A city in the generally take-it-slow Midwest may seem like an unlikely place for the start of a revolution. But Minneapolis has passed some of the most progressive housing policies and zoning reforms in the country, and other cities—including those on the coasts struggling to overcome an affordability crisis—are taking notice.

Minneapolis first attracted attention by banning single-family-only zoning in an effort to usher in more multi-family housing in all neighborhoods. The city also legalized accessory dwelling units, eliminated minimum parking requirements, and dramatically up-zoned for more height and density along transit corridors and around employment centers.

Perhaps most important, Minneapolis tied all up-zoning with increased affordability requirements for new development—based on the idea that changing zoning to allow more housing creates measurable value for private landowners and developers.

It was a singular moment when a political coalition came together to focus on equity, says Minneapolis City Council President Lisa Bender, one of the leaders of the effort and a rising star in local politics. She made time for the Land Matters podcast recently on a trip to Vancouver, Canada, where she was a speaker at Rail-Volution, an annual summit promoting transit and transit-oriented development.

Vancouver—full of residential high-rises and well served by transit, but known as the most expensive city in North America—was a fitting place for the 41-year-old Bender, who has a master’s degree in city and regional planning from the University of California Berkeley and served for a time in San Francisco’s planning department, to reflect on her experiences. Nobody wants a city, she says, that can only be enjoyed by the wealthy.

You can listen to the interview and subscribe to Land Matters on Apple Podcasts, Google Play, Spotify, Stitcher, or wherever you listen to podcasts.

Learn More

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Inclusionary Housing: Creating and Maintaining Equitable Communities
Land Value Capture: Tools to Finance Our Urban Future
 

Photograph Credit: Kubrak78/GettyImages

“Wish I didn’t know now what I didn’t know then.” 

It was a throwaway line in Bob Seger’s 1980 ballad “Against the Wind,” a reflection on innocence and regret. Although he felt the line sounded odd and thought it was grammatically incorrect, Seger kept it in because the people around him liked it. The line has since inspired other artists to offer their own interpretations. It inspires me as an invitation to learn, providing a frame for reflection on unintended consequences and letting us imagine how we might have done things differently. It’s particularly apt in the context of our current national affordable housing crisis.  

For four decades I directed and studied the use of public, private, and philanthropic funding to produce affordable housing and provide decent shelter for low-income families since the Great Depression. Lots of big ideas were discussed, many of them implemented. Most of those implemented did not deliver the expected results, but they all delivered unintended consequences. What can we learn from these 20th-century missteps—and more to the point, what are we willing to learn?  

The federal government has struggled for more than eight decades to meet the basic commitments it made in the U.S. Housing Acts of 1937 and 1949: “a decent home and a suitable living environment for all Americans.” The acts committed significant subsidies to build new public housing and eradicate slums. They promised new jobs, modernized cities, and better housing for those who needed it. Because the Housing Acts proposed to benefit all Americans, they attracted broad public support.

When implementation time came, most public housing authorities aimed to provide housing for those in the lower half of the income distribution—a politically popular decision. To maintain the new housing stock, rents were set to cover buildings’ operating expenses. But as the buildings aged, operating expenses increased, and rents increased along with them. By the late 1960s, lower income tenants were getting priced out—paying upwards of 60 percent of their income to keep a roof over their heads.

Senator Edward Brooke (R-MA) remedied the situation by sponsoring an amendment to the Housing Acts in 1969, which capped rents at 25 percent of tenants’ incomes. The federal government covered operating shortfalls with subsidies. For reduced rents to be set, tenants had to disclose their incomes. It soon became apparent that public housing was not serving the poorest families with the greatest housing needs. In 1981, Congress acted again, reserving public housing for families earning half of the median income and reserving 40 percent of the units for families earning less than 30 percent of the median.  

The deterioration of the buildings was accelerating. This was because federal operating subsidies did not cover capital expenses and major systems (heating, lighting, elevators) began to fail. The federal fiscal austerity of the 1980s compounded problems by reducing operating subsidies. By the end of the decade the only reasonable response to the national crisis in public housing was widespread demolition.  

As the subsidies declined and our aging housing stock failed, a counternarrative emerged through which the residents themselves were blamed. The “culture of poverty” and “learned helplessness” became dominant memes. Poverty was viewed as a communicable disease rather than a symptom. The poor became convenient scapegoats bearing responsibility for the failure of their own shelter, as if any renters, poor or not, are expected to take responsibility for maintenance of their buildings. By concentrating the poor in public housing, we reinforced bad habits and transmitted values that perpetuated poverty across generations. This was supported by another dominant meme of the 1980s—the perils of big government. Big government was sloppy and inefficient, this narrative went (and still goes); the decline of public housing was the government’s fault.  

In the “HOPE” programs that followed—Homeownership and Opportunity for People Everywhere—many public housing projects were replaced with low-rise, mixed-income developments, typically replacing one affordable unit for three that were demolished. To stimulate additional rental housing production, the federal government created the low-income housing tax credit (LIHTC) in 1986. The program offered private investors a decade’s worth of tax credits in exchange for upfront equity investments—typically the hardest money to find—for housing production. States had authority over how to allocate the credits, and regulations mandated long-term affordability of the housing.

Importantly, the LIHTC program promised to overcome the two biggest failings of public housing. By attracting private investment, the efficiencies of the private sector would overcome dependence on inefficient big government. Second, location decisions could be delegated to state and local governments who could ensure that the housing production did not concentrate poverty. Moreover, competition for the tax credits would reduce their cost to taxpayers and eventually, the private sector would produce affordable housing without the need for subsidies.  

Some pundits consider the LIHTC program extraordinarily successful. Over three decades, more than 2.5 million units of housing were built. But through that period, we lost more affordable units from the national housing stock than we produced. Moreover, the promised private sector cost efficiencies never materialized. Depending on the year and the market, production of LIHTC units was estimated to cost 20 to 50 percent more than similar unsubsidized units. This does not even count the estimated $100 million spent annually to administer the program. 

Tax credits for equity from private investors came at credit card rates to taxpayers. And the costs went up when public capital was cheapest. During the Great Recession, tax credits were yielding average after-tax returns of 12 to 14 percent to investors when the federal funds rate was near zero and the 10-year Treasury yield was around 2 percent. The private sector never was weaned from subsidy dependence. Today, virtually no affordable rental production happens without tax credits. Finally, disappointingly, it is universally accepted that the production of tax credit housing exacerbated the concentration of poverty.  

How can the largest housing production program in the history of the nation, with broad bipartisan support, produce such disappointment? There are a lot of things I wish I didn’t know now that I (and we) didn’t know then—in 1999, in 1979, even in 1949.  

I wish I didn’t know that as good as we are at identifying big challenges and announcing ambitious responses, our commitment rarely survives economic challenges. We know now that simply building affordable housing is not sufficient for providing a decent home and a suitable living environment. One needs a sustainable model that maintains the buildings and preserves their affordability over time and builds where we need to—close to good jobs and schools.  

I wish I didn’t know that political support is evanescent, and memories are short. Ensuring that scarce subsidy reaches those who need it most is reasonable, but only if the subsidy is protected. The neediest are politically weak and not likely to marshal support to defend their entitlements. And when they try, they are easy to scapegoat.  

I wish I didn’t know that we spent tens of millions of dollars evaluating housing programs, but we haven’t learned very much. We counted units, acting as if the number produced is the only important measure of impact. Twenty years ago, one in four families who qualified for housing assistance received it. Today, it is one in five families. While the general wisdom says housing costs that exceed 30 percent of income are unsustainable for families, about half of renters pay more than 30 percent of their pretax income for rent, with 20 percent handing over more than half of their income.  

When do we take an honest reckoning of eight decades of effort to shelter our people? The complexity of housing challenges makes it impossible to learn anything from program evaluations. To learn, we need to reveal and commit to our intended outcomes, share the logic guiding our actions, and reconcile what we actually accomplish with our intentions. This is a learning model that we’ve embraced at the Lincoln Institute and I hope it can be applied more broadly to policy analysis in housing, community development, and philanthropy.  

Providing affordable housing for all is no easy task. The painful truths of eight decades of work are offered not as an indictment, but as an invitation to learn, and to think and act differently. We need to try new things and learn from them. That innovation might take the form of building apartments above public libraries, a trend we explore in this issue. It might mean forging unexpected partnerships, as public utilities and housing advocates are doing in Seattle. It might mean auctioning development rights or otherwise leveraging land value.  

We should aspire to the same ambition of the confident policymakers of 1949, committing to provide “a decent home and a suitable living environment for all Americans.” But we’ll need to try a lot of new things and learn from our mistakes. And if we commit to “searching for shelter again and again,” as Seger sings later in the same song, we just might get it done. 

Have your own example of “wish I didn’t know now what I didn’t know then”? A policy or program we could have, or should have, learned from? We hope to spotlight a few in an upcoming issue—send yours to publications@lincolninst.edu.

George W. McCarthy is the President and CEO of the Lincoln Institute of Land Policy.

How will the introduction of autonomous vehicles affect the Philadelphia metro area? That question brought several regional stakeholders together this summer, including representatives from the Pennsylvania Department of Transportation, the regional African-American Chamber of Commerce, Drexel University, and other organizations. Participants considered four different scenarios that might result from this vehicular shift, ranging from a future in which the private market gains increasing control over technology development and automation disrupts transportation, fueling worker displacement, to a trajectory where political uncertainty and slow innovation lead to a slow rollout.

These experts are part of the Greater Philadelphia Futures Group, a working group of the Delaware Valley Regional Planning Commission tasked with identifying various driving forces of change that are most likely to shape the region through 2050. The group is using an approach called exploratory scenario planning, a practice with roots in military intelligence, which attempts to outline possible futures and develop strategies that will be successful regardless of which reality plays out. Throughout the fall, the group will use this type of exercise to explore other complex issues, such as climate change and the area’s changing demographics.

The Greater Philadelphia Futures Group is one of many cases highlighted in the newly released How to Design Your Scenario Planning Process, written by Janae Futrell, former manager of the Lincoln Institute’s Consortium for Scenario Planning. Published by the American Planning Association as a Planning Advisory Service Memo, the guide is intended to help planners who are new to scenario planning, as well as veteran scenario planners who want to improve their practice. It combines a 12-page primer with a workbook that allows readers to create a preliminary plan for their specific project.

“By unpacking the wide range of decisions an agency makes to produce scenario planning efforts, this PAS Memo invites planners to think of scenario planning not as a product, but as an achievable process to shape and strengthen their organization’s planning efforts,” Futrell writes.

The memo is unique among existing scenario planning literature because it is tailored to practitioners, rather than academics or those already intimately familiar with the process, according to Heather Hannon, scenario planning manager at the Lincoln Institute. Instead of offering examples and theoretical information, the memo does more “handholding,” Hannon says, and aims to empower agencies to lay out a scenario planning process internally without necessarily requiring the help of external consultants.  

Futrell believes that any scenario planning process should have one of three goals: establishing a clear set of strategies to orient a planning effort; directly influencing specific, planned actions for operations and implementation; or educating staff, stakeholders, and the public to increase awareness about particular issues and influence decision making. For instance, in developing its ON TO 2050 plan, the Chicago Metropolitan Agency for Planning used public engagement processes to both inform the public about future challenges and invite public feedback on issues of concern such as climate change and transportation: “A two-way dialogue was designed to give and receive information to influence the exploratory scenario planning process,” Futrell writes in the memo.

A Roadmap

The memo breaks the scenario planning process into three key steps: direction setting, approach development, and roadmap creation. Futrell emphasizes that outlining an effective plan is just as important as executing the plan itself: “An organization must know where it is headed to increase its chances of success, and it must be able to evaluate its work for continuous improvement.”

In the first stage, a planning agency must understand and decide which type of scenario planning process is most suitable and how it will relate to other planning processes. While the Delaware Valley group opted to use exploratory scenario planning, whose primary purpose is to understand the implications of different futures, planners with a specific objective in mind could benefit from a normative approach, which focuses on a single desired scenario and considers multiple paths to get there.

Organizations must also identify the project’s key internal and external stakeholders, which can include organizations, the public, or subject matter experts.

In the approach development step, a team outlines key variables that will shape the future, such as extreme weather events and changing technology. In an exploratory process these variables can be seen as the driving forces of change. For the Delaware Valley group, these include enduring urbanism, meaning people and jobs will continue to move to the walkable centers; severe climate; and transportation on demand, in which smartphones and apps help people travel using new and existing transit infrastructure.

In the final stage, roadmap creation, groups should select a manager of the scenario planning process, establish milestones and tasks, take stock of existing resources, and work to obtain additional financial support as needed.

A graphic included in the memo illustrates the steps of a scenario planning process, guiding participants from choosing a scenario planning model to the start of implementation. An accompanying workbook further guides the design of a process for a specific municipality or region.

The consortium will use the memo to engage more planners who are new to scenario planning, as supporting material for workshops, and as the basis for a session at its annual conference, November 6–8 in Hartford, Connecticut.

Throughout the memo, Futrell highlights publications that may be useful as supplementary reading at each stage of the process, including two forthcoming Lincoln Institute publications: Scenario Planning for Cities and Regions: Managing and Envisioning Uncertain Futures (Book) and Exploratory Scenario Planning (XSP): A Planning Tool for Responding and Adapting in Uncertain Times (Policy Focus Report).

Emma Zehner is communications and publications editor at the Lincoln Institute.

Photos in order of appearance

“Driving Forces of Change” in an exploratory scenario planning process. Credit: Janae Futrell/Consortium for Scenario Planning.

Scenario planning process design path. From the Scenario Planning Process Design Workbook. Credit: Janae Futrell/Consortium for Scenario Planning.