City governments tend to provide necessary infrastructure like roads, sewers, and electricity grids. They also enact regulations and other policies designed to affect the quality and density of buildings. But what's the ideal balance between government planning and de-centralized decision making when it comes to affordable housing? What can cities that rely less on planning teach us about the right role for government in improving housing affordability and development overall? Alain Bertaud of NYU joins us on this episode to discuss how solutions to creating more affordable housing can arise spontaneously and independent of top-down design.


United States


00:00:00governments often impose regulations and policies designed to increase the quality and affordability of housing planning appears to have a proper role for things like sewers and electricity but some aspects of cities change so quickly that planning proved to be too difficult so what point will too much planning
00:00:15lead to less affordable housing are there examples of successful neighborhoods that rely more on decentralized decision making and how does this give us an insight into how development happens in a larger sense you're listening to the success projects podcast series from the NY you development research institute CNY
00:00:36you development research institute DRI was founded by William easterly any out Jarkko DRI understanding the barriers to growth and development I'm well comparable in here to talk with me today is a lumber tall of NYU's merit institute of urban management and the NYU stern urbanization project his recent
00:01:04papers entitled housing affordability top down design and spontaneous order one thank you for coming on the program thank you city governments often implement regulations regarding things like building density floor area ratio known as F. A. R. R. green belts what are these regulations control well %HESITATION let's start
00:01:24with the last one the green belts he supposed to prevent the expansion of the city %HESITATION into the countryside and it's supposed to provide many days for the president and put text also the countryside %HESITATION the effect of green belt ease of course to %HESITATION to increase the
00:01:42price of housing you know within the green belt because you %HESITATION you limit the supply in the local friend and and of course %HESITATION plan was was that we should green both have no way of knowing %HESITATION how many people who live in the city %HESITATION what will
00:01:58be their income %HESITATION you know in the future and all my friend the costume so the the the setting of a green belt isn't always a victory and nobody is is very negative aspect to wherever they are %HESITATION if they aren't on the floor issue limits the amount
00:02:14of floor space you built on a piece of land %HESITATION Jim the late it came from you double the the beginning of the twenty century where toward building where made possible by the elevators and the people were very concerned by shadows because like thing was very very expensive
00:02:35and so he told building with the %HESITATION would cast shuttle and and therefore the what what the county scoring negative externalities and somebody creates a problem neighbors %HESITATION this this problem now is greatly exaggerated most of the people %HESITATION inside a building spent their time outside anyway %HESITATION
00:02:57light get allied forces for children or saying lie that they get it outside the home they don't get it in their home anymore so it's not clearly such an issue but the effect of %HESITATION flori sure when they are %HESITATION you know pretty too restrictive as it's happening
00:03:16some cities like Mumbai for instance is that it limits the amount from space that people can build and therefore you end up please %HESITATION %HESITATION people consuming very little sprawl space now for the rich people it's not that dramatic you know instead of %HESITATION having get a two
00:03:34hundred square meter the other road and fifty per per house is %HESITATION but for the poor would normally could afford only maybe ten square meter than the %HESITATION squeezed into towards the square meter that the the the the leaving bunk beds and sometimes even I've seen in some
00:03:50cities %HESITATION people renting space %HESITATION build our it also seems is regulating something like floor area ratio allows a planner to prepare for future population densities because of course they need to lay certain infrastructure like sewage or electricity based on this so could you justify these in perfect
00:04:11measurements %HESITATION in perfect regulations of F. A. R. as a way to plan for infrastructure absolutely yes but you see the problem is when planners up put checked it population in a density and then the design and infrastructure like she sure what to apply based on their projection
00:04:32that's completely leach teammates to do that to to protect the problem is when the transform their projections into immigration it's much cheaper two two W. what Caroline always sure lying in the street then to expand the city because there is not enough space in the city because of
00:04:52a floor show him %HESITATION there's a trade off so when you sort of regulate the amount of housing it'll cause this tendency to sprawl we could in this role requires more infrastructure try ten in that actually and to be more expensive absolutely and you know the problem is
00:05:08that the the plan is very often %HESITATION identify these you know this constraint on the coast by infrastructure you know saying well we have already planning it water pipe of the stylish and therefore they should not be a high intensity than that so the rest take the floor
00:05:29ratio and at the same time the creative is a green belt which tracks the elastic thank the expansion of the city so that the outcome is really extremely expensive housing that's why you see %HESITATION all over the world not to never see the button that all cities where
00:05:45%HESITATION you know the price of housing going up the extraordinarily now again affecting the lowest income people are much more than the original which cost you less than they would but it's still a you know it's still comfortable let's see where for the point is not when we
00:06:03think of the price of housing there a lot of factors that go into it it could be proximity to a big business districts or to to a nice setting %HESITATION and then of course obviously spaces it is a factor of that so what how do these these forced
00:06:17basement of moms and contribute to the flexibility of making a choice I've got to think that a wealthier individual is going to have different priorities than a low income been individual that might not have the mobility to get to their job as easily as rich person could just
00:06:34prefer more space and is more willing to live far away yes you know more mobility can be interpreted two ways one either mobility there everyday mobility between the ability from your house to go anywhere in the city and then again he had that which I have I have
00:06:51an advantage %HESITATION because you have a choice between the using a cart taxi or or tries it %HESITATION and the price of transit for the ratio of it you know it's only the time which care for the poor its most the time and the cost and some means
00:07:08of transport to completely out of their reach for like very often the car %HESITATION war we enter and certainly the taxi so they are in the in in some country by the way they can either for Tracy T. either you know they have some of about twenty five
00:07:26percent of the people who live in Mumbai cannot afford the very little subsidize the cost of taking the suburban track so therefore there mobility in terms of looking for a job is limited to about to raid useful for five kilometer which means still walking about an hour %HESITATION
00:07:46is two hours of commuting a day and that's very much limits the %HESITATION %HESITATION the ability to get the job or a job paying better or things like that that's why for some scene in in it again a city like Mumbai minister of India a lot of poor
00:08:02people are really limited to to work %HESITATION inside a house of domestic to help you know because the they cannot reach the area where you know the %HESITATION you off business so single that's more centrally located when they could get the job where they could evolve into something
00:08:20better you know you can imagine %HESITATION somebody very poor starting in a restaurant washing dishes but learning you know to do something better becoming it cool cool even managing the restaurant now if you are a domestic seven days not publish it from this lack of affordable housing people
00:08:39are still finding ways to live in the city so in your paper you mention something %HESITATION called informal informal sector housing sector so describe a little bit and what what you think about it well informer easy way for %HESITATION for the people want to live in a city
00:08:57to make their own trade off between the distance land consume and floor space culture %HESITATION in their everyday to %HESITATION to to make sacrifices in certain area in order to obtain some saying again fourteen another forces in many slums for the slums which are what are chiefly whether
00:09:17located you will find that the streets very often %HESITATION no more than sees scale for feet wide now this is not because of people don't know what to do design streets it's because they make a trade off that the floor space is more important than the street space
00:09:36in the area and so this would be legal nobody teasingly called channel %HESITATION but that's how I roll them to live close to %HESITATION %HESITATION you know to where they want to leave on the other hand if they follow the regulations they were pushed back the would be
00:09:54pushed back in the folly suburbs where they would have no way to getting to check out so the informal housing sector then is to close a reflection of how these lower income people actually value that trade off absolutely yeah but of course because it is not a formal
00:10:11market that the government functions there are some issues with %HESITATION accountability you know for example if you're in the formal housing sector in your landlord %HESITATION breaks the contract for whatever reason then you can go to the authorities and invade forced contract but informal housing sector you don't
00:10:27have those mechanism so what can we say about those well that that's a very negative aspect of the the former sector in the country as we do not recognize that there are some exceptions %HESITATION is that you are completely %HESITATION let's see you're not protected by the law
00:10:43of the country anymore on anything practically %HESITATION if you live in the informal sector including %HESITATION nothing school not having water supply and %HESITATION it'll %HESITATION UF usually E. legal %HESITATION electricity connection and things like that and and also you are much more you know if it was
00:11:01legal to do what they did there are certain things that that they could do to protect themselves against fire especially with something like F. A. R. %HESITATION even if it was originally intended to allow more sunlight an area I think it's fair to say that now people want
00:11:19to keep regulations like that because Hey I've got a great view out my window I don't wanna building going up next to me that so there's a lot of not in my backyard that telling each even that happen %HESITATION you know people have the habit very often the
00:11:32in %HESITATION when you have ten ounces of talking about calling the streets for free so the cost of that if there is a building which is a little higher next to them it's not so much shall eat so they would have to share the parking was more people
00:11:46and although they don't own the parking because state sales and therefore they would argue and of course they were seldom discussed the parking if they were talking about the environment to maintain the historic feel that so with all these forces going to sort of making housing less affordable
00:12:06government still try to intervene to increase the the affordability of housing so what are the common policies implemented and what we say about their outcomes well %HESITATION usually the outcome is not very good let's say the the the first thing government does for say all right %HESITATION those
00:12:29people cannot afford housing the we we want them we know what we constitute as decent housing therefore we're going to build it for that so politician of that because they can make indication they they take credit for %HESITATION yeah the %HESITATION %HESITATION the the brake kit the ground
00:12:46to front of television the the cat to open in front of the think the problem is that %HESITATION %HESITATION they never build enough for the people who are would be will officially entitled to it you know typically %HESITATION in a in a in a city in a market
00:13:05economy you know you know we see this country you have about the city said to percent of the population will be entitled no money to have P. because so the the drama never build enough of those because it would cost too much it's complicated you know to get
00:13:21dealing with so so you have a in the vision of that and then when it is built suddenly because you are selected the only on the basis of being poor at the time you you end up was it was a ghetto you know leaving a ghetto and again
00:13:36here the selects of mix city of thing call me so desirable so the other solution is set of the most recent teas %HESITATION inclusion always on ink that means asking a a developer at two built for free full for the city %HESITATION so core affordable housing now the
00:13:57problem with that is that first you have to define define what is affordable housing you know you have to say whether it say the mantra floor space Austin arrange something of that so this is number which is going to be fixed well you can you can related to
00:14:13information or something but it's it's a little arbitrary because you have the continuum of poverty you know you do not have one group which is for the other which you have the right to come to you so you so you have the selfie Travis then of course these
00:14:27know that the teeth increase the cost of housing for the people who do not benefit from it so in a way you increase the number of beneficiary by increasing the end to you ever again politician love it's because %HESITATION it doesn't appear in their budget because for if
00:14:44if the city makes an agreement with the developer will let you build here if twenty percent is %HESITATION affordable housing then because that is an arbitrary number like you said the other eighty percent are going to see their costs go up to still make it profitable for the
00:15:00developer to build that trust him in so that is going to make it it's sort of like pushing a balloon down you just pushing the hair to the side even if it looks like yourself and that's right yeah yeah and and at the same time %HESITATION if you
00:15:12look at the numbers you know and typically it's twenty to twenty five percent of the units built %HESITATION he the the it's a the developer will can afford to do that it would have to get to to the high end of the market let's say in New York
00:15:28it might be twenty or even fifteen percent of the top of the market who could afford to provide the same creatures like so if you are talking about twenty percent of fifteen percent it's a very very small group of people who I tried that and that would be
00:15:44%HESITATION you know every year let's see you do depend you know to provide for a very large number of phones sold polite housing you you are lying in fact on the gross of for the market for housing of a very small group of people so you very vulnerable
00:16:03you know too so it's not the very very efficient way of providing the housing full for the poor and by the way you want your money isn't very often that the government will look lacks a floor issue for the developer would grease you know what kind of as
00:16:20an incentive then you wonder will if you can relax the floor he shall we docked in the negative externality why don't you are exiting the anti city where the first place you know and and lower the price of housing for everybody so if government intervention in the housing
00:16:38market %HESITATION like we talked about leads to these in perfect outcomes is there any better alternative so even if the regulations and affordability efforts are not perfect is it still the best effort no I think that %HESITATION if the if the local government we're sincere in %HESITATION trying
00:16:57to solve the housing problem of low income people they will increase the supply of housing by removing you know again the regulation which are not clearly use for you okay every time they give you a bonus of throw ratio means that in fact the provincial without betray so
00:17:16that that's the first thing we move some of your nation which are reasonable including by the way %HESITATION the the technician which forbids the you know one family house to be subdivided the second will be trying to improve transport you know one way to increase the supply of
00:17:36housing is to improve transport in many different part of the city and when I simpering transfer is not only to run the bus line each to %HESITATION to decrease the time required to go from one part of the city to another so that's poor people can select an
00:17:53area based on its low cost and steel and still at the same time have access to a lot of jobs in the city so I think the speed think it's very important are there examples of neighborhoods around the world that we can look to %HESITATION to see what
00:18:11happens when we relax these regulations and let the market to take care of %HESITATION the these choices rather than having to be more centralized %HESITATION yes actually %HESITATION one country which has tried that you know the scene innovative approach for a long time it's been Indonesia Indonesia you
00:18:28know as the city of in the nation expand the they absorb villages and the Indonesian I've always put a little battery out on those villages and saying within the village you are allowed to have the regulation you want %HESITATION heat severe chief for decide you know there's a
00:18:46council failed or something but we will not impose our vacation to you and we will connect you to the infrastructure of the city but within the village you do what you want so %HESITATION so in this case the scene in the show's because compound which is basically village
00:19:06in the nation and now they are more morning cleave some of a log where you have those form the villages and use you see there affordable housing %HESITATION now some houses are very minimal but all of them have access to clean water supply the garbage is removed from
00:19:24days of school because those are not the legal the I'm not the informal they are just too within those area you up in a weight within those areas the government to saying you are allowed to come sure whatever you want %HESITATION in terms of pro space and and
00:19:39land we will provide you with water supply %HESITATION storm drainage sewer and schools your paper also mentions the Vietnamese vertical urban villages to those function the same way as the camp on to a little different but it's a bit the same principle that and it's the same %HESITATION
00:19:58so in China actually %HESITATION you know %HESITATION so so the villages which are for which have been the %HESITATION expense you know absorbing the city I have a different status you know in in China and get them the other different stages because you'll come as society divided society
00:20:15between workers in cities and and roof it'll the peasant and the worker so they have different right to the land depending you know it's strange to us but that's what it is so that's give them in a way privilege to decide what to do with their land and
00:20:31%HESITATION in Vietnam era compared to Indonesia the the course is mostly vertical %HESITATION each source so %HESITATION a provides an income for the former farmers for you know what real seven and in that way %HESITATION because the event housing to migrant and the terrorists migrants to leave %HESITATION
00:20:51in you know in a rough area very desirable of the city %HESITATION into level so for the first time shot now sometime %HESITATION those migrants you know there is a building with four single for story all right and there is only one bathroom one shower at the bottom
00:21:08now this is very drastic but it's better than to be in a slum in many other countries where you have no what terrible you have dirty water and no time to talk there okay with that with those conditions because it's the location that they're really trying to yeah
00:21:23yeah that's right and as income improve %HESITATION you'll see that insert forces in the south of China chains and where where the income not much higher because you know the work of paid more %HESITATION you see immediately that those toilet at the bottom of the building get disappear
00:21:40and suddenly you see Toyota took the fourth floor in chains and their growth has been so quick recently so as the city transformed from this tiny village into a massive city yeah it seems like it would be difficult for planners to to see that coming in and change
00:21:57regulations accordingly whereas maybe when they were small village regulations would have been a suffocating because there aren't that many people there most men for space so what can we say about the ability for planners to adapt to change that rapidly I think they have to to introduce flexibility
00:22:17you know they have to acknowledge that the building is city he's not like building a building you cannot plan every detail in that sense you have to enter you have to %HESITATION also admits that in a prosperous city you would have vantage people and very poor people and
00:22:37those very poor people should be able to to come to the city and the job of the city is not to insure them you know that the the kitchen would be %HESITATION you know as a set and die mission and things like that the job of the city
00:22:52east to provide good school good health there for clean water supply remove the garbage %HESITATION drain the land for the snow fretting and unfortunately %HESITATION %HESITATION many many stability instead of trying to concentrate on those basic issues where we were war agreed support have incredible you know regulation
00:23:17of about you know the the slice proportion of free will feel womb or something like that which are completely irrelevant very often not planned for us and when they are in force is just a way of getting a bribe people from the very poor person to a quality
00:23:33people person was an aspect you know it's just because it's so it's not for a fiction so we talked about before the affect that too much planning can have on the four to build a house in it seems like you're in favor of a certain level of a
00:23:47role of government in making sure that cities can insure for the house %HESITATION absolutely but what happens if we have any examples of what happens when government doesn't do enough we have many example of that %HESITATION most of the cities of first serve the world in a way
00:24:05%HESITATION as very deficient channel water supply and transport a system %HESITATION the storm drainage also is very important you know in tropical countries that that's why you see you know again the moon by being %HESITATION fraud that tell you the key at the moment so when fact Mumbai
00:24:23should not be Friday because its quality Leahy the hilly and close to the sea so it should be allowed to lazy to two is just that the drain on not to maintain or not designed correctly you know the storm drainage so this is a figure of government on
00:24:39something which is relatively simple you know it's not because they do not they have brilliant engine is it's just that the city disperse its energy in a lot of little flank instead of concentrating on their main mission which is to provide the primary infrastructure to a large group
00:24:55of people how do you think your analysis on affordable housing we talked about today applies to development in the big picture people escape poverty is when they go to cities and we have seen also that for many poor people they have more chance to escape poverty in a
00:25:11large city than in a smaller city for the cyst cities to be let's take to be able to to provide this transition from poverty to let's say middle class they have to function well in again to concentrate on their primary mission which is to provide infrastructure to provide
00:25:34the the the you know the PP goods I want thank you for coming on the program today in talking to us about affordable housing thank you both cities most forecast future population densities in order to properly build supporting infrastructure these predictions often result in regulations that adversely affected
00:25:51the availability of affordable housing neighborhoods in Indonesia Vietnam and chance and show how letting people inside their own trade off between things like floor space and density can allow for the presence of more housing that is affordable and scooted closer to the desires of residents this episode of
00:26:12the success project podcasters was recorded in New York New York and featured a lumber Todd and why use Merrin institute of urban management visit and why you D. R. I. dot org to hear other episodes in our series read aligns paper and learn more about the success project
00:26:31this project was made possible through the support of a grant from the John Templeton foundation as expressed in this publication are those of the authors and do not necessarily reflect the views of the John Templeton foundation

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