We are over-housed
Today’s households are much smaller than they used to be, yet these smaller households often live in large apartments built originally for the wealthy or for large immigrant households. If some of these large apartments are allowed to be subdivided into two smaller units, the supply of units would be doubled, yet the rents would be “naturally lower” simply because of their smaller size.
Today in Boston, for example, 37% of all households consist of just one person, the most common household size. Another 27% are two-person households, making almost two-thirds (64%) of Boston households composed of just one or two people. Consequently, today’s smaller households, including many three-person households, are “over-housed.” One of the best ways for any household to lower its rent is to move into smaller space, become more efficient, and get rid of all the junk.
THE KEY IDEA:
Smaller new units will release larger units
If we are allowed to subdivide large apartments and to add a substantial number of smaller units, people will move into them, which will immediately release their former larger units for larger households. Thus, creating more smaller units will actually increase the supply of both smaller and larger units, which, as economists say, will lower rents broadly.
This approach makes far more sense to us than somehow trying to make more costly, new, large-sized units for which there is almost no undeveloped land to build on in large cities. To get around this lack of empty lots, tenant advocates in Boston’s City Life/Vida Urbana literally steal older housing from private owners, by organizing tenants to do rent strikes, crushing small owners and getting them to sell cheap to nonprofit, tax-funded “affordable housing” groups.
Our solution uses the efficiency of private rental housing and small owners to create a substantial supply of new rental units, no tax subsidies needed, just zoning changes.
Use existing, older housing
• Allow accessory dwelling units
Accessory units are small units built in unused spaces in existing houses: attics, basements, and garages. One or two or even more smaller-sized units can be added to many existing buildings in these unused spaces. No high-priced empty lots to build on are needed.
• Allow large units to be subdivided
In addition, larger apartments can easily be subdivided into two smaller units, such as triple-decker units or the “owner’s unit” on the second and third floor of two-family properties. Again, no empty lots are needed.
• A variety of smaller sizes
These smaller-sized units can vary all the way from “micro-units” to studios, to one-bedroom units, and to smaller two-bedroom units (such as two bedrooms plus large eat-in kitchen).
• Cheap to build, no tax subsidies
These new smaller units are quite cheap to build. Half the work has already been built: foundations, floors, walls, ceilings, roofs, and all utilities are on site. A few new partitions and doors would be needed, and the utilities extended to each new unit to create new kitchenettes and bathrooms. Owners can build these smaller units with their own financial resources or small loans, and will build them for the extra income they will receive. No tax subsidies are needed! Detached “cottages” built in garages would be more expensive (less infrastructure is present), but would yield higher rents and would also increase the housing supply. Whatever option is chosen, all new units must be built with permits and according to codes.
• Naturally lower rents
Smaller in size, with modest (not luxury) amenities, and sometimes built in less desirable spaces, these units would have naturally lower rents, with no tax subsidies. Restricting their rents is unnecessary and would actually inhibit their creation. The modest increase in rental income is what will motivate small owners to create these units.
• Preserves historic appearance
All these units would make little or no change to the exterior appearance of our beautiful historic older housing. A second means of egress is often needed, but basement entrances on the sides or backs of the houses and exterior staircases on the backs will scarcely be noticeable.
• Only zoning changes
Many present zoning rules prevent accessory units, subdividing large apartments, or creating any new multifamily housing at all. Hence, only zoning changes are needed to make these additional units possible. The zoning for smaller units should be “as of right,” without any need for a special permit that requires neighbor input.