Podcast Summary: The Indicator from Planet Money – "How to Build Abundantly"

Release Date: May 27, 2025

Hosts: Darren Woods and Adrienne Ma
Guest: Derek Thompson, Journalist and Co-Author of Abundance
Show Description: The Indicator from Planet Money is a bite-sized NPR show that delves into big ideas, offering quick insights into money, work, and business. This episode explores the challenges and solutions surrounding affordable housing in major American cities.

1. Introduction to the Housing Crisis

Darren Woods opens the discussion by highlighting the steep housing costs in major American cities like New York and San Francisco. He points out a significant shift in demographics, noting that "the median age of a first-time home buyer is now 38 years old, up from around age 30 in the 1980s" (00:41). This increase underscores the growing inaccessibility of homeownership for younger generations.

Adrienne Ma and Darren Woods discuss the rising costs, with Derek Thompson questioning, “Hey, you're paying $2 million to get a little bando box. How do people even do it?” (00:37). This rhetorical question sets the stage for a deeper exploration of the factors driving up housing prices.

2. Factors Contributing to High Housing Costs

Derek Thompson attributes high housing costs to "rules that constrain supply" (01:21). He explains that in markets with rising demand and constrained supply, prices inevitably surge. This phenomenon is prevalent in high-earning cities, particularly those in democratically led states, which paradoxically struggle to keep housing affordable despite inclusive political values.

Darren Woods introduces the focal point of the episode: "Today on the show, how to build housing affordably. We visit a San Francisco apartment complex that managed to overcome those rules that are driving up house prices" (01:35).

3. Case Study: Tahanen Apartment Complex in San Francisco

In spring 2022, then-Mayor of San Francisco, London Breed, dedicated the Tahanen building—a project featuring 145 studio units for homeless individuals (03:18). Derek Thompson praises Tahanen as a model of success, illustrating what’s possible when innovative approaches are applied to housing development.

Adrienne Ma contrasts typical Bay Area projects, which "typically take around six years to build," with Tahanen's swift completion in three years at "less than $400,000 per unit" (03:43).

4. Overcoming Zoning and Regulatory Barriers

Darren Woods identifies zoning as the first major hurdle Tahanen overcame. Zoning laws regulate building sizes and uses, often restricting the development of affordable housing. Tahanen wasn't originally zoned for affordable housing, necessitating new legislation to fast-track its construction (03:52).

In 2017, California relaxed regulations on building affordable housing, allowing faster permitting decisions and reducing the power of NIMBYism (Not In My Backyard). Derek Thompson explains, “a lot of times we think about local government being the most democratic government… in many cases, I think these local elections where decisions are made about whether to add or deny new housing aren't as democratic as we think they are” (04:45).

5. The Role of NIMBYism and Inclusive Values

Derek Thompson discusses the paradox of inclusive values in democratically progressive areas. Despite yard signs expressing kindness and inclusion, restrictive zoning in places like California drives up housing costs, pushing out many residents (05:16).

Comparatively, Adrienne Ma cites Houston's lack of traditional citywide zoning as a factor in its ability to permit approximately 50,000 single-family homes in 2024, contrasted with New York City's issuance of only 20,000 housing permits, leading to higher prices and increased government subsidy calls (05:41).

6. Public Funding Challenges and "Everything Bagel Liberalism"

Derek Thompson identifies a third barrier: rules surrounding taxpayer money, which many affordable housing projects rely on. In San Francisco, using public funds meant adhering to "a bunch of public requirements," including preferences for small contractors, local hiring mandates, disability reviews, and arts commission scrutiny (06:04).

Darren Woods and Adrienne Ma discuss the concept of "everything bagel liberalism," a term coined to describe progressive laws overloaded with priorities, making it difficult to achieve their intended outcomes. Derek Thompson elaborates, “these progressive laws become black holes when it comes to achieving their own outcomes” (07:02).

7. Tahanen’s Alternative Approach to Financing

To bypass the restrictive public funding requirements, the Tahanen complex secured a $65 million grant from philanthropists Charles and Helen Schwab, avoiding "everything bagel liberalism" by rejecting public money (07:55). This private financing allowed the project to maintain affordability without the bureaucratic delays and costs associated with public funding.

8. Insights from "Abundance" and Broader Government Inefficiencies

Derek Thompson and Ezra Klein, co-authors of Abundance, extend their analysis beyond housing to include other infrastructure projects like wind turbines and nuclear power plants. They argue that government inefficiency, regardless of political party, hampers progress due to bureaucratic obstacles (08:10).

Adrienne Ma highlights bipartisan frustration with red tape, referencing the Trump administration’s Department of Government Efficiency (Doge) aimed at slashing government spending and bureaucracy. However, Derek Thompson criticizes Doge, stating, “I see DOGE overwhelmingly as a disgrace and a catastrophe” and emphasizing the importance of understanding governmental structures before attempting reforms (09:00).

9. Conclusion: Navigating Regulatory Constraints for Affordable Housing

The episode concludes by weighing the necessity of regulations against the urgent need for affordable housing. Derek Thompson poses a critical question: "Do we need all these rules that constrain building?" While recognizing the importance of certain regulations, he advocates for streamlined processes to facilitate the development of affordable housing without succumbing to bureaucratic overreach.

Adrienne Ma and Darren Woods wrap up by acknowledging the delicate balance between maintaining community standards and enabling the construction of affordable housing, underscoring the need for innovative financing and regulatory reform to address the housing crisis effectively.

Notable Quotes:

• Derek Thompson: “We have rules that constrain supply and as your listeners know, in any market where there's rising demand and supply is constrained, prices have only one direction to go and that is up” (01:21).

• Derek Thompson: "These progressive laws become black holes when it comes to achieving their own outcomes" (07:02).

• Derek Thompson: “If you're going to go across government with a machete, you better understand the bushes and the trees that you're hacking away at” (09:00).

Production Credits:

• Produced by: Julia Ritchie and Lily Quiros
• Engineered by: Gilly Moon
• Fact-Checked by: Sarah Juarez
• Edited by: Cake and Cannon
• Produced for NPR by: The Indicator team

This episode of The Indicator from Planet Money offers a comprehensive analysis of the multifaceted challenges in creating affordable housing in high-demand cities. Through the lens of the Tahanen apartment complex, hosts and their guest explore the interplay between zoning laws, public funding, and innovative financing, providing listeners with a nuanced understanding of what it takes to build housing abundantly in today’s economic landscape.