The Lincoln Institute provides a variety of early- and mid-career fellowship opportunities for researchers. In this series, we follow up with our fellows to learn more about their work.

Urban economist Néstor Garza first partnered with the Lincoln Institute’s program on Latin America and the Caribbean (LAC) over 20 years ago—to publish a working paper based on his undergraduate thesis, looking at the spatial distribution of land values in Bogotá, Colombia. Garza’s early career coincided with the city’s increased use of land value capture tools—policies that empower communities to recover and reinvest a portion of property value increases that result from public investment or government action—which allowed him to both study and experience their impact on the built environment. In 2005, Garza received a LAC Graduate Student Fellowship while pursuing his master’s degree in Colombia; he later earned a PhD in Land Economy from the University of Cambridge.

Today, Garza teaches economics at California State University, Dominguez Hills. In this conversation, which has been edited for length and clarity, Garza explains what Los Angeles could learn from his former hometown, why the concept of land value capture is sometimes misunderstood, and why he was excited to prove a 19th-century political economist correct.

JON GOREY: What is the main focus of your research, and how did your Lincoln Institute fellowship help you build upon that work?

NÉSTOR GARZA: My research has always been about urban economics, and more precisely, on the spatial analysis of land markets, regulation, and taxation. For example, I wrote a series of four papers on the neutrality of the land value development tax in Bogotá. This is neutrality in the sense described by Henry George, in that you’re able to extract part of that land value without changing anything else; I was able to prove both static and dynamic neutrality in Bogotá.

In 2005, I was doing my master’s in economics at Universidad Nacional, and I participated in the LAC fellowship. It was about the spatial distribution of housing markets and the creation of a value index for newly built housing in Bogotá. That one was super special: they flew us to an event in Quito, Ecuador, with Lincoln Institute faculty and with the other thesis fellows, and it was super interesting, I learned a lot. And more importantly, I started exchanging with all these colleagues in Latin America that are also interested in these types of things. It was really valuable for me. Then in 2008, Lincoln invited us to stay for three months in Bogotá, a group of Latin American students from maybe 10 different countries, to intensively learn about land markets, land policy, land law, geographic information systems, valuation, and so on. Once again, it was extremely rewarding.

JG: What are you working on now, and what are you hoping to work on next?

NG: One thing I’m working on is in-kind development contributions in Seattle. We all know the West Coast is suffering from a lack of housing—at this point it’s a humanitarian crisis, no?—and part of that is definitely related to the operation of land markets. So I have continued studying in-kind development contributions, specifically sidewalks in Seattle, and the effect of that on the supply of housing.

In Latin America, I’m working with a colleague in Santiago, Chile, creating spatially accurate land value indexes, and with another colleague in Merida Yucatan, in Mexico, on the effects of globalization on the local real estate markets. Essentially, huge amounts of international money are flowing to this region, purchasing absentee-owner real estate which geographically encloses the city, limits its development potential, and increases land values.

And I’m working with a colleague in Colombia tracing the unfolding of neoliberalism there back in the 1980s and ’90s. There was a paradigm shift in the way policy is made toward neoliberal logics, so we analyzed, one by one, the key economists and policymakers who were behind those transformations, analyzed their professional, educational, and research careers, to understand the motivations behind the reforms of 1991.

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JG: What’s the most surprising thing you’ve learned in your research?

NG: To really be able to see and prove, empirically, the static and dynamic neutrality of land value capture, that surprised me. Because, sure, I expected to find that, but when you do find it? Okay! So Mr. George was right, it’s not crazy. The entire thing makes sense. So I would say that was surprising, but a nice surprise, that it works the way we thought it works. Static neutrality means that applying a land value capture fee where there’s a reason for it—for example, new zoning rules, or a new park—decreases land values or decelerates land value increases while leaving everything else constant; it doesn’t discourage new development or change built environment prices in that area. Dynamic neutrality means that the enactment of the land value capture fee does not cause preemption, where developers rush to build, increasing land values, nor does it shift development or home value increases to a different part of the city that doesn’t have the land-based fee.

JG: What’s one thing you wish more people understood about Latin American land policy, or about urban economics more broadly?

NG: There are two things. One is what I wish that the Latin American policymakers and public would understand, and another is what I wish the rest of the world would perceive, particularly the place where I live, the metro area of Los Angeles.

In Latin America, thanks to the Lincoln Institute, I have traveled around the continent, making presentations, talking to people. Some people are really engaged and want to participate and activate all these economic tools for land management. But some people are super resistant, and the resistance comes from a kind of preconception, where in Spanish “land value capture” is translated as la captura de plusvalías. And plusvalías, in Spanish, is the same as the Marxist term “value added,” which has a kind of socialist connotation. People think that this is some kind of socialist conspiracy against private property and markets. This preconception is very difficult to change, to tell them, ‘No, it’s not, it’s actually the opposite. These are tools to enhance the construction industry, to enhance a very active real estate market’—because that’s what we want to march towards, an active market able to provide more housing for everybody.

Now on the other hand, I would like other places, particularly Los Angeles, to see how well Latin American cities use the tools they have to make positive changes in the built environment. It’s an environment of precariousness, poverty, lack of funding—but still, things get made, city blocks get transformed. Here in LA, we have Proposition 13 that completely undermines property taxes, and it’s the exact opposite. We have one of the largest financial bonds markets in the world, with large and extremely sophisticated developers, but we are unable to, for example, redevelop one block, we are unable to increase densities to what’s required to make this region sustainable. It’s so, so difficult here to do anything, as if all of those policy tools did not exist. In Latin America, regardless of the poverty and the problems, it’s not that it’s easy, but it’s being done, it’s happening. So I would like the rest of the world, the US and particularly the state of California, to notice that lots of positive transformations to the urban built environment can be made in the context of market institutions. We can change cities and make them a bit more livable, a bit less hostile to pedestrians or to the inhabitants.

JG: When it comes to your work, what keeps you up at night? And what gives you hope?

NG: For the last few years, what has kept me awake at night, but at the same time given me hope, is higher education, here in the United States and around the world.

On the one hand, I notice a kind of obsession with the specialization of higher education, an obsession with practical skills in everything we do. I feel it from students, from administrators, and from higher level education experts, where everything has to be immediately applicable, and abstract or higher reasoning skills are set aside as unimportant, because they’re not immediately marketable skills to be used in the labor market. But those higher-level abstract reasoning skills are the ones all of us use all the time in the labor force.

At the same time, the higher education system is what gives me hope. In Colombia, back in the ’90s, I attended public school—it was one school for millions of possible students, so the rate of rejection was like 99 percent, everybody was rejected using purely standardized exams. Then once you got in, they failed about 50 percent of the students. It was a cruel elimination process that I somehow survived. But that’s not what higher education should be about—it’s not about eliminating people, it should be about widening possibilities for everybody. Of course, you have to have some degree of rigor, some real seriousness with it. But it doesn’t help to just eliminate people, that doesn’t help society. And I have noticed that in my own country, and everywhere in the world, higher education has moved towards a more accepting, less regimented, less boring way of doing things. And that gives me hope.

JG: What’s the best book you’ve read or show you’ve streamed lately?

NG: About three or four years ago, I read a book—the title is actually quite aggressive—called Bullshit Jobs: A Theory, by anthropologist David Graeber. And it caught my attention because, in a very funny way, it touches on the nonsense that the neoliberal organization of society is bringing on us, the kind of obsession with working. Why? The truth is, the modern capitalist system is able to deliver for everybody by doing almost nothing, it’s so immensely wealthy. But we have ingrained in our heads that we need to have a job to justify our very existence, and that’s produced a kind of collective paranoia where we need to do something and justify doing it, because our lives depend on it. And it creates these masses of disenfranchised workers in a middle state, where it isn’t clear if they’re productive or not, and people suffer psychologically because of that. So the book, in a funny way, takes all of that, and actually touches on important elements of ethics and economics and philosophy, with some funny commentary and interesting anecdotes.

Jon Gorey is staff writer at the Lincoln Institute of Land Policy.

Lead image: Néstor Garza. Credit: Courtesy photo.

Housing—and the urgent need for more of it, at more affordable prices—scored prime real estate in President Biden’s State of the Union address in March, as the president proposed tax credits for first-time home buyers, sellers of starter homes, and affordable housing developers.

But there’s more to the Biden-Harris Administration’s latest housing plan than was mentioned in the president’s speech—including three big actions to bolster manufactured housing, which is already the most abundant source of unsubsidized affordable housing in the United States. Factory-built homes offer a cost-efficient and speedy option to ramp up production of the smaller, entry-level homes America sorely needs to meet its housing demand.

The White House’s positioning of manufactured housing among its solutions to the nation’s affordable housing woes is extraordinary, says Arica Young, associate director of the Innovations in Manufactured Homes (I’m HOME) Network, a group convened by the Lincoln Institute of Land Policy that promotes manufactured housing as a safe and affordable path to homeownership.

The administration’s attention and the new federal moves—which include establishing a grant program for manufactured housing communities, increasing borrowing limits for individuals, and offering a new financing approach for resident cooperatives—could go a long way toward reversing lingering stereotypes and stigma associated with manufactured homes, Young says: “I think it’s game changing, to be perfectly honest. It’s taking a form of housing that was viewed as a last resort and discussing it as a viable option.”

Grants for Manufactured Housing Communities

The first new initiative will award $225 million in competitive grants to manufactured housing communities (MHCs) to make infrastructure improvements or to repair or replace dilapidated homes. Manufactured housing communities, colloquially known as mobile home parks, generally must fund and maintain their own infrastructure, from roads and sidewalks to water and sewer services. And in many MHCs, these vital systems are long overdue for upgrades.

“It’s really expensive, and owners don’t always have the incentive or the money to keep up with the infrastructure or repairs,” says Young. “A lot of older facilities are mom-and-pop–owned, and they’ve been run on shoestring budgets. And in some cases, they’ve forced in more units than the infrastructure can accommodate.”

Grants awarded through the new Preservation and Reinvestment Initiative for Community Enhancement (PRICE) program can be used to fund the installation or improvement of such critical infrastructure, as well as the repair or replacement of existing manufactured homes, energy efficiency or accessibility updates, resiliency measures, and environmental remediation, among other improvements. Notably, homes manufactured before the Department of Housing and Urban Development (HUD) standardized its building code in 1976 are not eligible for repairs, only replacement.

“PRICE is a completely new program. It’s exciting because it’s the first time that this money has been specifically appropriated for infrastructure improvements in manufactured housing communities and the replacement of pre-1976 manufactured homes,” says Maya Hamberg, policy analyst at the Lincoln Institute. Communities can also use the funds to help existing residents acquire the land they’re renting, or to prepare lots for new manufactured housing—running new utility and water lines, for example.

The bulk of the grant money, $200 million, “is for broad use by state and local governments, multi-jurisdictional entities, cooperatives, nonprofits, resident-owned communities, CDFIs [community development financial institutions], and tribal applicants,” Hamberg says. A portion of that funding, $10 million, is designated specifically for applicants from federally recognized tribes, who can also apply for the maximum grant of up to $75 million.

The final $25 million will fund a pilot program that uses manufactured homes as an affordable replacement housing strategy in MHCs, swapping old mobile homes in disrepair with up to four new units. In a state like Arizona, Hamberg says, where nearly a third of manufactured homes predate the mid-1970s standardized HUD code, “a community with a preponderance of these homes could apply for a matching grant through PRICE” to replace deteriorating structures with efficient but affordable new ones.

Raising Awareness, and Loan Limits

Replacing more pre-1976 mobile homes with today’s well-built, energy-efficient models won’t just improve living conditions and resiliency for those homeowners; it could also help change public perception, Young says. “This is not your grandfather’s mobile home. They’re high-quality homes, and they can be as resilient as site-built houses in disasters, if not more so, depending on what part of the HUD code they meet. But there’s still a lot of stigma, and education we need to do to overcome that stigma.”

It’s not necessarily homebuyers who hold a negative perception of manufactured homes. A 2022 survey by Freddie Mac found that over 60 percent of respondents across racial and income demographics—and more than two-thirds of millennials—would consider buying a manufactured home.

But lenders, lawmakers, and zoning officials still seem to turn up their noses at manufactured housing, which limits the availability and accessibility of the housing type. As Lincoln Institute President and CEO George W. McCarthy said in his 2022 testimony before a Congressional subcommittee, “Although manufactured homes have reached the same quality as site-built homes, they hold a second-class status in our financial and legal systems.”

More than 40 percent of manufactured homes are not titled as “real property” under state laws, for example, and therefore don’t qualify for a mortgage. That leaves manufactured homebuyers to rely on personal property (or “chattel”) loans with shorter terms and higher interest rates—and nearly two-thirds of those applications are denied, partly due to stricter credit standards and a dearth of participating lenders.

What’s more, until this month, the borrowing limit on the FHA’s personal property loan program, Title I, hadn’t been updated since 2008, rendering the loan program functionally useless. The average price of a new double-section manufactured home was roughly $150,000 in 2023, not including the cost of land or site preparation; the maximum loan the FHA would back was just $69,678.

The administration’s second major action on manufactured housing aims to remedy that. In a new rule change that took effect March 29—one that the I’m HOME Network has long been advocating for—the FHA increased its Title I borrowing limits to 115 percent of the average price of a new manufactured home. That will allow a manufactured home buyer to borrow upwards of $105,000 for a single-section unit, and nearly $200,000 for a double-section home. “In addition to raising the loan limits, the rule also provides for annual indexing, so they don’t have to do this again in 10 years when the loan limits are outdated,” Young says.

FHA Financing for Resident Ownership

A third win for manufactured housing in the newly announced plan is a proposed change at the Federal Housing Administration (FHA) that will allow resident cooperatives to use an FHA 223(f) multifamily loan to acquire or refinance their manufactured home community.

Resident ownership is one way for manufactured housing communities to remain affordable—and out of the hands of profit-focused investors, who have been known to scoop up MHCs and abruptly jack up the rents on longtime residents who lease the land beneath their home. However, securing financing for such a purchase can prove difficult for a group of residents.

“There’s just a lack of financing available writ large for resident-owned communities, especially government-backed programs that insure lenders against losses on mortgage defaults,” Young says. “So this is another avenue for borrowers to apply for these loans that otherwise wouldn’t have been available to them.”

Local Barriers Remain

While the administration’s actions are heartening, there’s still much to do, at both the federal and local levels, before manufactured homes can play a bigger role in easing our housing crisis. Exclusive zoning rules and other land use restrictions remain a major barrier to the greater use of manufactured housing for entry-level homeownership, for example, according to a new report by Harvard’s Joint Center for Housing Studies.

But there are encouraging signs that city officials and zoning boards are starting to come around, too, Young says.

“If you go to planning sessions, city planners are dying to find out about manufactured housing,” she says. “Nobody ever talked about manufactured housing as infill, but they are now. Not a lot of people have talked about manufactured housing as multilevel, but they are now, and they’re discussing the technical feasibility around that.”

In addition to educating the public and policymakers about manufactured housing, members of the I’m HOME Network have met with government officials and other institutions to discuss ways of leveraging the efficiency and affordability of the housing type.

McCarthy’s testimony before the subcommittee and the information he provided was “instrumental in helping them make a supportive decision on how much to allot toward the PRICE Act especially, but also to highlight some of the inherent structural issues with both resident-owned communities and manufactured housing writ large,” Young says.

In February, members of the I’m HOME Network and the Pew Charitable Trusts cohosted a meeting with housing officials in Washington, DC, Hamberg says. “The focus was specifically on Title I, to talk through with HUD officials and other leading experts in the manufactured housing field what is important about these changes—but also what more needs to be done.”

Jon Gorey is a staff writer at the Lincoln Institute of Land Policy.

Lead image: Manufactured housing is gaining attention as a cost-effective, energy-efficient housing type. Credit: Next Step Network.

A few years ago, the city of San Antonio conducted research into the anticipated impacts of climate change on local temperatures. The study projected that, by midcentury, the city might experience 61 days a year with temperatures over 100 degrees. In reality, the city notched 75 days over 100 degrees—in 2023.

Like many cities, San Antonio has been strategizing responses to climate change for years, but recent record-shattering temperatures have given such efforts a new sense of urgency, says Douglas Melnick, San Antonio’s chief sustainability officer. One major component that’s been getting a serious rethink: city surfaces, from roads to roofs. These human-made surfaces are often dark and impermeable, amplifying hot weather, worsening flood risks, and contributing to the heat island effect. But soaring global temperatures are sparking a wave of experiments with new materials and engineering innovations designed to reimagine surface problems as deep opportunities.

Pavement is a particular focus for San Antonio and many other cities, because it’s hot and there’s a lot of it: researchers estimate that it accounts for 30 to 40 percent of urban land cover. After an initial “very small” pilot in 2021 experimenting with a reflective pavement coating, San Antonio embarked on a $1 million project that will test five such materials in various parts of town, Melnick says. The streets were selected based on data related to equity and heat, and the work is being integrated into already-scheduled maintenance and repaving projects; the city will work with the University of Texas San Antonio to evaluate the results.

A similar effort is underway in Phoenix, a city “on the front lines of extreme heat,” as David Sailor, professor and director of the school of geographical sciences and urban planning at Arizona State University, puts it. The city was an early proponent of rethinking surfaces, launching a major Cool Pavement Pilot Program three years ago. But even in this notoriously hot place, efforts have accelerated lately: ASU has been involved as a research and advisory partner in a city-led project that has treated more than 100 miles of local roads with reflective coatings. “This is something that would not have happened five years ago,” Sailor says, “and it’s increasingly happening across different cities.”

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Los Angeles has introduced a number of pilot programs, including one in the Pacoima neighborhood testing a reflective coating on streets, a school playground, and a recreation center parking lot. Researchers at Purdue University, meanwhile, have developed and are preparing for market the “world’s whitest paint,” which reflects 98 percent of solar heat and could be used on buildings, trains and buses, and other surfaces. A number of US cities are offering tax incentives for reflective roofs. Others have installed green roofs, topping waterproofing material with plants and other greenery that can be both cooling and absorb rainfall. And smaller projects are popping up all over the world, like parking lot solar canopies that provide shade and generate energy; corrugated self-cooling walls that stay as much as 18 degrees cooler than flat walls and can help reduce the need for air conditioning; and innovative, affordable cool-roofing materials for informal and self-built structures in India, Africa, and elsewhere.

The idea that governmental will to address extreme heat is expanding—and municipal funding is growing along with it—is spurring more material innovation in the market, says Sailor of ASU. He notes the creation of new, acrylic-based asphalt treatments. Because lighter colors can show tire markings, demand has also led to the development of a coatings that are dark in the visible spectrum but engineered to have high reflectance outside that spectrum, and reflect 30 to 40 percent of the sun’s energy, compared to 4 percent on a standard road. Other materials getting their moment in the sun include new kinds of coating for extruded metal roofing; reflective, porous concrete; and passive radiative cooling film engineered to actively radiate heat away from surfaces (instead of simply reflecting it, as coatings do). ASU is testing such products from giants like 3M as well as smaller startups.

But the real breakthrough isn’t any single material or innovation, says Greg Kats, founder and CEO of the Smart Surfaces Coalition (SSC)—it’s the sheer variety of projects afoot, and a new willingness to “think broadly and citywide” about surfaces. Launched in 2019, SSC is now working with some 40 organizations and 10 cities and metropolitan areas across the country, providing data and tools to help implement smart surfaces effectively. “The city has gotten hotter and darker and more impermeable, with higher energy bills, more environmental injustice,” Kats says. “A lot of cities have really reached a point where they’re looking for systemic solutions.” Kats notes that there are fiscal motivations, too: major credit rating agencies have begun to factor climate change into their calculations, which could affect municipal credit ratings.

Kats and other smart surface advocates emphasize that tech-based materials must be complemented by trees and other natural solutions. Brendan Shane, climate director for the Trust for Public Land, which focuses on creating and enhancing parks and green spaces in cities and communities (and works with SSC), argues that smart surfaces and green infrastructure go naturally together. “Our tree canopies are at historic low levels,” he points out. But they are part of a city’s surface area, and “the surface of the city is one of those things that really does change. You’re going to repave roads. And you’re going to replant trees.”

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The coalition hopes to help cities devise multi-pronged but locally tailored approaches, Kats says, through improved data synthesis and analysis. SSC is already working with a dozen US cities, and two in India, to compile data from hundreds of sources, producing detailed heat maps from satellite data and other information, and running cost/benefit scenarios on different implementations and timelines. The goal is to be both comprehensive and flexible, given that a dry city like Stockton, California, will have different needs and solutions than a wetter city like Baltimore. Whatever a given city’s objective, Kats asserts that with a full suite of responses—smart reflective surfaces, trees, and green infrastructure projects like rain gardens—the vast majority of cities can cool average temperatures by five degrees, or even more in previously neglected heat island neighborhoods.

Back in San Antonio, plans are taking shape to use heat-mapping technology to identify the neighborhoods that would most benefit from municipal investments in cool pavement, street trees, and shade structures. The wake-up call of recent extreme weather, Melnick says, has created a real opportunity for coordinated, citywide plans. “Cities tend to be very siloed. The parks department’s doing trees over here, and then the public works department is doing roads over there,” he says. “Everyone’s got a role in mitigating heat, but how do we get everybody talking together?”

As technologies evolve and the world’s cities continue to grow, investing in solutions to create cooler, more livable cities—and working together to implement them—is essential, Kats says: “Waiting is now a higher-risk strategy than taking action.”

Rob Walker is a journalist covering design, technology, and other subjects. He is the author of The Art of Noticing. His newsletter is at robwalker.substack.com.

Lead image: Researchers measure the reflectivity of cool pavement coatings at Berkeley Lab. Credit: Roy Kaltschmidt/Berkeley Lab, ©The Regents of the University of California, Lawrence Berkeley National Laboratory.