How to build abundantly

Summary

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.

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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.

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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).

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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

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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.

Transcript

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[Darren Woods]

This is the indicator from Planet Money. I'm Darren Woods.

[Adrienne Ma]

And I'm Adrienne Ma. People are facing pretty steep housing costs in big American cities like New York.

[Derek Thompson]

Hey, you're paying $2 million to get a little band box. How do people even do it?

[Darren Woods]

It shouldn't be that expensive. The median age of a first time home buyer is now 38 years old. That's up from around age 30 in the 1980s. And you'll hear a range of explanations for why housing is so expensive.

[Sponsor Message]

Everyone wanting to move into all these high rises get built without really accounting for where lower or middle income housing is going to go and that you're.

[Derek Thompson]

Going to do it. And if you're going to pay for it, we're going to keep charging you that much.

[Adrienne Ma]

Derek Thompson's a journalist and co author of a new book called Abundance. He and his co author Ezra Klein are self described progressives and they think their fellow progressives share a lot of the blame.

[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, progress prices have only one direction to go and that is up.

[Darren Woods]

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.

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[Darren Woods]

Affordable housing in San Francisco, it can cost a million dollars per unit.

[Derek Thompson]

Well, at that point you're no longer building affordable housing. You're building incredibly expensive housing that you then need to subsidize.

[Adrienne Ma]

Writer Derek Thompson says high housing costs are pretty typical across the US Especially in high earning cities in democratically led states, which makes the success of one apartment complex in San Francisco surprising.

[Darren Woods]

In the spring of 2022, then mayor of San Francisco, London Breed posed with a red ribbon in front of the new building. She was there for the opening dedication of what's named Tehanan, 145 studio units for homeless people. Derek says that Tehanan illustrates what can go right when building housing.

[Adrienne Ma]

Affordable housing units in the Bay Area typically take around six years to build, but Tahanen went up in three years for less than $400,000 per unit.

[Darren Woods]

The first problem that Tahanen overcame was zoning. Zoning is a way that cities regulate the size and use of buildings in different neighborhoods. Some might restrict buildings, like Tahanen.

[Derek Thompson]

It wasn't zoned for affordable housing, and so it needed a new law passed to fast track this construction.

[Adrienne Ma]

And they were in luck. In 2017, California eased regulations on building affordable housing. That meant the city of San Francisco could make faster decisions on permitting, and the city could not deny the permit based on fuzzy criteria like neighborhood character. It also substantially reduced requirements for community input or challenge, also known as NIMBYism. And NIMBYism is problem number two. But cutting down on NIMBYism has a cost.

[Darren Woods]

How is the issue of Democratic voice dealt with if there's going to be fewer opportunities for citizens to stop construction in their neighborhoods?

[Derek Thompson]

Well, here's the profound irony. A lot of times we think about local government being the most democratic government. You know, sometimes if the city wants to add a development and there's a City Council meeting, you're talking about a city Council determining whether to add new housing based on the testimony of 40 people who just happen to show up on a random Tuesday. So. So 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.

[Darren Woods]

Restrictive zoning is not just a liberal thing. It's popular in many conservative areas, too. But Derek Thompson's point is that you'll see inclusive values expressed on a liberal Californian's yard sign. Kindness is everything or no human being is illegal. And yet, in places like California, restrictive zoning rules do push out many people from being able to afford to live there.

[Adrienne Ma]

Houston is in a Republican state and does not have traditional citywide zoning. And you can see that reflected in the Numbers. Houston permitted about 50,000 single family homes in 2024. New York City, for example, issued only 20,000 housing permits total. That means higher housing prices for places like New York and increased calls for the government to subsidize housing.

[Darren Woods]

That brings us to problem number three, rules around taxpayer money, which a lot of affordable housing projects use.

[Derek Thompson]

If you build using public money, you typically have to abide by a bunch of public requirements.

[Darren Woods]

In San Francisco, this meant a law favouring small contractors. Derek says there are also local hiring requirements, a review from the mayor's office on disability, and that's a layer on top of the usual Americans with Disabilities Act. Then there is an arts commission review.

[Adrienne Ma]

Which, you know, you could argue that there are good reasons for each of these things to exist, right?

[Darren Woods]

San Francisco is a beautiful town, and I guess people want it to stay.

[Adrienne Ma]

That way, but there are a lot of extra layers on the process.

[Derek Thompson]

It becomes so difficult and so onerous and it takes so long to build public housing that it takes hundreds and hundreds of thousands of dollars to build each unit.

[Darren Woods]

Your co author, Ezra Klein calls this everything bagel liberalism.

[Derek Thompson]

Yes, everything Vega liberalism is this idea that in many cases, progressives will take a law and fill it with so many progressive priorities that to check the box of all of those progressive priorities, you can't actually fulfill the purpose of the law itself.

[Darren Woods]

Yes, everyone loves everything bagels. Are you one of those, Adrian?

[Adrienne Ma]

You know, I'm more of a blueberry bagel person.

[Darren Woods]

I'll take it. Derek is saying, though, that you can have too much of a good thing. So in the movie everything everywhere, all at once sucked into one of the characters, creates the ultimate everything bagel.

[Derek Thompson]

A bagel, the ultimate everything bagel that included every single known thing in the universe would become a black hole. And in many cases, these progressive laws become black holes when it comes to achieving their own outcomes.

[Adrienne Ma]

Derek says the Tahannan apartment complex avoided many of those everything bagel liberalism requirements by saying no to public money. Instead, it was financed largely from a $65 million grant from philanthropists Charles and Helen Schwab.

[Darren Woods]

Derek and Ezra's book Abundance is more than just about how to build housing. They want to build more wind turbines and nuclear power plants. They want a science funding system that creates more breakthroughs. And a theme again and again through the book is how government in the US under any political party really has been failing to build as bureaucratic roadblocks get in the way.

[Adrienne Ma]

Frustration with red tape spans the political left and the right. In the Trump administration, you have people like Elon Musk who came in leading the Department of Government Efficiency, or doge, which aimed to slash a lot of government spending and what they claimed is a lot of government bureaucracy and waste.

[Darren Woods]

So we asked Derek whether the recent shakeups have revealed anything that would align with his Abundance philosophy.

[Derek Thompson]

The degree to which Doge has found ways to move quickly might offer a bit of inspiration to liberals and progressives, but I really don't want to overstate the case here. I see DOGE overwhelmingly as a disgrace and a catastrophe. I don't think the folks working at the Department of Government Efficiency have given much thought to the G and the E of their acronym.

[Darren Woods]

Right? The government efficiency part.

[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. And what I see with Doge is quite the opposite. They are hacking first and asking questions later.

[Adrienne Ma]

Derek is asking kind of the same question though. Do we need all these rules that constrain building? Now, Derek does not have a chainsaw like Elon Musk, but he does have a whole book indicating where he might.

[Darren Woods]

Cut this episode was produced by Julia Ritchie and Lily Quiros. It was engineered by Gilly Moon, fact checking was done by Sarah Juarez. Cake and Cannon edits the show, and the indicator is a production of npr.

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