News Release: May 3, 2017

Study Reveals New Method for Measuring Informal Housing Production

Researchers apply newly devised formula to estimate informal housing production in California cities.

CHICAGO — Garages converted to rental apartments. Single-family homes divided into multiple units with separate entrances. An inhabited trailer parked behind a main house and illegally connected to water and sewer lines.

These examples of informal housing — defined as any construction built without proper building permits or land-use approvals — may help meet demand for affordable housing for low-income families, but they can also potentially compromise the health and safety of those who live in them and strain municipal infrastructure and fiscal health. Recent evidence suggests this is a significant phenomenon inside incorporated cities. Knowing where informal housing is located and to what extent the units exist is a challenge facing many planners because of the lack of available reliable data.

Jake Wegmann, assistant professor of community and regional planning at the University of Texas-Austin, and Sarah Mawhorter, a postdoctoral scholar at the Terner Center for Housing Innovation at the University of California-Berkeley, believe they have found a solution to this issue. In “Measuring Informal Housing Production in California Cities” published in the Spring 2017 issue of the Journal of the American Planning Association (Vol. 83, No. 2), they write that measuring informal housing at the city level enables planners to harness the potential of this type of housing while addressing its pitfalls.

Wegmann and Mawhorter developed a new method for measuring informal housing production using a simple accounting formula and applied it to incorporated cities in California. The key to getting a clearer picture of informal housing, they say, is to use city-specific data to quantify the rate of increase in informal construction over time.

The two researchers selected California for the study for several reasons. The state has the highest median home value of any mainland U.S. state. Its geographic size and diversity have created large disparities within the state’s housing markets. And the state kept records dating back to 1991 tracking housing units that were added to supply due to annexation and permitted construction.

The formula consists of the following data:

  • Number of housing units that existed at the beginning of the decade
  • Minus the number of units that were lost for any reason
  • Plus the units added to the city via annexation
  • Plus the units added via permitted construction
  • Equals the total number of housing units added within a given city during a specified time frame

Upon reviewing the result, Wegmann and Mawhorter concluded that any housing units still unaccounted for must have been added via informal means.

Comparing the data over two decades covered in the study, the 1990s and the 2000s, the researchers noted that informal construction shifted from places with strong job demand and slack rental housing markets in the 1990s to places where there was a stronger need for housing at the lower end of the market in the 2000s, one that informal construction could accommodate. They also noted that informal housing production was slightly higher in cities with lower population densities in both decades.

Wegmann and Mawhorter emphasize that their method of comparing housing stock with building permits over time is a starting point for future measurement. It serves as a practical tool for planners to gather basic facts about the informal housing market in their communities, which can lead to more appropriate policy interventions.

The quarterly Journal of the American Planning Association publishes only double-blind peer-reviewed original research and analysis. The journal has published research, commentaries, and book reviews since 1935.

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Contact

Roberta Rewers, APA, 312-786-6395, rrewers@planning.org