Changing The Narrative With Better Data And Better Ideas

Talibus insidiis periurique arte Sinonis credita res, captique dolis lacrimisque coactis, quos neque Tydides nec Larisaeus Achilles, non anni domuere decem, non mille carnae.

Thus, by the guile and art of perjured Sinon, we believed him, and therefore we became his captives, under compulsion of his tricks and tears, we whom neither Tydides nor Larissean Achilles, nor ten years, nor a thousand ships, could ever bring to our knees.

Virgil. The Aeneid, Translated by David Ferry, (Book II, 195-198, p. 44). University of Chicago Press, 2017.

The story of the horse isn’t complete or even coherent without Sinon. The horse appears and so does the young young Greek. Without Sinon, the wooden horse trick might have failed. While Lacoon’s truth is told in less than a dozen lines and he and his sons are devoured by snakes, Sinon has a rapt audience among the Trojans. That he should appear just at the right time and with such a compelling story and explanations about the purpose of the horse should have only added more suspicion; it had the opposite effect. As Aeneas says, what a decade long siege could not achieve, Sinon achieved with his guile in a day.

Princeton’s Eviction Lab is our greatest analog to the young and attractive Sinon, apparently a victim and full of answers for everything. The leader is Sinon, young, white, privileged and well-placed trading off of the suffering of others to gain access to the city. The Lab charges tens of thousands in speaking fees and is endowed with grants from the likes of Bill Gates.

And the “Lab” spools out a false narrative, gathering data from one year in time and declaring an “epidemic” without establishing a baseline. It isn’t that hard to debunk the data from Princeton or from any effort to prove that eviction is an “epidemic” because it isn’t. But, like the clustered little mobs around the wooden horse, Desmond is telling the story everyone wants to hear: housing problems are caused by other people who are bad and if you give us money, we’ll somehow hurt those bad people and help the good ones.

The truth is radically different. In Seattle, for example, a hysterical effort inspired by the lab resulted in a report called Losing Home, a document built on a tissue of assumption and unasked questions. That document claimed that in 2017 there were 1,218 evictions filed in Seattle. Looking at their own data from public disclosures revealed that there were only 585 evictions completed in 2017, less than half than those filed. Even more disturbing, when taking into account the number of rental housing units in Seattle, 168,295, Seattle’s “eviction rate” was less than 1%. You can read the full refutation of Losing home which I called Losing Perspective.

Let’s face it, housing providers, or landlords, are not an attractive bunch. And their advocate, a spear throwing, angry Latino, isn’t either. But a white, socially motivated boy from Princeton is a liberal’s dream. How do we counter the bad data coming from well-funded and popular opponents of a free housing market, of which the “Lab” is but one?

Challenge data and assumptions

First and foremost, when it comes to something like eviction, we have to ask out loud, “What eviction crisis?” Asking questions, really simple questions, can go a long way to deflate the “eviction epidemic” illusion. Any community facing an “eviction epidemic” as defined by the Eviction Lab needs to ask questions like,

• Where did your data come from and can I see it?
• What year did you measure for evictions?
• Were they filings or actual removals?
• Do you have data from local law enforcement on removals?
• How many years of eviction data do you have?

When we asked these simple questions in Cincinnati and wrangled the data from local government, Cincinnati’s eviction rate dwindled down to about 1 percent after following it all the way to actual removal.

Cost burden is another formulaic answer to housing problems that is not only unhelpful, but leads local governments to set unrealistic targets for spending on new subsidized housing construction. Cost burden methodology usually uses old United States Census data from the American Community Survey to guess at how many households are paying more than 30% of their gross monthly income on housing. As I’ve pointed out before, this is an unreliable way to project spending on capital projects. But still, the cost burden figures are used uncritically to set goals for building new housing.

In Albuquerque, for example, the Urban Institute suggested that there were 15,500 households paying too much for housing, then they leapt to the conclusion that indicted a need to build 15,500 units, which if priced at just $100,000 would cost more than $1,500,000,000, more than twice Albuquerque’s entire operating budget for 2021. And Albuquerque’s entire housing production for a 5-year period, from 2016 to 2021, was only 12,000 units, less than what the proposed unit count based on one year’s data from the American Community Survey data.

Challenging data and assumptions are essential for breaking the spell of the latest efforts to squeeze more and more money from state and local government to subsidize housing that if not over-regulated in the first place wouldn’t be needed.

There are better ideas

I’ll get more specific in the next post about ideas that are better than pouring more money on the problem of rising housing prices. Criticizing the assumptions, methodology, and data put out by advocates for more money is necessary but not sufficient to shift the conversation. At the same time as offering criticism we must be pointing in a different direction. For example, rather than use cost burden, we should encourage cities to look at their permitting departments and ask, “How many units of housing are we allowing to be built? How long does it take to get a permit? Once a permit is issued, how long does it take to get a finished housing unit?

Currently, as I have mentioned before, cities don’t regularly report on how many permits they are issuing and how that relates to new job growth and population increases. There isn’t any way to hold regulators accountable for hold ups in production when there are no measurements taken or shared with the public of the permitting process.

There is a relationship as well between the mix of housing types permitted and supply and demand. When few multifamily permits are issued in a city, and there is population growth, rents will rise even when overall production goes up because of new single-family homes. Knowing this is far more helpful for encouraging and incentivizing new housing than cost burden measures.

What do people think and why do they think it?

One of the most difficult things to persuade people in the housing business to invest in is research on public opinion. When faced with problems and bad regulation today, how will it help to spend resources researching why people think what they do about housing? We need those resources now to push back on the latest bad idea. This is a rational first response, but it is short sited and wrong.

I’ve suggested before that the main reason we get bad policy that cramps housing supply, imposes burdensome and pointless rules on the contracts between property owners and renters, and schemes to impose taxes on housing is that honest, well-meaning voters simply don’t understand the basics of housing economics. Most people believe that housing built by the private sector is fueled by greed, a desire to squeeze people who need housing for the most rent possible. They also think that rental housing is passive income and rents are set based on how much money a wealthy property owner wants to extract from his tenants.

Why do people believe this way? What messages would shift this thinking to a more realistic appreciation that housing is a marginal business just like almost any other business? If income matches or exceeds costs, the business is succeeding. People understand that from lemonade stands to multinational companies, revenue must cover costs and if it doesn’t prices have to go up. But if people don’t think this about housing, that the price of rent represents an arbitrary whim of a property owner, then it becomes easy to impose draconian rules that make it more costly and difficult to operate housing. Changing this mind set is of central importance.

Countering the false narratives of popular housing advocates, offering better methods for assessing and solving housing supply problems, and changing people’s understanding of housing aren’t easy to do and even more challenging to do all at once. But it’s the only way to break the spell that keeps us chasing more money instead of building more housing.