I don’t usually post articles commenting on what my fellow Howard County bloggers write. However I’m more likely to jump into the fray when important points need to be clarified—all the more so when I myself haven’t done a good job of being clear in my own blog posts.

The topic today is the oft-repeated claim that Howard County has a shortage of 5,000 (or 5,500) affordable housing units, and in particular the post “The High Cost of Affordable Housing” by the pseudonymous blogger “Shaykh.” In this post they write,

The current refrain of the far left is that Howard County “needs more affordable housing,” making claims such as “we have a shortage of 5,500 affordable housing units.” Why is there a shortage? Where are these 5,500 families that are without housing? Are they living in a tent city like we now see out in Seattle?

Shaykh then goes on to speculate:

If each of these 5,500 affordable housing units sees an average of 2.5 persons, that would equal 13,750 more residents, or a 4.3% population increase over the current 321,000 residents. This is more than 3.5 times higher than the current growth rate of 1.2%. . . . If each of these 5,500 affordable units has an average of 1.5 children (I feel this is a reasonable guess), that would mean 8,250 more children in HCPSS, a 14% increase of the roughly 58,000 students currently enrolled.

First, to nitpick: I think the number 5,500 should actually be 5,000, if (as I think) the source of this estimate is ultimately the the 2018 Howard County Rental Survey commissioned by the Howard County Housing Commission. If so, this is not Shaykh’s fault, as various politicians and activists have used the 5,500 number in their public statements.

More fundamentally, the estimate of 5,000 “missing” affordable units does not mean that there are 5,000 Howard County households who are homeless, or 5,000 households living elsewhere who would like to move to Howard County but cannot. Instead it is an estimate of the number of households already renting housing in Howard County who are paying more for rent than is considered “affordable.”

I already posted about how this estimate was derived, but looking back on that post I’ve concluded that I didn’t do a very good job of explaining things. So, I’ll try again:

The 5,000 estimate is based on a comparison to a theoretical ideal: If the housing market were a totally free market and if there were no factors artificially inflating the price of housing, then we would presumably see developers and landlords offering a range of housing options priced to be suitable for households in each and every income range, just as we do with other types of consumer goods. (Just as, for example, with clothing we see the free market offering options ranging from buying low-priced outfits at TJ Maxx to buying haute couture from Christian Dior.)

At the time the 2018 Howard County Rental Survey was produced, there were an estimated 9,545 households with household income of less than $50K who were living and renting in Howard County. To put this in context, at the time of the survey there were an estimated 116,711 households in Howard County, of which an estimated 32,358 households were renting. (See page 17 of the survey, Table 10, “Renter Household Characteristics.”) These lower-income households thus make up about 8% of all Howard County households, and about 29% of renting households.

So, if the housing market in Howard County were a totally free market and if there were no factors artificially inflating the price of housing in Howard County, then we would expect to see these 9,545 lower-income Howard County households renting units that were priced roughly in line with the incomes these households have.

However at the time of the survey there were only 4,486 rental units in Howard County that were considered to be “affordable” to those 9,545 lower-income households, with “affordability” based on the (somewhat arbitrary) guideline that a household should spend no more than 30% of its income on housing. The difference of 5,059 (9,545 minus 4,486), rounded off to 5,000, is then considered to be the amount by which Howard County falls short in terms of providing affordable housing.

So this has nothing whatsoever to do with enticing thirteen thousand poor people to move to Howard County, or adding eight thousand more FARM students to Howard County public schools. Those people are already living here, and their children are already attending school here. They’re just paying more than 30% of their household income for their rental housing.

As for how to make housing more affordable in Howard County, Shaykh’s position is that the best solution lies in making the housing market more of a free market, for example by loosening zoning restrictions. I agree with this, and said so in my previous post.

The fundamental problem with government policy on housing is summed up by the economist Arnold Kling as “restricting supply then subsidizing demand.” On the one hand, zoning regulations and other government-imposed restrictions (e.g., APFO regulations) result in less housing built than would otherwise be built in a totally free market, reducing the supply of housing and driving up its price.

Government then seeks to offset the impact of increased housing prices through various direct and indirect subsidies, including things like Section 8 vouchers (which attract the most attention and controversy) but also including providing tax credits for developers building affordable housing and allowing homeowners to take tax deductions for mortgage interest and real estate taxes.

These subsidies not only divert government spending from arguably more useful purposes (like improving transportation infrastructure), they also have the effect of increasing the demand for housing beyond what it would have been in the absence of the subsidies. This then further drives up the already high housing prices caused by the restricted supply of housing.

From this point of view the way to address the issue of housing affordability is not to create more “affordable housing,” it’s to build more housing, period.

After writing something I almost always think of things I wanted to say but didn’t have the time or space for. So it was with my last post touching on housing affordability issues in Howard County. Here are a couple of random follow-up comments,:

School redistricting and housing affordability

I have for the most part stayed out of directly commenting on the current controversy on school redistricting in Howard County. My family is not directly affected by it since we don’t have a child in the public school system, and I didn’t have the time or inclination to do the sort of in-depth research I normally feel is necessary before I make public comments on my blog or elsewhere.

However I did at least obliquely comment on the issue in my post “Moving to opportunity in Howard County.” To recap briefly, I suspect supporters of the superintendent’s proposed redistricting plan are likely over optimistic as to how much of a real difference the plan would actually make in the lives of students, especially students already in high school. (I think one could make a stronger case for redistricting at the elementary school level.) At the same time I definitely believe opponents of the plan downplay the extent to which the current situation is the result of deliberate government “social engineering” that has the effect of isolating lower-income households geographically and discouraging their living in Howard County.

Some people claim that rather than redistricting the school system we should be instead focusing on issues of housing affordability, making sure that lower-income households are able to live in any part of the county and take advantages of the schools in those areas. That’s a perfectly legitimate opinion to hold, and I look forward to seeing these people work to build political support for concrete proposals to do just that.

The “no public transit” argument against affordable housing

Still on the topic of affordable housing, Tom Coale (who is variously an attorney representing developers, a progressive activist, and co-host of the Elevate Maryland podcast), recently tweeted, “Time after time, inadequate public transportation is used as an excuse to reject affordable [housing] projects,” and claimed that “The median income in certain parts of Maryland is high enough that those eligible for affordable housing, based on percentage of median [income], make enough to own a car, but not enough to pay for housing.”

As it happened, that tied in nicely with the analysis I had been doing on new vehicle sales, and so I tweeted in response. To expand a bit on my comment:

The median new vehicle price is around $35,000, and according to the affordability criterion I used (the vehicle price should be no more than 50% of pre-tax income) such a median vehicle should be affordable to a household making $70,000 a year. Although such an income is above the US median income of approximately $62,000 a year, it is well below the Howard County median income of almost $120,000 a year, and so it’s quite possible such a household would have difficulty affording housing in the county.

If we turn to households making between $25,000 and $50,000, they should be able to afford a single vehicle worth $12,000 to $25,000, used or even new. They could even probably afford two high-mileage used vehicles. But, again, they would almost certainly have problems affording housing in Howard County.

The result is that, as Coales tweeted, “There is no record of people being ‘stranded’ because we built affordable housing without a bus route.” As he also pointed out, housing affordability is a problem across the state, even in areas where people absolutely need a vehicle to get around, and presumably are able to afford one one way or the other.

That’s it for follow-up for today, though I may have some additional comments later.

UPDATE 2024/01/04: This post originally appeared on my Civility and Truth Substack newsletter. I’ve moved it to my main site in an effort to collect all of my writing in one place.

This is a follow-up to my post about home value declines across Maryland, and a companion to my post about median household income within Howard County. For reasons discussed in that post, this analysis covers only the period from 2010 forward, and in particular compares median home values in the 2006-2010 time frame with median home values in the 2013-2017 time frame.

As with median household income, the margins of error for median home value estimates at the census tract level are high, up to 10% or more above and below the estimates themselves. So again I decided to divide the 55 Howard County census tracts into 5 quintiles of 11 tracts each, with quintile 1 containing the 11 census tracts with the lowest median home values, quintile 5 containing the 11 census tracts with the highest median home values, and the other quintiles in between.

The result is the map above, showing which census tracts are in which quintiles according to the 2010 American Community Survey 5-year estimates of median home values. The areas with high and low median home values should not surprise anyone familiar with Howard County real estate: with one exception the census tracts with the highest home values are west of US 29, and the tracts with the lowest median home values are east of US 29 or in Columbia.

How did this situation change over time? In the graph above I show how the average (inflation-adjusted) median home value for each 2010 quintile changed from 2006–2010 to 2013–2017.

(A reminder here: I write “2010 quintiles” because the census tracts are grouped according to their rank in 2010. If a tract was assigned to, say, quintile 2, in 2010 then it will still be considered in quintile 2 when comparing 2013-2017 to 2006-2010. Also, as noted in the last post averaging median values is not strictly speaking correct, but is the best that can be done in the circumstances.)

From the graph above we see that all quintiles experienced a decline in average inflation-adjusted median home values over the time frame in question. The quintile with the largest decline in percentage terms was quintile 1, for which average inflation-adjusted median home values dropped 19% from 2006–2010 to 2013–2017. The quintile with the smallest decline in percentage terms was quintile 3, with a 13% drop.

This map is an alternate approach to showing the changes in median home value between the 2006-2010 and 2013-2017 time frames. It shows the percentage declines in median home value for each census tract in Howard County. No census tract had an increase in median home value between the two time frames, and only a couple of census tracts experienced small declines. At the other end of the spectrum a few tracts experienced declines of between 30–40% in median home value.

The final map shows the distribution of census tracts among median home value quintiles based on the 2017 ACS 5-year estimates. (In other words, I recalculated which tracts were in the top 20%, etc., based on the newer figures.) The overall picture is similar to that for the 2010 map (high median home values west of US 29, low median home values east of US 29), but some tracts have moved up to a higher quintile or down to a lower quintile. This may be due to how home values fared in those tracts, or simply to random errors in the estimates. (Recall my note above about relatively high margins of error for tract-level estimates.)

For the code and data used to produce the graphs above, see “Howard County median home value trends by census tracts.”

That’s all for this week. A reminder: if you find these posts interesting and useful please tell other people about them and encourage them to subscribe to the Civility and Truth mailing list. Having readers who care enough to subscribe helps motivate me to send these posts out on a regular basis, and the more readers I have the more motivated I’ll be. In the meantime, thanks for reading this post!

UPDATE 2024/01/04: This post originally appeared on my Civility and Truth Substack newsletter. I’ve moved it to my main site in an effort to collect all of my writing in one place.

After looking at median household income for Maryland counties, I’m now turning my attention to median home values for the same geographies. But before I start, a brief apology for getting this out two days later than my (self-imposed) schedule; I’m switching to a new method for retrieving census data and map geometry, and it took longer than I thought to get the kinks out of my code.

As you can see in the map above, median home values in Maryland have not yet recovered from the Great Recession. As the following bar chart shows, all Maryland counties experienced declines in inflation-adjusted median home values from the 2006–2010 timeframe (used for the 2010 American Community Survey 5-year estimates) to the 2013–2017 timeframe (used for the 2017 ACS 5-year estimates). Allegany and Garrett counties fared the best, followed by Montgomery and Howard counties and Baltimore city, with declines ranging from 8–15%. The worst counties for median home value declines were Prince George’s and Charles counties, with almost 25% declines.

(For the code and data used to generate these and other graphs in this post, see “Maryland median home value trends per county.”)

Now, the declines across Maryland are not always directly comparable. For example, as you can see in the two bar charts below, the inflation-adjusted 2010 5-year estimates for median home values in Allegany and Garrett counties and Baltimore city range from just above $100,000 to almost $200,000, so those home values were relatively low to begin with.

On the other hand, the inflation-adjusted 2010 5-year estimates for median home values in Montgomery and Howard counties were over $500,000. A decline of almost 15% from the 2010 estimates to the 2017 estimates therefore represents a decline of about $70,000 to $80,000 in real terms.

The following maps correspond to the bar charts above, and show median home values across Maryland per the 2010 and 2017 ACS 5-year estimates. Again Montgomery and Howard counties stand out for having relatively high median home values, even after the declines between the 2006-2010 and 2013-2017 time frames.

Some concluding remarks: In general we see stable or declining prices as a good thing—no one ever wishes for (say) cars to be more expensive than they are, and the decline in prices for computers and other electronic devices has been universally welcomed.

However homes are simultaneously something you use and something you invest in. Before you buy a home the price is an obstacle. After you buy a home its price is an indicator of your future returns. This complicates the issue of housing affordability in many ways, most notably by pitting the interests of existing homeowners against those of would-be homeowners. I’ll probably have more to say about this in future.

UPDATE 2024/01/04: This post originally appeared on my Civility and Truth Substack newsletter. I’ve moved it to my main site in an effort to collect all of my writing in one place.

After looking at the median household income of Howard County relative to other local jurisdictions, I now look at median home values. As I noted previously, the earliest county-level data I can find dates from 2005 and the beginning of the American Community Survey.

The graph above shows Howard County median home values over time compared to a select set of other jurisdictions. (I chose the same jurisdictions as in my previous analysis of median household income, for the same reasons.)

All values are in current dollars as of the year of the survey. Thus, for example, the values for 2005 are expressed in 2005 dollars, the values for 2006 are in 2006 dollars, and so on. (I did not use inflation-adjusted values because housing costs are themselves a major component of the Consumer Price Index. Multiplying by a CPI deflator would therefore understate any actual rises in home values.)

Here’s some immediate takeaways from the graph above:

• Unlike other counties (not to mention the US as a whole), Howard County home values have not yet fully recovered from the Great Recession, and have been essentially stagnant since 2014. The same is true for Montgomery County and Baltimore city, as well as possibly for Anne Arundel County.
• In contrast, home values in Virginia counties are rising, and in the case of Fairfax County have fully recovered (at least in nominal terms).
• The District of Columbia has experienced a major rise in home values, over 50% since the start of the time period covered in the graph.
• Stafford County, Virginia, has significantly lower home values than Howard County, but a median household income that is essentially equivalent to that of Howard County. (See my previous article.)

This second graph shows the ranking of Howard County over the years versus the most affluent local jurisdictions. (Note that these rankings do not reflect home values in counties or county-equivalents with populations less than 65,000. These jurisdictions are too small to be included in the American Community Survey 1-year estimates.)

The story is similar to that from the previous graph:

• Howard County has gone from being in the top 25 counties (or county-equivalents) based on median home value to barely being in the top 50. (Its actual rank for 2017 was at number 45.)
• As it did in the median household income rankings, the District of Columbia has come from being out of the top 50 to being in the top 20 in terms of median home value. (Its actual rank for 2017 was at number 16.)

This is consistent with the narrative of major “showcase” cities (DC, New York, San Francisco, etc.) experiencing economic success and an accompanying rise in home prices, while other cities (like Baltimore city) and some suburban areas (like Howard County) languish.

I’ll continue looking at median home values, but may post about something else next week for a change of pace. As always, if you find these posts interesting and useful please tell other people about them (feel free to forward them these emails if you’d like) and encourage them to subscribe to the Civility and Truth mailing list themselves. In the meantime, thanks for being a subscriber and reading this post!

I’ve set an informal goal for myself of sending out something to this mailing list each and every week, and Wednesday by default seems to have become the day I do that. This week work and home responsibilities have prevented me from doing a full post.

However, I did want to recommend a Niskanen Center blog post from last year by Joshua McCabe: “How the SALT Deduction Subsidizes Opportunity Hoarding” (“SALT” = “state and local taxes”). When you combine McCabe’s argument with an argument I previously made in my post about Judith Rich Harris, “How do schools and parents matter?,” I think it provides what (as an ex-physics major) I’d call a “unified theory” regarding the problem of housing affordability in Howard County. Hopefully I’ll have time to sketch that overall argument out in next week’s post.