NYT Journalist on Sprawl and Why You Can’t Make Money on Housing
A few weeks ago, the New York Times article "Why America Should Sprawl" went viral, sparking a national discussion about housing and development patterns.
In today’s episode, Chuck sits down with Conor Dougherty, the reporter behind the article, to discuss his perspective on housing in more depth.
Whether you prefer listening, reading, or watching, we’ve got you covered:
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Chuck Marohn 0:00
Hey everybody. This is Chuck Marohn. Welcome back to the Strong Towns Podcast. Today, I am speaking with Conor Dougherty. He is an economics and housing reporter for the New York Times. If you follow housing policy in America, you have almost certainly read his work, whether it's in depth reporting on zoning battles, thoughtful portraits of people navigating our housing system, or his recent provocative column "Why America Should Sprawl." He's also the author of a book called "Golden Gates." It traces the roots of housing affordability crisis in California and the rise of the YIMBY movement. Conor, it's a delight to chat with you. Thanks for being on the Strong Towns Podcast.
Conor Dougherty 0:47
Yes, thanks for having me.
Chuck Marohn 0:49
I feel like the best place to start here is for you to-
Conor Dougherty 0:54
Just start throwing the punches on sprawl.
Chuck Marohn 0:57
Oh man. I'm a Minnesotan.
Conor Dougherty 1:00
Let's just do it.
Chuck Marohn 1:01
So I'm I always- I mean, maybe this is the Minnesotan in me, but I always feel like when I have someone on, I want to give them the opportunity to talk their book and, you know, make their case in as friendly a way as possible. So I feel like I want to give you an opportunity to talk about what you see as the core problems we're facing when it comes to housing. I'd like, I'd like you to define it in your terms.
Conor Dougherty 1:28
First off, let me start by saying, thank you so much.
Chuck Marohn 1:32
Yeah, absolutely.
Conor Dougherty 1:33
I will give you a little bit of a background on me. Which is, I like to think that I'm on a journey. A journey where I'm just reporting on a lot of different things. I'm doing, individual stories, and I hope that over time, they amount to some I don't know, illumination of a problem or, you know, and hopefully unearthing new facts, helping people understand this better. You know, hopefully telling stories interesting enough that it that it helps them, that they just like the stories, and then also that it helps educate them about a big problem.
But I guess what I'm saying in all that is I try to just take it one step at a time. And it was funny, because I remember when I wrote my book thinking, like, oh, I really need to get everything I want to say about everything into this book. And then I didn't do that because, you know, housing is always changing and the situation was particularly fluid at that time. And then COVID happened, you know, just shows you how fast things can change. And at first I began feeling disappointed. Like, oh, man, I really messed up. I should have gotten more in there, and I should have thought about this one. And I was like, Oh, guess what? You know, I write for the New York Times. Lucky for me, I can write another story tomorrow, and another the day after that, and another day after that.
And so I just kind of have come to think of it as I'm writing a bunch of different stories, some of them in the book, most of them in New York Times. And they all just sort of hopefully exist as a kind of body of work. And I guess the reason I'm beginning with that sort of maybe overly pensive introduction is that I'm not trying to think of it as like this is part of some grand intellectual project.
Chuck Marohn 1:33
Yeah.
Conor Dougherty 2:32
So maybe I should start by saying my philosophy is that I have to live where the story lives. Ultimately, I'm trying to write about things that are happening now and and I'm trying to live in the action of a particular story. When I first started writing about housing, it began with, you know, a couple conversations I had had at that time with Ed Glaeser. I'm sure many of your listeners know, but he's a professor at Harvard, an economics professor, who was pretty influential in sort of sounding the alarm of America has a housing problem and it has to do with some degree of over regulation, some degree of making it difficult and expensive to build housing, in particular in the places that are the most economically prosperous, and that's a travesty because this is where people's access to high paying jobs and educational mobility and all those things is. That's where they can fulfill themselves economically in the easiest possible way, and so this is a travesty.
When I first started writing about that, I mean, the truth is the stories were sort of like, "economists say." You know, there was nothing really happening. I mean, certainly you could find people who were like, "Yes, I wish my rent was lower," or something like that. But it was a story that existed really in the intellectual sphere. And so profiles of Ed and people like that was kind of where the story lived. It was basically an intellectual story. Well, then I moved to the Bay Area, and I was covering tech. And they had started to have these protests of the tech busses, which were really just protests about the cost of rent in the vicinity of those busses. You know, obviously gentrification and all these things. I grew up skateboarding.
Chuck Marohn 5:44
Yeah, I saw that.
Conor Dougherty 5:45
Yes. I really knew that this had reached the zeitgeist when I went to the skateboard store and one of the graphics on the board was a Google bus, and it said "gentrification and eviction technologies" on the side of the bus. You know, I was like, wow, they're doing skateboard graphics about this.
And then I met Sonja Trauss who, I'm sure some of your listeners know, is sometimes considered the founder of the YIMBY movement. That might be pushing it a little too far, but you know. Sonia was a woman who was living in San Francisco at that time. She's a high school teacher. She started showing up to the board of supervisors meetings — San Francisco does not have a city council, little known California quirk — and you know, saying, "We need to build more housing, we have a housing shortage," etc, etc.
She had read Ed Glaeser, and she was very aware of that intellectual sphere that I was sort of referencing. And so I kind of followed the story to write about her and other activists at that time, thinking to myself, okay, this story is now living in an activist sphere. And without taking, you know, five hours to explain to you this evolution, then there were California bills and I wrote a bunch of stories about California bills. And then, you know, there were other things. National bills. I wrote a bunch of stories about accessory dwelling units, when that type of housing became people really building it in a large way. I wrote about a bunch of rent control drives. I mean, the rent control movement was functionally dormant, and then all of a sudden they were passing new rent regulations all around the country.
My point is, I'm just always trying to live where the thing is happening. When people were talking much more about social housing, I tried to write a story in Montgomery County, which is sort of ahead of the country on a lot of that stuff. And the reason I picked Montgomery County was that it was a very mature example. It was a place where you could say, here are the buildings, here are the tenants, here's the organization. Here's how this works. It wasn't about bills, you know what I mean?
Chuck Marohn 7:48
No totally. Totally. Yeah.
Conor Dougherty 7:50
I'm always trying to illustrate an idea in a place in which it is actually happening. And I think sometimes it can confuse people, because — and this is going to sound counter to what we're going to talk about in a second — but I try to stay away from the word "should." And I don't mean that literally. I just mean like the idea "should" isn't always- Like, I remember when I wrote my book, I had an example of a nun. It was a horrible story. There was an affordable apartment complex in a lower income Latino part of the Silicon Valley, probably the last remaining one, called North Fair Oaks. And there was a Catholic kind of charity that was across the street from this building, and there was a symbiosis between the places, the tenants and the place. And an investor bought the building.
There was all these protests. Ultimately, the nun got together an investment group and they bought it and put it into her nonprofit. And it was this amazing story. But my point is this: After I wrote about that sort of, how they put it into a community land trust and all these things, somebody wrote a critique — which they're totally entitled to — but they sort of said that I treated this sort of resolution as a quirk, you know, sort of rather-
Chuck Marohn 9:19
Yeah. Holes and oddity, sure.
Conor Dougherty 9:21
Yeah. And I actually- the words "quirk" or "oddity" or "edge case" or whatever adjective you might use was not in what I wrote. I just presented it, but I did not write a bunch of paragraphs after that saying, "This is the way, oh my God," you know?
Chuck Marohn 9:39
Right, right.
Conor Dougherty 9:40
I was like, you know, this is what happened. And what's interesting to me is, for all the talk about community land trust, for all the people who've sort of tried to get me to write about that, I'm like, this has to be, by assets, one of the largest ones in the country. I mean, they own a ton of real estate in California. That particular nun, her organization owned so much real estate that they were running up against tax laws. Essentially, if you have a small enough real estate portfolio, you're exempt from property taxes in California if they're designated affordable, right? And she now had so many assets that they were like, actually, you do have to start paying tax, you know what I mean? Because it was like, $30, $40, $50 million. It was a lot of real estate, right?
Chuck Marohn 10:31
Right.
Conor Dougherty 10:32
My point is, I was like, this is a land trust. This is here it is. This is how it works. This is who's running it. This is how they do it. Move on, right?
Chuck Marohn 10:43
Can I say this differently?
Conor Dougherty 10:45
Yeah. I trying to present the story- and I don't want to say present it neutrally, but I'm trying to present it as just an idea. And here is how the people are doing it, and here's how it's being executed. And I'm not prescribing this for everyone.
Chuck Marohn 11:03
I feel like what you're saying- Before we started, I noted to you that my wife is a reporter, and I kind of understand how she approaches things. It's like she's very, very, very smart, but she's not the expert, in a sense, and so she's asking a lot of questions and trying to figure things out. The line between "should" and not using "should" is the reporter's line, right? It's the "I'm reporting on what's happening. I think this is a really interesting story. I think this is meaningful in the time that we're in, and I'm giving you what people are saying about it. But I'm not here as an advocate would be." As like I would be saying, "Here's what cities should do, here's what a smart place would do, here's what a logical thing should do." Is that the line we're talking about? Because I feel like that makes a lot of sense.
Conor Dougherty 11:53
Short answer, yes. But also I'm not trying to sound like a cliched reporter. I just literally think the stories are better when you are following action. And you know, a lot of times, many of the ideas people are most passionate about aren't happening in action, right? And so I try to find what is happening.
Chuck Marohn 12:25
Your story "Twilight of the NIMBYs" is such a good story. And part of what makes it a good story is that you don't spend, you know, three columns ripping NIMBYs as horrible, degenerate people. You actually talk about their you know, what is motivating them in a very human way.
Conor Dougherty 12:46
Yeah. I mean, I appreciate you saying that. On top of that, I think that, you know, I'm 47, which is just old enough to have a sense of what people were thinking in a particular time, or something like that. I know that that has changed, bu not- You know, I certainly grew up in a more homophobic, more sexist world, certainly high school.
Chuck Marohn 13:14
I'm 52, so we have the same kind of Gen X window, yeah.
Conor Dougherty 13:17
You know. But I don't think that the people I went to high school with were like, vicious, horrible people. My point is, I have a sense of like living in a time that was different than your time. And so when I look back at some of the stuff with the NIMBYs in the 70s, it's funny because people looking back frequently ascribe like a vast conspiracy to that. But that's like insane, because much of what they're ascribing to it assumes those people can know the future which they can't. So I'll give you an example. I mean, core cities in the 70s, when they were passing a bunch of down zoning rules in San Francisco, were in a very bad spot.
Chuck Marohn 14:00
People who moved there and bought real estate were crazy, yeah.
Conor Dougherty 14:03
Yeah! And it's like their idea that they didn't want to build big apartments at that time, and there wasn't a huge amount of demand for it at that time. Like, it's not the same context. Now, we probably should be lightening up some of those rules because the framing of like "They knew that one day there'd be a giant tech boom," and that is the kind of attitude. The other thing I will say — this is going to be a kind of silly digression — but one of my first jobs in journalism was covering the .com boom.
Chuck Marohn 14:40
Sure.
Conor Dougherty 14:40
And I remember at that time there were like, a million different companies, or, you know, not a million, but there are many, many, many different companies that had versions of this business model, which was, we're gonna watch everything you do online and then sell your activity online to advertisers. So there was a company that was giving you free internet, free broadband, because that was a new thing, and you would have to give them all your IP stuff. There were search engines, there were, you know, there were various different kinds of companies that were offering some kinds of services.
Chuck Marohn 15:19
My first big investment was yahoo.com, and I- I lost lots of money on it.
Conor Dougherty 15:24
Right, there were all sorts of different kinds of services. Some were search, some were actual internet. Were different things, you know, different kinds of search engines, all of which were trying to create, like a portal. And if you went through that portal, whether it was the ISP or the, you know, a site or the browser, or whatever, you know that they would watch what you did and they would sell that information to advertisers.
So I remember thinking to myself, you know, in the couple years after Google became the thing, oh, how stupid those other companies were — which was idiotic, but I thought to myself, I should have sort of realized that this was the better prospect. And then I realized, actually, that's dumb, because what was actually interesting about the period is that the actual insight that all of those companies had was totally the same. Like every single one of those companies was saying, "People are going to do a lot of stuff online, and what they do is going to give us a lot of insight into their habits, and that is going to allow us to target ads to them in a in ways that will be highly effective and will make a ton of money," right? That was actually the insight. And it doesn't actually matter what company wins. I mean, it matters to the company and its shareholders, whoever. But to society it's like, no, the thing that's changing right now is that they were all doing the same thing.
Chuck Marohn 15:24
Yes.
Conor Dougherty 16:36
The point of that story here is, I'm not interested in trying to predict the future like at all. You know what I mean? I'm very interested in trying to understand what's happening in the present, what's gaining momentum in the present, what's losing momentum in the present. And I do believe, based on that experience and based on a million other experiences I've had, that you will get actually a pretty clear sense of the future from that without getting into this silly game of trying to sort of forecast the precise winners and losers, or the precise contours of the future. In the present, you can get some pretty clear ideas about about where the future is headed based on what's happening now. If you can sort of unpack now in some very essential ways, right?
And I know this is like me going off in a weird direction, but I just, I'm not interested in trying to predict the future. It just, I think it's, I think it distracts you, and I think it A) becomes like a lottery ticket, you know, that's actually not even really valuable. And then B) it can distract you about the fundamental pressures of now. And so with housing, I've tried to explore the sort of general problem of there being not enough housing and it being very high cost in a bunch of different ways, but sort of trying to stay rooted in that problem, rather than like, "oh, it's going to be all solved by triplexes." You know what I mean?
Chuck Marohn 18:29
No, I totally know what you mean.
Conor Dougherty 18:30
So that's what's happening now, or all the different aspects of it, and exactly where we end up is just, who knows?
Chuck Marohn 18:40
Can you, can you unpack it then for us? I feel like there's a story that I want to pull out of you through your lens. The San Francisco YIMBY kind of movement or just awareness of "there needs to be more housing" to what I think is like a California awareness to now what is a national awareness. What is that story through your lens? Because you were in Dallas with the sprawl article, you've you've been all over talking to people about this. How do we get here, and what's the themes that connect this moment together?
Conor Dougherty 19:28
I guess what I'm trying to say is, like, my understanding of it has changed a lot. You know what I mean?
Chuck Marohn 19:35
Give me that change. I'm interested in that change.
Conor Dougherty 19:38
So when I started writing about housing. I will be honest with you, I met Sonja Trauss, who is this kind of bombastic, original YIMBY. She's a very interesting character. Anybody who has met Sonja can attest to this, but, you know, she's really smart but kind of, like, very outspoken and whatever. So I ran around with Sonja, and I just wrote a profile of Sonja and the YIMBY movement, and how funny and interesting and kind of quirky and funny it was. But ultimately, I was trying to write a story about, here are these cities like San Francisco, New York, whatever, that are very desirable amongst people who are in their, you know, 20s to 30s, kind of their younger single years. There's a huge demand for housing in those places. And at that time, I just found that to be an interesting version of it.
Now, because I'm a journalist- and maybe this is a limit to journalism, which is fine. There's other different ways to get knowledge. This is mine. I'm trying to write about things in a place, kind of like I was saying, where I can illustrate that story, where I can live that story, where I can show that story. And at that time, you could really only show it in those higher cost cities. I remember shortly after I wrote that article which said something like, "build, baby, build," or whatever the headline was.
Chuck Marohn 21:07
Yeah.
Conor Dougherty 21:08
I mean, to give you a sense of how edgy that article was in the time that I wrote it- San Francisco, like a lot of cities, there'll be a mayor's race and it's like there are the two main candidates, or three or four main candidates, but then there's really like 40 people who run. And some of them are just like, random kind of comedians. And there was this guy named Star Child at that time — legal name, Star Child — who was a male prostitute and presented himself this way. Exotic services provider is what he called himself.
Chuck Marohn 21:41
Yeah, sure.
Conor Dougherty 21:42
He would show up and he would run for different offices. Somebody said to me, "Your article on Sonja is like if you wrote about Star Child as if he was like a serious movement." I mean, sorry, Star Child, who, if he hears this, he's going to be unhappy. But my point is, people thought of him as sort of a stunt kind of candidate. And somebody said to me, when I wrote that YIMBY article, basically like you are treating this thing that is as serious as these stunt candidates, as if it's, you know? And it was like, actually, no.
So then right after that article came out, there was this YIMBY conference in Boulder. And they invited me to it, and I went and it was people from Cambridge, Portland, Seattle, Austin. It was all the places you would think that would be very expensive at that time and had that kind of weird mix of education, technology, and kind of cool, for lack of a better term. Like, those are the places where it really was.
So then, you know, fast forward a couple years. Really almost 10. I wrote a story about Kalamazoo, and sort of how Kalamazoo had become super expensive. This was a place where they were literally tearing down housing after the great recession. And I could never have written about Kalamazoo's housing problem at that time. And so I guess what I would say is one thing I just didn't appreciate when I was writing about San Francisco is my focus on San Francisco was extremely narrow. It was a lot of thinking about zoning. It was a lot of thinking about single family neighborhoods versus the more downtown core. It was a lot of thinking about, could you have triplexes? It was a lot of like, oh, how do some of these neighborhoods have apartment complexes in them that are now outlawed, right? Similar things in Berkeley. I wrote a story at that time. I remember the headline was "The Great American Single Family Home Problem," and it was about this fight to replace, like, basically a duplex with a triplex, and how flipped out everyone was about that.
And then what I started to realize, partly because I started to think about the problem in a larger way, also partly because it was just like happening, is that construction — this is a good segue to our sprawl thing — fell off a cliff after the Great Recession, which I had been covering. I originally covered economics, more through the like grand economy, but the housing mess. I mean, one of my first stories was about housing falling apart in Florida. It was like 2007 that was for the Wall Street Journal. Totally different time in my life. And I guess what was happening was the the net number of units we built in America, so in 2008 or 2009, basically, was that like $2.2 million, give or take, and then it-
Chuck Marohn 24:58
If you've seen the chart, it just crashed.
Conor Dougherty 25:00
It crashed to like, literally $500,000 or something. It was hard to get back to a million, right? And it still has never eclipsed $1.3 million, $1.4 million. So if you take like, maybe we could call $2.2 million a little too hot. Maybe that was a bubble, right? But I mean, generally speaking, it's like $1.7 million, $1.8 million, you know what I mean? And each one of those years in which it remains way down is, you know, a couple 100 thousand, I mean, you start compounding that, right?
Chuck Marohn 25:32
Right.
Conor Dougherty 25:32
And I guess what I mean- I almost don't want to admit this, but like, it just sort of dawned on me. Everyone's gonna say, "How could you be so stupid that it took you that long?" But like, that problem is not a zoning problem, right? Like, this $2.2 million falling to $500,000.
Chuck Marohn 25:53
No, that's not a zoning problem. Right.
Conor Dougherty 25:56
That is not what's happening there. And it's kind of like- I love Scott Wiener in San Francisco, he will always say this thing I've heard — Scott Wiener is a California state senator who's really been leading on housing and he's a person who was pushing housing when it seemed incredibly unpopular, when it seemed risky. So he's to be commended for that. He did it long before it was popular, and he did it when it was specifically considered a liability, and put himself on the line at times when it seemed conceivable that he could lose a political race because of a particular position.
Chuck Marohn 26:36
I remember, yeah.
Conor Dougherty 26:39
He's legit, right? But I've heard him say on many occasions, like, "Oh, we were building so much more housing in the 70s when we had a smaller population." And I'm sitting there thinking, like, oh, were we building like, apartments in San Francisco then? You know, I mean, they were building some apartments in San Francisco. But my point is, they were building like the San Fernando Valley then.
Chuck Marohn 26:58
Yeah, that's what they were building. Right.
Conor Dougherty 27:02
What is happening at that time? And then, of course, this California Forever thing happened — for people who aren't aware, California Forever is this bunch of billionaires from Silicon Valley who have bought a significant amount of, I mean, like, 60,000 acres of farmland.
Chuck Marohn 27:20
Yeah, they want to build a new city.
Conor Dougherty 27:21
Yeah. Whether or not you think that is a specifically good idea, whether or not that's the right place for it, whether or not they've engendered themselves to the community, whatever. Anything about that specific proposal in that specific place and how that specific group has gone about it, let's just put those questions aside. And the question like, does California need more greenfield — which, as your listeners know, just means building in the middle of nowhere, basically. I mean, it's hard to argue that you can dent that problem without doing some of that.
Chuck Marohn 28:04
Yeah, yeah. I feel like you said something profound, and I want to repeat it back to you. You just made the case — and I think it's absolutely true — that these large macro, "here's how many units, we've built all this," has really- I'm not gonna say nothing to do with zoning, but zoning is not the bottleneck in that delivery pipeline.
Conor Dougherty 28:31
No! I mean and- full stop, yes. I was gonna say, not only that. For the zoning stuff to be effective, this- it's essentially a different problem.
Chuck Marohn 28:43
Yeah, it's a different problem.
Conor Dougherty 28:44
Years ago, I was writing a story about Spokane. And I remember I was talking to this developer there, and they have this really cool development there, I think it's called Jackson something, I forget what it's called. But it is like what you would be advocating for.
Chuck Marohn 28:59
Sure, sure.
Conor Dougherty 28:59
Near downtown, but on a kind of parcel, kind of contiguous with another neighborhood. And it's got, like, mid-rise single family homes, duplexes, and they're all just kind of scattered together. And I remember the developer, I forget his name but he's a really interesting guy, telling me there are two things in America that people really hate. One is, like, massive suburban subdivisions, which are obviously popular with buyers but, generally speaking, people don't like how they operate. And then the other is these, like, block-long, giant, five to eight story, like, just-
Chuck Marohn 29:40
Yep. Big complexes.
Conor Dougherty 29:42
Complexes in the middle of a block, like the things you see in Denver and Dallas and places like that, right?
Chuck Marohn 29:47
Yep, yep.
Conor Dougherty 29:48
And he goes, "But those are the only two things we're basically allowed to build in this country." And so what's interesting to me is, if you look at the like manufacturing/capital side of housing, there is not some like Toll Brothers of triplexes. And to the extent there is, it's Toll Brothers in more- I mean, I'm not specifically talking about Toll Brothers-
Chuck Marohn 30:13
No, but in some greenfield they're doing where they add that, yeah.
Conor Dougherty 30:16
And so for the kind of California, kind of more zoning-oriented type stuff to eventually happen, you almost need to, like, build a separate industry. And I think that can happen, but it's something that has to happen, basically, gradually. Changing the regulations is not itself going to just lead to some explosion. It is not the bottleneck. So, I mean, that's a long term investment in how things are going.
Chuck Marohn 30:55
It's fascinating, because I spoke with Cullum Clark for the podcast last week. And I mean, he's been making this case — you know, you chatted with him — he's been making this case to me for years. It's like, hey, Chuck, this is great. We can do infill. This is wonderful. We can, you know, thicken up neighborhoods. That's great. But all the delivery mechanisms that we have to build housing at scale, if we want to catch up and fill the demand and all that. There's only two things that we can build right now at that scale. That is single family homes out on the edge and apartment buildings in the big complex, where we tear down a bunch of stuff, where we find a vacant lot in somewhere, and we build at this huge scale. Those are both functions of the finance more than the zoning. I mean, is fair?
Conor Dougherty 31:49
I think it's totally fair. And you know what? I'm convinced — this is me just launching an idea a little bit, so nobody hold me to this — I'm convinced that's one of the reasons ADUs have been popular. Two kinds of ADUs, like one is a developer who's just using it as a backdoor way to build multifamily, so that is different. But when someone builds an ADU, you just talk to them and you listen to their calculations. They're like, "Oh, I could take a home equity loan out, build this thing, and then if I rent it out I can make a profit of like $500 a month." Most homeowners don't think to themselves, "Oh, I could take a giant home equity loan out, put it in the S&P and have an annual compounded-" Right? But investors do.
Chuck Marohn 32:51
Right. No, investors absolutely do.
Conor Dougherty 32:53
Investors, when they are weighing whether or not they are going to invest in an apartment complex, they are weighing it against the risk-adjusted returns of, like, all the other things they could do in, like, the world. I mean, more or less, right? You know, especially private equity firms. And so they are only going to invest in the kinds of housing developments that can compete-
Chuck Marohn 33:19
Like it's gonna pay a higher return, right.
Conor Dougherty 33:21
And so I think one of the reasons ADUs have actually been successful is that the people who are building them basically aren't thinking on that scale. They just like, aren't thinking that way. You know?
Chuck Marohn 33:33
Yeah, they don't. They are making economically irrational arguments in terms of, like, the broader scope of the market.
Conor Dougherty 33:42
I mean, obviously there are people who are helping family members.
Chuck Marohn 33:45
Yeah, yeah.
Conor Dougherty 33:45
I remember I met this woman. I probably should have profiled her, I thought about it. But, like, I remember I met a woman during a story I did on ADUs, and it was a woman who had bought a house in a part of San Diego that was like, not very nice, and now is very nice. And her friend was on the list to be in senior housing and, you know, is on the list for the rest of time and whatever. And then she realized, "I could take out a loan, build this ADU, put her in it for exactly this rent, and I would make-" I think she made, like, $0. She just had maintenance and the rent. And I was like, "You're an affordable housing provider." She's like, "What do you mean?" And I'm like, if you just think about it, like, that's what you're doing right now, you know? And so in that case, she was helping someone out. I mean it adds to her equity long term, you know what I mean?
Chuck Marohn 34:41
Totally.
Conor Dougherty 34:40
But she was coming from a more altruistic place. But anyway, I do think — and I've tried to write about this a little bit when I was writing about Montgomery County — what you and I are talking about right now, because we're just going off in weird directions now, which is great. There does need to be a different kind of capital supporting some of these units. It doesn't have to be free capital. I mean, I feel like the most revolutionary thing we could do with housing is make money on it but, like, not that much. You know, it's like people right now are either like, "Build everything. It will filter. Let the market do its job." Or they're like, "Socialism, social housing dream, whatever." And I feel like the answer is actually just, like, build housing, make some money, but not that much. You know what I mean?
Chuck Marohn 34:41
I know exactly what you mean. I feel like you interviewed Monte Anderson, who, to me, is an odd-
Conor Dougherty 35:21
One of the funnest five hours I've spent in my life. I went to his thing and then we got dinner, and it was like, so fun.
Chuck Marohn 35:52
He's a blast. I do feel like he is somewhat- Okay, let me say this because I love Monte. I mean, I really, as a person, I love the man. I found it took me a long time to understand his business model, because it seems so weird and irrational to me. Because it is not about making the maximum amount of money. It's not that he's not making profit, but he's making slow profit, a little bit here, a little bit there. And I think if you were going to rationalize it through like a Nassim Taleb lens, you would say Monte has stable income, like stable money, not maximizing money. But I think what it is, is he's kind of mixed a business model that actually — and I'm gonna say this in a corny way — allows him to kind of love a neighborhood and care for a place and actually make decent money doing it. I don't know if that's the impression you got.
Conor Dougherty 36:52
It seems like he's having fun. Like I mean, when I went to his wax paper plant, you know, where he's got all those small businesses in this one warehouse type thing. He introduced me to the brewer, and they are, you know, the owner of- I think it's a brewery-
Chuck Marohn 37:11
Oh yeah, I know, I've been there. Yeah, it's cool.
Conor Dougherty 37:13
There is a brewery there.
Chuck Marohn 37:14
Yep.
Conor Dougherty 37:15
Yeah, and obviously, introducing me to that person, and knowing that person, like that meant something to him.
Chuck Marohn 37:23
You watch how all the people react to him when he enters the room. And he's rented them a spot, and he's helped them get started-
Conor Dougherty 37:34
We went at night, so the brewer was essentially the only one that was open.
Chuck Marohn 37:38
Oh, okay.
Conor Dougherty 37:38
That and like, a boxing gym type deal, but they were, like, in it. There wasn't, like, a way to talk to them, you know what I mean?
Chuck Marohn 37:45
Yeah, yeah, I get it.
Conor Dougherty 37:47
I actually think one of the cool things that could happen if we had these kind of different zoning things is you could start to have stuff like that. Like, it's a more artisanal kind of, you know, like-
Chuck Marohn 38:06
So let me ask you this- Yeah, you finish. And then I got a question.
Conor Dougherty 38:12
Years ago, I wrote a story about illegal housing in LA and how, you know, there's estimated, like- I mean, essentially, there's a city the size of Minneapolis living in illegal units in Los Angeles, you know, in most garages.
Chuck Marohn 38:30
Yeah.
Conor Dougherty 38:30
But there are some that are, like, just full-on freestanding structures. Like, you can look at zoning maps, and you can look at satellite maps, and you're like, Okay, who the hell built another city there? I think somebody told me, I don't know if this is true,but a building enforcement guy told me this. They are not allowed to use, like satellites for enforcement. So everybody knows what's happening, but they they can't do it unless someone complains.
I went and visited a bunch of these places. I ended up writing about one —because everything has to be on the record — that had been illegal but then had been converted because they were in the clear now and it wasn't like anybody didn't know they were legal, because that was part of the conversion. But what was fascinating to me is, okay, you hear all these stories about like Bill Gates or Google realizing where a particular world was headed, technology or something, and making, like, billions of dollars, totally cornering the market, because they understood where their industry was going better than the titans at that time. You can tell I covered only two things.
Chuck Marohn 39:37
This is a Google story, right?
Conor Dougherty 39:40
Yeah, or Microsoft right because of software being better than hardware.
Chuck Marohn 39:46
Right, yes.
Conor Dougherty 39:47
Okay, many of the predominantly Latino builders that I met who were doing those legal units, they are the Microsoft of their time. Who understand the housing market in Los Angeles better than any, quote, big developer I've ever met. Like, what are the specific needs of people? What can they specifically pay? How do we create housing? You know, whatever, right. But because of the way capital and regulation works, they're not able to just- If they were in tech, they would have just wiped out the industry at this point. Like all these people building luxury apartment buildings, essentially, they're doing what they're doing because that's what the people who are financing them want them to do. They're absolutely not doing that because that's what the market wants.
Chuck Marohn 40:41
Totally.
Conor Dougherty 40:42
And so I just remember thinking to myself, like, these mostly Latinotradespeople should be like, conquering this market, or they should at least be building giant companies and everything, because their understanding of the housing market and its needs is- If this was any other industry besides this, like, capital intensive, highly regulated industry, they would have just conquered the industry at this point. And I remember thinking myself, well, how could you-? I mean, you know, look, I don't want to build a favela either, right? But there's some middle something that we're not allowing. And I do think the creation of small businesses to become big businesses like that's a very underappreciated piece of this. But anyway.
Chuck Marohn 41:27
Well, let me ask you this. Building on that, because-
Conor Dougherty 41:30
It's a little vision of how that could look, was my point.
Chuck Marohn 41:35
No, I get that from you. And that makes a lot of sense. There's a- Let me say this, and then you react to it. One of the people that you have talked to is Ross Perot, and I can't remember if it's junior or the third or like the fourth. I don't know where he-
Conor Dougherty 41:53
Junior.
Chuck Marohn 41:53
Okay, Ross Perot Jr. Who is a greenfield like, you know, basically going to build to Oklahoma City. Like new homes as much as he can north of Dallas. You've got Monte Anderson. To me, I would love to, instead of finding a way to get half a billion dollars to Ross Perot Jr to build a bunch of homes, figure out how to create 10,000 more Monte Andersons.
Conor Dougherty 42:25
Absolute- So this is where the digression comes, or the — digression is the wrong word — this is where the schism arises.
Chuck Marohn 42:37
Exactly.
Conor Dougherty 42:38
My job in that question was to ask, how are we really going to build enough housing that is even in the neighborhood of what everyone thinks that a number of units we are behind. Which is, I mean, a figure that's all over the map. But what current group of actors and style of development would even have a prayer of coming close to it? And I guess there were two things-
So I'm going to admit maybe something I shouldn't admit. But I wanted to ask the question — which is one of the things I love about journalism — I basically wanted to ask the question, what if everything I wrote before was, like, basically wrong? What if I was thinking about this wrong? What if all this zoning stuff was some stupid quirk? I mean, what if I'm being honest with myself, and what if, like, I need to just look at this other right? One of the fun things about journalism is, like, you are encouraged to think that way. In any other industry, a lot of people are like, "Oh, you can't do that, because your whole brand is that." I mean, just think about if, like, a commentator or someone just completely was like, actually, I'm a socialist now — I mean, I'm kidding but-
Chuck Marohn 43:55
Yep, I'm gonna reinvent myself. Yeah. Like, what if?
Conor Dougherty 43:58
Like, what if actually I was thinking about this all wrong? And what if the kind of development that everyone abhors, that all these climate goals are saying is the worst possible. What if, actually, that's going to end up being a significant part of the solution to this problem? And God bless, you know, the New York Times for being like, hell yeah, go for it. You know what? I mean, it's not like anybody said to me, "Well, Conor, aren't you the zoning guy?" You know, they were like, "Can you make the case for that? Can you provide data? Let's hear your best case." And I gave my best case, and then they were like, go to Dallas and have at it.
So I guess part of what I was trying to do was be a little honest with myself. And then the other thing, just on a more human level, because I'm talking about ideas right now. I mean, you go to these places, you meet these people from New York — one of the main interviews in the story is this guy who's the mayor of this, like town in Texas, I forget what its even called- Princeton. And he had grown up in New York public housing. Loved that he had a big house in the middle of Texas. What am I supposed to say to that guy? Like, "Oh, no, you should love living the urbanist dream in socialized New York." I mean, no!
Chuck Marohn 45:13
Totally, no.
Conor Dougherty 45:14
This was a happy person. I was happy for that guy and his family and I'm not here to like rain on his parade, you know. And so don't get me wrong, there are, like, large societal questions we should be asking about climate change and all that stuff. But my point is that, when you get to the ground level, it's kind of snobby. Another thing, and I'm kind of curious what you think about this, because this is kind of the question I left with but couldn't really articulate in the story. There's this guy, Bill Gietema
, who runs a thing, I think it's called Arcadia Realty or something. If I'm messing this up, sorry Bill. But he took me to this, you know, project he had, it's kind of a new urbanist type of project called, like, the Canals at Grand something.
Chuck Marohn 46:01
Yeah.
Conor Dougherty 46:02
Have you been there?
Chuck Marohn 46:04
I think so, yeah.
Conor Dougherty 46:05
like, it was this really cool development, you know, that mixed like five-story senior care with like triplexes, with like wraparound porch single-family homes. You know, just like a total mishmash, but in ways that were logical, you know. The streets connected to other developments; it wasn't just like these dead end, like hermetically sealed things. And then they had retail. The retail was very thoughtful, because if you approached it from inside the development, it looked like a main street, but if you approach it from outside, it looked like a crappy like, strip mall parking lot.
Chuck Marohn 46:41
Lots of parking, right.
Conor Dougherty 46:42
Which was needed, right? Because it had to be both of those things. And I remember asking him — I'm going to paraphrase here — essentially, like, how do you do a development like this? And I mean, he had some very thoughtful answers about planning, and he's associated with MIT or something. I mean, he was a really smart guy. But, like, Frisco had to exist for that to exist. Well, Frisco had like, 4,000 people, like in the 90s. And so it had to become a place that was larger, like a couple hundred thousand population city. Then redevelopments like that are possible.
Short of having a massive subsidy or, in the case of California, a housing market that's so screwed up that there's a lot of demand for anything, it's hard for me to see how you build those great redevelopment kind of things until the place is there in the first place. And how do you get there in the first place? Typically, it's like some sort of suburban thing. I mean, one of the things that really influenced me — it's kind of crazy to think how long the burn is on some of these things — but I read this book sprawl, by Robert Brugman.
Chuck Marohn 48:09
Sure, I read that.
Conor Dougherty 48:10
A million years ago. I mean, like, shortly after it came out, so 20 years ago. And I remember that was at the time when I was first talking to Ed Glaeser, and before YIMBY. And I'm living in Brooklyn at that time. I'm probably married, but I didn't have kids. I'm living like a very like, New York, Brooklyn life at that time. And I remember, I was like, "Wow, this book is the opposite of anything I want to think or read right now."
Chuck Marohn 48:45
Sure.
Conor Dougherty 48:46
And I just remember being like- It was very well argued. It was very anti-snob.
Chuck Marohn 48:51
Totally.
Conor Dougherty 48:51
And then you kind of just talked about how, like, all the neighborhoods I was living in in that time, Brooklyn, or whatever, like this used to be sprawl. Or what you would have called sprawl in that time.
Chuck Marohn 49:07
No doubt.
Conor Dougherty 49:08
It just kind of made me realize, like the problem, maybe it's both of these problems. We have all these zoning problems, right? So the natural course of a city is that we expand outward to some technological limit. Yeah. I mean, whether it's trains or horses.
Chuck Marohn 49:32
Yeah, in Brooklyn it would have been how far you could walk.
Conor Dougherty 49:37
Yeah. Well, I think there were ferries. And then they reached that limit, and then you start to fold over yourselves. You densify out to the edge.
Chuck Marohn 49:47
That's exactly what you do, yep.
Conor Dougherty 49:50
We've screwed ourselves on both ends of the cable. We've made it very difficult for that folding process to happen, right? And so we've created this perpetual motion machine where we always build a low density suburb further out, right? You know, because we're never folding over. But we've also made it impossible to build the next low density place. And I think that you essentially need both of those things to be unhooked a little bit, so that when land values do go up, the density goes up with it, right? But also that you can keep pushing out.
Chuck Marohn 50:34
It's fascinating to me, because I feel like you've reached the exact place that I'm at. If you look at a city, cities need to grow outward, upward, and they need to thicken up and mature over time. There's a there's a natural kind of maturity that happens in a neighborhood when property values go up and the thing becomes a better place. And yes, we've arrested that entire spectrum. And really you can only finance the hyper-out and the hyper-up. And both are kind of dysfunctional in in an actual, real city.
Conor Dougherty 51:20
I totally agree. And so I you need both of those things to be happening. The other thing is true- I remember Richard Florida once wrote an article, I think it was him, maybe it was someone else. If it was someone else, I'm sorry for doing that, but it was basically about what he called vertical sprawl. And the essential gist of it was these, like, giant towers. These, like, glass towers that are going to look so dated and horrible. I mean, someone was like, "What do you think is going to be like, the super crappy, like, exterior apartment complex?" I'm like, "Those glass things!"
Chuck Marohn 51:56
Yeah.
Conor Dougherty 51:57
And the basic gist of the argument was all of the things we would associate with, sprawl — lifeless street, not knowing your neighbors, you know, everything looking the same, dead community — all of that is present in those towers. And I mean, just look at the cities that people who are urbanists like. It's frequently Paris, which outside of La Defense, which is just a bunch of office buildings, does not have high-rise buildings.
Chuck Marohn 52:30
Absolutely, yeah.
Conor Dougherty 52:31
I think Jane Jacobs said. I mean, one of the things I love about Jane Jacobs is that people who claim to have read Jacobs but haven't, have very, like, stringent sort of ideas about what they think she says in that book. And people who actually have read the book don't have any solid idea of anything,
Chuck Marohn 52:54
Right.
Conor Dougherty 52:54
It's kind of like, "Well, just think about it for a second." You know what I mean? And like, "Oh, and if that doesn't work, well, maybe you could think about it this way." You know, it's like a very fluid book. You know what I mean?.
Chuck Marohn 53:08
She's all about bottom-up complexity.
Conor Dougherty 53:15
It's like a book that's bobbing and weaving a lot of the time. And I think that's hard to describe to people unless you're reading it yourself. And so people have just have very, like, ossified ideas of what it is saying. But like, it's not super certain about anything. It's more saying, like, as the city flows around, maybe- you know what I mean?
Chuck Marohn 53:35
I totally know you mean.
Conor Dougherty 53:36
This is the solution, and sometimes it's the opposite of the solution. And that's how cities are, right? Like, sometimes you need this and sometimes you need that. And I think sometimes the problem with politics is people start these groups, these nonprofits, and their nonprofit is so dedicated to like, X or Y thing, an X or Y idea, that anything opposite of that idea becomes, like, verboten, even if maybe the state of play is totally changed, that the opposite of that idea is actually what we need.
Chuck Marohn 54:19
I totally know you mean, and I feel like that's a little bit where we're stuck today, right?
Conor Dougherty 54:23
Totally. It was funny, I was joking to someone, like, We'll know the YIMBY movement has succeeded when this next generation of whoever is, like, treating them as the evil NIMBYs.
Chuck Marohn 54:38
Right, you live long enough to become the villain. I know what you mean.
Conor Dougherty 54:46
People should think of living long enough to becoming the villain like an honor. You know what I mean. Otherwise you're like, Kurt Cobain or whatever, which isn't a happy story.
Chuck Marohn 54:56
So those are two Gen X references there.
Conor Dougherty 54:58
I know right? I mean, I guess what I'm saying is that, if there was two ideas that I just really wanted to level in that sprawl story — which I will admit to you and only you. Don't ever hold me to this. Don't record me saying this. I'm making a joke that we're on a podcast right now — but I think there are aspects of the argument that might have overshot a little, but I guess I just really wanted to try to make the case that greenfield has to be part of the solution. And, you know, I don't want to get super prescriptive design wise about what that is, because then I'm off in the realm of architecture critics and stuff like that, which, which is totally value. It's just not where my value lies.
I was just trying to make essentially a mathematical argument, which is, it's very hard to imagine us solving this problem, certainly in any kind of timeframe that could make anyone around right now's life better, without that being a big piece of it. And on top of that, the more you look at how some of those cities truly operate, the more you kind of realize, like, this idea of everyone commuting to the downtown and these super commutes — which, guilty, I've written a lot about — is like, sort of a fiction. Like, it's true that that happens. But like, I would meet people in McKinney or in Salina and be like, Well, how do you go to Dallas? And it was if I asked them, like, how do you go to Atlanta?
Chuck Marohn 56:42
Right? Yeah, they're going for a basketball game once every three months, to get on an airplane every six months, yeah.
Conor Dougherty 56:53
Yeah or they work in Plano. So, like, I mean, I remember I wrote about this development in like San Joaquin County, outside of the Bay Area. And I met a bunch of people there. And there was one guy who commuted to San Francisco, which would be the stereotypical, "Oh my God," but a bunch of them were working in Livermore, and they're like, I just go to Livermore. For how far people live now, commute times have not increased that much. So they're really organizing themselves around some optimal commute. You know what I mean?
Chuck Marohn 57:34
No, I totally know what you mean.
Conor Dougherty 57:38
I want you to be meaner, Chuck. Come on like mix it up a little.
Chuck Marohn 57:43
So here is my- I had two pages of questions. You know, how many we did?
Conor Dougherty 57:47
Two? I don't know, three?
Chuck Marohn 57:49
Zero.
Conor Dougherty 57:51
You can ask more. I'll stay if you want.
Chuck Marohn 57:53
No man, this is good. I feel like this was very illuminating. I feel like I learned something. I certainly feel like our audience learned something about how you think and how a reporter approaches these things. And I mean, I feel like there's a lot to a lot to build on here. Maybe we should do this again sometime. This was, it was really helpful, I think, to hear how you think about things.
Conor Dougherty 58:17
I'm sorry if we just went off in a weird direction, but maybe that's good.
Chuck Marohn 58:21
Conor Dougherty, New York Times. Get his book. I actually have not read your book, but I have it on order because they told me I should read it. "Golden Gates." I'm sure you'll write another one because you're a writer. Thanks for taking the time and seriously, we should keep chatting. I would love to do this again.
Conor Dougherty 58:43
I mean, happy to.
Chuck Marohn 58:45
Thanks, man.
ADDITIONAL SHOW NOTES
Learn how to beat the housing crisis the right way. Download The Housing-Ready City: A Toolkit for Local Code Reform today!
Read more:
“America Should Sprawl” by Conor Dougherty
“Golden Gates” by Conor Dougherty
“America Should Sprawl? Not If We Want Strong Towns” by Charles Marohn
“Escaping the Housing Trap” by Charles Marohn and Daniel Herriges
Chuck Marohn (Substack)
Charles Marohn (known as “Chuck” to friends and colleagues) is the founder and president of Strong Towns and the bestselling author of “Escaping the Housing Trap: The Strong Towns Response to the Housing Crisis.” With decades of experience as a land use planner and civil engineer, Marohn is on a mission to help cities and towns become stronger and more prosperous. He spreads the Strong Towns message through in-person presentations, the Strong Towns Podcast, and his books and articles. In recognition of his efforts and impact, Planetizen named him one of the 15 Most Influential Urbanists of all time in 2017 and 2023.