How Stressed is KC's Housing Market?

Relatively, not very. Of course, things still aren't exactly rosy, but in this recent analysis by the Wall Street Journal, out of the 49 most populous U.S. metro areas, only three had lower "housing-stress indicators" than Kansas City. Factors considered included percentage of income spent on housing, percentage of population without health insurance, and percentage of population not working. The Miami area was rated as the most stressed, with three California metros close behind. Perhaps this is yet another indicator that much of so-called fly-over country is actually, in the words of urban development scholar/commentator and recent LWREC speaker Joel Kotkin, a "zone of sanity."

Infrastructure

Infrastructure (an incredibly broad category) location, capacity, and condition are critical factors in real estate investment decisions. Economic slowdowns and resulting contractions in tax receipts and budgets for local governments tend to lead to particularly pronounced infrastructure deficiencies. Something of a negative feedback loop can emerge in such an environment, given the heavy reliance of many local government revenue streams on real estate activities. In some cases, funding shortfalls and forced resource reallocations lead to reworkings of infrastructure funding channels and project processes (selections, approvals, reviews, etc). For example, recently, federal stimulus funds have trickled through to select infrastructure projects. Private, public-private, and community-based efforts can also offer alternative means of infrastructure provision. But there remain innumerable project wishlists and maintenance backlogs dispersed across our city and beyond in need of creative solutions. Here's a smattering of links to current KC infrastructure-related stories and organizations:

"Chamber: Kansas City infrastructure shortcomings hurt business"

U.S. 71 upgrades coming

Green infrastructure

Christopher S. Bond Bridge project

KC Design Center

City's new infrastructure manager 

Time is Money

LWREC research from early 2010 examined the ways in which time delays in building permit processing affect overall project costs in several KC area communities. Links here and here provide some coverage of the report by local media. Given the slowdown in new projects, city planning departments may now be able to take pause to evaluate development approval policies in search of improved means of creating the best built environment possible while avoiding unintended consequences in the form of undesirable costs. Research like that by the LWREC is a great place to start to understand the issues. Economists Edward Glaeser of Harvard and Joseph Gyourko of Wharton, among others, have been on the forefront of similar research in recent years.