Monday, September 04, 2006

Top Secret: UCLA Housing Affordability Research Initiative

As do many, our university has a real estate center -- The Richard S. Ziman Center for Real Estate -- which sponsors faculty research on housing and related topics. In urban planning alone, we have a fair sized group (i.e., Blumenberg, Burns, Cuff, Leavitt, Loukaitou-Sideris, Mukhija, Ong, Richman, Stoll, Takahashi) interested in what could be loosely called housing "affordability" issues, ranging from housing/poverty challenges, to labor/housing linkages, to developers' concern that young owners of million dollar condos can't move up to single family homes nearby as their families grow.

I woke one day with the bright idea of proposing to the RE Center leadership that we rethink, reorganize, and relabel our joint and individual efforts, and perhaps put more resources into campus affordability studies generally. The purpose was partly strategic positioning, to brand our department's potential contributions to campus- and community-wide real estate interests, which normally appear to the authorities as more concentrated in the business and law schools. That is, it seemed a good idea on many levels to blow our own horn a bit. Tactically, collectively revisiting what we do and hope to do might help move this otherwise uncoordinated work forward. Finally, we have a generous and often engaged group of wealthy land developers who talk about affordability all the time. I wondered if this might not resonate with them too, generating more resources for our work.

I convened a meeting of our people and then floated an incomplete draft memo to their people, hoping for a clear signal of how much time to put into this. The gist of the response was that they would certainly keep affordability in mind in the future.

So the proposal to rethink is being rethought. In the meantime, others might have some interest in this effort or for their own campus, or even ideas of how to proceed. FYI, while leaving out the specific $ figures and the details of how we could improve on what other universities presently have in place (e.g., MIT's Housing Affordability Initiative) but leaving in the obvious gaps, it went something like this:

It is increasingly clear that housing affordability is no parochial market or policy issue. Rather, it is arguably the preeminent urban problem of our era, especially in urban California. As more people bid ever higher for comparatively less land, all segments of the market are stressed and possibly at risk. This is particularly true where a substantial share of our economic growth comes from the construction and mortgage banking industries, on the one hand, and is highly sensitive to employment access problems, on the other.

At the entry level, questions concern the availability of “affordable” housing for both renters and first time buyers, either to move up or out. These underlie many problems related to local economic development, social and economic mobility, and the smooth functioning of the labor market. At mid- and higher-levels, families also face growing obstacles to mobility, while land developers face challenges either “buying retail” or negotiating a convoluted regulatory terrain.

Second, (One more punchy paragraph here …)

What is the problem? (Illustrative trend data for urban California here, perhaps compared to other metro areas – one or two charts ...)

Research and Outreach Gaps
Part of the problem is simply our limited understanding of what is going on and why. What are the trends, where are they headed over the mid- to long-term, which are more important, and what in turn explains them? Further, what opportunities exist – either for the private sector to stimulate growth or for its proper regulation?

Much of these data are neither centrally organized or analyzed, except in piecemeal fashion. In part, we propose to improve our outreach capacities as repository, manager, and facilitator of such data. We also propose to redouble our efforts to characterize and explain the fundamental private and public factors behind these issues, in a manner that bears on both public and private operations in urban land markets.

(One more paragraph with more specifics? ...)

A UCLA Proposal
To establish an adequately funded research and outreach initiative responding to the key private and public sector questions surrounding housing affordability in California, and beyond. We propose a 3-legged focus on Consumption, Development, and Strategic Planning:

1. Housing Consumption

a. Trends (urban vs. suburban, rental vs. owner-occupied, by market niche, etc.)
b. Determinants of trends (market vs regulatory based, demographics, employment access, etc.)
c. Additional focal topics (Regulatory impacts, poverty, transportation linkages, growth management, etc.)

2. Land and RE Development
a. Trends (new vs old, for profit vs. nonprofit, rental vs non, land availability, etc.)
b. Determinants (market vs public factors, ….)

3. Strategies
a. Market based (e.g., facilitating information flows, coordination, competition,…)
b. Public policy (e.g., regulatory reform, …)
c. Public/private strategies


Fully funding 5 PhD and MA students per year (in Law, Management, and Public Affairs) and a month or two of 5 faculty would be sufficient to dramatically increase UCLA’s usefulness to both the public and private sectors, and provide the foundations for a strong research impact and visibility. This would require about $X/year, plus the cost of an annual conference on Regional Affordability Trends.

We believe that a pitch could be made to the private sector for support on two grounds.
  • This initiative would strategically strengthen UCLA as a research and policy university with respect to a broad series of private/public sector issues. It would thus have more influence in policy debates, with respect to both market initiatives and regulatory reform.
  • These issues are more tangible and encompassing in our metropolitan area than perhaps anywhere in the nation, and thus affect our economic and social development more forcefully, and with longer term consequences, than elsewhere. That is, the national and international competitiveness of local businesses are more at stake. UCLA can concretely improve their competitive position with relatively little investment.

  • White paper series on determinants of housing demand/supply in for-profit and nonprofit sectors
  • Regulatory reform white papers
  • Regional strategic planning studies
  • Annual “Regional Affordability Trends” conference

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