Holiday Reading: UN Habitat III in Quito

As the Northern Hemisphere braces for the holiday season and its accompanying wintry weather, we at CUI wanted to offer up an option for reading material through our break, December 12th through January 9th. While we’ll  still have two more blog posts before going on hiatus, below is the summary (and some links for further reading) on a recent development in an important topic to all cities, housing.

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Image courtesy Pakhuis de Zwijger and Global Policy Journal

The United Nations Conference on Housing and Sustainable Urban Development (Habitat III) was held from 17 to 20 October 2016 in Quito, Ecuador, and concluded with the adoption of the New Urban Agenda as the primary product of the one-every-20-years Conference. This Agenda acknowledges the speed and importance of the increase in urbanization worldwide, and cities’ unique ability to guide and support sustainability efforts going into the future. The Agenda sets global standards for truly sustainable urban development that also focuses on equity.

 

 

To learn more, try some of the Suggested Reading:

Read the Adoption of the final outcome of the Conference (English), and learn more about the New Urban Agenda here.

The Habitat III press kit contains concise, intriguing information on the conference, Habitats I and II, and more.

Press coverage, such as by CityLab and the BBC was generally positive, though global development organization Devex criticized the New Urban Agenda’s lack of specificity, while The Guardian questioned equity of Quito residents’ inability to participate.

The U.S. State Department also offered its thoughts on Three Reasons Habitat III Matters for Successful and Sustainable Urbanization.

Within the industry, Smart Cities-oriented organization 100 Resilient Cities released a post discussing how the work done at the conference ties into other urbanization concerns, such as gender equality.

 

 

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Mortgages, Data, and Disclosure: Current Research on Homeownership in New Latino Destinations

An interview of Allen Hyde by Todd M. Michney

With the passage of the 1975 Home Mortgage Disclosure Act (HDMA), Congress required American banks to disclose data about where they lent for homes, in order to determine patterns of investment after mounting evidence emerged indicating that discriminatory lending and disinvestment since the 1930s (“redlining”) was negatively impacting the quality of life for urban areas and exposing residents to potentially abusive credit terms. HDMA’s disclosure requirements were updated in 1989 to include the reporting of race and ethnicity on the level of the individual borrower, and the resulting data serves as a useful measure of progress toward more equitable lending. Legislation like the HDMA, the 1974 Equal Credit Opportunity Act, and the 1977 Community Reinvestment Act (CRA) were intended to tackle structural inequalities difficult to remedy using 1960s civil rights laws, and originated in grassroots campaigns by neighborhood activists like Chicago’s Gale Cincotta. To this day, some local groups have succeeded in leveraging improved credit access through HDMA and CRA, and an estimated $1.7 trillion was redirected to urban areas already by 2004 as a result of such legislation.

Nevertheless, studies indicate that African Americans and Latinos continue to be disadvantaged in home mortgage markets. Especially in the wake of the Great Recession and subprime mortgage crisis in the United States, it is important to understand how housing policy continues to produce unequal outcomes. HDMA and CRA have had their shortcomings and limitations, but still serve in protecting the opportunities for minority homeowners to build wealth. Whether they will continue to do so is an open question, with even stricter reporting requirements debuting through 2018 currently meeting considerable pushback from the banking industry.

Allen Hyde is an Assistant Professor in Georgia Tech’s School of History and Sociology, who along with coauthor Professor Mary Fischer of the University of Connecticut, analyzes HMDA data to study the seemingly counterintuitive relationship between increased Latino access to mortgage financing in the lead-up to the 2008 housing crisis, and higher observable levels of segregation. Whereas existing research on Latino homeownership has been largely limited to historic areas of residency, Professor Hyde focuses on newer destination cities in the country’s interior and the South, of which Atlanta is one. He answered several questions on what this data can tell us and about national and local patterns of Latino homeownership.

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Plaza Fiesta, a Latino-oriented mall in metro Atlanta, a “new destination” city. Image via the Federal Reserve Bank of Atlanta.

TM: What are Latino “new destinations,” and what does it mean that we seem to be seeing simultaneously rising homeownership among Latinos alongside increasing segregation rates in these cities?

AH: Starting in the 1980s, changes in immigration policy and the economy shifted Latino migration away from cities in established destination areas like California, Texas, and Florida to “new destinations,” often located in the South and Midwest. Latino communities have been developing over the last few decades in medium to large Southern cities like Atlanta, Charlotte, Raleigh, Greensboro, and Washington, D.C., meaning they moved into areas that have historically been overwhelmingly either black or white. Because Latinos were a small percentage of the population and thus were less likely to be pushed into racialized neighborhoods, they tended to be less segregated in new destinations in the 1980s and 1990s. However, other scholars like Daniel Lichter, Matthew Hall, and colleagues note that Latino-white segregation in such cities has increased rather dramatically over the last decade or so. Interestingly, this has simultaneously come at a time when Latinos have seen rising incomes and increased homeownership as a result of the Housing Boom of the early-mid 2000s. Given that homeownership signifies higher status and the achievement of the American Dream, one would predict that Latino homeowners may be less segregated from whites than their Latino renting counterparts. My colleague Mary J. Fischer and I are conducting research to determine if new Latino homeowners, as opposed to renters, still find themselves in segregated neighborhoods in new destination cities during the Housing Boom.

TM: How has this played out in Atlanta? Will you give us more of a sense of the Latino population dynamics and homeownership pattern here?

AH: Our research can speak to what is happening in Atlanta in several ways. First, Latinos are the largest ethnic grouping within Atlanta’s immigrant population, after Asians. Second, Atlanta, and Georgia more generally, has experienced dramatic growth in its Latino population. Most Latino Atlantans have origins from Mexico; however, there are sizable Puerto Rican, Salvadoran, and Guatemalan populations, as well as communities from other parts of Latin America. Furthermore, Atlanta is a diverse but segregated city. As of 2010, Latino-white segregation was substantially lower than black-white segregation, but was still moderately high.

Overall, Atlanta is emblematic of Latino migration patterns for new destinations, which comes with both good news and bad news according to our research. Increased socioeconomic status and homeownership should decrease segregation between whites and Latinos, thus policies that promote homeownership can be used to promote integration in the metro area. However, subprime loans, predatory lending, and other real estate practices can potentially negate the positives of homeownership. Local real estate agents and mortgage lenders should be required to provide full disclosure on the details of fixed versus adjustable rate mortgages to their customers, and they should be trained to recognize and avoid racial and ethnic biases that may seep into their everyday practices.

At the same time, Atlanta’s relatively high levels of racial residential segregation raise questions about where Latino newcomers fit into the existing racial/spatial hierarchy. It is unclear whether we can expect homeownership to reduce segregation for Latinos in the future. This depends on the extent to which racialized housing markets for Latinos develop, as well as the neighborhood ethnic preferences of whites in response to demographic changes in their communities (which are especially difficult to address through policy). Finally, escaping to the suburbs no longer means upward mobility in economic and social status. Poverty rates have been increasing in the suburbs while we have seen middle class whites begin to return to the city through gentrification. These patterns will shape the neighborhood compositions of the Atlanta metropolitan area over the next decade or so.

TM: How has HMDA data traditionally been used by researchers, and do you have any general thoughts on the particular usefulness of such public data sets, in what they can tell us about lending and homeownership patterns and policymaking?

AH: HMDA data have traditionally been used by economists to look at patterns of loan denial, subprime lending, and “redlining.” These studies are more in line with the original intent of HMDA, which was to aid in the enforcement of fair lending laws. We are using these data in a somewhat different way to look at the neighborhood characteristics of new homebuyers. This type of detailed, individual level data is not publicly available at the neighborhood level of geography through other data sources with housing information, such as the U.S. Census, American Community Survey, and American Housing Survey. The annual nature of it in addition to the fact that it is whole population data (e.g., not a sample), makes it a particularly powerful dataset to test theories of neighborhood access and assess changes over time. While longer historical perspectives on race, ethnicity, and homeownership are important, we decided to focus on the period 2000 forward because this included the peak of the housing boom, as well as the bust so that we could see whether neighborhood access for Latinos changed in the wake of broader housing market shifts.

The Handbook of Manufacturing Industries in the World Economy (2015): Now Available in Paperback

by Jennifer Clark

manufacturing-front-cover The Handbook of Manufacturing Industries in the World Economy, edited by John Bryson of the Birmingham Business School, Jennifer Clark of the Georgia Institute of Technology, and Vida Vanchan of Buffalo State is now available in a paperback edition.

The Handbook of Manufacturing Industries in the World Economy provides a critical and multi-disciplinary state-of-the-art review and analysis of current manufacturing processes, practices and policies. Expanding our knowledge and understanding of production and innovation, this collection demonstrates that manufacturing continues to matter in the world economy.

The contributors, including scholars ranging from engineering to policy to economic geography, cover manufacturing policy and the revival of the industrial base in the US, UK and Canada and engage national and regional strategies for implementing advanced manufacturing policies. Questions of economic resilience in the wake of the recent recession are asked, and industry and firm case studies are utilized in an international comparative context. Applying a wide range of international cases from the US, EU, Australia and Asia, this approach allows readers to view transformations in production systems and processes across sectors, technologies and industries.

Students, scholars and policymakers in the fields of public policy, economic geography, city and regional planning, and business and management will find this collection invaluable in understanding how firms and industries adapt, through dynamic and design-driven strategies, to produce for established and emerging markets.

Chapters highlight how firms and industries modify existing processes to produce for established and emerging markets through dynamic and design-driven strategies. This approach allows readers to view transformations in production systems and processes across sectors, technologies and industries.

In the foreword, Sir Mike Gregory from the University of Cambridge, UK comments, “This book represents a major contribution to our thinking about modern manufacturing industries – and is not just timely, it is long overdue! The authors have done an outstanding job in bringing to bear a range of multi-disciplinary perspectives on a domain which all too often suffers from rather narrow disciplinary analyses. Ranging from engineering to social science and drawing on examples from the US, Europe and Asia, the book provides not only a wealth of fact and illustration but a rich landscape to inform those charged with industrial policy and manufacturing strategies.”

In his book review in Economic Geography, Douglas Gress wrote, ‘In [The]Handbook of Manufacturing Industries in the World Economy, editors Bryson, Clark, and Vanchan offer up a welcome addition to the manufacturing literature replete with valuable contributions from immensely competent researchers . . . The strengths of the Handbook are immediately apparent, and include the fact that contributions are provided by seasoned scholars, active scholars in mid-career, and budding scholars alike. The editors have thus ensured that the Handbook is well grounded while remaining topically fresh.’

Frank Giarratani, Center for Industry Studies, University of Pittsburgh further commented on the book that, ‘As industry practitioners know well from experience, generalization is hard to come by. Whether it’s manufacturing, services, or something in between, it’s the details that seem to matter most when it comes to determining outcomes. The value in this book is enormous because details tell the stories across a diverse set of industries. I applaud the editors and authors on their substantial achievement. Manufacturing and related supply chains are dynamic, and this book is rich with information that offers deeper understanding about the processes involved.’

The book is available from the publisher, Edward Elgar, as well as other venues such as Amazon.com.


The book, organized into five sections and over thirty chapters, includes the following contributions:

PART I: INTRODUCTION
Manufacturing Matters: Space, Place, Time and Production
Jennifer Clark, John R. Bryson and Vida Vanchan

PART II: (PROCESSES) BUILDING BLOCKS: FACTOR INPUTS AND PRODUCTION ORGANIZATION

  1. Manufacturing Management in Theory and Practice
    Paul L. Forrester
  1. Manufacturing and Labor
    Sally Weller
  1. How Does Financialization Affect Manufacturing Investment? Preliminary Evidence from the US and UK
    Susan Christopherson
  1. Manufacturing Logistics
    Peter V. Hall
  1. Reshoring and the ‘Manufacturing Moment’
    Margaret Cowell and John Provo
  1. Relocation of Production Activities and Underlying Social Dynamics: An Analytical Framework based on a Canadian Perspective
    Patrice Jalette
  1. Tool-less Manufacture: Digital Fabrication, 3D Printing and the Third Industrial Revolution
    Michael Ward
  1. Engineering and Manufacturing: Concurrent Maturation of xRL
    Ben Wang, William C. Kessler and Andrew Dugenske
  1. Energy and Manufacturing: Technology and Policy Transformations and Challenges
    Marilyn A. Brown and Gyungwon Kim
  1. Design and Manufacturing: The Competitiveness of American, European and Chinese Industrial Design Companies
    Vida Vanchan and John R. Bryson
  1. Intellectual Property and Patents: Knowledge Creation and Diffusion
    Dieter F. Kogler

PART III: INDUSTRY AND FIRM CASE STUDIES

  1. Manufacturing Textile Futures: Innovation, Adaptation and the UK Textiles Industry
    Megan Ronayne
  1. Finding a Future for the US Furniture Industry
    Susan Walcott
  1. New Geographies of Advanced Manufacturing: The Case of Machine Tools
    Ronald V. Kalafsky
  1. Farm Machinery: A Changing Path to Feed the World
    Dawn M. Drake
  1. Hidden in Plain Sight: The North American Optics and Photonics Industry
    Jennifer Clark
  1. Traditional and Emerging Markets in the Global Steel Supply Chain
    Carey Durkin Treado
  1. Intermediate Manufacturing: Profit, Dependency and Value Attainment in Supply Chains
    Rachel Mulhall
  1. Aerospace Manufacturing: Past, Present and Future
    Colin G. Drury
  1. Manufacturing Stoke: Emergence, Transformation and Consolidation in the Surfboard Industry
    Andrew Warren and Chris Gibson
  1. Migrant Manufacturing: Translocal Production and the Establishment of a Polish Bakery in Birmingham, UK
    Catherine Harris
  1. Skoda Auto: The Transformation from a Domestic to a Tier Two Lead Firm
    Petr Pavlínek
  1. Samsung: Restructuring, Innovation, and Global Networks
    Sam Ock Park

PART IV: POLICY NARRATIVES IN MANUFACTURING

  1. Stability Amid Industrial Change: The Geography of U.S. Deindustrialization since 1980
    Marc Doussard and Greg Schrock
  1. Searching for Advanced Manufacturing in the United Kingdom and United States: Definitions, Measurement and Public Policy
    Finbarr Livesey
  1. National Manufacturing Policy, Local Real Estate Markets, and the Missing Region: Prospects for Urban Industrial Development in the US
    Laura Wolf-Powers
  1. The City and Industry: Deurbanizing Manufacturing in New York City?
    Lynn McCormick
  1. Manufacturing in the Knowledge Economy: Innovation in Low-tech Industries
    Teis Hansen and Lars Winther
  1. Crafting a Comeback: Cultivating an Innovative Ecosystem in Mature Regions
    Maryann Feldman and Lauren Lanahan
  1. From Skill Mismatch to Reinterpretation: Challenges and Solutions for Manufacturing Worker Retention and Recruitment
    Nichola J. Lowe

PART V: CONCLUSION
Regeneration Economies: Manufacturing as the Next Industrial Revolution
Jennifer Clark, John R. Bryson and Vida Vanchan

Voluntary Inclusionary Zoning & Subsidies in Atlanta: The Legal Environment

By Chris Thayer

 

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Example of a Density Bonus from an inclusionary ordinance.

Last April, this blog covered the legal environment of mandatory inclusionary zoning in Atlanta. This companion piece considers the situation faced by voluntary affordable housing measures, in particular, voluntary inclusionary zoning policies and subsidy programs.

While voluntary inclusionary zoning can take many different forms, these policies essentially form the “carrot” to mandatory inclusionary zoning’s “stick,” offering developers optional but enticing benefits in exchange for producing affordable units within their developments. These benefits can range from minor administrative boons like fee waivers, to zoning variances of a reduced parking requirement, to increasing the permissible density of units, or even monetary incentives like tax abatements — a form of voluntary inclusionary zoning that begins to overlap with supply-side subsidies.

Subsidies, rather than mandating or coercing developer action, represent a monetary outlay from the government to encourage the desired behaviors, and come in three major forms: demand-side subsidies, public housing, and supply-side subsidies. Demand-side subsidies operate by extending a benefit directly to individual lower-income families in need of housing, generally in the form of a voucher intended to cover the gap between the market-rate and an affordable one (at 30% of the recipients’ income). These subsidies make up HUD’s Housing Choice Voucher program, funded at the federal level and administered by subordinate localities. While still the largest affordable housing program nationwide, it has come under fire for its notoriously long waiting lists, concentration of poverty (due to a flaws in rent calculation and higher-end landlords often refusing vouchers), and upwards pressure on market rents.

Vouchers were initially designed to take over for the second subsidy approach, public housing. Public housing projects were an attempt on the government’s part to directly provide the lower-income housing needed. Like vouchers currently, in their heyday public housing project were notorious for concentrating poverty, as well as for unhealthy building conditions, high crime, and stigma. Because of these failures, HUD discontinued these programs in the late 1980s (though some public housing developments continue to operate), and instead turned to the third and final category of affordable housing support: supply-side subsidies.

Supply-side subsidies are a monetary incentive given to developers to produce affordable units within their otherwise market-rate developments. Unlike inclusionary zoning as such, these programs explicitly serve as part of the funding stream for the project and are often subjected to a ‘but-for’ analysis (the project could not otherwise be built without the subsidy). There are a variety of such programs at the federal, state, and local levels, the largest of which is the Low-Income Housing Tax Credit (LIHTC), but all of which share the essential character of funding unit construction through developers.

Compared to the difficulties mandatory inclusionary zoning faces, the way is far clearer for voluntary policies. Indeed, Atlanta already has several policies that fall under this umbrella, one of which is the Affordable Housing Impact Statement (Atlanta, GA Municipal Code § 54.2). While not affecting developers directly, it requires a statement indicating the number of affordable units added or lost be made publicly available for any legislation that might impact the housing stock, increasing transparency and lobbying power. Within the region, Fulton County adopted a voluntary inclusionary zoning program that lasted two years and offered a wide range of benefits for developers, who participated either by building units or paying fees-in-lieu during the 2007-9 ordinance activation window (Fulton County, GA Municipal Code § 4.26). Invest Atlanta offers an attractive tax abatement schedule and fee waivers for developers who include workforce housing in projects constructed in Urban Enterprise Zones, and also waves impact fees for affordable units (GA Municipal Code § 19.1001-24). The Atlanta City Council passed a voluntary zoning ordinance in 2013 that provides incentive “points,” scheduled by the number of affordable units, the extent of the affordability, and the presence of other amenities. These points can be exchanged for benefits including a density bonus (up to 120% of the existing maximum), removal of parking requirements, and reduced yard requirements (Atlanta, GA Municipal Code § 16.37). This option seems to have been largely unused by most developers, especially the density bonus, which goes unneeded as many Atlanta developers do not currently max out their ordinarily allowed densities — a similar problem to the history of failure seen in Atlanta’s attempts at Transferable Development Rights programs.

Subsidy efforts also have a good legal outlook. Vouchers are fully supported by law, and the recipients thereof are protected from administrative discrimination. However, like most of the nation, Atlanta does not have any source-of-income protections and it is therefore perfectly legal for landlords to refuse voucher-holders — leaving recipients trapped in the few low-income, high-crime neighborhoods that will accept vouchers, despite the program’s best intentions.

As previously mentioned, public housing construction has been discontinued for roughly thirty years. However, many developments are still in active operation nationwide, and the federal government’s HOPE VI and RAD programs offer grants to renovate and rehabilitate aging public housing facilities, meaning that these remaining complexes could continue to provide affordable housing for years to come. The Atlanta Housing Authority (AHA) is the largest Housing Authority in Georgia and one of the largest nationally, overseeing 8,200 units (and more than 18,000 voucher recipients). This status persists despite AHA having torn down all existing public housing projects over the last decade, redeveloping into mixed-income residences with about two-fifths the number of affordable units as the prior public housing structure offered and “vouchering out” the remaining residents with all the problems that housing vouchers entail, thereby earning the dubious distinction of being “the first U.S. city to demolish all of its low-income family public housing.” This pattern of redevelopment — which not only reduces the total of affordable units, but has shown itself to increase gentrification in the surrounding area, to the point that “in and around areas redeveloped through the AHA, the assessed value of property has increased by some $1.1 billion since 1998” — is entirely legal and up to the discretion of the current director of the AHA. This redevelopment trend is hardly new to Atlanta — indeed, Charles Palmer, who built the first public housing project in the nation in the form of Atlanta’s Techwood Homes, stated that he first became interested in ‘slum clearance’ out of concern for the effects of nearby slums on the value of his Downtown commercial properties. However, typical of Atlanta or not, it is a matter of great concern for affordable housing advocates due to the current impossibility of constructing any new publicly-owned housing ventures.

Finally, supply-side subsidies are the most popular and politically palatable form of affordable housing instrument available in Atlanta. While each source of funding has its own programmatic rules, there is relatively little other legislation in effect on subsidies. The only major legal change of note for federal subsidy provision is the recent (2015) case of Texas Department of Housing and Community Affairs v. The Inclusive Communities Project, Inc, in which the Supreme Court ruled that disparate impact claims are cognizable under the Fair Housing Act (576 No. 13-1371 2015). This means that plaintiffs may sue a housing department or other jurisdiction for distributing those funds to proposed developments in a way that would have a disparate impact, such as by clustering low-income housing in only a few neighborhoods. This increased scrutiny could have substantial implications for the subsidy allocation process, as jurisdictions must now re-evaluate their project approval criteria for discriminatory outcomes, especially in the area of income mixing. This in particular is contrary to established practice, which encouraged 100% affordable (if privately owned) projects to be built, a unit-mixing structure that is now considered unsuitable and concentrating of poverty. It remains to be seen if housing advocates will actively pursue this newly open legality to increase the level of mixed-income communities being funded through supply-side methods.

What, then, are some practical routes for pursuing affordable housing in Atlanta? There are a number of measures local politicians could put into place. First, the city council might approve zoning measures to downzone maximum acceptable densities in hot neighborhoods, forcing developers there to use the voluntary inclusionary measures to make a better profit. Next, a source-of-income protection ordinance could be passed, protecting voucher-holders from rejection due to voucher use. Thus far, there have been no successful challenges to such ordinances in any of the 44 locales and 11 states that have this protection, suggesting that Atlanta would likely see success with such an ordinance. Third, Atlanta might consider a measure parallel to House Bill H.R. 2231 (the Public Housing Tenant Protection and Reinvestment Act of 2015), which would mandate an equal number of new units of public housing be constructed for every unit torn down. While this measure seems a bit too-little, too-late for Atlanta, it would protect the 8,200 units that still exist, which are a unique, non-renewable resource. By employing any, or ideally all, of these legally defensible changes, Atlanta could take concrete steps to ensure an affordable future for all residents.