Blog
Reduced or Not, the Mortgage Interest Deduction Can Help Fix Sprawl
Galina Tachieva | September 15, 2011
As of late, the mortgage interest deduction (MID), a tax break many Americans have become accustomed to, has become the focus of much debate and controversy. It first became the subject of heated discussion when President Obama's debt commission suggested its reduction. They argued that in addition to reducing deficits, such reform could also help slow the growth of sprawl. The claim was that the deduction encourages people to buy larger homes on larger, exurban lots, and that reducing this subsidy would slow the growth of sprawl.
In a previous post, I argued that the MID is only one of many incentives that have made sprawl the predominant form of growth. What's more, slowing growth does nothing with the huge surplus of sprawl that already exists. If the goal is to effectively deal with sprawl, we will be better served by encouraging its repair through regulatory and financial incentives.
Now the MID debate has started anew as President Obama suggested funding portions of the Jobs Act through certain reductions of the MID. And yet again the result has been uproar from all directions. It is obvious that any proposal to reform this all-American "privilege" will be an uphill battle.
Here is another proposal. We know that sprawl is a disaster of biblical proportions and that we will need to deal with it sooner or later. Why not modify the MID to encourage the repair and redevelopment of our sprawling communities? We need to create incentives for density and mixed uses. Sprawl happened not only because people wanted big houses and privacy, but also because the policies and incentives, such as the MID, were very attractive.
The MID could be reduced for all properties except those in locations targeted for sprawl repair and redevelopment. This would create a strong incentive for people to buy and build in places that need infill and densification. If that action proved to be politically unfeasible, the MID could be increased for investments in sprawl repair sites, such as dead malls that could be transformed into mixed-use town centers and failing commercial strip corridors that could be made viable as transit-oriented boulevards.
Recent studies show that dense cities create more jobs and expand markets. It is not a coincidence
that these places are not only dense, but also demonstrate great urbanism, attracting the entrepreneurial and the
talented. Incentivizing sprawl repair, transforming struggling or failing places into spots of great urbanity, would
benefit larger regions and help the economic recovery.
Not This Time - Why the new Apple campus doesn't work
Galina Tachieva | September 12, 2011
It is disheartening to see that one of the most innovative companies in the world has wasted a great opportunity and is choosing for its new corporate campus the most conventional stereotype of suburban sprawl: a free-standing, single-use, mega-structure in the form of a glass doughnut. We are not talking about architecture here; no doubt the architecture could be spectacular. It will be Foster + Partners designing the building, so we can expect the architecture to be the state of the art. What is hugely disappointing and substandard for Apple is that their place-making concept is wrong. They will create a commuter-oriented environment using one type of building: an object, to which everybody commutes (yes, 2/3 not by car but still commuting). Some may find the spaceship beautiful, free-floating in green space. But that is not the point.
The point is that the Apple campus could have been a real place. Located amidst disconnected fabric of sprawling enclaves, it could have been a focal node in suburban Cupertino. Why not incorporate living, dining, entertainment, shopping, within the campus? This would have been a revolutionary idea, similar to the spectacular Apple products. How about a new elegant product for suburbia Ð a self-sustained, walkable, human-scale place? An opportunity was missed to correct past mistakes in the way the region grew, to infuse sprawling Cupertino with a piece of real urbanism.
The Onion's spoofs similar to
the "Mac wheel." Turned out they are serious...
Sprawl Tongue Twister: Say That Three Times Fast
The Reduction of the Mortgage Interest Deduction
Galina Tachieva | January 6, 2011
The mortgage interest deduction (MID) has been the subject of much discussion after President Obama's debt commission suggested its reduction. It has been argued that in addition to reducing deficits, such reform could also help slow the growth of sprawl. The argument is that the deduction encourages people to buy larger homes on larger, exurban lots, and that reducing the subsidy will slow the growth of sprawl. That may be correct, but how important is it?
Sprawl has been malfunctioning for decades, and is one of the primary factors in the recent mortgage crisis, escalating transportation and infrastructure costs, deteriorating environment, and growing health problems. We certainly need to stop the growth of sprawl, but the MID is only one of many incentives that have made sprawl the predominant form of growth, and besides, slowing growth does nothing with the huge surplus of sprawl that already exists. If the goal is to effectively deal with sprawl, we will be better served by encouraging its repair.
The common perception of sprawl is the multitude of housing subdivisions built in the exurbs. That is correct, but sprawl is also composed of such elements as office parks and shopping malls, and these places are failing as fast as the subdivisions. The problem is that we have created a landscape dominated by segregated, single-use pods, where residences are separated from stores, which are separated from offices, etc., and cars are required to reach every destination.
The way to repair sprawl is to strategically redevelop certain portions of it - by making it walkable and by adding options for housing, working, shopping, and transportation. Failed office parks and shopping malls, for example, are prime candidates for sprawl repair because they are typically in good locations, under single ownership, and are substantial parcels (their parking lots represent possibly the largest depository of underutilized real estate in the country). These failed, sprawling behemoths have the potential to be transformed into complete, sustainable communities that provide most of the daily needs for the people who live and work there. Such places are in high demand, but there is unfortunately a whole host of obstacles to their creation - whether land-development regulations that don't allow them or difficulty in securing funding. The focus, therefore, should be on making sprawl repair possible and desirable.
That task is best addressed by local stakeholders. Citizens, elected leaders, and municipal staffs must decide these places are worth saving and do what is necessary to encourage their repair.
Local officials can change zoning ordinances to allow higher densities, mixed uses, and expedited permitting for sprawl repair projects. At the state level, legislation and policies can be created to enable this type of zoning and provide financial incentives. Rather than continuing to pour money into sprawling infrastructure projects that make the problems worse, states can direct funding to the transformation of failing sprawl into functioning, sustainable communities. Projects expected to benefit their larger regions should be eligible for such funding, as well as indirect incentives such as tax deferrals, the right to use tax money for improvements, and reduction of fees, among others.
These repaired, sustainable communities would serve as amenities for their inhabitants and their entire regions while also aiding the real estate markets and giving much-needed boosts to the local economies.
Sprawl is draining our resources, damaging our environment, and worsening our health. Reducing the MID might slow the growth of sprawl, but other regulatory and financial incentives would be much more effective for truly dealing with the larger problem of existing sprawl.
Galina Tachieva | September 15, 2011
As of late, the mortgage interest deduction (MID), a tax break many Americans have become accustomed to, has become the focus of much debate and controversy. It first became the subject of heated discussion when President Obama's debt commission suggested its reduction. They argued that in addition to reducing deficits, such reform could also help slow the growth of sprawl. The claim was that the deduction encourages people to buy larger homes on larger, exurban lots, and that reducing this subsidy would slow the growth of sprawl.
In a previous post, I argued that the MID is only one of many incentives that have made sprawl the predominant form of growth. What's more, slowing growth does nothing with the huge surplus of sprawl that already exists. If the goal is to effectively deal with sprawl, we will be better served by encouraging its repair through regulatory and financial incentives.
Now the MID debate has started anew as President Obama suggested funding portions of the Jobs Act through certain reductions of the MID. And yet again the result has been uproar from all directions. It is obvious that any proposal to reform this all-American "privilege" will be an uphill battle.
Here is another proposal. We know that sprawl is a disaster of biblical proportions and that we will need to deal with it sooner or later. Why not modify the MID to encourage the repair and redevelopment of our sprawling communities? We need to create incentives for density and mixed uses. Sprawl happened not only because people wanted big houses and privacy, but also because the policies and incentives, such as the MID, were very attractive.
The MID could be reduced for all properties except those in locations targeted for sprawl repair and redevelopment. This would create a strong incentive for people to buy and build in places that need infill and densification. If that action proved to be politically unfeasible, the MID could be increased for investments in sprawl repair sites, such as dead malls that could be transformed into mixed-use town centers and failing commercial strip corridors that could be made viable as transit-oriented boulevards.
Recent studies show that dense cities create more jobs and expand markets. It is not a coincidence
that these places are not only dense, but also demonstrate great urbanism, attracting the entrepreneurial and the
talented. Incentivizing sprawl repair, transforming struggling or failing places into spots of great urbanity, would
benefit larger regions and help the economic recovery.Not This Time - Why the new Apple campus doesn't work
Galina Tachieva | September 12, 2011
It is disheartening to see that one of the most innovative companies in the world has wasted a great opportunity and is choosing for its new corporate campus the most conventional stereotype of suburban sprawl: a free-standing, single-use, mega-structure in the form of a glass doughnut. We are not talking about architecture here; no doubt the architecture could be spectacular. It will be Foster + Partners designing the building, so we can expect the architecture to be the state of the art. What is hugely disappointing and substandard for Apple is that their place-making concept is wrong. They will create a commuter-oriented environment using one type of building: an object, to which everybody commutes (yes, 2/3 not by car but still commuting). Some may find the spaceship beautiful, free-floating in green space. But that is not the point.
The point is that the Apple campus could have been a real place. Located amidst disconnected fabric of sprawling enclaves, it could have been a focal node in suburban Cupertino. Why not incorporate living, dining, entertainment, shopping, within the campus? This would have been a revolutionary idea, similar to the spectacular Apple products. How about a new elegant product for suburbia Ð a self-sustained, walkable, human-scale place? An opportunity was missed to correct past mistakes in the way the region grew, to infuse sprawling Cupertino with a piece of real urbanism.
The Onion's spoofs similar to
the "Mac wheel." Turned out they are serious...Sprawl Tongue Twister: Say That Three Times Fast
The Reduction of the Mortgage Interest Deduction
Galina Tachieva | January 6, 2011
The mortgage interest deduction (MID) has been the subject of much discussion after President Obama's debt commission suggested its reduction. It has been argued that in addition to reducing deficits, such reform could also help slow the growth of sprawl. The argument is that the deduction encourages people to buy larger homes on larger, exurban lots, and that reducing the subsidy will slow the growth of sprawl. That may be correct, but how important is it?
Sprawl has been malfunctioning for decades, and is one of the primary factors in the recent mortgage crisis, escalating transportation and infrastructure costs, deteriorating environment, and growing health problems. We certainly need to stop the growth of sprawl, but the MID is only one of many incentives that have made sprawl the predominant form of growth, and besides, slowing growth does nothing with the huge surplus of sprawl that already exists. If the goal is to effectively deal with sprawl, we will be better served by encouraging its repair.
The common perception of sprawl is the multitude of housing subdivisions built in the exurbs. That is correct, but sprawl is also composed of such elements as office parks and shopping malls, and these places are failing as fast as the subdivisions. The problem is that we have created a landscape dominated by segregated, single-use pods, where residences are separated from stores, which are separated from offices, etc., and cars are required to reach every destination.
The way to repair sprawl is to strategically redevelop certain portions of it - by making it walkable and by adding options for housing, working, shopping, and transportation. Failed office parks and shopping malls, for example, are prime candidates for sprawl repair because they are typically in good locations, under single ownership, and are substantial parcels (their parking lots represent possibly the largest depository of underutilized real estate in the country). These failed, sprawling behemoths have the potential to be transformed into complete, sustainable communities that provide most of the daily needs for the people who live and work there. Such places are in high demand, but there is unfortunately a whole host of obstacles to their creation - whether land-development regulations that don't allow them or difficulty in securing funding. The focus, therefore, should be on making sprawl repair possible and desirable.
That task is best addressed by local stakeholders. Citizens, elected leaders, and municipal staffs must decide these places are worth saving and do what is necessary to encourage their repair.
Local officials can change zoning ordinances to allow higher densities, mixed uses, and expedited permitting for sprawl repair projects. At the state level, legislation and policies can be created to enable this type of zoning and provide financial incentives. Rather than continuing to pour money into sprawling infrastructure projects that make the problems worse, states can direct funding to the transformation of failing sprawl into functioning, sustainable communities. Projects expected to benefit their larger regions should be eligible for such funding, as well as indirect incentives such as tax deferrals, the right to use tax money for improvements, and reduction of fees, among others.
These repaired, sustainable communities would serve as amenities for their inhabitants and their entire regions while also aiding the real estate markets and giving much-needed boosts to the local economies.
Sprawl is draining our resources, damaging our environment, and worsening our health. Reducing the MID might slow the growth of sprawl, but other regulatory and financial incentives would be much more effective for truly dealing with the larger problem of existing sprawl.