Episode Summary

  1. Even with relatively flat population growth in the United States demand for households continues to increase with delayed household formation.
  2. Public banks are a way for municipalities to have more control over their money reducing investment costs for infrastructure and issuing dividends back to the community.
  3. Sprawl is a tragedy of the commons situation where individual preference creates a situation less appealing for everyone. Sprawl does affect us all.

U.S homebuilding boom isn't (7 min read).

A city bank. Literally (30 min podcast episode).

2 tools. One to rank livability and walkability (repost).

Sprawl is a tragedy of the commons. (4 min read).

Episode Transcript

Hey everyone. I’m Kyle Gulau and on this show, patterns of development, we take less than 10 minutes each week to deconstruct what's going on in real estate, architecture, and urban planning.

First up the U.S homebuilding boom isn't as good as it appears, according to Joseph Politano. According to US census data complied by Politano total housing starts are at the highest level in more than a decade.

But! Even with the construction surge, the supply of housing is still at historically weak levels. Part of the trick to understanding housing supply and demand is to understand household formation. To quote the article now, "The general theory is simple enough: people tend to live in the same house as their parents until they reach a certain age and move out to live alone, with a significant other, or with roommates. That moving out represents household formation (which can also occur with divorces, old age, and other life events, but growing up is generally the biggest contributor and main focus)."

Usually, you would expect that a growing population would be the driving factor toward increasing household creation. But! According to the last u.s. census, we had one of the lowest rates of population growth in almost a century.

So if population growth is slowing what's going on? According to Jospeh Politano, there's a couple of factors (in his article he's got links to sources, which are in the show notes):

  • Over the last 20 years young adults are more likely to live with their parents longer. Delaying house hold creation of their own.
  • The pandemic magnified the importance of home for many - working from home, watching content from home, socializing at home. Increasing an appetite for more square footage.
  • The median age for marriage has consistently risen it's now at 30 for men and 28 for women. Creating another delay in the household formation journey.
  • A majority of Millennials (now the largest generation) prefer to live alone. Which also pushes up demand.

It's a complicated picture but points to a continuation where demand will outpace housing supply.

Next up - Council Member Green in Philadelphia has been championing the Philadelphia Public Financial Authority - aka a bank operated by the city of Philadelphia. On March 3rd, Bill #210956 passed. Getting the Philadelphia bank one step closer to reality.

The project in Philadelphia was inspired by The bank of North Dakota. In North Dakota, by law, all the state’s financial assets and revenues are deposited in the Bank. In turn, the bank pays its dividend to its only shareholder—the people of North Dakota. In the past decade, despite its small population and modest volume of economic activity, the Bank of North Dakota has returned over $300 million to the state’s general fund, helping to ensure regular annual budget surpluses and eliminating the need for drastic tax increases or spending cuts for vital public services.

The Bank of North Dakota partners with private banks to provide a secondary market for mortgages and supports local governments by buying municipal bonds at low-interest rates. The bank also helps individual North Dakotans, for example by refinancing the federal student loans of North Dakota residents, allowing many of those students to pay off their loans and escape unfair and excessive debt.

This leads us to our patterns of the week!

  1. Even with relatively flat population growth in the United States demand for households continues to increase with delayed household formation.
  2. Public banks are a way for municipalities to have more control over their money reducing investment costs for infrastructure and issuing dividends back to the community.
  3. Sprawl is a tragedy of the commons situation where individual preference creates a situation less appealing for everyone. Sprawl does affect us all.

Talk to you next week!