How Do YIMBYs Respond To Housing Markets With *No* Demand?

Believe it or not, there are neighborhoods that are deeply devalued, and need the attention of urbanists as well.

A street view looking south of the intersection of 68th and Emerald Avenue in Chicago’s Englewood neighborhood. Source: google.com

I’ve had my differences with the YIMBY (Yes In My Back Yard) movement. Over the years I’ve written multiple pieces raising a position on zoning reform that rarely gets discussed – upzoning can open up the floodgates for new housing in cities that don’t need new housing in the way that overpriced coastal cities do, and disrupt a fragile housing market equilibrium in slow-growth, less expensive cities like those in the Midwest. In fact, I raise the counterintuitive argument that zoning reform in slow-growth metros can potentially lead to higher prices and rents, as developers seize on the opportunity to appeal to the most affluent buyers and renters.

Just prior to moving the Corner Side Yard to Substack last April, I wrote a five part series offering dissents to the YIMBY movement. The series probably didn’t get the attention it deserved because it straddled the old platform and Substack, and my following isn’t necessarily the same as it was. Still, I encourage you to read it.

However, if you don’t read it, here’s a very brief summary. In my view, there are six conventional explanations for our housing affordability crisis:

o The post-Great Recession collapse in housing production;

o Zoning, specifically widespread single-family zoning;

o High interest rates, low inventory;

o Excessive government regulation, raising the cost of housing production;

o Household incomes haven’t kept up with housing costs; and

o A reliance on “filtering” to create affordable housing.

These are indeed explanations that drive the efforts of YIMBYs. But I’d argue there six less-considered, yet equally important explanations as well:

o The dramatic decrease in average household size in the last 60 years;

o The reluctance of banks to move on from their financial models that favored single-family home development;

o General aversion to subsidized housing;

o General aversion to the displacement caused by gentrification; and

o A growing sense that younger, urban-oriented people “want what we want, where we want it,”; and

o Geography. There simply are physical limits to construction in some metros, and they’re costly to overcome.

I also referred to three socio-cultural causes for the housing crisis:

o Housing exuberance, when property owners have expectations of higher prices and rents even before new development increases demand;

o Segregation, in the sense that it drives down demand in portions of a metro area while driving up demand in others, pushing up costs; and

o Inventory mismatch, with a greater demand for a development type (often pre-WWII style development) that’s declining in inventory.

I concluded the last entry in the series with a comparison between Los Angeles County and Cook County, the home counties of Los Angeles and Chicago, respectively. I’ll quote myself here:

“Consider the last time a concerted effort was made at the national level to increase housing units in the middle of a housing crisis, in the late 1940’s and early 1950’s. The federal Housing Act of 1949 spurred widespread new housing construction and provided funding for slum clearance and redevelopment in cities. The Interstate Highway Act enacted seven years later enabled new housing developments to be connected in ways never seen before. Welcome to suburbia.

But not every city or metro area was in the same place demographically. Consider a comparison between Los Angeles County and the city of Los Angeles in California and Cook County and Chicago in Illinois. Los Angeles County and Cook County were similarly sized in population in 1950 but diverged dramatically since. Look at these charts below. Decennial U.S. Census data here shows population growth and housing unit growth between 1950 and 2020 for the counties in question:

In 1950, Los Angeles was still firmly in a high-growth phase that began at the turn of the 20th century. Los Angeles County had 4.1 million residents in 1950, with 1.9 million living in the city itself. By 2020 that would grow to 10 million and 4 million, respectively. Housing unit growth closely tracked population growth for most of this period, and there was a 20-year period between about 1985 and 2005 population growth exceeded housing unit growth. These figures, however, underestimate the impact of substantial decreases in household size over the last 75 years. It led to a corresponding increase in demand for smaller units, which wasn’t being met. That’s how LA County’s housing affordability got out of control.

Meanwhile, Cook County had unknowingly completed a 100-year cycle that saw its population jump from 43,000 to 4.5 million. But Chicago would undergo a steep decline in population that would impact the population trajectory of the county overall. Between 1950 and 2020, Chicago’s population would fall by nearly 900,000 people. By 2020 Cook County had 5.3 million residents. Interestingly, housing unit growth exceeded population growth in Cook County for almost the entire 70-year period of analysis. Or more accurately, population loss was faster than housing unit loss in Cook County. That’s how Chicago became more affordable, in relative terms.”

As a result, the Chicago metro area has pockets of overvalued as well as undervalued homes. Devaluation has led to tax delinquency, abandonment, demolition and local government acquisition of vacant property. Chicago is not alone in this regard. Detroit became known in the aughts for its stretches of vacant land as well as its urban ruins. But you can find similar conditions in the Midwest, from Buffalo to Milwaukee.

Call me crazy, but I don’t believe Los Angeles has the same issue with devalued properties. Therefore, the cities that have devaluation issues need to find ways to bring value to their devalued communities.

This is something I’ve struggled with professionally for some time. Between 2005-2008, I worked on the Greater Englewood Community Plan, a plan for Chicago’s adjoining Englewood and West Englewood community areas on the city’s South Side. It was commissioned by the City of Chicago when I was working for a private consulting firm at the time.

Englewood sits at the heart of Chicago’s South Side. Englewood grew as a working-class community in the first half of the 20^th century, full of households supported by people working in stockyards or steel mills. It’s been a tough place to be since the 1970’s, when white flight and deindustrialization pulled the rug from under the community. Housing demand shifted, jobs disappeared, and the devaluation cycle I mention above kicked in.

The key issue in 2005 was the incredible amount of vacant land. In 1950 Greater Englewood had more than 157,000 residents; by 2005 that figure was about 85,000 (as of 2024, Greater Englewood had 47,000 residents). In 2005 we estimated that 29% of Englewood’s land was vacant – vacant residential, commercial, industrial, and institutional land scattered across 6.2 square miles of land.

At some point, city staff and the consulting team realized that a new land use policy needed to be put in place, and that it might be counter to the best practices and principles often touted by planners. Sure, we wanted to encourage development near transit (the area is amply served by the CTA’s Red and Green L lines), and Greater Englewood’s development infrastructure – its streets, lots, general development patterns – were already tailor-made for the kind of development planners want to encourage. But. There. Was. So. Much. Vacant. Land.

So we created a land use policy disposition matrix. We needed to figure out a way to make use of land in the absence of any real housing demand. Our goal was to encourage alternative uses in the area – allow homeowners to acquire adjacent vacant properties, pursue the development of play lots and pocket parks (never mind the maintenance concerns), and community gardens, At a certain point some sites would become seen as opportunities for new infill development, and later for larger-scale production of perhaps dozens of homes. You can see the matrix below, recreated from the original plan:

Today, Greater Englewood’s official vacant land figure is at 18%. Some of that reduction was because of the construction of a new Kennedy-King Community College at 63^rd and Halsted by City Colleges of Chicago, as well as scattered sites of commercial development. Otherwise, the reduction came from residents acquiring adjacent vacant properties, some gardens, and perhaps some new churches.

This represents a land use strategy for broken real estate markets – broken because of the lack of demand, not too much of it. Ironically, allowing a declining population to spread out over the community can lay the groundwork for future revitalization, if and when it comes.

There are hundreds of neighborhoods like Englewood that shouldn’t have to wait until market demand is strong enough to spark change. And I can’t help but think this is something that goes completely unconsidered by YIMBYs.