is growing, a whole lot of new housing is going to get built someplace. Dallas is the classic place where there are no, no geographic constraints in any direction, and not much in the way of policy constraints either on growing outwards. We're really, really good at growing outwards. You know, as long as growing outwards is fairly cheap to execute, you can build whole Master Plan communities that pretty large. You know, percentage of the population likes boats with their feet. They're they're buying the more you grow outwards, the less pressure there is to develop anything, to redevelop anything that is in the urban. Sure. So that force, I think, is present in a lot of parts in America, but, but here, where you really have such low constraints on all sides of the city, that's a pretty, pretty powerful force. And the second force, I think, is that, again, the vast majority of the city is zoned single family. And I think every single, every single neighborhood you could find in Dallas that is primarily single family. The resistance to change and the resistance to anything new getting built is typically extremely strong. I don't think we're anywhere close to some of the cities, you know, Minneapolis and a couple others where you have had kind of a, you know, a lively debate about whether to try to, really, you know, force along some significant changes in single family neighborhoods. We don't really have that debate. You got the odd, you know, here and there, there'll be a city council person who will not so much actually propose something, but just float the idea. Someday, maybe we ought to rethink a little bit of that that's nowhere close to being taken seriously here. The resistance is very, very high, and I would say even in the lowest income neighborhoods, that typically, the resistance there typically takes the form of not wanting to see, quote, gentrification and displacement, unquote. But that can, you know, in a sense, take the form of, but we really don't want new capital coming in in any form, because whatever it is is in some sense threatening. I think both of those forces are far more powerful than any kind of forces for reform. So in the absence of some really big changes, probably the the three quarters of the city, that is the way I said it is probably going to carry on about like it has been doing. By
Chuck Marohn 16:38
the way, we are in 100% agreement on the idea of the word NIMBY, and it's, it's use, and it's, it's, it's applicability. I've always argued that if you have a strategy, for example, the war on cars, you know, okay, we're gonna have a war on 92% of Americans who drive. We're gonna have a, you know, a battle with 90% of the property owners. These are just not winning framing strategies, right? Well,
Cullum Clark 17:05
to some degree, they're based on on shaming people, right, or punishing them. And neither shaming nor being nor punishing is particularly well received out there. You know, the strategies don't tend to get very far right?
Chuck Marohn 17:16
Well, let me ask you this question, because I feel like this is a this is one of the, I'm not going to go as far as to say hypocrisies of Texas, but it's one of the, it's one of the cultural narrative things that as a as an outsider coming in, I struggle to reconcile, because there is this strong property rights sense in Texas. There's a strong kind of independence, like the government shouldn't be telling me what to do, yet when it comes to something as simple as I'm going to put in a backyard cottage, or I'm going to buy this house that's in disrepair and convert it into a duplex, all of a sudden, now, the power of the state becomes embraced and Paramount and something that we will defend. How do you reconcile that, and is there a way to talk about this differently? Maybe that that will help us make some progress on getting housing built?
Cullum Clark 18:10
Gosh, good question. Chuck. I think that the for the typical individual or family out there that really, really feels pretty strongly, they don't want to see their neighborhood change very much, or at least very fast. The strict property rights argument, don't tell me what to do with my property. And the, let's say, more expansive version of don't come in as an outside force and tell me my neighborhood's going to totally change. I think those two things can be easily conflated together, and people aren't making, you know, kind of nice legal distinctions. I will say that the the idea of, you know, very strong property rights tradition does create some openings. In the state of Texas, there was a statewide minimum lot size reform bill in the last legislative session in 2023 that came extremely close to passing, Texas would have been among the first states to actually reform that, you know. And essentially, the Democrats in the legislature are a minority. They really have no power at all that this was entirely playing out among the Republican majority. And the idea of people should be able to, you know, do what they want with the property. And if they buy a relatively large lot and they want to divide it into into two or three smaller lots, that they should have the right to do it, that argument is does carry some weight with members of the majority in the legislature. We've also seen that Houston has led the country in reforming minimum lot size rules with its you know, it's has no zoning, probably more than any big any big city in America loves the idea of you can do whatever you want with your property. And they acted on that first in the in the downtown and in downtown adjacent area in 1998 then they went citywide with that reform in 2013 the results have been really good. And just in the last couple years. The City of Austin followed in their footsteps and also reduced the minimum lot sizes. And that that strikes me as that's that's kind of a made in Texas reform. You know, the ideas out there every place, but the Texas cities are furthest along with it. So, you know, I think that that's not a coincidence. I don't think that's because Texas is somehow more, you know, politically progressive than people think. I think it's because that the property rights argument is strong.
Chuck Marohn 20:25
It feels like a couple of decades ago, we were very the there was a national narrative about drive to qualify being a bad thing. And I know like here in Minnesota, there's been an emphasis to some degree or another, on trying to change that phenomena. But it does feel like, I mean, I've, I've seen the stats out of Austin. And if you said, Give me the city that is drive to you qualify personified. To me, it's Austin, right? Austin is a great build. Homes really, really quickly out on the edge, because they put an enormous, you know, tech status, put, and I would say, a financially ruinous, or like, an insane amount of money into building new highway infrastructure out on the edge to services in a way that I don't think is financially viable over the long run. You said that the three fourths of Dallas, that that could evolve, and maybe should be evolving? Well, probably not, because the pressure release valve is out on the far edge of the of the region. What? What are the conditions where that starts to shift? I mean, at what point does the TxDOT what I'm just going to say is like the the gravy train, voters in Texas are happy to pay TxDOT for transportation. You've kind of shown again and again and again that you're willing to do that. At what point does that become untenable or become a limiting factor? I know I'm asking you a hard question. No,
Cullum Clark 21:55
it's a wonderful question. I love I love thinking about things like this, as I know you do. You can imagine a hypothetical world where either state government or the ultimate source of much transportation funding, which is the federal government, make some kind of draconian decision to literally, you know, slap an urban or a metropolitan growth boundary around metropolitan areas every place and simply say we're not going to fund any more road infrastructure at all for further outward expansion, that would be a kind of a revolution in US transportation and urban policy. We're very far from that happening. I think that maybe what is more conceivably within range, like Ed Glaser at Harvard, for example, I think is among a number of people who've said that you have a kind of, kind of a game theory situation out on the outer edge of growing metropolitan areas, and you have one single tool available to maybe solve the game theory problem. The Game Theory problem is every little community out there on the outer edge arguably has an incentive to build at very low density, to not allow any multi family to be built, or town homes, et cetera, to act in such a way that the place will only thrive if other municipalities within relatively close range do something that that municipality doesn't want to do classic game three situation, like people want to be able to commute to work within a reasonable period of time. They don't want to go way. Time. They don't want to go way out to the outer edge of the Dallas or Austin Metro and have an hour plus commute down to into the middle of the core city. They actually want to commute to some kind of attractive job center that's really maybe not more than 1520, 25 minutes away. But that only happens if the next municipality over allows the dense job center to be built, right? Game theory situation. But the reality is, if every place thinks that that way, then, you know, we build a bunch of really sprawling, low density suburbs, and ultimately we have something that's not sustainable, as you've oftentimes written. What Ed Glaeser says is this, the plausible solution to that is that federal and state government, between them, basically offer a deal. We're going to solve the game theory situation by saying we will only pay for the ongoing further expansion of the transportation network, the road network, if all of you all come together with a regional plan that actually, in its totality, does a better job of addressing America's housing crisis than you're currently doing. I tend to think laser is generally right on that. Now, could you imagine a future over the next say, you know, say, the next four years into the new administration, where that kind of deal truly gets offered by the US Congress? I don't think we're there yet. It seems. I don't think we're there. I You could imagine it somewhere out there, but it's but, you know, those are two very different solutions, and this is something that I've written about in a report that we're going to put out in another month or two. One solution, which is more draconian, says we want this whole suburban sprawl experiment to end. We want to obliterate it. Right? That's a theoretical world that is so far from reality. Reality that I don't really anticipate it in my lifetime, or probably in my children's lifetime. Another World is one where the federal government, and perhaps text dot, you know, on behalf of the state, gets a little bit smarter and saying that infrastructure growth and solving the housing crisis are joined at the hip, you really should be thinking about doing them together. And if they increasingly do that. I can imagine the state of Texas pursuing such a policy. I could imagine them saying, Look, we really are concerned about the continued viability of the Texas miracle. I don't think it's that hard to convince members of the Texas State Legislature that the single biggest threat to the Texas miracle is that housing prices start to go the way of California housing prices, and the housing prices becomes literally the single biggest reason why companies start moving out rather than in. So I don't think it's that crazy to think that they might start to adopt a mentality of like, well, we're if we're going to pay for the roads, we need to get bang for the buck. We need to get sufficient wealth creation, sufficient creation of Job Centers, sufficient creation of housing to actually make the whole thing part of a package that actually addresses all these issues a little bit better. I can imagine that happening, but it's not going to happen in the next, you know,
Chuck Marohn 26:10
the next two or three years. I want to talk about California, because that's actually where I wanted to go next. But the transportation thing is so interesting to me, because I do see a world where the federal government doesn't say hey, we're done investing in exurbs period, or we're done investing in the infrastructure of sprawl period. But they do say something like, Hey, the funding, the cost share formula, is going to shift. So instead of us paying 90% on expansion, we're going to pay 10% on expansion, or we're going to, we're, you know, our contribution to growth as a federal government is going to decline dramatically, and we're going to shift that money into maintenance, which would, you know, for us, a state like Texas would mean maybe you're Taking from Peter to pay Paul, because you Texas TxDOT could shift their money around, but it would make the lucrativeness of expansion projects a lot less and would increase the urge to, in a sense, just better maintain things. I don't know. Does that seem like a
Cullum Clark 27:19
that could, I mean, it's plausible, Chuck, I personally, my take on politics at present is that the political power of the growth machine in places that are growing is extremely strong. You know, I was reading this is kind of apropos of nothing, but I've read some history on the history of the water sector in America. And there was a time when the the lobby in the US Congress to keep on building dams was completely in Super Bowl. You know, President after President tried to rein it in. They couldn't succeed. So we did finally, Cadillac desert. Exactly the Cadillac desert microservice. Great book. I think the power of the, you know, the transportation spending, slash build housing further and further out engine is not remotely challengeable right now. And you know, and for what it's worth, I have mixed feelings about that, because I think that while a lot of our outward expansion in Texas and other kind of fast growing places, you know, the Carolinas and Georgia, Tennessee and so forth, Arizona is not particularly well planned and could be improved on in many ways, including in ways that would both, you know, create a higher quality of life for the people who will actually be there long term, and also address the housing crisis better. While I think that I am not really excited about trying to put an end to the whole system, because I don't know what comes in its place. I, you know, I've read your books, I've got a I've got a some concept of what conceivably could come into its place, but what really would come in its place? My guess is, what would really come in its place if we, if we actually managed to slow the whole growth engine down in places like Texas, I think it what might come into place is things like the model of France and the UK, which is to say very little housing gets built any place, and housing reaches prices relative to incomes beyond anything we've seen in America, including even in San Francisco. It's interesting that
Chuck Marohn 29:16
you you make the case that, for lack of a better term like the political clout to the lobbying arm of this growth machine is really, really strong. One of the things that I saw this year that surprised me, and I used the term hypocrisy earlier in an ungenerous way. I will turn this to California. Now, California politicians have made careers out of lecturing the rest of the country about climate change and the need to reduce greenhouse gas emissions and the need to reduce driving and the need to to change and reform. I mean, I remember not too long ago, their governor out in a place where a forest fire had decimated a hillside, castigating all the the the people who were not doing everything they could on climate change and. California got their allotment of the highway money, highway expansion or highway funds. They also received climate mitigation funds, and they opted to turn the climate mitigation funds at a 50% reduction into highway expansion funds, because the bill allowed them to do that. It does seem to me like even in a place like California, there's this irresistible urge to build more transportation in order to facilitate more growth, more investment, more housing, more this. I feel like I'm reinforcing your point to a degree. But is there a California
Cullum Clark 30:40
Well, you know, I think California at the state level arguably embodies what I just said could happen at the level of the whole country, if we, well, frankly, became more California like nationwide, in our in our housing and land use policies. What do I mean by that, notoriously, for a wide variety of reasons, not just zoning rules, but in countless other long list of rules. It is more difficult to build new housing within core areas or built up areas in California, cities, suburban and core, than just about any place else in the United States. We all know this. Every study confirms it. The study I've just done confirms it. So you might say, well, the case of that means we'll expand outwards. Of course, that was the California model. And California pioneered that model, maybe in some sense, ahead of every place else in the, you know, mid mid 20th century, maybe somewhat into the late 20th century, but they've made it more and more difficult to execute. And I think the the result there's, there's only one natural equilibrium outcome in California, if you ask me, and that is population shrinkage. You know, you just got an environment where, fundamentally, the all of the reforms that have been attempted have failed. There's no significant uptick in development of housing in the core areas, the suburban areas, are among the most ferocious opponents of any kind of change anywhere in the United States. You know, they're like they vote blue in national elections on the whole but when it actually comes to local land use decisions, you know, I don't know what's blue or red in the context of California land use, but for sure, they're against change. They're very against change. And it is interesting what you say about highways, but I don't think that's inconsistent with what I just said, because you could well imagine that essentially, the place becomes, you know, a place that experiences genteel shrinkage aging of the population in place. But the population in place wants to live extremely comfortably, which includes, maybe in principle, having less less congestion on the highways. So they want to be able to drive fairly easily from, you know, the middle of LA to be, you know, beach town someplace more highways and less population, arguably, is exactly what the people of California really want.
Chuck Marohn 32:51
There's part of the housing debate right now that is focused on public engagement and how public engagement processes empower that, that backlash against change, right? California seems to be like the epicenter of that right. We live in a democracy. I think you could arguably say we often get the government that we actually want or or maybe even deserve at times, right? Yep, because democracy is messy, right? Like we sometimes want very irrational things. I want very high services and very low taxes. I mean that is that there is a certain amount of irrationality to that base, core insight. Maybe you want to start with dysfunctional but I'm wondering what good public engagement looks like around housing. Good public engagement that gets us to some where we need to go, which I think you and I would agree is more housing, particularly we have existing neighborhoods and existing infrastructure. How do we what does public engagement look like? And if you want to start with what it doesn't look like, I'm good with that too, because we were talking California, and California seems like the worst of all worlds when it comes to public engagement. I
Cullum Clark 34:04
think there is a myth out there among some people, some participants in the housing debate, kind of a very big myth, and that is that if only things were more decided in a more democratic fashion, we'd be doing a better job of addressing our housing problems. And of course, there's loads and loads of evidence that suggests, you know, people have looked at particular municipalities, and every time within that municipality when there is a debate over this or to approve this or that housing development, the comment that comes forward from the you know, Citizens overwhelmingly negative. It's always overwhelmingly negative every place. So you remember the whole kind of scientific theory of the universe before Copernicus, where you had the kind of the grand theory that made less and less sense, so they added more and more epicycles, right to try to explain what was otherwise inexplicable. That's what I think is going on with this discussion. Like, Well, it's true. Of the people who turn up and actually comment are opposed to the new development, but out there, there's another crowd that, if only they knew the meeting was happening, or if they weren't so busy, you know, putting their kids to bed or whatever, they would have turned up, and then you'd get this great big outpouring in favor of of the new development. I think that's absurd. When the politicians, instead of what you know, doing the meeting in City Hall, but actually they go out in their district, go to the meeting at some school, go door to door, ask anyone who's actually done the job. Time and time again, they will say everyone's opposed to, you know, that's a slight exaggeration. Most of the constituents are opposed to most new developments everywhere. I'm going
Chuck Marohn 35:38
to tell you, I am shocked internally, how many people come and read our stuff, are hanging on our site, sign up to become members and actually donate to strong downs, and then will tell us, I'm doing this because I'm trying to fight a development in my neighborhood. And I'm like, Well, what is this development? Well, they want to take a single family home and make it into a triplex. And I'm like, Oh my gosh. Like, I've written 20 articles about, I wrote a whole book about how that's what we should be doing everywhere. It is astounding how, like, deeply embedded I think that that is, yeah, I don't think politicians are not reflecting their constituencies, right? I
Cullum Clark 36:16
absolutely. I think that's not just a myth, but fairly obviously a myth, and I'm kind of shocked anybody still tries to argue. Look, there's loads of evidence that the rules around housing and land use have grown progressively stricter, harder to build. That's been borne out by lots of economists over the last several decades, the people who have looked at it most recently, since this really became a hot issue, and that, I would argue, the 2000 teens, you might say, well, it became a hot issue. Maybe there was the beginnings of reforms. Yeah, there were reforms in a number of places. But what did the studies show about the overall climate for building new housing? It kept on getting worse. So you could say like, well, was that because people's attitudes changed? You know, back to the 1950s and 60s, when it was a lot easier to build housing and as a share of the population, the amount of new construction was way faster. Well, did people? Were people more welcoming then? I don't think any poll shows that. I actually think people are more just as welcoming and probably more welcoming to, for example, demographic change in their neighborhood, than probably they've ever been before in American history. The issue is not that people's attitudes changed in a way that is negative for new housing. It is that the political processes, in fact, grew more democratic. They became better at capturing, rather than overriding, the sentiments of the people in the neighborhood. And I think we just all of us who care about addressing this issue. I think we just have to kind of contend with the facts. You know, you can argue for a different political system that kind of gives elites in City Hall more power to override people in the local neighborhood. That's a plausible point of view. You could argue that it is what it is, and in a fully built out place where the population is overwhelmingly opposed to change, well that place just didn't going to grow. That's just the you know, tough luck. You know, other places are going to grow. So on the whole issue of public engagement, I have a theory of it. You know, it's more hypothesis than really borne out by a careful study, okay, but I'll throw it out with you. Okay? I think we already talked about the idea that if you know a developer, or indeed, a you know a local political leader who wants to actually get some new multi family development or town home development approved, if they try to shame the opponents into agreeing, like your your opposition is rooted in attitudes that are simply wrong and not acceptable, and I'm going to bludgeon you into changing your mind, nearly certain to fail. Nearly certain to fail. The question is, is there some kind of mode of engagement and some kind of not just a way of speaking about it, but a way of actually leading a city that will actually convince some of those opponents that some degree of growth in their town will be good for them and good for their families, that it actually will make the place a better place to live, a stronger town, if you will. So does that exist any place my argument just because it's close to my home, but I've kind of borne this out, and maybe some other places in the United States, I think some of the fastest growing suburban cities in Texas actually have, loosely speaking, a consensus for more growth. I mean, for rapid growth. What does that consensus consist of? Well, it's kind of easy to articulate. You know, you've got like in the case of Plano Texas, Frisco, excuse me, Frisco had the same city manager for more than 30 years. Many mayors came and went. They all stood for the same line. What was the line as the city grows, we all know kind of what the plan is, what kind of number we're trying to grow to as it grows, there'll be more and more tax base. We will build out more and more public schools. They will be fantastic. We will build them with such amazing facilities. It's going to blow you away. We will. Will build out with a better portfolio of parks and trails than any other suburban city in Texas has like has ever achieved before. We will listen and listen again. What is it people want more of and we will have a plan to invest in that. And I've driven around Frisco with people who are involved in leading the city, who can point to locations where some new amenity will get built in the 2040s or the 2050s the plan goes out that far, and the citizens are being told that plan, and Mayor after Mayor keeps reiterating the plan. And on that basis, it doesn't mean people love it. They say, like, I can't wait to have way more cars on the road. That is not the case. They're generally bought in, like, yeah, I have moved to a place that plans to grow to become, you know, 50, 60% bigger than it is today. As that happens, I'm going to be part of a place that becomes a better and better place to live. And that, I think is working. You know, it's a bit of a messy story, but it's working better than just about any place else
Chuck Marohn 40:59
you're saying. The marketing brochure of a place like Frisco is about growing. So if I'm buying into that, like I'm moving there, I'm also buying into, in a sense, this upward trajectory of my quality of life that would would parallel an upward trajectory in in population. Is that fair? I
Cullum Clark 41:21
think that's that's the claim. I think that's the that's the story that's being told, and I think it is generally a credible story. If it was not credible, a lot of people would have judged it to be so and would have stopped moving there. But when you talk to people who live in these various cities and the friscos and the mckinneys and so on, the Allens and similar suburbs around Austin and Houston and also around, you know, Raleigh and Charlotte and so forth. Nashville, they're kind of bought into a story of growth, plus ongoing investment in new quality of life and school and other type of amenities. And, you know, they understand it. They moved to the place knowing what they were getting into. Generally speaking, the plan includes that there actually will be a decent number of, for example, townhomes and apartments built. Not everybody loves that, but when you ask them, they'll say, well, there are too many apartments being built lately in Frisco. It's irritating to me, but then I say, so. Are you fed up with the place? Are you going to move like no, of course not. It's a great place to live, right? Yeah. Well, just, you know, it's just changing, and change is hard, but we'll live with it. That's kind of the story you usually get. It's
Chuck Marohn 42:29
interesting because I have a, I have a different hypothesis of public engagement. And I think the question that I would have about, let's say the Frisco story or the Allen story is the same one I have about, like Carmel, Indiana. You know it is, Are you robbing from the future in a way where you won't be able to make good on those promises? Or when you reach the you know, there's a there's a maturity level that we talk about Dallas being in right now, where you have a sense created neighborhoods, where there's a built in resistance to change. And do you reach that level of maturity in Plano in a way where, like, financially, you're over committed and under resourced. And that, to me, is like, that's, that's a, I'm willing to say that's an open question, but it's a question that won't resolve itself until you you reach the end of that growth phase, because the growth does create a lot of free cash flow, right? I mean, it is, yeah, yeah.
Cullum Clark 43:43
Let me. Let me try to address this. Because I have oftentimes brought up with people leading these cities. I said, Have you, have you read Chuck's first book, sustainability of physical infrastructure? I will tell you this, usually they have. They're acutely aware, in a way that a number of you know people involved in managing the the core city of Dallas, say, or Austin, are less likely to be aware. They're acutely aware, and they're planning for it. So two, two situations that have to be managed over the over the very long term for these, these communities, in my opinion, one, it's true there is the question of, are they building out the city in such a way that it will generate enough tax revenue to make the whole infrastructure, in its entirety, sustainable indefinitely into the future? At least they're aware of the question, and they say we don't know, but at least we have a kind of a hypothesis as to what the answer is. So the answer would be some minimum amount of the land mass actually becoming, you know, used for relatively intensive commercial purposes. And that, in itself, is something that leaders have to sell to their public, because oftentimes the public takes the view, I want my town to be all single family. Room, community, period. I want those job centers to be in some other town across the line right, which comes brings us back to this game theory situation, if everybody, if every place, thought that way. But the problem is, each place that does think that way is putting itself on a path to, for sure, not being long term, financially sustainable. So the commercial piece is one the pockets of relatively high density apartments, townhomes and so forth. Is another piece they're trying, at least to deal with it. They're also trying to put in physical infrastructure that actually does raise property values. Yes, it raises the cost of maintaining the infrastructure, but it actually also leads predictably to the better property values like awesome trails and so forth. At least they're trying. That's one second thing that they, I think, that they have to deal with, is that, and I remember learning this from a from a kind of a friend and mentor, some years ago, that on the whole, almost every neighborhood, or ever, every collection of neighborhoods, you know, a town, if you will, over time, the population is aging in place. Generally speaking, there's not, you know, unless you're talking about like, college town or military town or something. There's not fast enough turnover of where people live to prevent the average age from going up faster than the average age of the whole, say, American population. And as the population ages, it's going to pose stresses. For sure. You know, the newest exurbs in Texas are relatively young communities, but the inner ring suburbs are relatively old communities where they're fighting over which elementary schools to close. It's pretty stressful. It's pretty hard. It isn't that these places are bad places to live, necessarily. It's just that the people who are empty nesters like I am now. Are you an empty nester now? Chuck, I
Chuck Marohn 46:43
will be in in eight months. Okay,
Cullum Clark 46:46
all right. Well, welcome to The Club. We are empty nesters who still live in a house with enough bedrooms to house all of our three grown daughters, no bigger, right? That's the story of American cities. There isn't any really obvious reason for us to downsize. You know, maybe we will someday. Probably will at some point. My wife doesn't really want to yet, until such time as as we do our neighborhood, just ages in place and and so the today's relatively young, very fast growing places will be tomorrow's relatively, you know, older population, not enough school age kids to actually keep all the schools open, they'll be fighting over which ones to close, and some other place will be the growth place, and I don't really know how to address that, other than through some kind of really big change in incentives that causes everyone to move more frequently. You know? I mean, if it really cost my wife and me a whole lot of money, really extreme property taxes, to live in this house that has extra bedrooms, then I suppose we might respond to that incentive as it is. Yeah, it's somewhat expensive, but it's still within the manageable range. So we aren't, we haven't we feel no pressure to move. Let me give you
Chuck Marohn 47:59
my hypothesis on public engagement, sure, and it is, I'm not even sure how I feel about it from a an acting standpoint, but let me, let me give you the observation. And this comes from Steve Jobs. Steve Jobs said, If I asked people what they wanted, they would told me they want a better Walkman, and instead, I asked them how they were using their Walkman, and I observed the struggles they were having with that Walkman, and I tried to respond to those struggles. I feel like public engagement often is something we do where we get people in a room and then we ask them, like, what do you want? And the answer you're going to get is always going to be a bad answer. Like, I don't want change. I want things to be better, but not in that way. I I'm give me the stuff I'm not I don't want, I don't want, I don't want. I feel like the best places are the ones that are going out and almost like demonstrating what change looks like. I mean, there's this whole technical urbanism movement that I think does a fairly good job of this. In Dallas, you have the better block people who I think are the best in the country at like, saying, Hey, look at this. Like, this is what this could look like. And they, they are able to kind of demonstrate rapidly, what you know, and cheaply, what something could look like. I feel like really good public engagement goes more to, like, the subsidiarity model of, hey, we're going to do something small. Take a look at this. React to it. What do you think? And then, like, we'll do the next thing and the next thing and the next thing. There's a version of that that becomes despotic because it becomes, you know, bureaucrats and intellectuals at city hall saying what they want, and then going out and doing that, and then having people react to it. But I think a a more humble version of it looks like us asking this question over and over, do you like this? Like, let me, let me, let me show you this little thing. Do. You like that? I don't know. Does that fit with to me, that would be a hard one to pull off in Plano, but in three fourths of Dallas, I feel like that would work.
Cullum Clark 50:09
I like the theory because I think it is actually borne out by a certain amount of experience. Like, as you said, Better Block people are great showing things at very small scale. People see it. They say, this is actually pretty cool. Maybe we can imagine doing imagine doing something a little bit different. I agree. I think it's somewhat bigger scale. When I was a kid, if you talked about the walkability of neighborhoods, most people would have no idea what you're talking about. And so therefore they'd say, why would I want that? I don't have an image in my mind. Now I think we live in a time when the image is there for, you know, a great many people, because whether they actually truly live in a walkable neighborhood or not, they've kind of seen their fair share, just because there's a whole lot more than there used to be, and in general, they like it. So I think it's true that, you know, demonstration showed people that change could actually bring something that they would like better than what they thought they liked before. I agree with the Steve Jobs theory. What that actually means in terms of actual execution, you know, kind of goes back to whole maybe your theory of political economy and a political change. How does it actually really play out if you generally like relatively free markets and lots of experimentation, you could say, well, one thing for sure, you want is for the developer, including the, you know, the very small, single neighborhood developer that you've written about, to have reasonable freedom to try experiments. I mean, that's the model I tend to like. An alternative would be that, you know, elites in a very large city decide from city hall that people are, you know, this is what we're going to do, and the people are going to like it, I'm going to make them like it, you know. I think the problem with that model is it doesn't have a lot of, you know, feedback loops. There's not a lot of try the experiments in one place and then very rapidly adjust when it turns out they didn't quite like this or that aspect of it, I would, I kind of prefer the market model of give that small developer a lot of a lot of rain to, you know, try something, and if nobody wants it and they lose money, then that's, that's, that's great. That's, that's a happy news. We all just learned something, and everybody, all the other developers, are watching, and they do it a little bit better the next time. So, I think that this has been working and will continue to work well. But there actually, actually has to be a somewhat Freer environment for those developers to operate in.
Chuck Marohn 52:32
I gotta tell you, we're at time. I've gotten through about a third of the things I want to talk about, so I feel like we could do this again sometime soon, there's a there's a macro question that I've been struggling with. I know part of the the incoming administration, and we're going to run this at some point in in January or February of 2025, so I'm not sure when timing wise, people will hear this, if it's before, after inauguration or what have you. But the the incoming Trump administration, to the extent that they have been talking about housing, and it's much more limited than what Harris did during her campaign, but there is a little bit of talk it has seemed to center around things like ending the conservatorship of Fannie Freddie, expanding the role of Wall Street and people's ability to borrow more money. I've heard the idea of a 40 year mortgage floated as a solution to making housing, I'm not going to say more affordable, but more attainable for people. Is there an impression that you have of like what you're expecting or anticipating, or is there a hope that you have of what would come out of maybe a little bit of urgency that we feel kind of nationally around housing right now, my
Cullum Clark 53:51
gosh, it's hard to be too optimistic about what federal government will do under any administration. You know, there were handfuls of, I think, intelligent ideas floating around in every administration of this century. And, you know, Democrat and Republican, sometimes an idea that was more favored by Republicans kind of became the signature thing of Democrats, and then Republicans didn't like it anymore. And vice versa. You know, on the whole, the things that that the last four administrations, like, really, you know, Bucha Obama, the first Trump administration, and the Biden administration, ideas they had mostly didn't come to fruition in the on housing issues. It's not because the Presidents necessarily didn't care. It's because the issues are hard. They would take kind of sustained application of effort over a long period of time, and really a lot of money, potentially, in some cases, and it just it never quite rose to the priority for any of them. So, yes, there's some ideas floating around the new, you know, President Elect Trump's group. People. But I think it'd be kind of premature to assume that any one of those things has very high probability of happening, you know, personally, you know, I suppose if I was gonna cheer for something in particular, I think there is, you know, there's a lot of currents going on in this, in this new administration's, you know, appointees and so forth. And among the among the currents is, you could say, a school of thought. Maybe it's embodied by some of the, you know, the tech industry, people who have kind of risen to the four who are, you know, some would say, perhaps not with meaning. This is a compliment, that they are kind of tech techno libertarians, you know. But sometimes they do talk about housing. Sometimes some of the kind of the tech bros from Silicon Valley who are kind of surrounding President elect Trump right now, do actually talk about it. And when they talk about it, they generally have a kind of innovative abundance agenda. They want to see change. They want to shake the system up. And with the end state being more housing getting getting built, more variety in our cities, more thriving cities, they're they're not agents of, kind of hunker down into a defensive crouch and, you know, kind of resist all change. So the ascendancy of that group at the moment is intriguing. You know, we should watch that space and see what these various people come up with. Now, none of them has been, let's say, fully empowered in housing. Yet, we haven't heard that like after musk and Ramaswamy are done with the, you know, government efficiency, they're going to really focus on America's housing crisis. But, you know, I think we should watch that space. There's, there's, there's, there's interesting ideas afoot, and they, some of them, just might get a little bit liberated in the next few years. I've
Chuck Marohn 56:50
been telling local leaders, regardless of how you feel about the incoming administration, if you think this is great, or if you have a lot of concerns, this is a moment, particularly around the issue of housing, that mayors, city councils, city managers, need to lead on. This isn't something people will solve for us, even if there is a a federal or even a state kind of approach with this, the solutions lie almost exclusively at the local level, is that, I don't know you think that's a fair assessment.
Cullum Clark 57:27
I strongly agree the The only caveat I would make to that is that the whole area of subsidized income restricted housing, this is a this is a certain chunk of the market that is large matters to millions of people deeply dependent on federal money. How the federal government decides to organize that those funding flows is important to a great many people. But when we talk about everything we've been you and I have been talking about today, which is largely what happens in the market rate world, which then filters over to the whole rest of the, you know, the city as it were, I think that it is overwhelmingly a, you know, a local challenge. You know, there's a lot of interesting experiments afoot. I think it's pretty darn interesting that, you know, Houston and then Austin did the minimum lot size reform we talked about, and a lot of places have done parking reforms and and actually, the evidence generally suggests in those two categories, reforms do actually pay real dividends. The results are there to be measured. So So I think that movement will spread, and it might help turn the corner. One thing that we talk about in our in our new report at the Bush Institute, what we're going to come out with soon is, I think, an issue that doesn't get enough attention, but I'd love to see mayors and local governments think about a lot. It's one thing to kind of shake up the kind of the encrusted aspects of the system that have made it really hard to build new housing. It's another thing to actually make your city a high demand, an in demand place. Build a town that people want to live in. And in the absence of clear evidence of demand growth, very little housing gets built. And I think one of the problems we've had in America is the in the Venn diagram, if you places that are in demand and places that are allowing new new housing to get built, this, this the overlap space is very small. It's too small. It's not quite nothing, but it's too small. And those places like Austin, Texas would be the classic example. The system can't bear it. It's just it's too much demand trying to go into too small a place. So we've got it. So I would be telling the mayors, yes, look at the minimum lot size issue. Look at the parking minimums. Look at some of these other kind of obvious reforms that have been tried in other cities, generally speaking, you'll be happy if you, you know, if you do start a few baby steps reforming those things. But also think about, are you running a city where people want to live? You know, are people moving in or out? I mean, watch how people vote with their feet. You know, I'd encourage them to think really, really hard about. A you gotta figure out how to be a place where people want to live, and if the demand is there and you allow the housing to get built, you will perform better than most other places. And so, yeah, I think it's primarily a local story. And, you know, it's tough in the near term, but long term, I think there's enough interesting ideas afoot and interesting changes taking place that it might just be we start to actually get a hold of the problem a little bit. Colin
Chuck Marohn 1:00:27
Clark, thank you for being with us. Director of the Bush Institute, economic growth initiative, if you want to follow columns, work Bucha center.org, is the website. Column is there? Is there any other place that people should go to check out the stuff you're working on, and you all at the bush Center are doing, people
Cullum Clark 1:00:46
can find, find everything that I've worked on related to housing and everything else on the George W Bush Institute website. I hope people will take a look.
Chuck Marohn 1:00:53
I do. I do as well. And we will put a link in our show notes if you're trying to find that site. But my gosh, just go to Google. We've all heard of George W Bush, right column. Thanks for your time and your generosity again. Let's like I said, I got two thirds more questions to go through, so maybe, maybe we can schedule another one of these sooner rather than later.
Speaker 1 1:01:16
Chuck, I would love that. Let's do it. Okay. Thanks. Thank you, everybody. Great to see you. And
Cullum Clark 1:01:21
if you want, if you'd like to do a sequel and first half, 25 I'd love it. Let's
Chuck Marohn 1:01:27
do that. Thanks everybody for listening and keep doing what You can fulfill the span time. Take care.
ADDITIONAL SHOW NOTES
Learn what comes next for incremental housing in 2025 by tuning into the State of Strong Towns address on January 30 at 4 p.m. EST.
Charles Marohn (known as “Chuck” to friends and colleagues) is the founder and president of Strong Towns and the bestselling author of “Escaping the Housing Trap: The Strong Towns Response to the Housing Crisis.” With decades of experience as a land use planner and civil engineer, Marohn is on a mission to help cities and towns become stronger and more prosperous. He spreads the Strong Towns message through in-person presentations, the Strong Towns Podcast, and his books and articles. In recognition of his efforts and impact, Planetizen named him one of the 15 Most Influential Urbanists of all time in 2017 and 2023.