Surveys consistently show that owning a home is one of the keys to overall happiness, which no doubt explains why debates about housing prices are so emotional—and so dominant in the Legislature and at city councils. Thanks to low supply and the resulting price surges, many Californians now struggle to buy homes. The nationwide homeownership rate is nearly 66 percent, but that number is only around 55 percent in California.
Obviously, homeownership comes with drawbacks. Replacing a roof or repairing a foundation is expensive. It's harder to take a new job in another city if you've got to first sell your home. But owning a home allows you to design it to your tastes. You're not living in fear the landlord will sell it. You get tax breaks and can build equity over time. You can settle in and become part of the community. The feds have long viewed homeownership as a key to economic stability.
A brewing battle in Northern California 60 miles east of San Francisco in exurban Solano County will determine whether our state is serious about building new housing. It will also show whether YIMBYs—the Yes In My Back Yarders who promote housing construction—are true to their own rhetoric, or are just the urban version of NIMBYs (Not In My Back Yarders) who oppose any construction they don't like.
People often have the misconception that home prices are so high in the Bay Area because urbanization has limited places to build. In reality, there's seemingly endless open land throughout the eight-county region—but government growth controls are limiting opportunity for development. For instance, across the Golden Gate Bridge in Marin County, 84 percent of the land is off limits to development. No wonder the population is only 260,000—and home prices are absurd.
It's the same story throughout the area. Growth-control measures in Alameda County have assured that one sees nothing but lovely empty hillsides on the drive to Oakland, but they have scuttled development plans and assured million-dollar median home prices. Solano is home to some major suburbs but is dominated by vast tracts of ranchland (and wind farms) as one heads eastward to the Sacramento County line. I love the open spaces, but it's an ideal spot for a new city.
That's exactly what savvy venture capitalists from the Bay Area are planning. Beginning in 2017, a group called Flannery Associates has quietly purchased 50,000 acres—in a move that echoes the Walt Disney Co.'s secretive purchase of swampland around Orlando in the 1960s as it pursued the construction of Disney World and eventually Epcot Center. Big dreams require bold action, especially if one wants to build an entirely new city in regulation-choked, growth-controlled California.
The project has become the biggest thing in Solano County in perhaps forever, which makes the proposal's name, California Forever, apropos. A New York Times article in August turned local buzz into a statewide controversy. It described the idea as follows: "Take an arid patch of brown hills cut by a two-lane highway between suburbs and rural land, and convert it into a community with tens of thousands of residents, clean energy, public transportation, and dense urban life."
California Forever representatives have been holding the usual array of public meetings, as they prepare for a November countywide ballot initiative that's necessary to rezone the land from agricultural uses. That's necessary because in 2008 county voters overwhelmingly passed the Orwellian-named Orderly Growth Initiative—a common type of NIMBY open-space measure that has paved (actually, not paved) the way for the state's housing crisis.
The Press Democrat reports that the initiative campaign is off to a "bumpy start," which isn't surprising for a project of this scale. It's also not surprising that some locals take a burn at the idea of tech moguls from the Bay Area helicoptering into a somewhat rural area and imposing their big ideas on them.
Fortune magazine reported that, "The Silicon Valley billionaires' Astroturf city being built from scratch is running headlong into a NIMBY backlash." Ironically, it's not only NIMBYs who are a problem. The San Francisco Chronicle reported the proposal has divided YIMBYs. "It's sprawl with a prettier face and prettier name," one YIMBY activist told the newspaper.
I've found many YIMBY critiques on social media, which is odd given the plan is filled with the latest urbanist concepts. "All cities were once 'new' cities," California Forever notes. It's also spot on when it explains that "we will never, ever come close to solving our housing affordability challenges through infill alone." But many YIMBYs aren't so much about building housing, but shoehorning us into tiny apartments along bus lines.
The project certainly is shaking up the housing debate across the state—and might determine whether new generations will be able to take part in the American Dream.
This column was first published in The Orange County Register.
The post A Brand New City in Northern California Will Show if the State Is Serious About Housing Solutions appeared first on Reason.com.
]]>Happy Tuesday and welcome to another edition of Rent Free. This past week, I was in Austin, Texas, for this year's YIMBYtown conference of activists, academics, architects, builders, and more, all there to talk about ways to make housing more abundant and affordable.
I'm told it was the largest YIMBYtown conference yet—a sign of a growing and increasing bipartisan movement. Since it was held in Austin, a city experiencing explosive growth inside a state that's also growing like mad, this week's Rent Free is a special Texas-themed issue. Our stories include:
But first! We have our first Rent Free Q&A with red state zoning reformer, Montana Gov. Greg Gianforte.
Last year, Montana passed a long list of housing reforms (dubbed by Bloomberg the "Montana Miracle") that allowed middle housing options like duplexes and accessory dwelling units in single-family areas, allowed residential development in commercial zones, and limited public input on individual, code-compliant housing projects.
Most of these reforms were drawn from recommendations made by a housing affordability task force convened by Montana Gov. Greg Gianforte. The governor was a champion of the reforms while they were moving through the Legislature. His administration is now a defendant in a lawsuit filed by anti-density activists challenging the new state laws.
Gianforte spoke remotely at Austin's YIMBYtown conference. I also interviewed him by phone about Montana's zoning reforms, the case for more property rights in housing development, and whether we'll ever see 10 million Montanans.
Q: One case you can make for zoning reform is that it enhances property rights. How important was that case for passing Montana's zoning reforms last year?
A: To get my brethren on the right on board, it was very important. Different aspects of the argument appeal to different folks. Certainly, if you own a piece of property, within reason, you ought to be able to do what you want with it.
This is why two particular areas, allowing [accessory dwelling units] ADUs, allowing duplexes anywhere you have a single-family home were reasonable extensions of property rights.
There was also a need for public input so that everyone can put their fingerprints on the master plan for a community. But we've seen those processes weaponized at times to just shut down development.
Some of the reforms we adopted, like master planning, allow everyone's voice to be heard and the community to agree on how they want to grow. But once that's settled, if you come in with a development plan that matches the growth plan that the community agreed on, you just get your permit. I think that's the right balance.
Q: Critics of Montana's zoning reforms make their own case for property rights: "I bought into this neighborhood under certain zoning. I expect it to stay a certain way." Do you think that's wrong?
A: If you enter into an agreement, and there's a homeowners' association, and there's a contract amongst the owners, nothing we've done impinges on that. But nothing ever stays the same. The reality is that the needs of a community change over time. It's important that people's voices are heard.
With increased demand and lack of [housing] supply, prices have gone through the roof. Our teachers, nurses, and police officers can't afford to live in these communities anymore, and we need to do something different.
Q: Montana's zoning reforms were pitched as a way to avoid sprawl. Do Montana's cities need to sprawl, to grow outward, as they also grow upward?
A: There will be some of both. But we had policies that forced sprawl. In Missoula, there was virtually no zoning that allowed multifamily housing, virtually zero, in a university town where multifamily would make a lot of sense.
This is why we allowed duplexes anywhere you have a single-family home and allowed multi-family units in commercial and retail areas, so we could have more walkable communities. Once people are in those communities, they like them. And if they don't like them, they don't move there.
Q: Montana is the seventh-fastest growing state. It currently has 1.1 million people. Is the goal 10 million Montanans? Will you get there with these reforms?
A: Well, it's not the job of the government to set population goals.
I ran for office on two key platforms. One is we've been exporting our kids and grandkids for decades. My number one goal is more good-paying jobs. That's why a strong economy matters. We're hopeful that all the Montanans who moved away will move back home.
Secondly, just as important, is to protect our way of life. Restricting sprawl or increasing density as we grow as a state is essential to preserving our way of life.
Q: What's a mistake you see other policymakers making when they approach housing affordability?
A: This problem is so big, there's not enough money to buy your way out. Some policymakers try to do demand-side incentives to buy off mortgages or supplement rent. If you don't increase supply, those demand-side incentives have unintended consequences that actually make the problem worse.
Q: What do you see as the federal government's role in housing policy?
A: They need to stop printing money because it's the runaway spending at the federal level that's driving inflation. That's a large part of the problem we're facing in housing is the inflation that's occurred across the supply chain and labor, and everywhere else.
The first thing I think the feds can do is stop spending money like a drunken sailor. Someone pointed out to me that that wasn't a fair comparison because drunken sailors are spending their own money. When they run out, they stop spending. That is not what is going on in Washington.
And that's it. Then they should sit on their hands.
This interview has been condensed and edited for style and clarity.
According to the U.S. Census Bureau, Texas experienced the largest numeric population growth of any state last year. It was also the third fastest-growing state in percentage terms, tying with Florida and only a hair behind booming South Carolina.
Stepping back, there are 5 million more Texans today than there were at the beginning of the century. Texas also has more jobs than it's ever had before and is creating new ones at nearly twice the national rate.
Meanwhile, the country's other large states, noticeably California and New York, continue to shed residents.
Texas Gov. Greg Abbott likes to credit his state's small government, business-friendly economic policies for the state's growth. Texas does have some of the lowest tax burdens in the country, although it's also one of the most regulated by one measure.
At a YIMBYtown panel, the Manhattan Institute's director of research, Judge Glock, suggested another reason for Texas' growth: it's hot and ugly. Or at least, most of Texas is not as pretty as the San Francisco Bay Area.
"This has made us work harder to keep the cost down," he says.
It's the (Housing) Economy, Stupid
A major way that Texas has kept prices down is through building gobs of new housing. Lone Star State jurisdictions collectively permitted about twice the number of new homes that California did last year, despite the state having around 8 million fewer residents.
Data culled by the Financial Times shows that the difference in per capita building is even more pronounced when one compares cities like Austin and Houston to San Francisco, which is in turn reflected in prices. Median home prices in Houston are a quarter of what they are in San Francisco.
The state has some of the most affordable housing of all the booming sunbelt states (save North Carolina) and is more affordable on average than the U.S. as a whole.
The Right Geography
Part of Texas' housing success is its uninteresting geography that Glock alluded to—lots of flat, dry land around its major cities that's ideal for building new exurban subdivisions.
"A couple of the metros might have some physical constraints, but not really," says Jacob Wegman, an associate professor at the University of Texas Austin's School of Architecture. It's "nothing compared to the California coastal metros or the Northeastern metros with their harbors. That's got to be part of the story."
The Right Policy
Texas' policies also put no real regulatory obstacles in front of new suburban housing either. The state's counties, for instance, can't adopt zoning laws. That means housing is allowed on all unincorporated land.
High-cost, low-growth California and New York both have environmental laws that require endless studies on new development, and which give third parties the right to sue over new housing approvals. The result is new subdivisions can take half a century to approve.
Texas, in contrast, has no such laws.
"There's just no real mechanism for neighbors who don't want greenfield development to happen to stop it in any meaningful way," says Wegman. "That's got to be a big, big part of the story."
Texas' cities (save for famously unzoned Houston) are zoned like typical American cities. Municipal governments have all sorts of land use restrictions on the height, density, and location of new housing. Like everywhere, these rules limit new housing construction and drive up housing costs. They're most burdensome on walkable, infill development.
Here too, local policymakers—often at the prodding of YIMBY activists—are shifting municipal development regulations in a more liberal, pro-growth direction.
Opening Austin's YIMBYtown conference was Austin Mayor Kirk Watson, who gave a crowd-pleasing speech about how the key to keeping Austin "weird" is to build more housing.
"Our distinct Austin vibe will be gone if only a select few can enjoy what Austin has to offer," said Watson.
It was a message tailor-made for the crowd of assembled YIMBYs. It also represents a shift in Watson's general stance on development since his narrow 2022 election victory.
"This is the same guy who proudly owned up to having a yard sign opposing the [liberalizing] land development code rewrite and was endorsed by the city's most prominent anti-reform leaders," writes Jack Craver in his Austin Politics Newsletter. "On land use, [Watson] has thus far completely abandoned the anti-density constituency that supported him in 2022."
Watson isn't the only Austin politician to find YIMBY religion on housing. At another YIMBYtown panel, a staffer for Austin City Councilmember Leslie Pool noted how the councilmember had gone from being an arch-opponent of liberalizing the city's zoning laws to being a chief zoning reform champion.
Overall, the 11-member city council has gone from having a minority who supports YIMBY-style zoning reforms to a nine-member YIMBY-leaning supermajority that's eliminated single-family-only zoning and parking minimums citywide. The council is now at work on new reforms that will shrink minimum lot sizes (allowing for smaller, starter homes) and upzoning transit corridors.
Susan Somers, one of the founding members of the local YIMBY activist group AURA, credits the city council's 2014 shift from at-large to district representation for bringing in a more diverse cohort of council members who were also more pro-development.
That change, combined with the rising national salience of housing affordability and Austin YIMBY's growing organizational capacity (AURA was founded in 2014), has shifted the city's housing politics in a pro-growth, pro-supply direction, says Somers.
One consequence of Texas generally being pretty accommodating of new housing construction is that policymakers have felt less pressure to adopt statewide reforms targeting local red tape.
While California has passed dozens of bills that collectively legalized ADUs on almost all residential land statewide (kicking off a boom in ADU construction), Texas has left local ADU bans untouched.
YIMBY activists and YIMBY-friendly lawmakers are now trying to play catch-up, but it's been a tough road to hoe.
In the 2023 Legislative Session, a bill that would have preempted cities' many ADU restrictions came two votes away from passing. Another bill capping urban minimum lot sizes also failed to pass. On the flip side, the Legislature did approve a new law that lets private parties issue building permits.
The question for many of the assembled activists at Austin's YIMBYtown conference was what, of a long, long list of possible reforms, should they prioritize for the coming legislative session.
Top of the list for many was reforming Texas' valid petition law, which gives property owners the right to protest rezonings near their properties. The law also requires cities to either provide individualized notice about rezonings to affected property owners (a tall order if you're trying to rezone the entire city) or to pass those rezonings with supermajority votes of the city council.
Local Austin anti-development activists, with the help of some novel (critics would say "radical") court decisions, have used the law to stop the city's last attempt at a major zoning overhaul. Earlier this year, in the City of Austin v. Acuña case, they also convinced a judge to toss out the city's density bonus program.
The solid YIMBY-leaning supermajority on the Austin City Council is enabling the city to revive that density bonus program and press ahead with other rezonings. But many still argue changes to Texas' valid petition law are necessary to safeguard future efforts.
"The court's [Acuña] ruling jeopardizes future zoning overhauls in the Fourteenth Court of Appeals District and casts a shadow over any Texas city's efforts to comprehensively rezone," wrote Salim Furth and C. Whit Ewen in a research brief for George Mason University's Mercatus Center last month.
Several bills were introduced last session that would have paired back Texas' valid petition law, but none went anywhere.
Rep. Cody Vasut (R–Angleton) says that any valid petition reforms will be a big lift at the Legislature.
"When you get to the rights of neighbors to be able to voice their concerns, that becomes perhaps, I don't want to say a bridge too far, but something that affects a lot of other issues," Vasut tells Reason.
He suggests more direct zoning preemptions, as was considered with last year's ADU and minimum lot size bills, would be easier policies to pass. That could involve some tweaks to give cities a little more flexibility in implementing these laws. Continuingly rising home prices could also prompt some lawmakers to be open to state-level zoning reform come 2025.
"Perhaps as we see more and more of an [affordability] issue in Texas, perhaps even bringing that bill up next session will have more traction because of changing circumstances," says Vasut.
Sometimes things have to get worse before they get better.
The post Everything Is Getting Bigger in Texas appeared first on Reason.com.
]]>Happy Tuesday and welcome to another edition of Rent Free. Despite the ink still wet on many state-level YIMBY reforms prodding local governments to allow housing, we're already witnessing a concerted counter-revolution from the forces of local control. This week's stories include:
But first, our lead item is a short take on how America's overregulated, undersupplied housing market turns good things, like economic growth, into bad things, like more evictions.
In an article from last week, L.A. Times columnist LZ Granderson asks "If the economy is so great, why are evictions soaring?" Despite low unemployment and better-than-expected economic growth "evictions have spiked and homelessness has reached a record high," he notes.
Granderson's explanation for this incongruity is that it's all just the latest ill effects of Reaganite low taxes, slim government benefits, and underregulated corporations.
The more compelling answer is that evictions are up because the economy is so great (or at least better than it used to be).
Landlord Incentives
As Granderson notes, unemployment is low. The unemployment rate has been under four percent for the past two years. Real wages have also been growing.
For landlords, that means that there are a lot of workers with steady incomes out there who would likely make for steadily paying tenants. If their current tenant isn't paying rent or is behind on rent, a low unemployment rate boosts their confidence that they'll be able to find another one who will pay their bills on time. That makes it less risky to take on the costs of evicting a tenant and turning over a unit.
That's a counterintuitive answer. The intuitive assumption is that since evictions are a bad personal economic event, they'll happen more often when economic times are bad generally.
This was the assumption that prompted both Republican and Democratic presidential administrations, and almost every state government, to adopt eviction moratoriums during the pandemic. The fear was that sudden, mass unemployment would result in millions of delinquent renters being kicked out of their homes.
Lessons from the pandemic
This turned out to be wrong. Even after most state moratoriums had lapsed, the federal moratorium had been struck down by the U.S. Supreme Court, and rental assistance programs expired, evictions stayed well below pre-pandemic averages.
Evictions did rise slowly over time, but there was never the sudden "avalanche" or "tsunami" of people getting kicked out of their homes that some housing activists predicted. Today, according to Princeton University's Eviction Lab data, evictions nationwide are slightly below pre-pandemic averages.
The fact that evictions fall during bad economic times and rise during good times might seem to validate the left-wing view that economic growth under capitalism just means more hardship for poor and marginalized renters. Therefore, the thinking goes, we need more legal restrictions on evictions, rent control, and/or direct government provision of housing to keep a roof over people's heads. That too is a mistaken view.
More homes, fewer evictions
All else being equal, economic growth and low unemployment will give landlords a greater incentive to evict a delinquent tenant. But economic growth and low unemployment should also raise the demand for housing, and therefore lead to new housing construction.
More housing supply will in turn make the housing market more competitive for suppliers. A landlord with a delinquent tenant can't be so sure they'll be able to find a replacement so easily, as the pool of potential tenants will have a lot more housing options. More housing supply will also lower housing prices, which in turn should result in fewer tenants risking eviction by falling behind on their rent in the first place.
Thanks to zoning, restrictions on mortgage financing, needless environmental reviews, and more, we're not seeing as much new supply as we would under a free market. That means we're also not seeing the eviction-suppressing effects of new supply.
The result of restricted housing supply in a time of economic growth and low unemployment is higher prices and higher evictions.
As Kevin Erdmann explained in his Substack last June, when there's not enough housing to go around, "somebody has to be displaced, and the displacement is achieved through rising housing costs, which tend to pile up the most on the poorest residents."
The good news in the short term is that in the places where evictions are going up the most (mostly booming sunbelt metros), there is a rash of new supply coming onto the market. This glut of new homes and apartments should cool price increases and evictions.
The better news in the long term is that many states are passing YIMBY zoning reforms that will make housing supply even more elastic. That is unless NIMBY forces manage to handicap these laws right out of the gate…
This past Wednesday, 54 percent of voters in Milton, Massachusetts, an inner suburb of Boston, approved a ballot initiative repealing recently passed local zoning amendments that allowed apartments near local rail stations.
In doing so, the town has made itself non-compliant with Massachusetts' signature YIMBY reform—the 2021 MBTA Communities Law—which requires towns with rail transit service to allow apartments near rail stations.
The vote sets up a crucial test for the state law: can it prod reluctant local governments to zone for infill housing in a way that actually gets units built? Or will it be another state YIMBY reform that's bested by clever NIMBY intransigence?
The backstory
Prior to Wednesday's vote, it appeared most localities were complying with the letter of the MBTA Communities Law. All twelve of the towns required by the law to pass upzoning legislation by the end of 2023 had done so.
That includes Milton. In December 2023, the town passed the state-required zoning changes. But shortly thereafter, local activists gathered enough signatures to put the zoning changes up to a popular vote.
State officials, including Gov. Maura Healey and Attorney General Andrea Campbell, had warned the town that a vote for repeal would make Milton ineligible for numerous state grants and a lawsuit from the state.
Consequences
Having voted for repeal anyway, Milton is now ineligible for three grant programs, including the state's largest capital grant program for localities. It's uncompetitive for another dozen grants.
The attorney general's office has made clear that "communities cannot avoid their obligations under the Law by foregoing this funding." Campbell said in a sharply worded, pre-vote letter to Milton that her office would bring legal action to enforce the MBTA Communities Law "without hesitation."
Jesse Kanson-Benanav, executive director of Abundant Housing Massachusetts, tells Reason that there's speculation that developers could also sue non-compliant town governments should projects they propose that meet the state law standards are rejected.
The combined weight of all these potential enforcement actions is seemingly encouraging most communities to come into line. Milton is thus far the exception, and even there, the margin on its referendum was a little under 800 votes.
An uncertain road ahead
The longer-term risk is that communities will find ways to comply with the MBTA Communities Law on paper while thwarting it in practice. The zoning amendments Milton had approved, for instance, required that newly legal apartments come with parking spaces and below-market-rate units—both of which are a tax on new housing.
Kanson-Benanav suggests some towns might come into paper compliance by upzoning commercial parcels that wouldn't likely be redeveloped into housing or upzone near environmentally protected areas where development is infeasible.
"It's hard to know what's written on paper, what its impact will be in practice," he says.
Was it too good to last? That's the question that YIMBYs in Florida might be asking themselves as local governments rebel against, and state lawmakers mull reforms of, the state's year-old Live Local Act.
The law allows developers to build apartments in commercial and industrial areas, local zoning be damned, provided the new housing includes affordable units.
Because the law's affordability requirements are turning out to be pretty modest, and its density allowances are turning out to be mouth-wateringly generous, developers have made ready use of the law to build massive new high-rises that would have otherwise been prohibited by local zoning.
Now the backlash. The Tampa Bay Times reports that Pasco County threatened to sue developers trying to use the law to build apartments. Another city adopted a six-month building moratorium to block a Live Local Project.
At the state level, the Florida Senate approved a bill that weakens the Live Local Act's zoning preemptions in one respect while strengthening them in another.
S.B. 328 would allow local governments to say no to Live Local projects that are more than 150 percent taller than adjacent buildings if its near a single-family neighborhood. In applicable areas, that's a significant reduction in the law's height allowances.
On the other hand, S.B. 328 would prohibit local governments from imposing floor-area-ratio regulations on Live Local projects. That would significantly pare back localities' ability to thwart Live Local projects they don't like.
All things considered, S.B. 328 doesn't appear to be a bad trade. It's now being considered by the Florida House of Representatives.
Early last year, Arlington County, Virginia, approved a series of zoning changes that allowed up to at least four units of housing to be built in neighborhoods formerly zoned for only single-family housing.
The architects of the reforms described them as intentionally "small 'c' conservative" by only allowing a modest amount of new housing. A yearly cap on how many new duplexes, triplexes, and the like could be built made sure of that.
The cap's done nothing to mollify opponents of the missing middle reforms, who expressed heated opposition during the local legislative process and are now suing to undo the already passed reforms.
Last month, an Arlington Circuit Court Judge rejected a motion from Arlington County seeking to stop the lawsuit from going to trial later this summer. Also last month, residents in neighboring Alexandria, Virginia, sued to overturn that city's also-quite-modest ending of single-family-only zoning.
Zoning reformers might consider these lawsuits good news in a way. Middle-housing opponents lost in the democratic process, so now they have to resort to the courts.
On the other hand, local courts have recently issued some truly bizarre rulings overturning other state and city laws abolishing single-family zoning. The Arlington and Alexandria lawsuits will be an important test of whether even modest missing middle reforms can stick.
The post Good Times, Bad Times: Eviction Edition appeared first on Reason.com.
]]>Housing news happens all across the country, but this week's Rent Free is a little more California-centric. Our stories include:
But first, our lead story about zoning laws once again coming for the Good Samaritan.
Since March 2023, Chris Avell's church, Dad's Place, in Bryan, Ohio, has been keeping its doors open 24/7 for anyone who might stop by to use the church's kitchen, get food for themselves or their pets from its pantry, or join in church services.
When the homeless shelter next door is full, Dad's Place will take in some of those people too. Avell considers all these activities a core part of his church's mission. The city of Bryan, however, considers his sheltering of people an illegal, residential use of a commercially zoned property.
This past New Year's Eve, when Avell was arriving at the church to preach that Sunday morning, a police officer served him with 18 criminal charges related to violations of the town's zoning code. Avell pleaded not guilty to those charges earlier this month.
Churches' charitable activities often don't fit neatly into zoning codes' definitions of commercial and residential uses. For that reason, they often get dinged with code violations for doing things like operating a soup kitchen in a residential area or sheltering people in a commercial zone.
The fact that churches are also serving the poor and homeless can make them a target of nuisance complaints from neighbors and extra scrutiny and enforcement from local officials as well.
Bryan's decision to criminally charge Avell is nevertheless unusually punitive.
"It's a rarity that a city and a mayor would press criminal charges against a church period. I'm not aware of a mayor anywhere in the country prosecuting a pastor for having his church open. That seems to be the very definition of religious discrimination," says Jeremey Dys, an attorney with the First Liberty Institute who is representing Avell.
City officials hit Dad's Place with an escalating series of complaints before it filed criminal charges.
In early November 2023, city police and fire personnel visited Dad's Place, where they interrogated people inside and recorded a number of alleged violations of the zoning and fire code. They gave the church 10 days to fix the code violations and stop letting people use the church as a residence.
After those ten days had expired, the city's zoning administrator also visited the church, where he observed more allegedly illegal residential activity including people sleeping in chairs and makeshift bedrooms and preparing food in the church's kitchen. The administrator's report recommended charges be filed against Avell.
Dys argues that the city is using an unfairly narrow definition of what counts as church activity to persecute Avell and Dad's Place.
"It may not look like St. Paul's cathedral, but it is in every sense a church," he says. "Mayor [Carrie] Schlade has in her mind that churches meet at 10 a.m. to noon on a Sunday morning and then they lock the doors and go away for the rest of the week."
The city objects to the idea that they're discriminating against Dad's Place.
"Pastor Avell never requested, nor was approval given, to use Dad's Place as a residence or homeless shelter. The city enforces its zoning code equally against all. A church does not have special rights under the zoning code," reads a city press release from last week.
A subsequent fire department investigation this month also discovered a gas leak and other fire code violations, says the press release.
Dys says that the church is eager to provide a safe environment but that city officials are unfairly targeting Dad's place and that they are giving the city shifting demands on what needs to be done to the building. He notes that the pastor of the previous church that had occupied Dad's Place's building lived on site.
Attempts to negotiate with the city have gone nowhere, says Dys. "It's been 'kick everyone out and then we'll talk'."
Beverley Hills, California, property owners are the collateral casualties in a war between the city and activists suing over its failure to allow new housing construction.
Last week, the Los Angeles Times reported that a Los Angeles County Superior Court judge had blocked the city from issuing new building permits for projects that don't add new housing. That means anyone in Beverly Hills wanting to expand their business or dig a pool in their backyard now can't.
The order comes in a lawsuit brought by the non-profit Californians for Homeownership against Beverly Hills for adopting what they allege is a housing production plan that doesn't meet state requirements.
For background, California gives cities targets of how many housing units they should be permitting to keep up with job and population growth. Localities are required to produce "housing elements" outlining where this new housing can go. The state reviews and certifies these housing elements.
One trick cities have long used to perfunctorily comply with the law while avoiding actually having to allow new housing is to identify existing, profitable businesses as the site of future housing. The city can say it's planned for new housing, even though it's exceedingly unlikely the business will actually be redeveloped.
State housing officials accused Beverly Hills of doing just this when it submitted a draft housing element for review. When Beverly Hills went ahead and adopted the housing element, Californians for Homeownership sued the city.
Courts have a lot of discretion to craft remedies and block cities' ability to issue permits if they're out of step with state housing law, says Chris Elmendorf, a law professor at the University of California, Davis. But they've generally used these powers sparingly. A complete moratorium on all building permits, but for those that involve adding new housing, is possibly unprecedented, he tells Reason.
Pro-development "yes in my backyard" (YIMBY) legislators and activists have cheered the ruling.
"Ignoring state housing law has consequences," said California Sen. Scott Wiener (D–San Francisco) on X (formerly Twitter).
To be sure, the city has invited these consequences by flouting pretty clear warnings from state officials about the inadequacy of its housing element. It's true too that Beverly Hills' restrictions on new housing production crush property owners' ability to improve their land and make the city more unaffordable than it otherwise would be.
Still, the people suffering consequences of Beverly Hills' NIMBYism and irresponsibility aren't really the city government but residents who don't have any direct ability to force their city government to do anything.
Supporters of the courts' moratorium say an inability to get permits will encourage these residents to pressure their local leaders to get into compliance with state law. That also strikes me as overreach. It's an attempt to coerce people into supporting local policy changes by taking away their private rights to improve their property.
Far away from Southern California's wealth, growth-hostile enclaves, development company California Forever has released the language of a proposed ballot initiative it'll need to pass to build a new, urbanist-inspired city in rural Solano County.
The 83-page initiative, which is intended to appear on the November 2024 county ballot, would amend the county's existing zoning laws and urban growth boundaries to allow a new community on 18,600 acres of land owned by California Forever's subsidiary company Flannery Associates.
The initiative would require the company to abide by a number of community benefits agreements—including paying $500 million for scholarships, affordable housing, and parks, as well as another $200 million to invest in existing downtown areas in the county's existing communities.
The California Forever plan for a new city has been controversial since before it was even unveiled. The mysterious Flannery Associates' land acquisitions led to lawsuits between existing landowners and the company. Congress held hearings on whether the company's land purchases near Travis Air Force Base was some sort of Chinese spy plot.
The New York Times eventually uncovered that the land purchases were not an act of espionage, but something even more insidious: a tech-billionaire-backed plan to build a whole new city.
The company has done its best to frame its new city plans as something sustainable and desirable, but not necessarily radical. "All cities were once 'new' cities," California Forever says in some of the pitch material on its website.
California Forever's plans have received a frosty reception from Solano County residents in community meetings thus far. Should it pass, the ballot initiative would also require an exacting level of environmental review to be done of the proposed new community. That could open up the company and the county to years of environmental litigation from project opponents claiming this or that environmental impact wasn't studied enough.
Speaking of excessive litigation, neighborhood activists in Alexandria, Virginia, have filed a lawsuit to undo a suite of zoning reforms the city passed late last year.
The suburban D.C. community's reforms allowed at least four units on all residential lots, housing in industrial zones, reduced parking minimums near transit, and expanded a density bonus program for affordable housing.
A lawsuit filed by the Coalition for a Livable Alexandria and several individual members, and posted online by WTOP, claims the city failed to show that allowing more housing in the city will improve housing affordability. By not establishing that link, the city had acted in an "arbitrary and capricious" manner, they argue.
The group's lawsuit also argues that the zoning reforms violate the Virginia Constitution's equal protection guarantees because they leave private restrictive covenants in place. Anti-development activists managed to block Montana's zoning reforms using that same argument.
The Livable Alexandria lawsuit also seems to argue there's an equal protection violation inherent in upzoning single-family neighborhoods because some single-family homeowners are black. The city's abolition of single-family zoning "deprives Plaintiff Phylius Burks, an African American, of equal protection by moving the goal post as to land ownership after Plaintiff Phylius Burk purchased a single-family home" reads the lawsuit.
We'll have to wait and see if that argument sticks.
The occupancy limits of Fort Collins, Colorado, allow a family to live with an exchange student or a nanny. A family living with an exchange student and a nanny is prohibited. Maybe this is why more sitcoms aren't set there.
The post Zoning Bans the Good Samaritan appeared first on Reason.com.
]]>State legislatures and city councils are starting off 2024 by proposing lots of housing policy reforms, many good, many not so good. This week's Rent Free covers a lot of them, including:
But first, our lead story about the rich and well-to-do beneficiaries of rent control in New York City.
New York's rent stabilization law—which sets limits on maximum rents and rent increases on roughly 1 million apartments in New York City and beyond—is intended to provide stable, affordable housing to the state's renters. It's also providing a windfall for wealthy homeowners.
Documents shared with Reason show the rents paid by several New York City tenants at their rent-stabilized apartments. Other documents shared with Reason, as well as public property information, show the same tenants own additional property worth north of $1 million. Some of these rent-stabilized tenants are themselves landlords who rent out their properties for more than what their rent-stabilized apartments cost.
That includes a married couple with a four-bedroom home in the tony community of East Hampton, New York. The husband is a wine broker. The wife is a real estate associate with Sotheby's International Realty. A county document show their East Hampton property has an appraised value of $2 million.
The couple's address on that same document is a rent-stabilized apartment in Lower Manhattan where the legal rent as of September 2023 is $931 a month. Online rental listings show market-rate one-bedroom apartments in the same neighborhood renting for anywhere from $3,000 to $7,000.
Another woman, an anthropologist with her own consultancy firm, is listed as the lessee of a Brooklyn Heights apartment with a legal monthly rent of $2,436. Market-rate one-bedroom apartments in the same neighborhood go from $4,000 to $5,000 a month.
County property records show that the same woman owns a home in the Long Island community of Greenport, New York. She advertises it as a vacation home for rent on her personal website, and it's listed on several rental websites with a quoted monthly rental price of $12,000.
No Means Testing
This is all perfectly legal. New York's rent stabilization law has no means-testing requirements. That means people of any income can benefit from its suppressed rents.
Wealthy tenants are getting some of the best deals out of the state's rent stabilization law. An in-depth Wall Street Journal analysis from 2019 found that regulated rents in richer Manhattan are around half that of market-rate rents. Regulated rents in working-class areas of Queens and the Bronx are at most few hundred dollars less than market rents.
Higher-income rent-stabilized tenants were paying 39 percent less rent on average than their peers in market-rate apartments. Lower-income rent-stabilized tenants were paying only 15 percent less than their peers in market-rate apartments.
"The biggest beneficiaries of rent regulation in New York aren't low-income tenants across New York City, but more affluent, white residents of Manhattan," concluded the Journal.
The owners of rent-stabilized buildings are chaffing at requirements that they provide housing at below-market rates to people who are themselves high-income property owners.
"Rent regulation without means testing has become a scheme that rewards affluent New Yorkers whose sense of entitlement has wrecked affordable housing options for those who truly need help," said Joseph Strasburg, president of the Rent Stabilization Association, in a statement to Reason.
Little Change of Reform
New York's progressive and socialist legislators typically oppose any efforts to weaken rent stabilization or exclude the wealthy from its benefits.
In fact, progressive-backed changes to New York's rent stabilization law in 2019 made the program more favorable to high-income tenants. Under the old rules, building owners could start charging market rents on their apartments if legal rents exceeded a certain threshold and their tenant earned above $200,000 a year for two years in a row. The 2019 amendments to rent stabilization closed that "loophole."
More recently, New York state Sen. Julia Salazar (D, WF–Brooklyn) and other progressive legislators have been pushing "good cause" eviction legislation that would generally cap rent increases for all tenants (regardless of income) at 3 percent and allow renters to challenge literally any rent increase in housing court.
Real estate advocates tell Reason that adding a means-testing requirement to the rent stabilization program is a political non-starter. The wealthy beneficiaries of rent stabilization are obviously in no hurry to change the system.
Some legislators are themselves beneficiaries of rent stabilization. That includes Assemblywoman Linda Rosenthal (D, WF–Manhattan), chair of the Assembly's housing committee. The New York Post recently reported that Rosenthal, who earns $174,000 as a legislator, inherited a rent-stabilized Upper West Side apartment.
Rosenthal has also criticized New York City Mayor Eric Adams' administration's efforts to make market-rate housing construction easier. "I'm not that worried about non-affordable housing, actually," said Rosenthal. "People who have means can buy, rent anything they need in this city."
Is the third time the charm? That's certainly the hope of "yes in my backyard" (YIMBY) activists in Fort Collins, Colorado. They are pushing the city council—which has passed and then repealed a handful of liberalizing changes to the zoning code twice in less than two years—to approve the reforms for a third time.
In November 2022, Fort Collins passed a long list of updates to their land use code that included legalizing duplexes, triplexes (provided one unit was below market rate), and accessory dwelling units (ADUs) in single-family-only zoned neighborhoods across the city and upzoning transit-serviced corridors.
That sparked fierce resistance from neighborhood activists, who formed the group Preserve Fort Collins to oppose the reforms. Preserve Fort Collins describes the city council's reforms as a "free-for-all for housing developers and investors" on their website.
Within a month, the group collected enough signatures for a petition requiring the city council to either repeal their zoning changes or place the full near-500-page code update on the ballot.
The council opted to repeal and replace the code changes in 2023 with a more modest set of zoning updates that still allowed some increased densities and ADUs in residential areas. Candidates who supported the zoning changes also managed to sweep city council elections in November 2023.
But the moderating changes did little to propitiate Preserve Fort Collins, who described the new, watered-down code as an "ill-conceived march toward density and overpopulation." They once again launched a successful petition requiring the city council to repeal the code changes or place them on the ballot. In December 2023, the council once again opted for repeal.
Nevertheless, the Coloradoan reports that city council members say they will take a third crack at zoning updates come January and will work with Preserve Fort Collins to see what changes they could live with.
Chris Conway, a local teacher and activist with the group YIMBY Fort Collins, argues that the results of the November election give the council a mandate to press forward with zoning reforms that allow more housing in more areas.
"The problem in Fort Collins is blindly obvious," Conway tells Reason. "The code is a response to the concerns of regular people in Fort Collins that their friends and families and themselves are being priced out of the city."
It can take up to half a century to get a new subdivision approved in Marin County, California. To make housing more affordable, the county is now mulling a crackdown on Airbnb.
On Thursday, the Marin County Board of Supervisors will consider an ordinance drafted by county staff that would place strict new limits on short-term rentals in the western, oceanside parts of the county.
Since 2022, Marin County has had a moratorium on issuing new short-term rental licenses there.
The new county's draft ordinance, unveiled late last year, would go further by banning short-term rentals in multifamily buildings within two years and imposing new caps on short-term rental licenses below the number of rentals currently in operation. The caps are distributed by community, with some community caps being roughly 70 percent below the current number of licensees.
Existing license-holders would be able to keep renting out their properties (provided they're not in multifamily buildings). But new licenses above the cap can't be issued. Current licensees will also have to meet new review requirements and pay additional fees.
The county describes its new limits on short-term rentals as a means of "[improving] the availability of middle- and lower-income housing."
Sean Callagy, a Marin homeowner, Airbnb host, and member of the West Marin Access Coalition, which advocates for lighter regulation of short-term rentals, argues it's a misconception that short-term rentals remove long-term rental housing from the market.
He says most of the country's short-term rental operators are like him; homeowners who rent out their vacation homes for some of the year to help pay the mortgage. If putting their home on Airbnb weren't an option, few would rent it to a long-term tenant. Many would have to sell to an owner-occupier.
"It's ban first and ask questions later, but they didn't really ask the questions. They're proceeding under the assumption that if we drive away [short-term rentals] life gets better for everyone and it just doesn't make sense," says Callagy.
Back when rent control's reputation was at rock bottom, state Legislatures across the country passed laws preventing local governments from regulating the prices landlords charged their tenants. With the policy undergoing a very unjustified rehabilitation, some lawmakers are trying to undo their state's preemptions.
In Wisconsin, a group of Democratic lawmakers have introduced a bill that would repeal a law barring localities from adopting rent control and inclusionary zoning (a policy that requires developers to include below-market-rate, often money-losing units in their projects). Eleven assembly members and three senators have signed onto the legislation thus far.
Likewise, in Georgia, Rep. Eric Bell (D–Jonesboro) has introduced a bill that would repeal the Peach State's preemption on rent control.
"[Local governments] know what's best for their communities. So I feel like we should empower them to take control and have a stronger local control," Bell told local news channel 11 Alive.
Both states have majority-Republican legislatures, meaning these bills likely won't pass. Efforts to undo state rent control preemptions are nevertheless worrisome.
Rent control has a bad track record everywhere it's been implemented. The research is pretty clear that to the degree rent control policies suppress rent increases, they also suppress housing supply. It's a good thing that state laws prevent local governments from trying to use rent control to fix a housing supply shortage caused largely by their own locally set zoning laws.
Palm Beach, Florida, sets minimum lot sizes for dogs and cats. One can keep a maximum of ten dogs and/or cats on properties that are 1.5 acres or smaller. Keeping a pack of 11 to 20 dogs and/or cats requires a property of at least 2.5 acres. Properties that are 2.5 acres or more can host up to 30 cats and/or dogs.
The post Rent Control for the Rich appeared first on Reason.com.
]]>With a new year comes new opportunities, and lots of new zoning news. But on Day 2 of 2024, there's still a lot of old business to wrap up. This week's edition of Rent Free includes:
But first, we have a story on a truly bizarre court decision blocking zoning reform in Montana.
In an eyebrow-raising decision, a Montana judge has halted the implementation of two laws legalizing duplexes and accessory dwelling units on residential land across the state, writing that they'd likely do "irreparable" damage to residents of single-family neighborhoods.
"With the 'top-down' imposition of these measures, Montana's citizens…stand to suffer. They dread waking up in the morning, with no notice, and a new, more dense, building is being erected in their family neighborhood," wrote Gallatin County Judge Mike Salvagni in a Friday opinion granting suing homeowners a requested preliminary injunction against the new laws.
Large majorities in the Montana Legislature had passed duplex and Accessory Dwelling Units (ADU) laws last year as part of a package of reforms that also allowed housing in commercial zones and restricted individuals' ability to challenge the approval of general plan-compliant housing projects.
Dubbed the "Montana Miracle" by CityLab, the reforms rank as some of the more ambitious housing bills passed by any state legislature last year.
Throughout the process, these reforms attracted the opposition of some local governments and homeowner groups who argued they would spoil existing single-family neighborhoods with rampant development.
This past month, homeowners organized under the group Montanans Against Irresponsible Densification (MAID) sued the state to overturn the new laws.
The group argued that the state's zoning reforms violated constitutional guarantees of equal protection by only allowing ADUs and duplexes in single-family areas that are not covered by restrictive private covenants that ban this type of housing. MAID said this would unfairly funnel development into areas without protective covenants, and produce arbitrary results whereby duplexes could be built on one side of a street, but not on the other side.
The group also argued that the new duplex and ADU laws, by requiring local governments to approve this type of housing, violated provisions of the Montana Constitution guaranteeing citizens' right to participate in government decision-making.
It's an odd idea indeed that people have a constitutional right to the protection of private covenants they didn't opt into. One commenter on X (formerly Twitter) noted that existing zoning laws produce equally arbitrary results of allowing duplexes on one side of a street but only single-family homes on another.
Nevertheless, Salvagni reasoned that MAID's arguments were likely to prevail.
In regards to the group's equal protection claims, he writes that "the result of the new laws is that two different sets of people, one protected by restrictive covenants, the other not, results in an arbitrary application of Montana law which is unrelated to any legitimate governmental purpose."
Salvagni also agreed with MAID that citizens' right to participate in government decision-making was likely violated. He rejected the state's argument that the public's ability to participate in the legislative process through which the ADU and duplex laws were passed sufficient public participation.
It's an inevitability that as more supply-side Yes in My Backyard (YIMBY) zoning reforms are passed, more will end up getting challenged in court.
In September 2023, a Minnesota judge overturned Minneapolis' first-in-the-nation abolition of single-family-only zoning (in addition to other zoning reforms), citing the city's failure to conduct a proper state-required environmental analysis of increased allowable density.
Last month, a court in Texas also shot down zoning reforms passed by the city of Austin, siding with homeowners who'd argued the city failed to provide adequate individualized notice of the zoning changes to affected property owners.
These decisions invalidated reforms on largely procedural grounds. Salvagni's decision appears more sweeping by blocking zoning reforms because of their substance. Any law limiting public hearings on individual projects or legalizing more housing than what's allowed under existing private covenants would seem to be vulnerable under the logic of his decision.
Lawyer and Mercatus Scholar Charles Gardner has a thread on X highlighting the more novel parts of Salvagni's opinion and arguing that his decision is vulnerable to being overturned on appeal. Time will tell.
Charlottesville, Virginia, and Portland, Maine closed out the year by passing "missing middle" reforms that allow smaller multi-unit developments in formerly single-family-only areas.
Charlottesville
On December 18, the Charlottesville City Council unanimously approved a major overhaul of its zoning code that's been several years in the making.
The changes include liberalizing rules in low-density residential zones to allow at least three units by-right almost everywhere in the city, and up to eight units by-right in some residential zones. Preservation and affordability bonuses would allow builders to add up to 12 units on some parcels.
The city did retain a small single-family-only district (covering 4 percent of city land), but even here builders will have the option of adding two additional homes if they preserve the existing house on the property.
The city also created new "inclusionary zoning" standards requiring developers of projects that contain more than 10 units in mixed-use zones to offer 10 percent of those new units at rates that are affordable to people making 60 percent of the area median income. That's a pretty burdensome affordability requirement that will likely make a lot of smaller-scale apartment construction infeasible.
Charlottesville Planning Commissioner Rory Stolzenberg has a helpful thread summarizing the zoning changes. The full draft ordinance, which does not include some amendments made at the December 18 meeting, can be found here.
Portland
Also on December 18, the city council of Portland, Maine, passed a slew of zoning reforms that allow up to four units of housing on most residential properties in the city.
The reforms are intended to bring Portland into compliance with a 2022 state law requiring localities to allow "middle housing" in all residential zones. The deadline for compliance with the state law was January 1, 2024.
Portland already allowed one primary unit and two accessory dwelling units in all residential zones, plus duplexes and triplexes in select areas of the city. The new reforms allow up to four primary residences as well as two accessory ADUs on all residential lots on the mainland and up to three units (plus two ADUs) on islands within Portland's jurisdiction.
The city also eliminated parking requirements for four-unit homes.
In Montana, equal protection entitles you to be covered by restrictive covenants you didn't opt into. In Colorado, equal protection apparently doesn't protect you from cities from writing zoning ordinances that only apply to you and no one else.
The Colorado Court of Appeals has given its blessing to a Lakewood, Colorado, ordinance that bans colleges from owning off-campus student housing. The Colorado Christian University—which had converted several off-campus homes it owned into student housing—challenged the ordinance in 2021. The university argued that, as the only entity covered by the law, it was being unfairly singled out.
The appeals court rejected those arguments, finding instead that the law was a legitimate way for the city to protect residential neighborhoods being turned into "university residential life centers."
I have a new feature for Reason covering Florida's efforts to overcome its legacy of slow growth laws. That includes recent reforms allowing property owners to build residential projects in commercial areas, much to the chagrin of local officials. A snippet:
For years now, Miami Beach officials have talked and acted like the historic Clevelander hotel was the worst thing to ever happen to the city. That was until they saw the business's plans for shutting down.
Over the past decade, the adults-only hotel, bar, and restaurant on Ocean Drive has been beefing with the city over whether it is an iconic pillar of South Beach's world-famous nightlife or a bad actor whose late-night operations are bringing crime and out-of-control revelers to the area.
"It's been a very contentious seven or eight years just to stay open," says Alexander Tachmes, a lawyer and spokesperson for the Clevelander. He estimates that the business has spent $1 million challenging restrictions the city has slapped on its nighttime concerts and alcohol sales.
Tiring of fighting continuous, expensive court cases, the Clevelander's owners decided to do something different.
In September 2023, they announced a plan to redevelop the five-story hotel into a 30-story residential tower. Most of the new homes would be luxury beachside condos. But 40 percent would be below–market rate, affordable units. The redevelopment would be a way to get out of the politically controversial bar business while cashing in on the growing demand for housing in ultra-expensive Miami Beach.
As a bonus, it really pisses off the city.
"I was hoping that it was simply a joke, but I don't think it is," says Miami Beach Mayor Dan Gelber. While he'd be happy to see the Clevelander replaced, he says the owners are scoring zero points with their "hideously out-of-scale" proposal.
"It's absurd," the mayor tells Reason. "It's like the kids that kill their parents and say, 'Have mercy on us, we're orphans.'"
You can read the whole thing here.
New York City's zoning code allows entertainment venues to allow patrons to dance in all manufacturing districts. The code nevertheless prohibits customer dancing in C-1 and C-5 commercial districts.
The post Court's Wild Zoning Decision Blocks 'Montana Miracle' appeared first on Reason.com.
]]>Happy Tuesday and happy holidays to all Rent Free readers who've helped make the newsletter a success right out of the gate. To close out 2023, I wanted to try something a little more in the Christmas spirit than the normal rundown of the week's top housing and urbanism stories.
December 26 is when many are feeling a bit of a holiday hangover (and maybe an actual hangover) after the excitement of Christmas Day.
Of course, if you are familiar with the lyrics of the classic "Twelve Days of Christmas" song, you'll know that the season is only just getting started. Over the next few days, you can expect a series of increasingly outlandish gifts from your true love.
Now, it's beyond my means to send every reader a partridge in a pear tree. The next best thing I can offer is the following list of increasingly off-the-wall ideas for making our cities more affordable, functional, and free.
Some of these are more grounded in actual white papers than others. A few still need a couple of details worked out. One or two are more thought experiments than anything else. But they hopefully will provide some food for thought as you polish off the last remaining dregs of eggnog.
This past year saw a lot of practical, incremental housing reforms get passed. In 2024, we should try some more out-of-the-box thinking.
(And check back next Tuesday when we return to regular programming.)
California has a policy called the "builder's remedy," which allows developers to build residential projects of unlimited density in communities that are out of compliance with state housing law, local zoning be damned.
It's supposed to be a weapon of last resort against cities that refuse to permit their fair share of housing.
To date, however, no one's gotten one of these builder's remedy projects approved. One reason is that California housing law and related court decisions make it anyone's guess when a city is actually out of compliance with state housing law.
One exceedingly modest off-the-wall idea to clear up this confusion, and make the system more market-oriented, would be to adopt a price-based builder's remedy law.
Let's make communities eligible for builder's remedy projects when rents or home values go above a certain price level.
Setting an objective standard for when builder's remedy projects apply would route around a lot of bureaucracy. Basing that objective standard on housing prices would allow home construction in places where demand for it is highest. Cities that wanted to avoid "builder's remedy" megaprojects would have to reform their zoning codes until they'd achieved broad-based affordability.
America's housing shortage is often blamed on an excess of local control. Could hyper-local control be part of the solution?
One modestly off-the-wall idea that's gaining currency in the United Kingdom is "block voting" or "street voting." Basically, this policy allows small collections of property owners on the block level to vote to upzone themselves without the need to get approval from city hall.
Incumbent homeowners often oppose upzoning that allows new housing because they get nothing from the new housing except more noise, more traffic, and potentially lower property values.
You can say that's a bad attitude. The idea behind block voting is that it's bad economics too. Homeowners should support upzoning, because increasing the development potential of their land should make their land more valuable.
If small collections of homeowners were given the opportunity to upzone their own land, odds are many would do it, and sell it off to the next developer who comes knocking. The homeowners get more money, and the city gets more housing. Everyone wins!
Bills that allow duplexes in single-family zones or mid-rise apartments near transit stops can turn into knock-down, drag-out fights that suck up everyone's effort and time. Wouldn't it be easier to just slip these reforms through without anyone noticing?
That might sound really off the wall. It's more or less what the Florida Legislature did this year when it passed the Live Local Act.
The law is mostly a grab bag of mortgage subsidies and developer tax credits. Tucked inside is a provision allowing developers to build housing in commercial and industrial areas, provided they include a set percentage of affordable housing. The residential projects allowed by the Live Local Act can also be as tall as the highest building within a mile.
For much of the state's suburban areas, that's not too dramatic a change. A disused strip mall can be turned into a low-slung apartment building.
In a place like Miami Beach, property owners are claiming the law gives them the ability to turn low-slung, landmarked hotels into residential skyscrapers.
If people grokked how much upzoning the Live Local Act really allowed when it was first proposed, it's possible it wouldn't have passed. One lesson for future YIMBYs is they should write their reforms in a way that will produce a lot of housing, without catching the attention of their NIMBY opposition before everything's signed into law.
The United States Postal Service (USPS) has been in the red for decades, necessitating constant subsidies from taxpayers. Those same taxpayers, meanwhile, are suffering the full brunt of America's housing cost crisis.
One midrange off-the-wall idea to solve both these problems at once would be to make the Postal Service into a real estate titan.
In a 2020 op-ed, infrastructure researcher Nick Zaiac and California YIMBY Research Director (and occasional Reason contributor) M. Nolan Gray noted that USPS owns 8,400 facilities totaling 900 million square feet of land and that much of it is in highly desirable, highly expensive urban areas. And because this is federally owned land, it's exempt from local zoning laws.
USPS should take advantage of both facts by selling off the development rights to build housing on top of existing postal properties. That would shore up the postal service's finances while adding thousands of new homes. As a bonus, people living on top of their post office would probably get their mail a lot faster too.
In January, a former Los Angeles city councilmember pled guilty to federal charges stemming from bribes he accepted from a developer. In June, a sitting Los Angeles councilmember was indicted for a similar scheme.
This is hardly a phenomenon confined to Los Angeles. Odds are, by the time you're done reading this list, some local official somewhere will have been arrested for taking bribes from a developer.
The frequency of real estate–related corruption scandals at city hall is a real shame. It's also real evidence of just how costly zoning regulations can be.
Profit-maximizing developers are willing to shell out exorbitant bribes only because the rules they're trying to route around cost them even more. Public officials will risk prison accepting those bribes because their power to say yes or no to new housing is really that valuable.
Lawlessness isn't good. It's also inefficient.
Instead of forcing developers and city council members to illegally swap favors in smoke-filled rooms, let's bring the whole process above ground. Let's "legalize" corruption by letting developers pay a cash price for regulatory relief.
If a developer wants to build a taller building than the zoning code allows or put apartments in an exclusively commercial zone, there should be a set price they can pay to get their permits. Politicians could get a percentage of this money for their personal use, while the rest goes into the public treasury.
This is a solidly off-the-wall idea but it could be a big boon for housing.
With legalized corruption, developers will make more money building larger, less-regulated projects. The public will get more housing and more tax revenue. The politicians will get smaller bribes, yes, but they'll also avoid going to prison.
Economist Gordon Tullock argued that in the short term corruption could improve the efficiency of systems with bad rules. But over the long run, Tullock said, politicians would make the rules even worse to maximize the bribes people pay to escape the bad rules.
A system of formally legalized corruption would likely produce the same result. But it would at least make the cost of bad rules all the more apparent.
In America, localities have carte blanche to write their zoning codes from start to finish. The result is a bewildering patchwork of bespoke local processes, one-off special districts, and arcane definitions. Because these rules are written by the level of government least interested in growth, they tend to be pretty restrictive too.
An off-the-wall idea to fix this problem would be to do zoning Japanese-style.
In the land of the rising sun, the national government is responsible for coming up with zoning districts. While an individual American city might have dozens of districts and overlays, the entire nation of Japan has just 12. The rules for each are also more flexible: Housing can go in commercial districts, shops can be built in residential areas, etc.
Local governments are still responsible for mapping which zones cover which properties. But they have to use those nationally created zoning districts.
Thanks to this system, Japanese cities are remarkably affordable places brimming with mixed commercial/residential areas. We could have that here too.
Notwithstanding all the nice things I just said about Japanese zoning, we really should just get rid of zoning altogether. That sounds pretty off the wall when you first hear it. After all, zoning laws are something most people just kind of accept, as a fish accepts the water it swims in.
But zoning is the real off-the-wall idea when you start to think about it. And not in a good way.
Anyone with a free market bone in his body should realize how crazy it is that we entrust city hall to scientifically plot out which kinds of buildings will go where, and then decide what's allowed to happen in each one.
Less libertarian observers still can, and indeed have, looked at the results of zoning in terms of higher home prices, longer commutes, higher rates of homelessness, less economic dynamism, and more, and decided the whole system has to go.
I make a more elaborate case for this in my "Zoning Theory of Everything" essay from earlier this year.
Gray also wrote a whole book about how a world without zoning would more easily deal with the things we think zoning is supposed to solve: noise, pollution, neighborhood character, etc.
Most of the housing and housing affordability discussion focuses on the zoning code. Less attention gets paid to the building code, which tells you how buildings actually have to be built.
While zoning has no merit whatsoever, the building code does have some value in protecting health and safety. But it can still cause lots of problems.
For instance, antiquated building code requirements that apartment buildings have two staircases make smaller garden apartments hard or impossible to build, and ruin the layout of family-sized apartments, for instance. Oftentimes, the building code requires the use of expensive materials that do nothing to protect human life, but do drive up construction costs.
An admittedly pretty off-the-wall idea would be to get rid of the building code too. In its place, we could rely on insurance companies to set more market-driven, and more rational, health and safety standards for new construction. Ensuring builders are liable, civilly and criminally, for shoddy work would enforce good behavior.
In return, builders would have more flexibility, people would have cheaper housing, and taxpayers could redirect all the money they spend on building inspectors into something more useful.
Former President Donald Trump has promised that, if elected to a second term, he'll kickstart the construction of beautiful "freedom cities" on federal land, where housing will be affordable and cars will fly.
The specifics of what Trump is proposing are indeed off the wall—so much so that I can't truly recommend the idea. That said, a more modest version of freedom cities would be a great idea.
The federal government owns vast tracts of undeveloped land in western states. A lot of that land exists on the exurban fringes of thriving cities, where it functions as a de facto urban growth boundary.
Given the post-COVID boom in Mountain West home prices, there's clearly a lot of demand for developing this exurban land. And if someone wants to take a chance on building a real freedom city out in the middle of nowhere, they should have that right too.
Opening up federal lands to residential development would require congressional action. Fortunately, Sen. Mike Lee (R–Utah) already has a bill to get the job done.
If Congress really wanted to do something to help more Americans own a home, they should drop their efforts to impose rent control on the whole country and take up Lee's bill to make (sort of) freedom cities a real possibility.
A pithy piece of investment advice Tony Soprano gives his son is to buy land because God isn't making any more of it.
Perhaps He isn't. But that doesn't mean man can't step in to do that job instead. An exceedingly off-the-wall idea for making cities affordable is to bring back land reclamation.
From Manhattan to Amsterdam, some of the world's greatest cities have been built atop land that used to be water until humans started piling dirt on top of it. Today, some of this manmade mud is the most valuable real estate in the world.
We hardly lost the ability to do land reclamation. Surely if 14th century Dutchmen figured it out, so can we. A lot of environmental laws would have to be tweaked and reworked to make this a possibility. But that's certainly no reason not to do it.
Indeed, since the most expensive land is typically coastal land, there'd be a huge financial return on building more of it.
We could go a long way toward making cities affordable by liberalizing the regulations we have on land that already exists. But if we want to go all the way toward making urban areas the best they can be, we'd benefit from adding more land too.
That doesn't necessarily mean we should fill in San Francisco Bay tomorrow. But we should at least consider the possibility of filling in part of it someday soon.
Homeless encampments are a depressingly common sight in American cities. They persist despite no one wanting them there. There's nevertheless a fierce debate about whether local officials should clear them or leave them be.
Some say yes to clearing encampments, citing the costs of concentrated vagrancy and loss of public amenities like parks. Others say no, arguing that encampment sweeps still leave people homeless, are expensive in their own right, and typically involve serious rights violations of the homeless.
I think both sides have pretty good points, and it doesn't seem like there's an easy answer. Until now.
Perhaps the way to solve homeless encampments is the incredibly off-the-wall idea of just giving the homeless property rights to the park or underpass or wherever they've occupied. Once they have secure title, some Coasian bargaining can begin.
If the homeless encampment truly is a severe blight on the neighborhood, nearby property owners could purchase the land from the homeless and return it to a functioning park. The homeless themselves would then have enough cash in hand to get more traditional accommodations of their own.
And if nearby property owners aren't willing to pay the price the homeless are asking, that's evidence that the value of using the land as a homeless encampment is higher than any negative externality it creates.
The homeless people's secure property rights would over time enable them to improve the encampment into a more permanent shanty town, which in turn would give way to more established, commodious dwellings.
The economist Hernando de Soto has argued that a cure for extreme poverty in the Global South is to give the poor secure title to their land. I think that's a great idea. If it would work in the slums of Harare, I see no reason it can't be applied to L.A.'s Skid Row or Washington, D.C.'s McPherson Square.
When working on a tough problem, sometimes it helps to work backward. Imagine where it is you want to be, and then figure out what steps you need to take to get there. Applied to housing issues, this means thinking long and hard about what policy reforms will get us "The Cube."
You know The Cube. It's the single building that will house the entire human race in one ultradense, megalopolis where every neighborhood has a walk score of 100 million and every job in the world is a short elevator ride away.
No one will want for shelter when one big building houses all of humanity. Space in such a dense environment will be quite expensive, but the high wages produced by locating a 7-billion-person labor market under one roof will make up for that. If they don't, no worries. We'll just make The Cube even bigger!
It's all well and good to abolish zoning and building codes, but these are merely intermediary steps toward our ultimate goal of building The Cube. Endless other regulations will likely also have to be repealed as well to ensure we're able to engineer, finance, and construct The Cube.
People will likely raise objections about the desirability and feasibility of The Cube. Selling The Cube will be hard. That's why it tops out as our most off-the-wall idea. But once it's built, everyone will be happy to have it.
Freedom is a good thing in and of itself. Freedom is also a tool that gets us other things we really want. And what we really want here at Rent Free is The Cube.
The post 12 Increasingly Off-the-Wall Housing Reforms appeared first on Reason.com.
]]>The year winds down, but housing news steams along here at Rent Free. This week's stories include:
But first, our lead item about a California couple who lost their fight with the state regulators ordering them to dismantle their home:
The two-story mobile home that Michael and Susan Christian own and live in in the Orange County beach community of San Clemente, California, isn't blighted, dangerous, ugly, or even unpopular with the neighbors.
But it is a little too tall, according to state officials with the California Coastal Commission.
For over a decade, the commission—a state agency with the final say over most development on the California coast—has been arguing that the Christians' addition of a second story to their home obscures ocean views from a nearby walking trail. It also argued the couple added that second story without getting the required permits from the commission.
Late last month, a California appeals court sided with the commission, ruling that the Christians must comply with its demands to shrink their house from its current 22 feet in height down to 16 feet. The Christians' representatives say that will require them to completely tear down and rebuild the home.
"They're an elderly couple. They're in their 70s. They have all kinds of health issues. This is their only home; they live in it," says Lee Andelin, one of the Christians' lawyers. Dismantling the home "is going to cost them millions of dollars, for what? There's not a broader benefit for the public."
Andelin argues the ruling will embolden the commission to place even more restrictions on coastal homeowners' ability to improve their properties.
The Coastal Commission's Long Anti-Development History
The California Coastal Commission has been called "the single most powerful land use authority in the United States."
Created in the 1970s to stop a "corporate land grab" on California's coast, it has the final say over local government regulations on coastal development and most individual projects within the coastal zone.
The commission's "yes in my backyard" (YIMBY) critics argue its overregulation of development has made coastal housing unaffordable to most Californians. One 2010 study found that areas regulated by the commission have higher housing costs and higher incomes.
Property rights advocates argue that the commission's discretionary powers give property owners little guidance on what they're allowed to do on their properties. That leaves them exposed to endless process and appeals when applying for permits—and huge fines for doing anything without the right permits.
The Christians' Story
The Christians got approval to expand their home in 2011 from the California Department of Housing and Community Development, which regulates mobile home construction. At the time, the Christians thought that was the only approval they needed.
In 2014, the Coastal Commission sent the Christians a letter of violation saying that the already-completed renovations were unlawful without their approval.
The couple applied for an after-the-fact permit, which the commission approved in 2016 only on the condition that they cut the size of their house down from 22 feet to 16 feet to avoid "significant" view impacts from nearby walking trails.
The Christians stressed to the commission that they couldn't just lop off six feet of their house without tearing down the whole thing and starting over.
That failed to change the commission's mind. So the Christians sued, arguing the view impacts of their second story were not significant. Pointing to its approval of taller buildings near other coastal trails and parks, they also argued that the commission was applying subjective and ad hoc standards on view impacts.
In November, a state appeals court rejected the Christians' arguments, finding instead that the commission had wide discretion to determine which view impacts were significant. The court also ruled that the commission was under no obligation to establish objective criteria on view impacts.
Determining when new construction adversely affected protected ocean views "will inherently depend on some site-specific factors that require subjective interpretation by the Commission," reads the unpublished opinion.
Wider Impact
Because the appeals court decision is an unpublished opinion, it's not a binding precedent. The Christians' lawyers argue that it will nevertheless encourage the Coastal Commission to deny or condition permit applications on subjective view-impact grounds.
The Christians' options after the appeals court decision are limited. Andelin says they are still within the deadline to appeal to the California Supreme Court, but the odds of the court taking up their case are slim.
Provided they don't appeal, the Christians have no other option than to comply with the commission's demands to tear down their house and build something smaller in its place.
It's an expensive and difficult prospect for the aging couple. But noncompliance could see the Christians hit with tens of thousands of dollars in daily fines.
"They'll have to move out," says Andelin. "It's a hardship."
Last week, Rent Free covered the Austin City Council's passage of an ordinance allowing property owners to build up to three homes on all residential plots citywide.
When one considers the fine print, it's one of the more ambitious repeals of single-family zoning that's passed anywhere in the country. But Austin's new regime could be short-lived.
Last week, in the case Acuña v. City of Austin, a local Travis County court struck down a previous set of zoning reforms Austin had passed in 2019 creating density bonuses and allowing housing in commercial zones. The court sided with suing homeowners who'd argued they hadn't been provided with the required individualized notice of the zoning changes and that their "right to protest" zoning changes had therefore been violated.
Jack Craver, author of the Austin Politics Newsletter*, writes that the "radical" opinion could effectively outlaw all of Austin's density bonus programs (which allow developers to build larger individual projects in exchange for including affordable units).
The ruling doesn't directly involve the more recent zoning reforms the city passed. The City Council also passed the new reforms via a special process and with a supermajority vote, meaning they don't have to give homeowners individualized notice of zoning changes.
But Douglas Becker, the lawyer for the plaintiffs in Acuña, tells Reason the city still arguably violated Austinites' right to protest zoning changes. Becker says he's conferred with clients about challenging the most recent reforms, but no decisions have been made yet.
There are roughly 650,000 homeless people in the country, according to the U.S. Department of Housing and Urban Development's (HUD) 2023 Point-in-Time Count report, which counts all homeless people on a single night in January.
The count, published this past Friday, found that homelessness had increased 12 percent nationwide since the 2022 count. Per the report, four in 10 homeless people are unsheltered, meaning they live on the streets or in other places not considered fit for human habitation.
A HUD press release credits the housing spending in the Biden administration's $1.9 trillion American Rescue Plan from 2021 for reducing homelessness between 2020 and 2022. The expiration of those additional resources "contributed" to this year's rise in homelessness, HUD said.
That's a tough claim to fact-check. HUD waived jurisdictions' requirement to complete a full Point-in-Time count in 2021 because of COVID concerns. Last year's Point-in-Time report said the 2021 partial count "artificially reduced" the 2021 homeless population. This year's report says lingering pandemic effects also "artificially reduced" 2022's homeless count.
It's tough to say then how much the rise in homelessness is attributable to expiring funding and how much is a result of a more comprehensive survey being completed in 2023.
Reason has covered how much local zoning restrictions hamper even purely private efforts to provide shelter and services to the homeless during the pandemic.
When Florida Gov. Ron DeSantis signed the Live Local Act in March 2023, he praised the law's tax credits for low-income housing and mortgage subsidies for teachers and firefighters. He made no mention of the legislation's inclusion of what's turning out to be some pretty radical zoning reforms.
The Live Local Act allows developers to build housing in commercial, industrial, and mixed-use areas at the highest residential density allowed in the local jurisdiction. Provided the projects include the requisite amount of affordable housing, local governments have to approve these new developments.
The potentially huge density increases the law allows, mixed with what are turning out to be relatively modest affordability requirements, and an opportunity to skate around local anti-development politics are seeing developers rush to use the law.
"I have them in every major city—Tampa, Orlando, Miami—and we're in a mad dash to get them done," one Florida land use lawyer told The Wall Street Journal, saying he's working on 40 separate Live Local projects.
— Kevin ???? Glass (@KevinWGlass) December 15, 2023
Washington, D.C., has only two licensed firearms dealers. The city's zoning code still finds it necessary to have minimum parking requirements for gun stores—1.33 spaces for every 1,000 square feet of floor space above 5,000 square feet.
*CORRECTION: The original version of this article misidentified the Austin Politics Newsletter's distributor.
The post California Officials Force Elderly Couple To Dismantle Home, Citing Blocked Ocean Views appeared first on Reason.com.
]]>San Francisco takes three years on average to approve and permit a new housing development, the longest timeline of any jurisdiction in California, and the city is out of compliance with numerous state laws requiring expedited housing approvals.
That's the damning, not necessarily surprising, findings of a new state audit released yesterday that found the city's housing policies and practices added up to a "notoriously complex and cumbersome" mess that will ensure San Francisco falls well short of its state-set goal of building 82,000 units by 2031.
Currently, the city is producing only about 4,000 homes per year, or less than half of what it needs to hit that 82,000-unit goal. The state audit also found that the city takes 523 days on average to issue planning approval for housing projects and another 605 days to issue building permits to already approved projects.
"This audit puts cities across California on notice: there will be no more leniency for illegally obstructing housing construction," said state Sen. Scott Wiener (D–San Francisco), the author of a number of state laws the city is out of compliance with, in an emailed statement. "San Francisco has added layer upon layer of unnecessary discretion and bureaucracy for decades."
This first-of-its-kind audit was launched by the California Department of Housing and Community Development (HCD) in August 2022. It came in response to a series of increasingly fiendish decisions by the San Francisco Board of Supervisors to route around state laws requiring them to approve new housing.
One notorious episode came in late 2021 when the board voted to require the sponsor of a planned 495-unit residential tower slated to replace a Nordstrom's parking lot to perform an additional environmental analysis of their project.
That was despite the fact that the project sponsor had already produced a 1,000-page environmental report on the project. After the vote, individual supervisors told the San Francisco Chronicle their vote was motivated by affordability concerns, not its environmental impact.
California law requires cities to approve projects that comply with the zoning code. If a city rejects a zoning-compliant project, state law entitles the project sponsor to sue in order to get their permits.
But by asking the developer of the Nordstrom parking lot project to produce endless additional environmental reports, the city was keeping the project in a legal twilight zone where it was neither approved nor denied.
This was followed up by an even more clever scheme by a majority of the Board of Supervisors to thwart a state law, S.B. 9, that legalized duplexes on single-family lots and required localities to approve these duplexes "ministerially."
Ministerial approval meant the San Francisco Board of Supervisors couldn't exercise their normal powers to say no to individual, otherwise code-compliant duplex projects.
But rather than bow to the state requirements in S.B. 9, the board voted to eliminate single-family zoning altogether. Because S.B. 9 only applies to single-family-zoned properties, that decision effectively nullified the law. Duplexes were legal on paper, but the San Francisco Board of Supervisors retained the ability to reject any one individual duplex project.
These are not isolated examples either, as the HCD audit makes clear.
"San Francisco has perfected the art of avoiding obligations under state housing laws by maneuvering around them through local rules that exploit loopholes and frustrate the intent of state housing laws," reads the audit.
To remedy the situation, HCD issued 18 required actions, alongside another 10 recommended actions, the city needs to take to come into compliance with state housing law.
That includes the elimination of "discretionary review"—a process by which third parties can file an appeal of an otherwise code-compliant project and the Board of Supervisors can ultimately decide whether it gets permits or not.
The state is also calling on San Francisco to reform its environmental review practices. Right now, the city requires developers to study a host of environmental impacts, including shadow and wind impacts, that go beyond what (already cumbersome) state environmental law requires.
Some might remember the case of Robert Tillman, whose plans to convert a laundromat he owned in the city's Mission District into an apartment building were frustrated by the city's requirements that he do not one, not two, but three separate shadow studies.
HCD's audit makes clear that San Francisco's average three-year timeline for permitting new housing is a problem the city government has created for itself with endless, meaningless process, red tape, and delay.
Neighboring Oakland approves comparable housing projects three years faster, the report notes. Affordable housing projects that make use of a state streamlining law the city hasn't managed to hamstring can get planning approval in just three months.
There's some evidence the city is getting its act together. Sort of. In April, it finally approved the Nordstrom parking lot project. Mayor London Breed vetoed the Board of Supervisors' effort to route around S.B. 9. A new state law passed earlier this year would conceivably allow more projects to escape discretionary review and endless environmental studies.
Nevertheless, many of the things San Francisco needs to do to get its housing house in order require the Board of Supervisors to act and pass proactive, pro-supply policies. As yesterday's audit makes clear, if there's any elected body less inclined to do that, it's the San Francisco Board of Supervisors.
The post Damning New Audit Finds San Francisco Takes 3 Years To Approve New Housing appeared first on Reason.com.
]]>Facing a storm of criticism—and lawsuits—Hawaii Gov. Josh Green is reversing substantial portions of his emergency suspension of homebuilding regulations.
The revised proclamation, issued on Friday, restores environmental reviews, historic preservation laws, and state zoning regulations that had been paused by the governor in July, Honolulu Civil Beat reports.
"My intention long before the emergency proclamation has always been to find a pathway to build housing and to honor our traditions of environmental protection and culture," the Democratic governor told Civil Beat. "I never intended anything except to build housing we need."
The state chapters of the Sierra Club and the American Civil Liberties Union, as well as Native Hawaiian cultural groups, sued the governor and members of his administration earlier this month. They described his replacement of environmental and historic preservation rules, which play a role in preserving Native Hawaiian burial sites, with a more streamlined process as attempted "genocide" and "dictatorship."
In addition to restoring those laws, Green is reorganizing a controversial Beyond Barriers Working Group. He created the group to determine whether individual housing and infrastructure projects should get relief from a range of additional regulations, including local zoning laws, impact fees, and taxes.
Nani Medeiros, chair of the working group, announced she would resign earlier this month, citing the negative comments she and her family had received from opponents of the governor's order.
The reorganized board will be led by a triumvirate of state housing officials.
"I can't stand the housing crisis we're in and have been in for decades. Our regulatory processes are considered some of the worst in the nation," said Medeiros in a statement obtained by Civil Beat. "Threats have been made against me, loved ones who don't even work for the government, and even children. I love my family, and for the sake of their health and safety, I've been left with no choice but to resign from my position."
The governor is also excluding Lahaina, the Maui community destroyed by July wildfires, from the new proclamation.
The governor's new order still allows authorities to waive local development regulations, impact fees, and collective bargaining arrangements. (The latter would be suspended while third-party permit reviewers are hired.)
The changes are nevertheless a major retreat from the sweeping provision of Green's previous order.
The governor has justified the reversal by saying that he doesn't "think war over process is going to help anybody." Yet the premise of his original proclamation was that Hawaii's process for approving new development was the primary reason for Hawaii's low rates of building and highest-in-the-nation housing costs.
The preamble to his latest proclamation still says that "a critical barrier to the speedy development of housing is the lengthy, cumbersome, and antiquated regulatory process." It notes that more than a dozen state and county studies commissioned since 1991 have recommended regulatory streamlining.
If you want to make progress on Hawaii's housing shortage, war over the process is inevitable. And it's a war Green could likely win, at least in the courts.
The emergency statute that the governor is using to justify his housing proclamation gives him "sole" authority to decide what counts as an emergency. The law also directs courts to interpret the statute in favor of the governor's exercise of emergency powers.
Federal courts rejected numerous legal challenges to the former governor's far more invasive emergency orders during COVID-19.
"There is little in the emergency management statute that constrains the governor's powers during an emergency period," concludes a 2021 report by the pro-market Grassroot Institute.
That is to say, it's probable that Green's housing proclamation would withstand the lawsuits already filed against it.
Rather than hold the line, Green is voluntarily choosing to retreat.
The immediate effect of the governor's reversal will be to defang the parts of his order mostly likely to expedite housing development. In the longer term, he's emboldening supporters of Hawaii's current burdensome regulatory regime.
Green's housing proclamation was controversial even among people who support its deregulatory thrust: Even if the governor was making the right decisions, he was still intruding on the legislature's sphere.
By keeping the emergency proclamation in place while neutering its overall effect, Green is not mollifying these critics.
"From necessary evil to worst of both worlds: Before, the question was whether abusing the emergency power could be tolerated in order to fast-track housing," tweeted Pacific Legal Foundation attorney Robert Thomas. "Now, however, all this is…an abuse of the emergency power that won't fast-track housing."
The post Hawaii Gov. Josh Green Backtracks on YIMBY Emergency Order appeared first on Reason.com.
]]>The California Legislature is rounding out its session by giving final approval to two bills that eliminate regulatory constraints on building housing on church lands and in cities falling behind on their state-set housing production goals.
On Monday, the state Senate gave final approval to S.B. 4, requiring local governments to approve affordable housing projects on land owned by religious institutions and non-profit colleges, even if their zoning codes wouldn't usually allow it.
Passing "Yes in God's Backyard" (YIGBY) legislation, a play on"Yes In My Backyard" (YIMBY), has been a long-running priority for many of the state's churches, who are often eager to develop housing on their land as part of their religious mission and as a means of financially supporting their operations in the face of dwindling church attendance.
Any number of laws can stop church-sponsored housing projects, however, from exclusively commercial zoning of church land to laws requiring a minimum number of parking spots per inch of pew space.
S.B. 4 allows churches and other religious organizations to build housing, even if their land isn't zoned for residential uses. They could also build apartment buildings on land they own in lower-density residential neighborhoods.
The bill also makes church housing projects "by right." That means local governments can't force them to undergo endless environmental review. Opponents of church housing projects would also lose their ability under state environmental law to sue local governments that approve housing on church land.
S.B. 4 stops well short of authorizing religious organizations to go on a laissez-faire building boom.
Any new housing made legal by the bill would have to be offered at below-market rates to lower- and moderate-income residents. Developers would generally have to pay prevailing wages to construction workers. The new housing would also have to come with at least one parking space per unit unless other state or local laws dictated a lesser minimum standard. S.B. 4 projects also couldn't be built in industrial zones or near active oil wells. (There are a lot of those in Los Angeles.) The list goes on.
Nevertheless, a new study from U.C. Berkeley's Terner Center for Housing Innovation found that S.B. 4 could open up about 170,00 acres of land for housing development.
"California has a deep housing shortage, and we need every available tool to create the housing we so desperately need," said state Sen. Scott Wiener (D–Calif.), the bill's author, when he first introduced S.B. 4 last year. "Let's make it easier for these nonprofits to build these critically needed homes."
Another of Wiener's bills, S.B. 423, also passed the Senate on Monday: S.B. 423 is essentially a rehash of S.B. 35, a temporary 2017 law that similarly requires local governments behind on their state-set housing goals to give by-right approval to new housing projects (secular or religious) that comply with local zoning laws. S.B. 35 has been used to entitle 18,000 units of mostly subsidized, affordable housing between 2018 and 2021.
The law streamlines approvals for mixed-income and market-rate developments as well. But the requirement that developers using S.B. 35 streamlining pay union-level wages—which can raise construction costs by 10 percent or more—has seen few market-rate developers take advantage of the law.
The major innovation of S.B. 423 is that it extends the streamlining provisions of S.B. 35 to California's coastal areas, where the powerful California Coastal Commission usually has the final say over what gets built. The commission, with a long history of opposing coastal development, initially came out hard against S.B. 423. Amendments that exempted land closest to the beach saw the CCC drop its opposition last month. Wiener's office estimates that S.B. 423 will streamline development on 250,000 acres of coastal land.
From a free market perspective, it's hardly ideal that both S.B. 4 and S.B. 423 streamline the development of primarily subsidized affordable housing.
It's certainly not the best policy for maximizing housing supply. Market-rate housing is usually easier to build, as it doesn't have to compete for a fixed pot of government subsidies—most of which come with cost-increasing strings attached. Bills that do little (or nothing) to open land to market-rate builders and market-rate-chasing capital leave unbuilt housing on the table.
An exclusive focus on streamlining the development of subsidized housing also distorts land markets by displacing market-rate builders from sites they would have otherwise snatched up.
Indeed, with S.B. 4, that's intentional.
"One of the chief obstacles to affordable housing development is that affordable housing developers must compete against market-rate developments for land. SB 4 opens tens of thousands of acres that affordable housing developers will have exclusive access to," reads an email from Wiener's office announcing the bill's passage.
The more market-rate housing has to settle for second-best land, the more economy-wide efficiency suffers.
Still, California does suffer from a shortage of housing generally. The state will build more housing with S.B. 4 and S.B. 423 in effect. At a minimum, they'll provide evidence that removing regulatory barriers can unleash a lot of badly needed housing.
Both bills will now go to Gov. Gavin Newsom for signing.
The post California Legislature Passes Slew of YIMBY Reforms appeared first on Reason.com.
]]>In this week's The Reason Roundtable, Matt Welch and Katherine Mangu-Ward welcome back Nick Gillespie and Peter Suderman to the show. The editors examine the unfolding migrant crisis in New York City before denouncing the city's new law cracking down on Airbnb and other short-term rentals.
1:56: Migrant crisis in major cities
24:16: NYC kneecaps Airbnb
34:27: Weekly Listener Question
48:55: Memorable moments from the political gerontocracy
Mentioned in this podcast:
"New York's Migrant Crisis is Caused by a Combination of Federal Work Restrictions and Local Zoning Policy," by Ilya Somin
"Down 136,000 Students in Just Four Years, New York City's Public Schools Manage To Spend Billions More," by Matt Welch
"Let Asylum-Seeking Migrants Work," by Ilya Somin
"A Costless and Humane Fix to the Border Crisis," by Shikha Dalmia
"How Immigrants Make America Great Again (and Again and Again)," by Nick Gillespie, with Alex Nowrasteh and Benjamin Powell
"Don't Blame Airbnb For New York City's High Rents," by Allie Howell and Jared Meyer
"Airbnb and Its Enemies: Who's Afraid of a $10-a-Night Sofa?" by Jim Epstein
"The Government Is a Hit Man: Uber, Tesla and Airbnb Are in Its Crosshairs," by Nick Gillespie
"Libertarians Have Won the Culture Wars, Even Though Universities Are 'Constipated, Stultified,'" by Nick Gillespie
"Santa Monica Evicts Airbnb: The War on Homesharing," by Zach Weissmueller
"Did NYC Just Kneecap Airbnb?" by Liz Wolfe
"County Where It Took 50 Years To Approve New Subdivision Bans New Airbnbs," by Christian Britschgi
"Silk Road Trial: Read Ross Ulbricht's Haunting Sentencing Letter to Judge," by Nick Gillespie
"Robert Lipsyte on ESPN, Muhammad Ali, and Billie Jean King," by Nick Gillespie
"Chobani and GoFundMe Wipe Lunch Debts in School District That Planned To 'Lunch Shame' Students," by Billy Binion
"Some Critics of the Ruling Against Biden's Censorship by Proxy Have a Beef With the 1st Amendment Itself," by Jacob Sullum
"Elite Journalists Love Big Brother," by J.D. Tuccille
"Journalists Outraged That a Judge Would Dare Limit Biden's Censorship Powers," by Robby Soave
"Social Security, Snoopy Snoopy Poop Dog, & Alan Simpson: Ultimate Enema Man Remix," by Nick Gillespie and Austin Bragg
Send your questions to roundtable@reason.com. Be sure to include your social media handle and the correct pronunciation of your name.
Today's sponsor:
Audio production by Ian Keyser; assistant production by Hunt Beaty.
Music: "Angeline," by The Brothers Steve
The post What's the Libertarian Answer to New York's Migrant Crisis? appeared first on Reason.com.
]]>Have you ever stayed at an Airbnb where you had the full unit to yourself, where the owner was not present? Have you ever stayed at one with a spouse and a child, or two friends?
In New York City, such arrangements will no longer be allowed. Local Law 18 came into effect Tuesday. It effectively makes the city's roughly 38,500 Airbnb listings illegal.
"Short-term rentals [30 days or under] are only permitted if the host is staying in the same unit or apartment as the guests, and there are no more than two guests staying with the host," says the city, which dictates that hosts "maintain a common household" with guests and that they register their short-term rental with the government, paying a $145 fee. Guests must have "free and unobstructed access to every room, and each exit within the apartment."
"For this reason, locking internal doors is not permitted," reports The Washington Post, "though hosts and guests can secure bathrooms, bedrooms and other private quarters when they are in use," per the law.
Many scenarios will now be banned due to Local Law 18. A property owner who rents out their apartment for three weeks while traveling will no longer be able to do so; a family who seeks to rent a full unit, with multiple bedrooms, will no longer be able to do so.
Homeowners like Julian Ehrhardt see this as an assault on their property rights. Ehrhardt bought his home in Brooklyn's Bedford-Stuyvesant neighborhood back in 2017. He restored the derelict property "with a lot of pride," Ehrhardt tells Reason, and started renting out one of the units while living in the other. Having hosted over 200 guests from all over the world, Ehrhardt talks warmly about watching foreigners experience his neighborhood. "The origins of the housing crisis are far more nuanced," he says, "than people renting out spare rooms."
"The concern for many homeowners is maintaining the mortgage payments" now that Local Law 18 has gone into effect, he says. "There were a lot of hosts who were retired, who had their homes inherited, who don't have the means" who will be affected by the new restrictions. Ehrhardt is part of a group called RHOAR NYC (Restore Homeowner Autonomy & Rights), a grassroots group that's trying to amend the law "to exempt owner occupied one- and two-family homes" and to remove the capacity limit so they can have the freedom to rent out their homes again, per their website. "The law and implementation of Local Law 18 takes away our autonomy over our homes and puts us at acute financial and personal risk," says RHOAR.
I live in Bed-Stuy, too. When my large family visits, they typically stay at an Airbnb townhouse that's 0.6 miles away from my apartment. I priced out how much they would need to spend for a comparable stay at a decent hotel—putting them two to three miles away, since Bed-Stuy has very few decent hotels—and it was double the price. Many others have chimed in with their personal stories of how short-term rentals have made trips to New York feasible for their families. If every visit becomes twice as expensive, why would anyone come to this rat-infested metropolis?
The law is a gift to the hotel industry. But hotels aren't always affordable, nor do they allow travelers to stay in off-the-beaten-path neighborhoods. (As for hostels, they were banned 13 years ago.) There's no reason why the city should let the politically powerful incumbent be locked into an advantage; facing some competition from short-term rental platforms may be a good thing in terms of forcing prices down.
"Council members are scared to vote against the [hotel] unions," says Ehrhardt. Groups like the Coalition Against Illegal Hotels have mobilized to oppose any change to Local Law 18; they cite San Francisco—which is notoriously unaffordable for both residents and travelers—as an example of a place where short-term rental regulations have snuffed out "illegal hotel activity" and as a model worth emulating.
Supporters of Local Law 18 claim short-term rentals are to blame for New York's housing affordability issues. The far greater problem is how difficult it is to build new housing stock in a city that heaps on onerous permitting restrictions and has for too long allowed lots of "not in my backyard" (NIMBY) veto power. In fact, New York is far less dense with Airbnbs than other cities, points out the Cato Institute's Scott Lincicome. And cities need all different types of housing configurations at all different prices in all different neighborhoods, not controlled by central planners, but subject to the changing needs of market participants. All this aside, even if short-term rentals were squarely to blame for a housing supply crunch, infringing on the rights of property owners is a terrible precedent to set.
This year, New York City expects to receive 61 million tourists, up from 56 million last year and inching much closer to pre-pandemic levels (66.6 million in 2019). But city officials are biting the hands that feed: both the tourists who help power the economy—whether residents like it or not—and the taxpaying landlords who provide housing options to willing buyers at rates all parties accept.
"I think the hotel lobby has done a very effective comms job—labeling us as wealthy landlords was very effective," says Ehrhardt, who seeks to comply with the law.
"The city is treating our private property as the city's housing stock."
The post Did NYC Just Kneecap Airbnb? appeared first on Reason.com.
]]>One of the more entertaining aspects of the state's battle to open up housing development to reduce California's housing shortage is the degree to which it has united officials in liberal coastal cities with those in conservative ones. Although Left and Right typically use different rhetoric to evade new housing bills, they are strangely aligned in their ultimate quest to block permissive new construction laws.
Republican-controlled Huntington Beach, which has sued the state government to stop enforcement of state housing mandates (and was sued first by the state for its failure to process "by right" duplex approvals under Senate Bill 9), has championed the "local control" argument and stoked NIMBY (Not In My Back Yard) fears about turning this suburban city into an urban hell-scape.
In a column, GOP Mayor Tony Strickland vowed the city will never be "rubber stamps for Gavin Newsom's vision of turning every community in California into his failed experiment of San Francisco, America's worst city, whose decline began on Newsom's watch as mayor there." Strickland lives in an "affordable-housing" unit and presumably his neighborhood has yet to turn into the Tenderloin.
In lefty near-coastal Beverly Hills, Councilman John Mirisch is raising a different specter—that pro-housing advocates are following the model of Texas, which has usurped local control on social issues including gun regulation. Mirisch also complains about corporate profits, the "urban growth machine" and the evils of "deregulation," but arrives at the same place as Strickland in opposing freer housing markets. Strange bedfellows.
Now, other coastal NIMBYs—who claim to stand up for principle, but seem allergic to newcomers moving into their cities—have something new to get agitated about. Senate Bill 423 is still alive in the California Legislature. It would extend the provisions of a landmark 2017 law, Senate Bill 35, which authorized a "streamlined, ministerial approval process" for multi-family projects in cities that aren't meeting their state housing mandates.
That law sunsets in 2026, but S.B. 423 would extend it for another decade. What's really got the no-growth cities upset is one short line in the bill language: "Strikes out S.B. 35's exclusion of the coastal zone." Existing law requires projects to still gain approval from the slow-growth California Coastal Commission. That would end and developers would no longer have to endure that excruciating process. Amendments that exempt additional coastal properties have resulted in the commission removing its opposition to the bill.
Why is this important? S.B. 35 had a measurable impact on the construction of affordable housing projects. "Between 2018 and 2021, developers proposed about 18,000 housing units statewide under S.B. 35—including about 13,000 low-income units, according to preliminary data from UC Berkeley's Terner Center for Housing Innovation. Of those, more than 11,000 qualified for streamlining under the law," The Mercury News reported.
Another significant provision of S.B. 423: it expands the streamlining to market-rate projects. That might not create many additional units given that, as Reason's Christian Britschgi has noted, pro-union prevailing-wage laws make it costly to build these projects without subsidies. Still, it's important to expand deregulation beyond subsidized projects. If the government stops stifling construction and imposing overly burdensome and arbitrary regulations, the market will rise to the occasion, boost supply, and open up housing at all price points.
Developers should be free to build more of everything—from single-family houses to apartments—without subjective approval (while following zoning rules, as the bill requires). Few current residents want more congestion, and yet-to-be new residents don't get a say, so the local default position often is "no". Councils often force developers to reduce the number of units when they do OK a project. And California Environmental Quality Act (CEQA) lawsuits derail or delay projects.
The bill's opponents continue to throw contradictory arguments at the wall. In their letter of opposition to S.B. 423, some coastal city officials in San Diego County argued: "The fabric of our coastal communities will be forever changed. And for what? SB 423 will encourage higher density and perpetuate gentrification with little to no affordability."
The letter adds that rents for one-bedroom apartments in North San Diego County start at $5,750 a month and new multi-family homes are selling for nearly $3 million. It's true many newer units are pricey, but adding supply—including the construction of the rent-restricted units this bill encourages—is the best way to moderate pricing. More supply is the solution. Protecting a community's "fabric" is pabulum—and it locks in the current situation.
Environmental groups are complaining, also. They pay lip service to the need for more housing construction—but like the coastal cities apparently want it built anywhere else. That's the bottom line. The state has been underbuilding housing for years, which has led to eye-popping prices, especially in sought-after coastal cities. The answer is to build more. Sorry, but building it in someone else's backyard is no longer an option.
This column was first published in The Orange County Register.
The post California Coastal Cities' Housing Plan: Build Elsewhere appeared first on Reason.com.
]]>The loss of life from the deadly wildfires on the Hawaiian island of Maui has been made even worse by the loss of shelter. Some 2,000 homes have been destroyed so far, leaving thousands more homeless or displaced.
The fire has only worsened an insufficiency of homes on the island and in the state more broadly. In Hawaii, median home prices are close to $1 million and regulations on adding new supply are incredibly strict.
Weeks before the fires, Democratic Gov. Josh Green had already proclaimed a statewide housing emergency with the purpose of slashing through all that regulation to get thousands of new homes built.
"We don't have enough houses for our people. It's really that simple," said the governor at a press conference last month, where he promised "bold action to streamline processes for creating thousands of affordable housing units."
Green is in fact taking bold action by suspending whole sections of state and local laws and regulations that relate to homebuilding.
Local governments are given far more flexibility to expedite housing approvals, while developers will have the chance to route around basically all existing regulations on home building to get housing projects approved.
It's a radically deregulatory approach that's received praise from across the political spectrum.
"This is probably the single most significant state-level action on accelerating housing production maybe in the whole country, maybe ever," Sen. Stanley Chang (D–Honolulu) tells Reason.
"Hawaii has probably the most regulated land on the planet," says Robert Thomas, a former Hawaii real estate attorney who now works at the Pacific Legal Foundation, a libertarian public interest law firm. The governor's proclamation "cuts through the Gordian knot" of red tape, he says.
At the same time, Green's sweeping invocation of executive, emergency powers—a sort of "yes in my backyard" (YIMBY) martial law—is provoking concern from an equally bipartisan group of critics.
Civil Beat reports that environmental groups have already denounced the proclamation's potential to allow for high-rises in residential neighborhoods. Others support the substance of the order, but question the governor's sweeping use of emergency powers.
Keli'i Akina, president and CEO of the Honolulu-based Grassroot Institute, a free market think tank, says the governor is correct in identifying government regulation as the primary cause of Hawaii's astronomical housing costs.
The proclamation nevertheless "puts the governor in the position of being a super legislator. He's basically eliminating longstanding laws in one fell swoop without the input of the legislature and therefore the people," he says. "The long-term impact on the balance of power will have to be considered. It may create some constitutional liability."
Key to the governor's proclamation is the creation of a Beyond Barriers Working Group made up of representatives of both state and local agencies, the legislature's housing committees, housing advocacy groups, and environmentalists. The working group will review individual housing projects and determine whether they're eligible for regulatory relief.
The working group would consider whether a project's sponsor had the experience and financing necessary to start construction within three years and whether their project would avoid "irreversible and irretrievable" impacts on environmental and cultural resources.
If a project satisfied these criteria, the group could then ink a development agreement with the builder allowing them to proceed with a project without having to comply with Hawaii's thicket of regulations.
Developers with a working group–certified project wouldn't have to comply with normal zoning restrictions. They wouldn't have to go through Hawaii's cumbersome environmental review process (which can add months or years to a project's approval). They could avoid historic preservation regulations, and get relief from normal impact fees and taxes. They could also skip the need to get approval from the state's Land Use Commission—a duplicative zoning body.
In sum, homebuilders would theoretically have the opportunity to build housing projects of unlimited density almost anywhere all while skipping normal layers of review and process.
This arrangement wouldn't quite be a regulatory free-for-all. Developers would still need to go through an expedited historic and environmental review process laid out in the proclamation. They'd also have to pay their workers prevailing (union) wages and host at least one public meeting about their project.
While the proclamation doesn't require projects to include below-market-rate units, the working group is directed to prioritize projects that do include some affordable housing.
More broadly, the governor's proclamation would also allow local governments to hire private parties to sign off on building permits, expand urban growth boundaries, and permit residential development in commercial areas without having to get the typical state sign-offs.
Many people have criticized the governor's proclamation for the way it suspends the state's Sunshine Law—which establishes sweeping transparency requirements for government meetings and decisions—if its provisions "delay the expeditious action, decision, or approval of any board or agency." That would seemingly relieve the working group of the need to hold open meetings, respond to records requests, publish agendas ahead of time, and refrain from ex parte negotiations.
A governor-appointed lead housing officer would also have the power to call the working group into session at a time and place of their choosing. Its decisions would only need a majority vote of those members present. "Its fiat powers to approve development could be politically influenced and subject to accusations of favoritism or waste or cronyism," says Akina.
Green has said his proclamation could lead to the construction of 50,000 homes within the next few years. Chang says that the proclamation, which has to be renewed every 60 days, would be most helpful for projects already in the works. In particular, he says it could really expedite the approval of thousands of public housing units that have already been proposed.
That's all assuming that there's no successful legal or constitutional challenge to the emergency proclamation. Lawsuits challenging the order are almost inevitable, said one Maui land use attorney to Civil Beat. "There's no disagreement that we need more affordable housing. But using the state constitution as toilet paper isn't the right approach," he told the publication.
Thomas says that Hawaii courts have generally been unwilling to second-guess the governor's use of emergency powers. Numerous lawsuits challenging emergency proclamations during the pandemic all failed. "COVID taught us that [the state's emergency statute] is extremely robust," he tells Reason. "It is essentially a political question is how the Hawaii Supreme Court has treated it."
At the same time, Thomas does suggest that a court might look differently on the use of emergency powers to address something like Hawaii's housing shortage. "Maybe it's an emergency but it's one that's been festering for 50 years. It's been on the longest fuse one can imagine," he says.
Chang argues that displacement caused by Hawaii's high housing costs is the textbook definition of an emergency.
"As a result of housing prices skyrocketing, we've entered seven straight years of population decline. About half of all native-born Hawaiians live outside of Hawaii," he says. "If you had 15,000 people leaving because of flooding or a hurricane or earthquakes or volcanic eruptions, I think that would certainly qualify for an emergency. The severe [housing] shortage constitutes an emergency as well."
Green has said he'll keep his proclamation in effect for one year. (Hawaii's emergency statute requires it to be renewed every 60 days, nonetheless.)
All parties agree that the governor's proclamation is a temporary solution to Hawaii's longstanding housing affordability problems and that it is incumbent on the legislature to enact permanent fixes.
Thomas argues the proclamation offers the opportunity to see what Hawaii would look like without its existing morass of development regulations: "At the end of the [proclamation], if there's anything close to the 50,000 new units on the market the governor predicted and the sky's not black with pollution, the waters look like they do today, that's going to provide some empirical proof that it was these [regulations] getting in the way."
The post To Tackle Highest Housing Costs in the Country, Hawaii's Governor Declares YIMBY Martial Law appeared first on Reason.com.
]]>Remy finds artificially low interest rates come with consequences.
Music and lyrics written and performed by Remy.
LYRICS:
You save a piece of each paycheck
To buy a house in your town
With a short white picket fence
You've got the right down payment
You're pre-approved as planned
So you can buy my house
From my cold dead hands
30 years fixed at 2.5
My name will be on this deed until the day that I die
Interest rates were kept artificially low
You think I'm ever selling? That must be some kind of joke
Zero inventory within five miles of church?
Zoom out to North America and click "redo search"
Like Amber Heard on a bed, I'm squatting right here
I hear the rental market's great around this time of year
So go and build your own house on that vacant land
Here, you can take this shovel
From my cold dead hands
More cars on the road, less sun in the sky
I will oppose all new construction till the day that I die
My property value might be slightly harmed
It would change the area's character—when you built here, this was all farms
Senior homes and row houses, I'm blocking them all
And God help the man I witness playing pickleball
Congressman! Congressman! I just want a house
But building here's illegal? Yeah, how's that allowed?
We could use a voice like yours, keep our House in your plans
You could take my seat. Really?
From my cold dead hands
Zero term limits, and industry vies
I will be the incumbent until my brain finally dies
And then a couple years more, it is what it is
I almost lost one time, so we drew the district like this
My cold hands
My cold dead hands
The post Remy: Cold Dead Hands appeared first on Reason.com.
]]>A significant number of zoning laws are restrictions homeowners put in place on other people's property to ensure their own property maintains or gains value.
This is great if you're a homeowner, but it sucks if you're Andrew Heaton.
Photo credit: Media Drum World/ZUMAPRESS/Newscom. Music: "Wellington Joke" by Manos Mars; "Happy Happy Game Show" by Kevin MacLeod.
The post Heaton Fixes the Housing Crisis appeared first on Reason.com.
]]>
For many years, libertarian economists, housing experts, and legal scholars have been at the forefront of efforts to oppose exclusionary zoning. Regulations restricting the type of housing property owners can build on their land severely constrain property rights and also cause immense economic and social harm by excluding millions of people from areas where they could otherwise find better job and educational opportunities. Libertarian legal scholar Bernard Siegan was a pioneer critic of zoning as far back as the 1970s, and other libertarian-leaning experts have made more recent major contributions to this literature, most notably those of Harvard economist Edward Glaeser. Few ideas are as central to libertarianism as the notion that private property owners have a strong presumptive right to use their land as they see fit, subject only to those restrictions they voluntarily accept.
In a recent Reason article, Robert Poole challenges the standard libertarian view on these issues by offering a defense of single-family zoning. The latter is one of the most severely restrictive types of government-imposed land-use constraints. It bars a vast range of housing options, including duplexes, quads, apartment buildings, and much else. Poole's defense of single-family zoning founders in a morass of logical and factual errors. Here is an excerpt from it:
When zoning laws began to proliferate in the 1920s, they were a newly imposed restriction on what homeowners could do with their properties. In those days, most people lived in long-established communities in cities. Today, after 70 years of suburbanization following World War II, the large majority of homeowners bought their homes in suburbs built in response to market demand for single-family living. Local governments (typically county governments outside the main city) responded to the kind of housing the developers wanted to create to meet the growing single-family market demand.
In effect, postwar single-family zoning represented an agreement under which homebuyers accepted restrictions on other types of uses in their neighborhood in order to be protected from negative externalities that neighbors might create, without the protection of the covenant provided by single-family zoning.
It is simply not true that single-family zoning restrictions were a response to "market demand" that property owners voluntarily agreed to. In reality, these rules were—and are—imposed by government coercion, including on many property owners who would have preferred to build multi-family housing on their land. At best, one can say that these policies met a "demand" that some property owners had for imposing constraints on others.
By that standard, almost any form of government intervention can be defended as a response to "market demand." Protectionism is a response to "market demand" from producers who seek to be free of foreign competition. Price controls are a response to "market demand" for lower prices. Even socialism can be justified as a response to "market demand" from those who prefer a collectivist society.
In his description of the historical origins of single-family zoning, Poole also omits the large role of racism. In many places, such policies were enacted as a seemingly neutral tool for excluding blacks and other racial minorities, after the Supreme Court invalidated explicit racial discrimination in zoning in 1917.
It is true that single-family zoning can sometimes protect homeowners against externalities. For example, some affluent homeowners dislike the aesthetics of mixed-use housing, and others may prefer to live in an area with few or no working or lower-middle class residents. Others simply want to avoid changes to the "character" of their neighborhood. But exclusionary zoning creates far larger negative externalities than it prevents, most notably by excluding millions of people from housing and job opportunities, thereby also greatly reducing economic growth and innovation. Moreover, even many current homeowners in areas with zoning restrictions stand to benefit from their abolition.
Poole also tries to defend single-family zoning restrictions by claiming that they are a kind of "contract":
To abolish single-family zoning is a violation of the contract between a municipality and its single-family homeowners. They selected the neighborhood and the house based on the protections offered by prevailing zoning.
The simple answer to this argument is that no such "contract" exists. A true contract arises through the voluntary agreement of the parties. By contrast, zoning restrictions are imposed by governments on all property owners in a given area, regardless of whether they agree to it or not.
It is true that, after the initial coercive imposition of zoning, some of those who buy property in the area may do so in part because they like the restrictions. But if that qualifies as a "contract" that future government policy is morally bound to respect, the same goes for virtually any other type of coercive government policy that some people have come to rely on.
We could equally say that protectionism is a "contract" between the government and protected industries. After all, many investors and workers may have "selected" that industry "based on the protections offered by prevailing" trade restrictions. Similarly, abolishing racial segregation violated the "contract" between the government and white racists who "selected" segregated neighborhoods "based on the protections offered by prevailing" segregation laws.
Libertarian economist David Henderson offers a similar critique of Poole's argument here. As he points out, "[w]henever government gets rid of restrictive regulations, people who gained from those regulations will lose. But that doesn't mean that the government violated a contract."
There may be some situations where completely abolishing unjust government policies that violate libertarian principles would be wrong, because of reliance interests. The most compelling examples are cases where people rely on welfare programs, without which they might be reduced to severe poverty. If, someday, libertarians succeed in abolishing Social Security, there will be a strong case for exempting the elderly poor who have come to rely on that program, and have no other way to support themselves. But few if any beneficiaries of single-family zoning restrictions are likely to suffer any comparably terrible privation if those restrictions are abolished.
In another part of his article, Poole analogizes single-family zoning to private land-use restrictions, such as private planned communities. This analogy (more often made by left-wing critics of private communities), is badly flawed for reasons I summarized here. The most important distinction is that, unlike zoning, private land-use rules really are contracts that only bind those landowners who have voluntarily consented to them:
The requirement of unanimous consent ensures that [private] restrictions rarely, if ever, violate owners' property rights. It also makes it unlikely that HOAs and other private communities can significantly restrict mobility in the way zoning restrictions do. It is nearly impossible for an HOA with severe restrictions on building to take over a vast area, such as a major metropolitan area or even a good-size suburb. The city of Houston, which has no zoning, but gives relatively free rein to HOAs, is an excellent case in point. The extensive presence of HOAs hasn't prevented Houston from building large amounts of new housing, and featuring far lower housing costs than cities with zoning restrictions. Indeed, the city's openness to consensual private land-use restrictions may even have facilitated new housing construction by allowing those who really want restrictions to create small enclaves for themselves instead of imposing those rules on everyone else.
In his article, Poole rightly praises Houston's policies. But he fails to recognize the fundamental distinction between them and government-mandated single-family zoning.
Poole claims that single-family zoning restrictions do not significantly constrain new housing construction, and that the best way to address the housing crisis is to focus on lifting restrictions on the development of previously undeveloped land. I agree the latter should be abolished. But exclusionary zoning rules are also a major constraint on housing construction. In suggesting otherwise, Poole ignores a vast amount of research compiled by economists and land-use experts across the political spectrum. Recent evidence suggests that the effects are even larger than previously thought.
Allowing more development in currently undeveloped areas is not an adequate substitute for zoning reform. Much of the benefit of the latter comes from increasing the availability of housing in places where there are important job and educational opportunities. Most undeveloped land is relatively further away from such locations, and building more housing there offers fewer benefits than allowing increased construction close to major centers of commercial and social interaction.
Finally, Poole complains that "preemption of local government policy violates basic principles of limited government: that any government action should be carried out at the lowest possible level of government." I always thought that one of the most basic principles of limited government is that private property owners should be allowed to decide for themselves what they can build on their own land. Allowing them to do that actually promotes greater diversity and decentralization of power than leaving that authority in the hands of local government.
Poole's article also contains a number of other errors. For example, it is not true that California "recently [became] the first state to enact legislation that invalidates single-family zoning, as an effort to increase housing supply." Oregon enacted a state-wide ban on single-family zoning in 2019 (exempting only communities with fewer than 10,000 residents). SB 9, the California law Poole refers to, is less far-reaching. It allows owners of property in areas with single-family zoning to build additional housing units, but only if they meet a variety of restrictive criteria. SB 9 is an important step in the right direction, but does not completely abolish single-family zoning.
In sum, Poole's defense of single-family zoning restrictions is at odds with libertarian principles. More importantly, it's based on weak arguments that should be rejected regardless of their ideological valence.
The post A Flawed Attempt at a Libertarian Defense of Exclusionary Zoning appeared first on Reason.com.
]]>There's an old saying that you can ignore everything a person says before the word "but," as in "I believe in the lower taxes, but…" That's because everything following that word will contradict what the person said before it. Likewise, whenever a conservative politician uses the term "local control," you can discard whatever else that pol might say about limiting government. It's an excuse for empowering bureaucrats.
California's latest housing debate centers on Huntington Beach, which is challenging the state's recent housing reforms that force cities to approve housing projects on a "by right" basis—e.g., without all the nettlesome and subjective local-government approvals. If builders meet basic standards, they are free to build these projects.
That should be a dream come true for conservatives, who argue bureaucrats have too much discretionary power. The proper right-of-center regulatory framework is for officials to produce simple and objective standards—and let citizens operate freely within those boundaries. By contrast, progressives like giving regulators broad and subjective powers. (Hey, "experts" know best.)
The California Legislature doesn't get much right, as it usually favors hamfisted government. To its credit, it has recognized that overly burdensome state and local regulations impede housing construction and drive up home prices. Their new laws even make it easier to bypass a conservative bugaboo, the onerous California Environmental Quality Act (CEQA).
Yet conservatives, who like to lecture us about the importance of letting markets do their thing, are throwing a hissy fit. Now they tout "local control" as their prime animating principle. It's a shibboleth.
In Huntington Beach's lawsuit against the state, the city says the laws "deprive the City Council of its authority to zone property" and complains that allowing private companies to build homes without the city's subjective authority "overburdens existing city infrastructure, damages environmentally sensitive areas of the city, and devalues affected private properties."
Republican Mayor Tony Strickland, who lives in the kind of "affordable-housing" project his current policies likely would forbid, makes the hackneyed NIMBY (Not In My Back Yard) argument: "If people in Huntington Beach don't want to live in a suburban community…they'd move to Los Angeles or San Francisco." The city attorney makes the view sound more highbrow: "This is all about whether the state controls local zoning or whether cities controls local zoning."
As Planetizen explains, "Local control is a term used to describe the legal powers of local governments (e.g., cities and counties) to create regulations." In other words, NIMBY conservatives such as Strickland argue for the "right" of governments to exert power and control. In this case, they are choosing bigger, more subjective, and heavy-handed government over deregulation and market forces—simply because it flows from the locals.
I've covered many land-use hearings. Typically, a builder or homeowner will propose a project. Staff members then impose their subjective design standards, the planning commission exacts concessions and the city council votes on the project in the same way that two wolves and a sheep vote on what's for dinner. Neighbors, who rarely like any change, exert a heckler's veto.
Local control isn't a principle, but a practical way to evaluate the proper level of government to undertake basic functions. Obviously, local governments are closer to the people and are the proper arm to fill potholes. You wouldn't want to depend on far-off bureaucrats to do that. The goal of conservatism is not to assure that a local bureaucrat is the one to erode your property rights. The real principle is the advancement of freedom.
That's why one of the current legislative goals of the conservative movement is to advance state "pre-emption" laws that limit the ability of local governments to set their own minimum wages, pass strict gun-control laws and enact tobacco bans. The Left is apoplectic about this given that local governments often are far more liberal than state governments.
And let's face it, if these California conservatives believed in local control as the be-all and end-all, they'd have to oppose Proposition 13 and other statewide limits on local taxing authority. So, "local control" is not their principle, but NIMBYism is.
This column was first published in The Orange County Register.
The post Don't Confuse 'Local Control' With Small Government appeared first on Reason.com.
]]>In January 2023, just days after her inauguration, Arizona's new Democratic governor, Katie Hobbs, used her first State of the State speech to bemoan the high and rising price of housing.
"Our state is no stranger to the boom-and-bust housing cycles—but this is something wholly different," she said. "Three Arizona cities—Tucson, Mesa, and Phoenix—have seen some of the highest rent increases in the nation. The number of individuals experiencing homelessness has risen significantly in recent years."
The moment seemed ripe for reform.
Just a few weeks later, however, the new governor killed a bill that would have eventually zeroed out about $300 million a year in taxes people pay on their housing costs. In February, Hobbs vetoed legislation that would have barred local governments from charging taxes on the rents tenants pay.
Ending Arizona's quixotic local rent taxes has long been a goal of the state's Republicans, who argue they cost renters hundreds of millions of dollars a year. Soaring housing costs and big municipal budget surpluses even brought around a couple of Democrats in the polarized Legislature.
But those savings to taxpayers also meant $300 million of red ink for Arizona's local governments. Eliminating rent taxes was a non-starter for Arizona localities' influential state lobbying arm, the Arizona League of Cities and Towns.
"This bill does not provide meaningful relief, will likely harm those it's purported to help, and will likely only accomplish providing a tax break for landlords," said league president and Yuma Mayor Douglas Nicholls in a press release distributed by Hobbs' office.
According to the author of the rent tax legislation, Arizona Sen. Steve Kaiser (R–Phoenix), the league's opposition sealed his bill's fate. "It's 100 percent" the league, he told Reason in February. "They have a lot of control and influence over the governor right now."
With the exception of Hawaii, which doesn't have municipalities, every state in the country has an association of city governments dedicated to influencing state policy.
Funded by dues from city budgets and controlled by elected city officials, these organizations have exerted formidable influence on state-level lawmaking, almost always with the singular goal of preserving municipalities' maximum autonomy to tax and regulate as they see fit.
And because the dues-paying municipalities are public entities funded by tax revenues, they have done so at considerable public expense.
Over the past decade, these leagues of cities have increasingly sparred with free market activists trying to put state guardrails on municipal regulation and conservative state legislators eager to overturn the policies of large, liberal cities.
Meanwhile, the country's widening housing crisis has opened a new front in this war over local control.
During COVID, millions of Americans left expensive coastal cities for life in the Sunbelt and Mountain West. The sudden inflows to Texas, Colorado, Montana, and beyond accelerated already rising home prices and rents. Affordability problems that were once thought safely contained in New York and San Francisco have spread to the rest of the country.
In response, a bipartisan mix of policy makers is taking a fresh, critical look at how local housing regulations are gumming up the new construction needed to moderate these sudden price spikes.
In state capitols across the American West, both Democrats and Republican lawmakers have introduced very similar bills that would override existing local housing regulations in favor of more permissive state rules. These state policies would streamline the approval of new homes, allow more units to be built on less land, and legalize less expensive types of housing.
These bills are supported by an oddball coalition of left-leaning housing affordability advocates, right-leaning property rights supporters, environmentalists, and libertarian policy wonks.
At the state level, these reforms are always opposed by taxpayer-funded leagues of cities. State-level zoning preemption represents an existential threat to their members and their mission.
Leagues of cities have proven remarkably effective at besting bipartisan pro-housing reforms with the argument that local governments know their communities best, so local control should prevail—housing crisis or no.
Home Rulers
War and peace and national economic policy are still decided in Washington, D.C. But localities exercise considerable control over the fine details of the average American's day-to-day life. Whether you can start a small business in your garage, get a straw with your soda, or shoot off fireworks on the Fourth of July is determined by city hall.
It wasn't always this way. For much of the country's early history, local governments were comparatively toothless. The U.S. Constitution gives them no powers or protections. Anything mayors and city councilors wanted to do, even just pave the streets, required them to ask state legislators.
But around the turn of the 20th century, municipal governments were rescued from obscurity by the "home rule" revolution.
The idea was "there's some natural domain of policy that cities have and can be defined by constitutions," says Yale Law School professor David Schleicher. "The progressives pushed this form of home rule to rationalize government. They also hated state legislatures, which they thought were super, super corrupt."
In the 1950s, the National League of Cities—then the American Municipal Association—spread a model home-rule law that continues to set the basic relationship between state and local governments today. Schleicher describes it as "great powers for cities to do things but no protections against override" from state governments.
Sweeping powers to tax and regulate combined with the ever-present threat that state lawmakers might take those powers away gives cities and their state-level associations a powerful incentive to lobby.
In her 2021 book When Cities Lobby, New York University political scientist Julia Payson notes that local governments are often the largest spenders of lobbying dollars at state capitals. For instance, from 1999 to 2014, local governments in California spent up to $100 million per legislative session* of taxpayer money on lobbying, more than any other interest group. They outstripped influential labor unions' lobbying spending by a 3–1 ratio.
The purpose of this influence operation is simple and explicit.
"That deep desire for local decision-making is the common thread that continues to link municipal officials across time, geography, and political ideology," wrote Clarence Anthony, the executive director and CEO of the National League of Cities, in 2020.
Payson is more succinct when she writes that cities lobby primarily for "more money, greater autonomy, fewer mandates, and increased institutional power."
Individual municipalities collectively spend the bulk of lobbying dollars. But their efforts are often directed at competing against other cities for state funding for local projects. Leagues of cities play a crucial role in fighting for cities' interests in local control generally.
Payson's book notes that state municipal associations collectively represent 95 percent of all municipal governments. In each association's charter is a commitment to two goals: ensuring state funding for cities and opposing legislation reducing local authority. It's less common for charters to mention specific policy goals like reducing homelessness or protecting public employee benefits.
In one sense, leagues of cities are no different from the Farm Bureau, the Teamsters, or any other interest group that tries to influence policies to the benefit of its members.
What makes them distinct, and controversial, is they're controlled by local elected officials using public resources for their lobbying efforts.
"This isn't some private entity, pursuing private interests. It's literally a collection of local governments that exists for advocating for local governments, not its citizens," says Jon Riches, an attorney with the Goldwater Institute, an Arizona-based free market think tank.
Riches notes that employees of the League of Arizona Cities and Towns draw from the state's public pension system. At the same time, Riches complains that they don't have to respond to public records requests like a normal public entity. In that respect, they are treated like a private organization.
The ability to draw from public resources makes them a powerful lobbying group at the state level, where interest groups are often less well-funded and organized, says Schleicher.
The Arizona league has an annual revenue of about $3.4 million, with $2.2 million of that coming from taxpayer-funded dues from its municipal members. That makes it about half the size of the influential Arizona Education Association (the teachers union) and about the same size as the Arizona Multi-Family Housing Association (which represents developers).
That comparison probably understates its influence at the state Capitol given just how focused the league is on lobbying state legislation. The Arizona league employs three in-house staff primarily focused on legislative issues. In FY 2023, it also spent $330,000 (or 10 percent of its budget) on contract lobbying and consulting services.
"The challenge with taxpayers funding lobbyists is that they're being forced to pay for services that typically run contrary to their interests," Chuck DeVore, then-vice president of the Texas Public Policy Foundation, told Reason in 2017. Lobbyists with the Texas Municipal League, he says, "invariably lobby for bigger government, more borrowing, higher spending, and more regulation." Leagues of cities are dedicated almost exclusively to fighting limits on their taxing and regulatory authority.
The Goldwater Institute has fought the Arizona League of Cities and Towns on a number of policy issues, including bills the institute has sponsored to protect home-based businesses, prevent municipal employees from engaging in union activism on the job, and regulate short-term rentals.
League staff themselves say they play a vital role in the public policy-making process. They offer state lawmakers the invaluable perspective of local governments on how best to respond to local issues.
"We represent the governments that are closest to the people," says Tom Savage, legislative director of the Arizona League of Cities and Towns. "When we come down to engage with our legislators on issues that they're considering, we try to inform them of the decisions they're making and how they're going to impact their constituents at the local level."
Responding to criticisms about transparency, Savage argues that the Arizona league is exceptionally open about its operations. "Everything we do when we talk to our 25-member executive board, all of those conversations are occurring in an open meeting format. They're open to the public, we post our agendas online, we post our minutes online," he says.
Leagues of cities strive to appear bipartisan. They represent big liberal cities and small conservative towns as local governments first.
That task has become more difficult over the past decade. Growing Republican strength in state legislatures, and their waning influence in municipal governments, has seen conservatives get increasingly on board with state preemption.
In a 2020 research brief, the National League of Cities notes that laws preempting minimum wage increases, local gun control measures, expanded anti-discrimination laws, and more have spread like wildfire over the past decade. State leagues' mission increasingly shifted to stopping these conservative initiatives.
Saving them from becoming a liberal influence group by default is the most partisan-scrambled issue of all, one that up until now cities have had the most authority over: housing.
States vs. Cities
In January, at a meeting of the Montana House of Representatives Local Government Committee, Rep. Katie Zolnikov (R–Billings) rose to make the case for her bill to create a minimum lot size of 2,500 square feet across the state.
The bill was designed to allow smaller lots than many Montana localities currently allow. Larger lot requirements drive up home prices by forcing builders to use more land per house.
Putting some state-level "sideboards" on excessive minimum lot size regulations would help bring Montana's spiking COVID-era prices back down to earth, Zolnikov told the committee. "This gives landowners more freedoms to develop their property in a way that serves the demand for their community."
There's a growing consensus in policy circles that housing is expensive because zoning regulations make it difficult to build more of it. Most of those regulations are imposed by local governments. In response, some advocates have pushed for state legislatures to override local regulations with lighter, more pro-growth state zoning rules.
The move toward preemption has scrambled partisan factions—and the weird new divide was apparent at the Montana committee hearing.
Testifying in favor of Zolnikov's bill were representatives from the local free market think tank the Frontier Institute, the left-leaning housing advocacy group Shelter WF, the right-leaning Americans for Prosperity, a local environmental advocacy group, and a former Democratic lawmaker.
The opposition was far more selective. It included only a spokesperson for the Montana League of Cities and Towns, a small-town mayor who was also a director with the league, several local government employees, and a member of the state's city planning association.
Opponents' arguments against the bill focused almost exclusively on the merits of local control of housing policy.
"It shouldn't be forced upon every community regardless of local circumstances. I'm not joking when I tell you that has only been done in California under Gov. Gavin Newsom," said the representative from the Montana league.
This unified local opposition proved persuasive. Zolnikov's bill officially died in the Legislature in March.
"Unfortunately, virtually always, it's leagues of cities organizations that are fighting to kill these bills that would put guardrails around local planning," says Nolan Gray, research director for housing advocacy group California YIMBY (and occasional Reason contributor), which stands for Yes In My Back Yard.
Gray testified in favor of Zolnikov's bill at that January hearing. A few months later, he testified in support of Senate Bill 23-213 in Colorado, a bill crafted by the state's Democratic Gov. Jared Polis that would require cities to allow a wider range of dwellings, with a focus on increasing density.
At that hearing, the bill's supporters included a diverse array of environmentalists, YIMBY housing advocates, homebuilders, and business interests. Its opponents were almost uniformly local governments and associations representing local governments.
When Kaiser's own sweeping housing reform bill, S.B. 1117—which would have likewise allowed accessory dwelling units (ADUs) everywhere, shrunk minimum lot sizes, pared back height limits, and required faster issuing of permits—was up for its first hearing in February in Arizona, the opposition was once again local officials and the state's league of cities and towns.
Leagues of cities argue that housing is everywhere and always a local issue and should be decided by local governments with local knowledge.
"There's nothing more local than what happens in your neighborhood," says Savage, the Arizona League of Cities legislative director. "There's no way a state law can reflect the individual needs of these communities."
At the Montana hearing, the state's league of cities representative noted that the Legislature could end up approving lot size reform for the whole state after only a few brief committee hearings.
"In our communities, the discussion about whether or not to reduce or eliminate minimum sizes would literally take hours and hours, public meeting after public meeting. You'd be up late into the night having discussions about impacts to the local community in terms of health and safety [and] services," she said.
For supporters of state-level preemption, routing around all that process is a feature, not a bug. What leagues of cities say is crucial local knowledge, YIMBY zoning reformers argue are often just bad local incentives.
Local governments are often captured by anti-growth residents who are willing to keep regulatory caps on housing if it means quieter streets, less construction noise, higher property values, and less change generally. If that drives up the cost of housing for the state generally, so be it.
"There are just certain types of land use regulations that we know local governments abuse," says Gray. "It's gotten us into a place where many cities are not building enough housing. The most affluent neighborhoods and towns are building virtually no housing."
Because the politics of zoning reform are so scrambled, with Democrats and Republicans on both sides of the issue, nonpartisan groups like leagues of cities can punch above their already considerable weight. That's particularly true for a policy area that's long been assumed to be the exclusive domain of cities.
"They have this particular source of authority that comes from sounding neutral. The fact that it sounds so anodyne," says Schleicher. "They have this added benefit which is that they're nonpartisan. They are a convenient tool for people opposed to something to point to and say 'the league of cities opposes it.'"
The confusing and highly technical nature of a lot of zoning policy gives the league, and its assumed expertise, a lot of additional influence, which critics argue they abuse.
Kaiser says there have been two primary reasons people lined up against the Arizona housing bill.
The first is "people don't understand the bill," he says. The other is "they just hate it because they're somehow associated with or close to the league of cities and towns here. They're a no because [the league] told them to be a no. They trust them."
Leagues of cities will occasionally make other policy arguments against state zoning reforms that go beyond preserving municipal authority.
At a hearing on Kaiser's S.B. 1117, a league of cities representative complained that his bill did nothing to guarantee that newly legalized housing would be affordable. Nevertheless, the league is currently opposing a bill that would override zoning controls only for affordable apartments near rail transit lines.
The point is local control. And local control almost always means more control—more regulations, more restrictions, more rules and processes that ultimately make housing more scarce and more expensive.
One can see this clearly in the advocacy of the National League of Cities. The organization has produced reports criticizing "NIMBY politics" and pushed updated model home rule laws that would all but ban states from routing around those NIMBY politics to do the upzoning themselves.
At the state level, leagues of cities have endorsed legislation and reforms that limit public hearings on individual developments and restrict private citizens' and third parties' abilities to challenge local governments' approval of housing. They also often support or are neutral on bills that require them to assess housing needs in their community.
These bills are one example of where protecting the powers of local governments aligns with more housing production. League support for those bills nevertheless cuts against their claims that they're merely interested in preserving citizen input into local affairs.
Situations where leagues find themselves on the side of more housing are still the exception, not the rule.
Kaiser's housing bill made it out of committee with bipartisan support but ultimately died on the Arizona Senate floor. Some of the policies from that bill have been included in other pieces of legislation that the league continues to oppose.
Colorado's zoning reform bill failed in the face of unified Republican opposition and a Democratic caucus split over the idea of state preemption.
Kevin Bommer of the Colorado Municipal League tells Reason his organization could come around to supporting the bill if the state-level preemptions were replaced with a voluntary menu of policy options.
Such a version of the bill managed to pass the Colorado Senate but ran into opposition in the House, where members insisted on preemption measures being included.
Hitting this impasse, Colorado Public Radio said the bill "imploded" in its final hours.
Despite League opposition, the Montana Legislature managed to pass a number of housing reforms, including bills requiring local governments to allow duplexes, triplexes, granny flats, and residential development in commercial zones. A bill supported by housing reformers and the league that limits public hearings on individual development projects also passed.
A League of Their Own
Since their inception, critics of leagues of cities have been trying to take away their tax funding.
In the early and mid-20th century, a flurry of taxpayer lawsuits in California, Ohio, and Arizona challenged the legality or constitutionality of spending city funds on league dues.
In 1944, the Arizona Supreme Court ruled—in a case brought by a Phoenix resident against his city—that league activities weren't a public purpose and, therefore, couldn't be funded by municipal tax revenue. That defunded the state league for four years, before a 1948 Supreme Court decision restored cities' ability to spend tax dollars on the league.
In that latter decision, the court ruled that because the purposes of the league included the improved functioning of municipal government, its purposes were sufficiently "public" to warrant taxpayer funding. And if the league of cities went beyond those purposes, then the judiciary could step in again and revoke its funding.
That hasn't happened. Instead, critics of tax-funded government lobbying have had to take their case to leagues' home turf: state legislatures.
The preemption fights of the 2010s have sparked perennial, unsuccessful legislative efforts to eliminate taxpayer funding of lobbying, including the funding of municipal associations.
"If you're a [lobbyist] in this state, we think you ought not get more taxpayer dollars to lobby for more government. We think you ought not get tax dollars for anything," says James Quintero of the Texas Public Policy Foundation, which has supported several bills banning public funds from being used for lobbying over the years.
"I think that would fundamentally change the game in a hugely positive way. You would remove this artificial advocacy that exists and is growing government. You would return the people's house back to the average citizen," he says.
A Texas bill prohibiting taxpayer dollars from going to lobbying activities passed the state Senate but stalled in the House this year. In Arizona, bills to prohibit league staff from receiving state retirement benefits and to prohibit taxpayer funds from going to lobbying activities both failed.
Schleicher, the Yale professor, is critical of these efforts to totally defund municipal leagues. He says that these groups often support bad policies, including unfettered local control of housing policy. But in a world where local governments get their powers from state governments, it makes sense for them to have organized representation at the state level.
"Cities need to work with state governments. And they can't work with them if they can't talk to them," he says. "In a complex intergovernmental negotiating system, the idea that you'd have someone working in a state Capitol just seems not crazy at all."
While it's tempting to blame league advocacy for the failure of every bill that would remove or relax zoning restrictions, it's also true that public support for these policies is often weak. Organized taxpayer-funded opposition is a headwind on policies that are already a tough sell.
One YIMBY tactic is to encourage housing advocates to show up to planning commission hearings and neighborhood association meetings to make the case for individual projects and more housing generally.
The idea was that these traditional forums for NIMBY politics could be won over to the pro-housing side if people with better ideas showed up. Perhaps something similar can happen with leagues of cities.
In March, the housing policy committee for the League of California Cities met to consider S.B. 4, a bill that would make it easier for churches to build affordable housing on their land. Because it would override local zoning restrictions, one would assume the league would end up opposing it.
Instead, the committee deadlocked on several motions either opposing the bill or demanding amendments to weaken it. It was the first time that the league had deadlocked in this way. (The bill has since passed out of the California Senate.)
"I think there's a transitional moment. The league has pretty much always taken the position of opposing most major housing bills," says Sergio Lopez, a city councilmember in Campbell, California, and a member of the league's housing policy committee who voted against the anti-S.B. 4 resolutions. "There's a recognition that there's a constituency, a majority in my community, [that believe] that there's a need for more housing, and what we've done in the past is not going to cut it," he says.
Leagues of cities are unusual interest groups. They're publicly funded organizations representing public officials. That gives them great influence over the policy-making process and incentivizes them to push for greater government control at the local level.
It also makes them vulnerable.
Unlike almost every other interest group, leagues of cities' lobbying arms can have the majority of their funding taken away by state legislators. Changing political views on housing could see their membership replaced with officers and board members more amenable to state zoning reform.
In wars over zoning policy, leagues of cities are both participants and, increasingly, battlefields themselves.
*CORRECTION: The original version of this article misstated how much money local governments in California spend on lobbying.
The post NIMBY Cities Are Using Your Tax Dollars To Lobby Against New Housing appeared first on Reason.com.
]]>Exclusionary zoning causes massive housing shortages that prevent millions of people from "moving to opportunity" and becoming more productive. The state of Montana is about to enact important new zoning reforms that will make it easier to build new housing in the state. The new legislation is the product of an unusual cross-ideological coalition that might serve as a model for "YIMBY" reforms elsewhere. CityLab housing expert Kriston Capps has a helpful analysis of these developments:
Lawmakers in Montana's state legislature advanced bills in April that would shake up zoning, land use and building codes, making it much easier for property owners to build new housing — and much harder for local authorities to stop them.
A flurry of five separate "Yes In My Backyard" bills — all five sponsored by Republican legislators — are winding their way through various committees. One would require cities to permit backyard flats and other accessory dwelling units by right. Another law would allow duplex homes to be built in places zoned for single-family housing. If Montana Governor Greg Gianforte, also a Republican, signs even a couple of these bills into law, Montana will have leapfrogged several East and West Coast states that have struggled to respond to housing shortages at home….
In one fell swoop, the Montana legislature could issue a range of deregulatory actions that have only moved forward in California after years of agitation. On April 20, the legislature passed SB 323, which requires any city with more than 5,000 residents to permit duplex housing in areas zoned for single-family homes. Gianforte is expected to sign this bill as well as SB 406, which prohibits local governments from passing building codes that are stricter than the state code, any time now.
Of the bills in view, the most consequential is SB 382, the Montana Land Use Planning Act, a YIMBY omnibus package the likes of which few blue states would dare to consider.
SB 382 would transform the development process, limiting public hearings on housing projects by front-loading them to the general planning stages, when municipalities adopt their overall land-use plans. After that, approvals in Montana cities would proceed by right — effectively shutting out NIMBY homeowners who often thwart growth.
As Capps explains, the new legislation is the product of an unusual left-right political coalition:
The wave of legislation is the work of a diverse group of advocates from both the political left and right. The coalition behind this push is clear about its goal: Montana needs to head off a housing crisis at the pass.
On this point advocates can agree, even if on almost every other subject, they're worlds apart. And by joining forces, this left-right coalition cleared a political impasse that has blocked so-called housing-abundant policies, which strive to remove barriers to new construction.
We were able to go to mostly Republicans and talk about free markets the importance of property rights. They were able to go to folks on the left and talk about climate and social impacts," says Kendall Cotton, president and CEO of the Frontier Institute, a right-leaning free-market think tank. "It doesn't break down on normal partisan lines. Advocates shouldn't silo themselves on the normal partisan lines."
The YIMBY movement taking shape in Helena is unusual in the US: Few states with a Republican governor, much less with a GOP supermajority in the legislature, have advanced such sweeping efforts to promote new housing construction in cities. Some red states have seen the opposite happen: When Gainesville became the first city in Florida to end single-family-only zoning locally, state leaders threatened legal action, and local Democrats repealed the ordinance before it could take effect.
Zoning reform cuts across standard ideological lines. Economists and housing experts across the political spectrum agree on the need to curb exclusionary zoning. But there is also is long history of both left and right-wing NIMBYism, motivated by a combination of public ignorance, suspicion of market forces and developers, and (particularly, though far from exclusively, on the right) fear of disruption of existing communities by in-migration, especially that by the poor and racial minorities.
NIMBY opposition will be easier to overcome if reform advocates can work together across traditional political lines, as they have in Montana. As Copps notes, such coalitions may not be needed in overwhelmingly "blue" jurisdictions, where conservatives and libertarians have too little political influence to make much difference. But they can be useful in light-red, light-blue, and "purple" states like Virginia, where GOP Governor Glenn Youngkin has recently advocated reform, but will likely need help from Democrats to push legislation through. A broad coalition has turned out to be valuable even in strongly red Montana, where the support of liberals helped push reform over the top.
Whether Montana's success can be replicated elsewhere remains to be seen. Capps suggests "[i]t's possible that the special sauce in Montana is ultimately Montana itself." But, while Montana-specific factors surely played a role here, the problems caused by exclusionary zoning are from unique to that state. Reformers should at least try to learn from the Montana experience and see if they can develop similar coalitions in other states.
The post A YIMBY Victory in Montana appeared first on Reason.com.
]]>Zoning rules that severely restrict the construction of new housing are a major violation of property rights, and also cause housing shortages that prevent millions of people from "moving to opportunity" and becoming more productive. There is already extensive research by economists and housing policy experts demonstrating these points. A new study by Alex Horowitz and Ryan Canavan, housing specialists at Pew Charitable Trusts, provides additional evidence:
A national housing shortage has driven up rents, leaving a record share of Americans spending more than 30% of their income on rent and making them what is known as rent-burdened. But in four jurisdictions—Minneapolis; New Rochelle, New York; Portland, Oregon; and Tysons, Virginia—new zoning rules to allow more housing have helped curtail rent growth, saving tenants thousands of dollars annually….
Research shows that rents rise when more people need housing relative to how many homes are available. Restrictive zoning policies make it harder and more expensive to build new housing for everyone who wants it, and most researchers have found that this drives up home prices and rents…..
But what happens to rents after new homes are built? Studies show that adding new housing supply slows rent growth—both nearby and regionally—by reducing competition among tenants for each available home and thereby lowering displacement pressures. This finding from the four jurisdictions examined supports the argument that updating zoning to allow more housing can improve affordability.
In all four places studied, the vast majority of new housing has been market rate, meaning rents are based on factors such as demand and prevailing construction and operating costs. Most rental homes do not receive government subsidies,… Policymakers have debated whether allowing more market-rate—meaning unsubsidized—housing improves overall affordability in a market. The evidence indicates that adding more housing of any kind helps slow rent growth. And the Pew analysis of these four places is consistent with that finding….
Each of these places kept rent growth minimal relative to the U.S. overall, even while demand for housing continued to grow. Between 2017 and 2021, the four jurisdictions saw their total number of households grow between 7% and 22%, while the total households nationally increased by 6%. More households require more homes, and a housing shortage relative to demand drives up rents….
During the period studied, rents nationwide increased by a whopping 31%, while, in the four reform jurisdictions, they only went up by 1% to 7%. That, despite the fact that all four experienced greater population growth than the national average. The success of Tysons, Virginia is particularly notable, because the northern Virginia area as a whole has experienced a major boom in housing prices over the last decade, driven by increased demand. Tysons' experience bodes well for the impact of "missing middle" zoning reform recently enacted in nearby Arlington County, where I live.
The Pew analysis emphasize the benefits of lower rent, which is of obvious value to lower-income households. But at least equally important is the increased ability of people to "move to opportunity" in these jurisdictions, thereby improving both their own prospects and the productivity of the broader economy. Libertarians and other property rights advocates should also welcome the great expansion in property owners' ability to decide what to build on their land.
Throughout much of the country, zoning is the single biggest constraint on property rights. Zoning is the biggest property rights issue of our time. I say that despite the fact that it isn't in my interest to do so, given that I have devoted much more of my property scholarship to eminent domain.
"NIMBY" defenders of exclusionary zoning argue that they are necessary to protect the interests of current homeowners in places like Arlington—people like my wife and myself. But, in many ways, we too have much to gain from breaking down zoning restrictions—especially if we have children and we want them to be able to find affordable housing.
In recent years, valuable reforms have been enacted in a number of states and localities, and others are under consideration. But much remains to be done. The progress made in these four jurisdictions is an indication of what can potentially be achieved through broader reform.
The post More Evidence that Cutting Zoning Restrictions Reduces the Price of Housing appeared first on Reason.com.
]]>Activists who would like to see more housing built and people who build housing for a living would seem to be natural allies.
That's typically the case in the California Legislature, where the building industry and pro-development YIMBY groups ("yes in my backyard") are usually aligned on bills that streamline housing approvals, loosen zoning codes, and reduce red tape.
But a new bill is driving a wedge into this coalition.
Working its way through the Legislature this year is Assembly Bill 68, authored by Assemblymember Chris Ward (D–San Diego). The goals of the bill are twofold: Streamline approval of new multifamily infill housing projects in "climate-safe" areas while adding additional processes to the approval of new housing in unincorporated, exurban land.
"Our current land use policies have left unchecked sprawl," said Ward in a statement. A.B. 68 will "enable more Californians to live in walkable neighborhoods, near jobs, schools, and transit."
Sponsoring the bill is California YIMBY, which has long a history of fighting for zoning reform bills at the state level, and the environmentalist group Nature Conservancy.
It's a "question of human safety and human life and the fact that for most of the last 30 years, most of the homes built in the state have been in high fire hazard zones," says Matthew Lewis, communications director for California YIMBY. "A lot of it is the result of the severe restrictions we place on infill housing in urban areas."
Over one-third of California's 14 million housing units are located in the fire-prone "wildland-urban interface," per The New York Times' parsing of Forest Service data.
But the fact that so much new housing is being built in these outlying areas—where land is cheap and NIMBY ("not in my backyard") opposition is weaker—is a great argument against, not for, making exurban development more difficult, argue the state's builders.
"It wipes out the most likely places [to build] in the future and where we're building the most housing today," says Dan Dunmoyer of the California Building Industry Association (CBIA).
The streamlining provisions in the bill would remove some roadblocks to new housing, he tells Reason, but leave many more in place. "Even though A.B. 68 contends to make it easier to get through some of our environmental regulations, we would contend it's not even going to grow the footprint of urban infill," he says.
A.B. 68 would require local governments to "ministerially approve" new housing projects on "climate-smart" properties near transit or amenities like restaurants and grocery stores.
That means sponsors of these projects couldn't be forced to go through public hearings. They also wouldn't be subject to discretionary review, whereby bureaucrats have the power to shoot down or condition housing that's otherwise compliant with the local zoning code.
A.B. 68 would also exempt qualified housing projects from having to go through the expensive, lengthy, litigious environmental review process created by the California Environmental Quality Act (CEQA).
That process includes requirements that developers produce book-length documents vetting every conceivable environmental impact their project might have. Third parties can sue over the approval of a project if they think that document isn't thorough enough.
Plenty do, either to stop projects completely or to wring concessions out of the developer. In 2020, projects totaling half of California's annual housing production got hit with CEQA lawsuits.
A.B. 68 also slips in some zoning reforms. Local governments would be limited in the kinds of height limits, setback requirements, and massing restrictions they could impose on projects being built on "climate-smart" parcels.
The bill's streamlining, combined with other recent YIMBY-backed reforms, is getting California to the point where "it actually gets harder for cities to block housing than to permit it," says Lewis. "There are provisions in here in that we think are additive enough and different enough from other pieces of legislation where it's going to be one more chink in the armor of cities trying to prevent housing being built."
At the same time, a major goal of A.B. 68 is also to make development outside of these climate-smart areas more difficult.
The bill would prevent counties from increasing allowable housing density or expanding water and sewer infrastructure in unincorporated, "climate resilient" areas unless they get the approval of California's state planning agency, the Office of Planning and Research (OPR). It also couldn't approve new subdivisions in areas with high fire or flood risks without going through OPR.
Getting OPR's approval for exurban development, in turn, requires counties to prove the new housing is immediately adjacent to existing development and necessary to meet state housing requirements and that there are no other properties within already developed areas where this new housing could conceivably go.
Lewis stresses that this isn't a ban on counties approving new suburban development. "There's just an additional step where they'll have to certify that's where we have to build," he says.
Dunmoyer, in contrast, describes it as effectively "outlawing" greenfield, suburban development. The CBIA is calling A.B. 68 a "housing killer" bill.
Ward himself has described his bill as making development in unincorporated areas "very rare or close to impossible" in comments to the San Francisco Chronicle.
The bill is proving divisive even amongst some YIMBYs.
"People are calling [A.B. 68's regulations on sprawl] a 'second look.' That second look could easily turn into a no look at all," says Louis Mirante, a former legislative director with California YIMBY who now works at the Bay Area Council (which is opposing A.B. 68).
Mirante says that in places like the Bay Area, new urban multifamily, infill development is the kind of housing the state needs to be building. Streamlining that kind of development, as A.B. 68 attempts to do, is good and necessary.
The trouble, he tells Reason, is California "does not have as robust a history as I'd like of infill-oriented policies working. The public resources code and the government code are littered with CEQA streamlining that ostensibly helps affordable housing in infill locations that simply go unused." What California does have is "a very long history of enacting policies that stop or slow development successfully," he says.
In other words, A.B. 68's approach of facilitating more urban infill development while restricting single-family, exurban development is a risky bet in terms of housing supply. The benefits of streamlining are uncertain, whereas the exurban development restrictions will almost certainly work.
Indeed, there are lots of conditions a property would have to meet to qualify for A.B. 68's streamlining provisions.
The project couldn't be replacing historic structures or affordable housing. A.B. 68 also excludes projects that would require the demolition of rent-controlled housing from the bill's streamlining provisions. That would include effectively all multifamily housing more than 15 years old, which are subject to California's rent control law.
Local governments could still adopt objective design and zoning standards, as well as "inclusionary zoning" ordinances that require developers to offer a set percentage of units at below-market rates to lower-income buyers and tenants. It's often the case that local governments and anti-development activists will demand higher and higher affordability thresholds from developers until a project becomes economically infeasible.
Recent history includes a few examples of similarly constructed streamlining efforts failing to produce much new housing.
In 2021, the California Legislature passed S.B. 9 which requires that duplexes and lot splits be ministerially approved by local governments. The law put some limits on the ability of localities to route around this streamlining requirement. State officials threatened legal action against the more cynical local attempts to effectively nullify the law.
Nevertheless, the law still left a lot of wiggle room for cities and counties to prevent the production of new duplexes.
"While SB 9 does state that local requirements may not 'physically preclude' the development of a duplex, in practice, localities could pass objective design standards, affordability requirements, or use of land requirements that would result in projects which are technically eligible under the law but are rendered economically infeasible by the requirements," wrote researchers at the University of California, Berkeley's Terner Center for Housing Innovation in June 2022.
A follow-up Terner Center report published in January 2023 found that S.B. 9 had underperformed even the modest hopes for the law. It had produced only a trickle of new permit applications for duplexes and lot splits, even in pricey Bay Area communities where it was assumed S.B. 9 would be the most impactful.
A.B. 68's proponents argue it's not just good policy but good politics by forging an alliance between the environmental and housing supply movements in support of major legislation.
"Historically we have worked separately or have even been at odds," write Melissa Breach of California YIMBY and Liz O'Donoghue of the Nature Conservancy in a Los Angeles Times op-ed. "Now our issues are colliding. The housing affordability crisis has become a significant contributor to loss of habitat as well as climate pollution, so we're breaking our silos and working on a shared vision. These problems are inextricable from each other."
Mirante is worried that trading the support of builders for a few environmentalist groups is bad politics.
To date, most of the zoning reforms passed at the state level have required the support of Republican legislators and often Republican-aligned builders and business groups.
"If these bigger organizations that largely do suburban sprawl, if they start seeing infill legislation as a threat, or start retaliating against infill legislation as a result of [A.B. 68], the infill coalition in California could utterly collapse. That would be truly devastating for millions of Californians in need of housing," he says.
Mirante tells Reason he doesn't anticipate A.B. 68 even making it out of a committee hearing this year. Lewis says he anticipates the bill to change a lot over the summer, which would well win over current opponents.
"To the extent that we can take another step toward building more homes that reduce climate pollution and climate risk, that's what we're after," says Lewis.
The post California's Builders and YIMBYs at Loggerheads Over Bill Cracking Down on 'Unchecked Sprawl' appeared first on Reason.com.
]]>In August 2022, the Gainesville, Florida, city commission narrowly voted to eliminate single-family-only zoning and allow the construction of four-unit homes on all residential lots. In January 2023, a new city commission celebrated its first day in office by narrowly voting to repeal the fourplex legalization.
That quick reversal represented a stunning rebuke of "yes in my backyard" (YIMBY) housing reforms. It provided a valuable lesson: Even modest zoning reform is political and requires political thinking.
Three states, including California, and a handful of cities have ended single-family-only zoning. Several other states and localities are set to do the same this year.
These reforms typically allow two, three, or four homes in residential lots where only one home was allowed before. Such "upzoning" may seem like a revolutionary change in regulatory thinking, based on the recognition that the immutable laws of supply and demand apply to real estate. Proponents of increasing housing stock see these reforms as a beachhead for more sweeping changes.
Gainesville's zoning reversal shows that even modest zoning reform is politically contentious and that a wary public won't necessarily learn to live with the new rules once they are on the books. Pro-reform commissioners were not up for reelection and therefore did not have much to lose by pursuing a proposal that went beyond what many voters wanted.
The city's pro-reform former mayor told Bloomberg News that Gainesville lacked an activist group supporting its reforms until very late in the process. Meanwhile, residents opposed to fourplex legalization were involved and energized from the start. In cities such as Minneapolis and Portland, both supporters and opponents of reform were highly motivated and organized.
The fourplex fight also demonstrates that state governments can not only supersede onerous local restrictions but also undermine deregulation. Sensing a wedge issue in an otherwise progressive city, Republican Gov. Ron DeSantis' administration sued Gainesville over its zoning reforms, arguing that it was improperly leaving affordable housing production up to the market. In jurisdictions such as California and Oregon, by contrast, YIMBY laws have passed with the support of state political leaders.
YIMBY activists generally have been successful in places where they have spent a lot of time and energy creating large coalitions across all levels of government in support of modest reforms. In Gainesville, zoning liberalizers got ahead of their skis and fell flat on their faces.
The post How To Fail at Zoning Reform appeared first on Reason.com.
]]>In yesterday's municipal elections, Denver voters roundly rejected a ballot initiative that would have allowed the conversion of a private, shuttered golf course into thousands of new homes and a park.
While votes are still being counted, early returns show that just under 40 percent of voters cast 'yes' votes for Referred Question 20. If approved, the measure would have dissolved a conservation easement requiring the 155-acre Park Hill Golf Course to remain a golf course and allowed developer Westside to proceed with its plans to build 3,200 housing units alongside a park and other public amenities.
"The Park Hill Golf Course will forever be a case study in missed opportunities. With historically low turnout, Denver has rejected its single best opportunity to build new affordable housing and create new public parks," said Westside in a statement. "Thousands of Denverites who urgently need more affordable housing are now at even greater risk of displacement."
Westside first acquired the Park Hill site back in 2019 and has been trying to put a mixed-use housing project on it ever since. At the time, developing the site required only that the city and the site's owner agree to lift the conservation easement requiring the property to be maintained as a golf course.
The company's plans didn't sit with neighborhood activists, who argued the city shouldn't forfeit the open space and should instead look for ways to acquire the site and convert the entire property into a park.
In 2021, these activists—organized under the group Save Open Spaces (SOS) Denver—successfully passed a ballot initiative requiring that any proposed dissolution of conservation easements be put to the voters. A Westside-sponsored initiative that would have exempted their property from this ballot initiative requirement failed.
Nevertheless, Westside and the city continued to hash out a development agreement for the Park Hill site. The final plan would have had the company offer hundreds of its planned units at below-market rates for lower-income residents. Westside had also agreed to reserve the majority of the 155-acre property for parks and open space, among other amenities it promised to provide for the neighborhood.
This did little to mollify opponents, who objected to any loss of open space.
"In a climate crisis, in a heat island with a deficit of trees, you don't cut them down and build on top of it. Not when you have alternatives that are equal and better," Harry Doby, an activist with SOS Denver, told Reason earlier this year. He suggested industrial properties adjacent to the site should be redeveloped instead.
The Westside project also attracted fervent opposition from Denver's socialists.
Democratic Socialists of America-endorsed City Councilmember Candi CdeBaca, who is on track to lose her reelection bid, criticized the Westside proposal as insufficiently affordable and said the Park Hill site lacked the infrastructure necessary to support an influx of residents.
The city's DSA chapter, and the national DSA's Housing Justice Commission, both came out against the Park Hill redevelopment as well. They argued letting a developer turn the golf course into more housing would only benefit "capital" at the expense of "democratic control and redistribution of land."
We support Denver DSA. Affordable housing can't be provided by the market. Reforms offered up by the state and developers that don't include democratic control and redistribution of land are ultimately false promises that serve only to benefit capital. https://t.co/EWMbFZXIAs
— DSA Housing Justice Commission ???????? (@dsa_housing) March 17, 2023
Countering this eclectic opposition were the city's local Yes in My Backyard (YIMBY) activists, affordable housing developer Habitat for Humanity, and business groups.
The Denver City Council approved a development agreement and rezoning of the Park Hill site in January 2023, setting the stage for last night's ballot initiative.
Throughout the process, Westside has argued that the site has to be a golf course as long as the conservation easement is in place. Opponents won't get the park they've been clamoring for.
After last night's vote, the company has said the land will be returned to a regulation 18-hole golf course and that the site is immediately closed to public use.
Doby, in a February email, predicted that Westside will not go through with the cost of restoring the golf course to active use, and instead cut its losses and sell the property. Because of the 'no' vote, he argues that "a developer wouldn't touch this parcel with a 100 foot pole." That should decrease the sale price, making it feasible for a non-profit to buy the land and work with the city to modify the easement to allow the park.
Time will tell what exactly ends up happening with the site. What is certain is that thousands of units that would have otherwise housed people won't be built.
The post Denver Voters Reject Plan To Let Developer Convert Its Private Golf Course Into Thousands of Homes appeared first on Reason.com.
]]>After a long and often contentious fight in the Washington, D.C., suburbs, Arlington County, Virginia, has managed to pass the first "missing middle" reform of 2023. A policy unanimously approved by the five-member County Board will allow property owners to build at least four, and in many cases six, units on lots where only one home was allowed before.
Similar reforms have been passed at the state level in California, Oregon, and Maine. A half dozen other states are considering missing middle reforms this legislative session.
For Yes in My Backyard (YIMBY) advocates, it was another proof of concept that exclusionary single-family-only zoning can give way to a liberalized code that allows more affordable townhomes, duplexes, triplexes, and more.
"It unlocks about 75 percent of Arlington's residential land to new housing that isn't just the most expensive type of housing, that aren't just single-family homes," says Luca Gattoni-Celli, founder of the group YIMBYs of Northern Virginia. "Although the best time to plant a tree is 20 years ago, the second-best time is now."
Opponents of the reform decried the passage of missing middle, which has been in the works in one form or another since 2015, as a sloppy rush job that they would continue to fight by other means.
"We just made a decision based on emotional arguments, not on fact and analysis," David Gerk, a member of the group Arlingtonians for Upzoning Transparency, told The Washington Post. "Having not listened to the residents and rammed through a rushed plan, our next stops are the courthouse and the ballot box."
Striking a more measured tone than either proponents or detractors of the missing middle ordinance was Arlington County staff, who noted in a report before the vote that the policy options being considered by the board would not result in many drastic changes.
"Staff anticipates…that construction of [missing middle] development would occur gradually over time," they wrote. "Replacement of older single-detached houses with new, larger single-detached houses would still be the most common type of change experienced in lower-density residential areas."
To guarantee this, the county board voted to include a cap on the number of annual permits that could be for properties making use of the "expanded housing options."
Only 58 former single-family properties could have new townhomes and multiplexes on them, with additional sub-caps distributed by zoning district. The county staff report says that the overall cap is about one-third of the average annual permitting activity in Arlington's low-density zones.
This overall cap, and particularly the distribution of the cap amongst different zoning districts, could prevent a lot of development, says Emily Hamilton, an economist and housing researcher at George Mason University's Mercatus Center.
"The place where I think missing middle will make the most sense in a market perspective and a planning perspective is in Arlington's neighborhoods that are zoned for single-family but are nonetheless really close to Metro or other transit corridors," she says, Yet, only 37 permits for missing middle projects can go to smaller R5 and R6-zoned lots near transit.
A number of other regulations in Arlington's ordinance will suppress production even further, says Hamilton. That includes parking mandates of up to one off-street space per unit, which she says will be particularly burdensome for four-to-six-unit homes, taking many of those units "off the table." The county has also set maximum floor plan sizes for multiplexes below the space allowed for some single-family homes, creating a further disincentive to build.
On paper, missing middle housing seems like it would be a relatively straightforward way for communities to enable more home construction without aggravating the anti-growth concerns of existing residents.
The type of housing being legalized is not all that different from the kinds of housing that already exist in low-density zones. Gattoni-Celli notes that Arlington's single-family neighborhoods are littered with existing, grandfathered-in duplexes and multiplexes that would be illegal to build today.
Katie Cristol, an Arlington County board member and early supporter of the missing middle reforms, describes them as intentionally "small 'c' conservative."
"The idea is based around the idea that a little bit more density can be built so long as it's in the form of a single-family home," she tells Reason.
The other side of this coin, however, is that the supply effects of such a small "c" conservative policy are quite modest. Other cities and states that have abolished single-family-only zoning have required that new duplexes and triplexes be roughly the same size as (or a little bigger than) single-family homes.
That really suppresses developers' desires to tear down existing single-family homes only to rebuild a similar-sized building of smaller units.
Hamilton says Arlington's requirement that new multiplexes be the same size as single-family homes isn't as burdensome in practice as other cities' policies.
The county already allows very large single-family homes to be built, housing is very expensive, and there are a lot of older single-family homes that are a lot smaller than they're legally allowed to be. A builder could make a lot of money taking one of those smaller homes and building a bigger, six-unit multifamily development, she says.
Even so, there's still the issue of the county's cap.
Cristol says there was no way the board would have approved the missing middle reforms without the 58-permit cap. She notes that she was the only "yes" vote on an amendment that would have gotten rid of the regulations further limiting how many of those 58 permits could go to which zoning districts.
Nevertheless, the intentionally incremental nature of Arlington's reforms didn't appear to do much to mollify opponents or lower the temperature of the debate. Almost every news article on Arlington's missing middle proposal has noted the emotions it's kicked up.
For months, the county has been covered with yard signs supporting and opposing missing middle reforms. Normally sleepy planning commission hearings became packed with crowds of activists on either side.
The Arlington County Civic Federation, a group opposed to the missing middle reforms, compiled a 108-page report alleging a lack of transparency and even improper collusion between county officials and pro–missing middle advocates. Arlington's YIMBYs countered with a press release accusing the opposition of harassing missing middle reform supporters in person and online.
"I don't think anything came close" to being this emotional, Cristol says, noting the relative tranquility about Amazon's HQ2 moving to the county.
Modest reform proposals being watered down in the face of strident opposition and then going on to produce little new housing has thus far been the story of recent missing middle reforms, where they've managed to pass.
Given the political lift they require and the limited number of units they produce, it's a fair question to ask whether these reforms are worth the effort expended on them.
Far from using up a fixed amount of political capital, Gattoni-Celli argues pursuing a reform that gets over the finish line was beneficial for the county's pro-housing forces. The fight helped activate and build a larger coalition that can more effectively fight the next housing battle. Both the Sierra Club and the local NAACP chapter supported missing middle.
"We really built the airplane as it was taxiing down the runway," he says. "This initiative was really great for our development and our maturation. Having a McGuffin, having something to go after, is really key."
He says his group is now looking to take on reforms in other Northern Virginia communities, including Alexandria and Fairfax.
Cristol, who is not running for reelection, says that she has serious concerns about the way the 58-unit cap is distributed across zoning districts and the regulatory uncertainty it will create. But she also says that, given how lucrative single-family home construction still is, the cap itself is probably pretty close to what the market would already produce. The cap also sunsets in 2028.
"It's hopefully putting Arlington on a different trajectory than the one that we were on now," she says. "We'll start to see opportunities like the one that gave my family a shot in Arlington, which was a 30-year-old condo in a largely low-density neighborhood. There's a lot of hope in the long run for that too."
The post The First 'Missing Middle' Reform of the Year Has Passed. Will It Get Housing Built? appeared first on Reason.com.
]]>There's a specter supposedly haunting the globe's expensive housing markets: the absentee foreign owner. Critics claim international interlopers are buying properties that should go to hardworking native homeowners instead of rootless global elites merely looking for investment opportunities.
That's the story people are telling themselves, and it's why politicians from Wellington to Winnipeg have banned home purchases by foreigners, as the Canadian government did in January 2023. That solution misconstrues the causes of high housing prices, which are largely due to regulations that restrict the supply.
Foreign buyers accounted for just 5 percent or so of the Canadian housing market before the ban. But Liberal Party Prime Minister Justin Trudeau's government hopes that excluding them will bring down prices.
These foreigners, the government complains, are not using their homes the right way. "We will make sure that houses are being used as homes, rather than as commodities to be traded," Finance Minister Chrystia Freeland said when the ban was announced.
In 2018, New Zealand began enforcing a ban on foreign home purchases. In 2016, the Canadian province of British Columbia imposed a 15 percent tax on foreigners buying homes in the Vancouver metropolitan area. Two years later, the tax was raised to 20 percent and expanded to more areas in the province.
These policies had a dramatic impact on the nationalities of homebuyers. In New Zealand, where Singaporeans and Australians were exempt from the ban, the share of homes bought by foreigners fell from a little more than 3 percent to just 0.3 percent. In British Columbia, "foreign-involved purchases" fell from about 10 percent of all property transfers to less than 2 percent. But contrary to expectations, housing did not become substantially more affordable in either place.
One study of the British Columbia tax found that it reduced home price growth by 1 percent for roughly seven months. British Columbia is still the most expensive province in Canada to buy a home.
Annual growth in Kiwi home prices, meanwhile, remained in the double digits after the ban on most foreign buyers. Summarizing the views of several real estate economists in 2020, the New Zealand news site Stuff reported that "the ban has reduced a marginal part of the demand but has done little to solve the fundamental undersupply that has driven up prices."
We can expect similar results from Canada's nationwide ban. The issue is not that some would-be purchasers have too much money but that Canada's desirable locations have too little housing. Tamping down prices requires increasing housing stock, which requires eliminating voluminous government restrictions on new housing.
Lifting those restrictions would force politicians to stand up to voters who already own homes and want the state to protect their views, their property values, their neighborhood character, or even their national character. Politically, it's easier to punish foreigners and hope constituents don't notice that the problem persists.
That is why politicians search for scapegoats: fat-cat speculators, out-of-town gentrifiers, and local landlords who supposedly profit from keeping units empty. The absentee foreign buyer combines all these archetypes into one rich bad guy.
The cross-ideological nature of the NIMBY ("not in my backyard") coalition compounds the problem. Conservatives don't like foreigners, and progressives don't like capital, so punishing foreign capital pleases people of every political bent. In Canada, all three major national political parties supported either a ban or a tax on foreign home purchases.
Canadians priced out of desirable towns or provinces by local restrictions on housing supply are at a disadvantage when it comes to changing those rules, since they can't vote in places where they don't live. That's especially true for noncitizens, who will serve as a scapegoat until Canadians build more housing or find a new specter to blame.
The post Blame Regulations, Not Foreign Buyers, for High Housing Costs appeared first on Reason.com.
]]>George McGovern, the Democratic Party's 1972 presidential nominee, was a liberal icon. During many years in political office, including as a U.S. senator from South Dakota, McGovern successfully championed loads of regulations, taxes, and mandates in the name of the public good. But as a businessman, he was held back to the point of failure by the same sorts of burdens he had once earnestly promoted to achieve lofty goals.
For today's most overzealous politicians, McGovern's story is worth retelling.
In 1988, seven years after leaving the Senate, McGovern took over the lease of the Stratford Inn in Connecticut. For the first time, this former politician experienced what it meant to operate a business while obeying government dictates and shouldering business taxes designed by people with little firsthand experience in the marketplace. In the end, the inn failed, leaving McGovern with many observations about the disconnect between politicians' dreams and business owners' realities.
In a 1992 Wall Street Journal op-ed titled "A Politician's Dream Is a Businessman's Nightmare," McGovern recounted how, as a senator, he didn't realize just how costly regulatory compliance is. He was unaware of how well-intentioned regulations often produce bad outcomes, how taxes dampen investment, and how mandates make it harder to innovate or survive, especially during recessions.
As McGovern wrote, "the concept that most often eludes legislators is: 'Can we make consumers pay the higher prices for the increased operating costs that accompany public regulation and government reporting requirements with reams of red tape.'" He added: "In short, 'one-size-fits-all' rules for business ignore the reality of the marketplace."
Indeed. A well-functioning marketplace requires rules—institutions such as property rights, an unhindered system of profit and loss, and a fair and stable law of contract. It also requires an abundant level of freedom within the confines of these institutions. Fundamentally, most government interventions into the market tinker with these institutions and hamper that freedom.
One example is requiring that companies provide their employees with child care benefits. Sounds great, but this requirement interferes with the contractual negotiation between employees and employers about what the right mix of wages and benefits should be. Because employers cannot dispense benefits for free, and because every firm and individual is different, mandating higher benefits means mandating lower wages. It's that simple.
Mandating that companies always use U.S.-made materials in their infrastructure projects is another example. It subjects factories to burdensome permitting processes that raise costs and increase the time required to complete construction plans. At some points, even when companies have the necessary financial and physical capital, the extra costs dissuade them from pursuing their original goals. Other businesses—as McGovern learned the hard way—are brought to their knees by the costs.
Excessive government interferences in the market also get in the way of politicians' dreams financed through spending. The higher cost of building infrastructure, for example, means that each dollar spent on a new school or clean energy project doesn't go as far as it otherwise would. Sometimes promised projects don't even get built.
This government-created inefficiency, unsurprisingly, affects things like the Inflation Reduction Act, a $400 billion statute meant to build green energy. Now, some people are worrying that this plethora of regulations could get in the way of building anything. This worry is justified.
As the Journal reported, government spending is flowing at a time when "new wind installations plunged 77.5% in the third quarter of 2022 versus the same period the year before, according to S&P Global Market Intelligence. New utility-scale solar installations likely fell 40% in 2022 compared with 2021." The culprits? Overregulation, tariffs meant to ban sourcing from China, and opposition by NIMBYs to building.
The same will be true of any industrial policy objectives that politicians pursue, such as the CHIPS Act with its $52 billion in subsidies to build microchips. Factories will have to be built in an already overregulated environment, and President Joe Biden's administration just added mandates that subsidy beneficiaries provide child care, buy American, cease stock buybacks, and more.
The administration claims it's doing this for workers, but it's not considering ramifications like, for example, how subsidizing companies' child care centers could exacerbate provider shortages in nearby centers, which, due to state regulations, cannot hire capable workers without college degrees.
Politicians today could learn from McGovern's epiphany and honesty. An excessive amount of government will only stifle entrepreneurs and prevent long-term policy goals from ever playing out. It will also get in the way of the government itself.
COPYRIGHT 2023 CREATORS.COM.
The post Progressive Politicians Are Regulating Their Own Projects Into Oblivion appeared first on Reason.com.
]]>When 17 million Americans tuned in to watch the first night of the 2020 Republican National Convention (RNC), they were greeted by the newly famous faces of Mark and Patricia McCloskey.
A few months prior, the McCloskeys had been obscure Missouri lawyers. Then footage of the married couple brandishing firearms at Black Lives Matter demonstrators outside their St. Louis home rocketed them to national notoriety.
Roundly condemned by liberal America and charged with felonious use of their weapons by local prosecutors, the McCloskeys used their brief RNC remarks to defend their names. Rather than the menacing bigots they'd been portrayed as, the two argued they had been lawfully defending their home from a mob of marauding leftists. The violence they faced down would soon descend upon your home too, they warned, thanks to Democrats' radical plot—to tweak local zoning codes.
Democrats "want to abolish the suburbs altogether by ending single-family home zoning," Patricia McCloskey told the camera. "This forced rezoning would bring crime, lawlessness, and low-quality apartments into now thriving suburban neighborhoods. President Trump smartly ended this government overreach, but Joe Biden wants to bring it back. These are the policies that are coming to a neighborhood near you."
These remarks reflected a newly adopted theme of President Donald Trump's reelection campaign: that he had saved the "American suburban lifestyle dream" by axing housing policies adopted under President Barack Obama. Then-candidate Joe Biden's promise to revive those rules was presented as proof positive of his plans to destroy all that was good about America.
The words zoning policy probably conjure thoughts of dull board meetings and interminable debates about setbacks, parking requirements, and seemingly small architectural details. Most Americans probably consider zoning about as dry as an unlicked envelope. Yet somehow, during a presidential election unfolding amid a deadly pandemic, divisive lockdowns, raucous protests and riots, mass unemployment, and spiking crime, zoning politics managed to show up center stage.
Looked at one way, it was another strange turn in an already bizarre election year. Looked at another way, it was yet another demonstration that zoning rules have become central to American life and politics, almost entirely to deleterious effect.
Zoning regulations control what kinds of buildings can be constructed where, and then what activity can happen inside them. They effectively socialize private property while controlling even the most mundane features of our physical environment and daily routines. Zoning rules flip property rights on their head, curtailing the owners' ability to do what they wish on their land. In exchange, they sometimes give people near–veto power over what happens on their neighbors' property.
Whether a disused shed stays cluttered with rusty lawn care equipment, is turned into a home business, or is converted into an in-law suite might not seem like a major decision. But the existence of a whole body of laws dedicated to controlling that decision tells you how far zoning reaches into American lives. The consequences of these laws are as far-reaching as they are devastating.
The immediate costs of zoning are straightforward: By limiting new housing construction, zoning drives home prices up in—and drives people out of—the most in-demand neighborhoods. By micromanaging commercial activity, zoning prevents entrepreneurs from trying new things, making everyone poorer in the process.
On a macroeconomic level, zoning slows economywide growth and dynamism by wrapping the most productive urban centers in red tape. The distortions it causes in the wider economy have helped fuel large-scale economic and political instability over the past two decades, playing a part in everything from the Great Recession to the election of Trump to COVID-19 craziness.
Zoning also makes America a less welcoming, less interesting place. Whether someone is trying out a new life, a new business, or just a new look, chances are there's a provision of the zoning code waiting to stop them.
Zoning not only gives busybody politicians the ability to affect everything; it gives them power to stop everything, making it the go-to tool for those trying to restrict everything from abortion to chain stores to goat yoga. It's only a little bit of a stretch to say that American political debates always come back to zoning—and that zoning makes everything worse.
When the 2010s began, America was in the nationwide economic rut that followed the housing price collapses of the Great Recession. By the end of the decade, most urban areas were experiencing a housing affordability crisis widely blamed on too little housing.
How did we go from one to the other so quickly? Zoning, of course.
That might sound counterintuitive. The conventional view of the Great Recession is that excess demand for housing—caused by some combination of loose monetary policy, government-subsidized credit, and unscrupulous lenders—inflated a bubble that inevitably had to pop. Leftists, liberals, libertarians, and conservatives can all find something to agree with in this theory.
But it's wrong, according to Kevin Erdmann, a senior affiliated scholar at George Mason University's Mercatus Center. Erdmann has advanced a heterodox theory that this century's most serious economic contraction before the pandemic can be traced back to zoning laws in the most in-demand cities.
In a 2020 paper on the origins of the recession, Erdmann and economist Scott Sumner argue that monetary policy was not exceptionally loose in the lead-up to the financial crisis and that new residential investment was not high by historic standards. Most of the toxic assets and bad mortgages originated after housing prices had already started to decline.
Erdmann and Sumner also point out that prices were increasing fastest in coastal "closed access" cities like New York and San Francisco, where the economy was booming but restrictive zoning regulations prevented much new housing from being built. The result was an out-migration of lower-income people to "contagion cities" in Nevada, Florida, Arizona, and other places where home building was less regulated. Erdmann and Sumner lay the housing crisis directly at the feet of NIMBYs—"not in my backyard" activists who opposed the construction of new housing.
"The NIMBY phenomenon that led to housing scarcity in closed-access cities induced households to migrate from large multi-unit buildings in dense coastal cities to single-family homes in cheaper cities," write Erdmann and Sumner. "The primary source of demand was households looking to economize on housing consumption by moving out of the expensive coastal cities."
Think of Mark and Patricia McCloskey as a class of activist. The McCloskeys of San Francisco, Los Angeles, and New York City tried to protect their views, their property values, and their relatively low-traffic streets with zoning laws that banned apartments across whole swaths of the city. Lack of supply met huge demand, hiking prices in the process. Middle-class people were effectively priced out of urban apartments because those apartments were simply never built.
So instead of living in Los Angeles and New York City, middle- and lower-income people moved to Las Vegas and Phoenix. That influx of demand saw prices spike and builders respond by throwing up lots of new homes. The glut of new homes in inexpensive Sun Belt cities wasn't just the result of an overinflated financial system. It was a response to real demand from cost-burdened coastal emigrants.
All this had massive macroeconomic consequences. Erdmann and Sumner argue the Great Recession was ultimately caused by federal officials misinterpreting rising home prices as a bubble rather than the result of a real shortage. So they tightened monetary and lending policy, and that tipped a rational building boom into an artificially induced recession.
It's an out-of-the-box theory that deemphasizes or disputes many common libertarian diagnoses of the Great Recession that center on an overly profligate Federal Reserve or on reckless financial institutions banking on an inevitable federal bailout. But it does explain how the country was able to go from a supposed glut of housing oversupply to a shortage of somewhere between 4 million and 20 million homes. The glut was overinterpreted—and the shortage never went away.
When economic growth did come back in the 2010s, in the form of a "return to the city" movement, zoning restrictions that were already tight became positively strangling.
With a decade of data now available, it can be definitively said that the 2010s witnessed an urban renaissance. But zoning ensured that renaissance would be painful and incomplete.
From 2010 to 2020, the densest urban neighborhoods grew faster than their more spread-out suburbs and only slightly less quickly than sparsely populated exurban fringes. After two decades of sprawl, the average American neighborhood grew denser; the percentage of Americans living in the densest urban census tracts ticked up considerably, albeit from a low baseline.
Even in places where urban areas didn't add that many people, they added jobs and businesses. Real estate prices grew the fastest in the densest neighborhoods.
Economists, urbanists, and city watchers credit this "return to the cities" to urban areas' longstanding advantages at spurring growth and innovation. When lots of workers and firms are accessible to one another, that allows for more specialization, for more economies of scale, and for ideas to form and spread more rapidly.
The knowledge-based nature of the 21st century's growth industries make the agglomerative effects of dense cities especially powerful. Tech and biomedical research don't require large factory floors, so cheap land out in the suburbs isn't as useful. Those industries do heavily depend on thick networks of highly skilled, highly specialized workers, which can be found in large cities. It also helps to have lots of customers nearby to test products on.
"In the 1970s, 'Silicon Valley' literally meant making semiconductors in large fabs that required expensive equipment and clean rooms," wrote venture capitalist Kim-Mai Cutler in 2014. "The big wave of the last decade has been social networking. And every notable consumer web or mobile product of this wave has been seeded through critical mass in the 'analog' world. Facebook had university campuses. Snapchat had Southern California high schools. Foursquare had Lower Manhattan. Twitter had San Francisco. These products favor social density."
Urban density also enables the frictionless interactions that are essential to innovation. "Face-to-face interactions generate a richer information flow that includes body language, intonation and facial expression and the opportunities they create for frequent, even spontaneous interpersonal collaboration," wrote Harvard University economist Edward Glaeser in a 2020 paper. "As the world became more complex, the value of intense communication also increases."
But as cities became more popular and productive, their zoning restrictions on new housing development started to really bite. Nationwide, urban rents rose twice as fast as urban consumer prices. Median rents shot past $2,000 in New York and $3,000 in San Francisco. Home prices quickly rebounded and surpassed their recession-induced dips in coastal metros.
The net result: Higher-income young professionals without kids became much more likely to live in the city by the end of the decade, but most other demographic groups ended the 2010s less urbanized. The largest urban core counties also witnessed net domestic outmigration for most of the 2010s. Only international immigration and new children kept their population growth positive.
"This combination of faster population growth in outlying areas and bigger price increases in cities points to limited housing supply as a curb on urban growth, pushing people out to the suburbs," wrote economist Jed Kolko in 2017.
When NIMBY zoning rules cut off industries from innovation-breeding cities, the economy's productivity as a whole suffers. Fewer inventions are created; fewer new ideas catch on. The higher wages and standards of living all that growth would have created do not materialize.
In "The Housing Theory of Everything," a 2021 essay for Works in Progress, Sam Bowman, John Myers, and Ben Southwood cobble together the most recent research to estimate that zoning restrictions cost the average American somewhere between $8,800 and $16,000 a year in foregone income.
If you take seriously the idea that politics is primarily downstream of material factors, you might blame zoning for a lot of the sheer craziness of American politics in the last decade too.
One October morning in 2018, a strange package appeared in front of George Soros' house in Katonah, New York. Inside was a homemade pipe bomb intended for the billionaire financier and supporter of liberal political causes. Over the next couple of days, another 15 pipe bombs would show up at the doorsteps of Democratic politicians and liberal media and entertainment figures, including Hillary Clinton, Barack Obama, and actor Robert De Niro, as well as CNN's New York office. The culprit turned out to be a pro-Trump Florida man named Cesar Sayoc. The pipe bombs themselves were all duds, and likely never intended to work. Sayoc ended up getting 20 years in prison.
Most of the commentary following Sayoc's arrest focused on whether Trump was culpable for inspiring the stunt, or on the role misinformation or polarization might play in producing political violence. But Sayoc had lost his Fort Lauderdale house during the 2009 foreclosure wave emanating from the Great Recession. As The Intercept's David Dayen noted, the loss of his home was among the setbacks in Sayoc's sad and unstable life that led him to living in a van and becoming a rabid Trump partisan.
Sayoc's story is just a small example of the ways American politics have appeared to grow increasingly deranged. There are obviously many factors at work, but zoning bears some of the blame. Were it not for overly restrictive zoning regulations, the Great Recession might not have happened. Without that recession, it's plausible that much of the instability of the past decade wouldn't have happened either. Zoning is a key ingredient in America's present political psychosis.
During the economic turmoil of 2007–2009, millions lost their jobs, their homes, or both, and a whole generation of workers entered a depressed job market with poor employment prospects but plenty of student debt. This was also the era of bank bailouts, automaker bailouts, and a massive federal "stimulus" that exploded the government's debt while failing to arrest the economic crisis. All that spending further enraged a recession-battered public, who saw their government go deeper into the red propping up large and powerful corporations.
The Tea Party movement started sweeping through the Republican Party, condemning government spending and fanning the flames of the ever-so-brief "libertarian moment." Republican presidential candidates were soon trying to outcompete each other on how many government programs they said they'd eliminate—provided they didn't touch military spending, Social Security, or Medicare—and who hated Mitch McConnell the most. On the other side of the political spectrum, the Occupy movement channeled outrage at bank bailouts into a general critique of Wall Street and corporate control of politics. For many Occupiers, the problem wasn't so much that the government was doing too much as that the government was helping the rich at the expense of everyone else.
These populist flames kept burning long after the worst effects of the Great Recession passed, though they soon took different forms. The anti-establishment fervor that the Tea Partiers kicked off within the GOP evolved from supporting libertarian-infused purity politicians to propelling Trump, presenting himself as the ultimate anti-system candidate, to victory in 2016.
Occupy proved less successful at taking over the Democratic Party. For a lot of its organizers, that wasn't really the point. But its narrative of the 99 percent versus the 1 percent helped fuel a more strident progressivism, embodied by the likes of Rep. Alexandria Ocasio-Cortez (D–N.Y.) and Sen. Bernie Sanders (I–Vt.).
As urban areas started to rebound from the worst of the Great Recession, urban progressives' targets shifted from the big banks to anything that smacked of growth or that ill-defined concept, "gentrification."
The people most harmed by restrictions on new housing supply teamed up with their more well-off NIMBY neighbors to oppose anything that might bring more young professionals to town. They protested hipster coffee shops and tech employee shuttle services. They fought new bar arcades and Amazon offices. Anti-growth activists also targeted new apartment buildings themselves, under the mistaken belief that these developments create their own demand and thus raise prices even more.
Ocasio-Cortez might have gone to D.C. to bring about the socialist revolution. But her biggest political victory to date is her successful opposition to Amazon opening a second office headquarters near her district.
In his 2016 campaign for the Democratic presidential nomination, Sanders touted his opposition to bank bailouts as a sign of his independence from Wall Street. During his 2020 campaign, he tried to win over Boston-area activists by opposing the redevelopment of a dilapidated horse racetrack into new homes and businesses.
About a decade after the Great Recession, another hugely destabilizing event came along. And while zoning restrictions didn't cause the COVID-19 pandemic, they made it even crazier than it would have been.
Zoning helped create single-use central business districts where everyone works but few people actually live. Mandated business closures quickly turned downtowns into ghost towns. The disappearance of office workers, tourists, and the businesses that catered to both meant that cities lost the "eyes on the street" that are important to maintaining urban order. That helped fuel crime and vagrancy, both of which spiked.
In the late 1910s and early 1920s, judges frequently pointed to the death toll of the Spanish Flu pandemic as justification for upholding early zoning codes' bans on allegedly superspreading apartment buildings. A century later, those apartment bans ensured that more people were living in overcrowded housing, where COVID was more likely to spread. A number of studies have linked more people per housing unit to faster COVID spread and higher COVID mortality rates.
Those early days of empty cities, rising death tolls, and collapsing public order set the mood during 2020 that the apocalypse was nigh. Mass racial justice protests, the riots that sometimes followed, and the occasional outbreak of leftist street communes seemed like an almost natural reaction to the end of the world.
American society did not collapse. But legal restrictions that kept people from changing their built environments reduced the flexibility that's crucial to weathering these system shocks. That rigidity means individuals fleeing crises elsewhere have a harder time taking advantage of the peace and prosperity America still provides.
In August 2021, the American military made a chaotic final pullout from Afghanistan. The news was filled with images of desperate people hanging to the landing gear of aircraft in a vain attempt to escape impending Taliban rule.
In the aftermath of the withdrawal, government refugee agencies and nonprofits set to work resettling the thousands of people who did manage to flee the country. To ease their transition, the U.S. State Department gave them an important piece of official advice: For the love of God, don't try to rent an apartment in California.
"Some cities in California are very expensive places to live, and it can be difficult to find reasonable housing and employment. Any resettlement benefits you receive may not comfortably cover the cost of living in these areas," the State Department warned, recommending lower-cost cities such as Houston, Salt Lake City, and Atlanta.
There are a handful of issues that don't directly connect to zoning restrictions. The war in Afghanistan and immigration are likely two of them. But the fates of people fleeing the Taliban end up being shaped by zoning nonetheless.
San Francisco, New York City, and Boston were once havens for new immigrants, because they offered both affordable housing and economic opportunity. The "return to the city" movement of the past decade has ensured the opportunity remains. But zoning regulations that choke off new housing has made those cities all but closed to poorer arrivals.
The State Department's direction to Afghan refugees to steer clear of California's cities is just one example. Another came a year later, when 49 Venezuelan asylum seekers showed up on the resort island of Martha's Vineyard, Massachusetts.
Their arrival had been engineered by Republican Florida Gov. Ron DeSantis. The migrants reportedly received papers promising jobs, housing, and other benefits. It was a political stunt aimed at exposing liberals' immigration hypocrisy, premised on the idea that they say they care about immigrants until they actually have to deal with them.
On that front, liberal hypocrisy didn't materialize. The surprised Martha's Vineyard residents put up the migrants in a local church for a few nights, providing them with clothing and food before sending them to stay at a military facility on Cape Cod. Within a few weeks, all had either left Massachusetts or settled in more permanent housing.
But why didn't these migrants, coming in search of work, find housing on their own on the island where they landed? Because Martha's Vineyard's zoning laws are exclusionary, even if its citizens aren't.
Residential developments larger than two units are all but prohibited in the community. The island's minimum lot sizes are gigantic, stretching up to two acres or more. Much of the island is reserved for "agricultural" purposes where nothing can be built.
All this limits the housing supply on the much-in-demand island. Average Martha's Vineyard home prices are $1.3 million—well out of reach for a penniless Venezuelan migrant. (They wouldn't be that much better off in the Boston area, where median home prices are just under $1 million.)
Meanwhile, Martha's Vineyard has been suffering a labor shortage, which has forced businesses to cut back on the services they offer for want of staff. Local business owners know exactly why there's a shortage. "There's no place for them to live—why would they come here?" one local hardware store owner told The Martha's Vineyard Times. It's not just desperate Afghans and Venezuelans who have a hard time moving to jobs and opportunity.
"Closed access" cities and towns aren't just losing out on units of labor. So much of what makes cities interesting comes from the culture, cuisine, local traditions, and neighborhood character added by migrants, foreign and domestic. Zoning doesn't just make cities more expensive, less accessible, and poorer. It also makes them less vibrant, less fun, and less interesting.
George R.R. Martin needs no help in delaying the completion of a story. The Historic Districts Review Board of Santa Fe, New Mexico, gave it to him anyway.
In September 2020, the board denied the fantasy author's request for an exemption to the district's height limit so that he could build a giant library-containing keep as part of the castle-like home he was designing.
While zoning makes our economy more unstable and our politics more deranged, it keeps everything else much more boring. When people want to try new ideas on their property, whether it's a startup business or just a fresh look, they are stopped by a litany of rules aimed at separating "incompatible uses" and eliminating "out-of-context" designs.
Often those rules govern what exactly a building can look like. Just as frequently, it's business practices that run afoul of voluminous zoning restrictions. The people who craft and enforce zoning codes can't predict every activity that people might possibly want to do. So ideas that don't fit into preexisting use tables get squelched.
Take Indiana farmer Jordan Stevens, whose goat yoga operation was shut down by county zoning officials. Goat yoga, for the uninitiated, is a lot like traditional yoga—but with goats on the premises. For a time, Stevens ran Indiana's only full-time goat yoga operation. As a relatively new practice, it's no surprise the county zoning code didn't spell out where exactly goat yoga is allowed. So county officials ordered Stevens to shut it down. She could legally raise goats and sell goats on her agriculturally zoned property, but letting people stretch next to them was apparently out of line.
Many home business operations meet a similar fate, regardless of how innocuous they are. Whether someone wants to sell dresses on Etsy from their house or clip hair in their garage, zoning codes are there to get in the way.
Home business bans can mean aspiring business owners need to rent prohibitively expensive commercial space. Even entrepreneurs with the means to rent a shopfront can still be undercut by long and complicated zoning approval processes. These restrictions can kill off innovative experimentation, and they can squelch the shops that give a neighborhood more vibrancy and character.
Even when most of the public is ready to live and let live when it comes to kooky new businesses, zoning gives the minority with a strong desire to control others' property ample opportunity to get in the way.
Then there's the controversy over Oregon's newly decriminalized trade in magic mushrooms. In 2020, voters approved an initiative that legalized the supervised consumption of psilocybin at state-licensed facilities. In 2022, a majority of voters in Jackson County rejected local ballot initiatives that would have imposed local bans on these new mushroom "service centers." That didn't stop Jackson planning officials from proposing zoning rules that would de facto prevent these businesses from establishing themselves.
Not all government departments are created equal. When whole bodies to control land use are set up, land use control freaks end up dominating them.
Even when zoning rules try to protect local, character-enhancing businesses, they can have the opposite effect. If there's one thing San Francisco's zoning code hates more than new housing, it's chain stores. The city's "formula retail" restrictions were enacted to keep national franchise businesses from dominating neighborhood commercial strips. But they also had the effect of stopping a beloved local burrito chain, El Farolito, from opening another location in the city's North Beach neighborhood. The chain had just enough preexisting locations that looked just similar enough to each other to qualify as a chain store. The rules designed to keep Starbucks and McDonald's out of town ended up strangling a local favorite as well.
Thanks to the favorable intervention of a city supervisor, El Farolito was eventually able to open its North Beach location after agreeing to modify its signage at its preexisting businesses. That was a welcome break. A business without a powerful city politician on its side wouldn't have been so lucky.
Prior to the U.S. Supreme Court's decision in Dobbs v. Jackson Women's Health Organization, states had limited ability to restrict abortion. As a workaround, some conservative states passed zoning-like regulations that required abortion clinics to be within a certain distance from a hospital.
When the Dobbs decision did come down, it kicked off a wave of commentary from pro-choice commentators arguing that blue states needed to liberalize the zoning rules that were driving up housing costs. That way, women from across the country could afford to relocate and have as many abortions as they wanted.
Somehow, everything in American politics traces back to zoning.
The universe of activities to which zoning regulations apply has grown substantially over time. These rules were once meant to keep glue factories away from houses and apartments away from single-family houses. They've since become an all-encompassing net weighing down nearly everything about a community.
The power we've given zoning means it's often the first thing officials reach for when trying to achieve social goals. But even the awesome scope of zoning powers hasn't reorganized society in the ways that its proponents might hope.
Restrictions on "yuppie fishbowl" apartments didn't turn tech out of San Francisco. They just made the city more expensive.
Single-family zoning didn't end up isolating Patricia McCloskey's neighborhood from 2020's racial justice protests. Nor was Trump's NIMBY rhetoric about saving the suburbs in 2020 enough to get the country's suburban communities to vote for him in large enough numbers to win the election.
The consequences of this hubris are increasingly being recognized and fought against. The high costs of housing in the most expensive cities birthed the "yes in my backyard" (YIMBY) movement of pissed-off city dwellers tired of seeing their urban wage premium eaten up by the urban housing premium. They are now out to make zoning pay for the damage it has done, either by substantially reducing its restrictiveness or eliminating it altogether.
The YIMBYs have scored impressive partial victories in eliminating restrictions on residential density in California, where they've legalized duplexes and in-law suites almost everywhere in the state. They're now putting teeth into forgotten state laws aimed at overcoming the zoning rules of anti-growth localities. Such reforms are spreading to states as different as Oregon and Virginia.
The material impacts of these wins are minor for the moment. But they represent an ideological inflection point. No longer are zoning restrictions being treated as boring and ordinary. Their high costs are now being calculated for all to see. The rules in place have to be justified and defended, or they risk being eliminated entirely by YIMBY activists.
Something similar is happening with zoning's use restrictions. The libertarian legal movement is increasingly convincing courts and legislatures that bans on people selling goods and services from their own home are unwise and, occasionally, unconstitutional.
Everything is zoning in that zoning's assumed task has become a general ordering of society. That's not just a big mission. It's a goal that goes beyond the zoners' ultimate capabilities. The task they've set for themselves has nevertheless had a profound, and profoundly negative, impact on society.
A general truism of free market economics is that individuals, when given the freedom to choose, will engage in mutually beneficial trades with the people around them. One argument for property rights is that these voluntary transactions need a physical space to happen in.
By constraining those property rights through restrictions on use, density, and more, zoning controls the physical substrata on which free markets are built. It is central planning brought down to an almost elemental level. It has made individuals and society poorer, less dynamic, more unstable, less interesting, less welcoming—and a little crazier too.
The post The Zoning Theory of Everything appeared first on Reason.com.
]]>In February, a California appeals court ruled that the University of California, Berkeley would have to halt its plans to build a much-needed student housing project on the site of Berkeley's famed People's Park until it studied the excess noise the future student occupants would cause.
The lawsuit was brought by a coalition of neighborhood activists under the California Environmental Quality Act (CEQA), which requires government bodies to study and mitigate the environmental impacts of projects they undertake or have a discretionary role in approving.
The decision sparked outrage across both California and the nation. A law meant to stop highway projects paving over wetlands was being hijacked by NIMBY (not in my backyard) activists to deny college students housing.
"California cannot afford to be held hostage by NIMBYs who weaponize CEQA to block student and affordable housing," thundered Gov. Gavin Newsom, a Democrat, in a statement. "This selfish mindset is driving up housing prices, and making our state less affordable. The law needs to change."
Legislators echoed these sentiments, introducing immediate fixes while vowing more comprehensive action to come. Blogs and editorials pointed to the appeals court decision as just more evidence that California, and America generally, had lost its ability to build the things it needs.
If this sounds familiar, it should.
A nearly identical set of facts played out last February when a California appeals court ruled in response to another CEQA lawsuit brought by neighborhood activists that U.C. Berkeley had failed to properly study the impact of its growing student body on the surrounding city.
The decision required the university to slash its enrollment by several thousand students until those studies could be done. Given the timing of the ruling, it would mean that some would-be freshmen who had already been accepted to the school would have to find somewhere else to pursue their education.
Newsom issued a statement criticizing that ruling. His administration filed an amicus brief in support of the university's (ultimately unsuccessful) appeal to the California Supreme Court. Legislators passed new laws to reverse the decision and exempt future student housing projects from CEQA. Essays in The New York Times and The Atlantic treated it as the epitome of America's staid Boomerocracy.
Despite all the outrage and even the successful passage of reforms intended to exempt student housing projects from CEQA, the state has wound up in a near-identical position one year later where neighborhood activists are using the law to stop a U.C. Berkeley student housing project.
The problems with CEQA aren't new. They've been talked about for years. The law's ability to stop or delay a wide variety of projects—including new housing, new hospitals, new bike lanes, new burger joints, new solar plants, and new marijuana dispensaries, to name a few—has produced a diverse set of critics eager for reform.
"It's the law that swallowed California. This state is addicted to CEQA," says state Sen. Scott Wiener (D–San Francisco). "Anyone with the resources to hire a lawyer can delay a project for years and years."
The same features of CEQA that make it so controversial also make it so hard to reform. Almost every interest group in the state sees some merit in using CEQA to stop projects they don't like or to wring concessions out of project sponsors.
"If you want to start to open up the law itself, you instantly get into these very complex coalitional negotiations with an ever-shrinking piece of what you set out to do in the first place," says Matt Lewis, communications director for the housing advocacy group California YIMBY.
Reforms that can pass the Legislature are, therefore, exceedingly marginal. Even when reformers leverage serious outrage at CEQA abuse to sweep whole categories of projects out of the law's purview, the caveats and conditions they include often defang their reforms. Whatever marginal improvements do make it out of the political sausage grinder are also easily erased by courts who see it as their duty to broadly interpret CEQA.
The CEQA deja vu over U.C. Berkeley is a great example.
Last year, Wiener capitalized on the negative reaction to the U.C. Berkeley enrollment decision to pass S.B. 886. It exempts student housing projects on or near public university campuses from having to go through CEQA, provided "they adopt stringent energy and environmental design standards, aren't replacing existing housing, aren't in flood zones and historic districts, and contain fewer than 2,000 units or 4,000 beds. The university would also have to hold a public hearing on the project."
Weiner tells Reason that the law didn't go into effect until this year, meaning it arrived much too late to save U.C. Berkeley's People's Park project, which has been in the pipeline for years.
It's doubtful S.B. 886 would have spared the project from CEQA litigation even if had been in effect.
The law's CEQA exclusion doesn't apply to projects that would demolish a historic structure listed on a national, state, or local historic register. The appeals court decision halting the People's Park project notes that the park was designated a historic landmark in the 1980s and building housing on it would require demolishing on-site structures.
That seemingly would have forced it back into the CEQA gauntlet, S.B. 886 notwithstanding.
"The Legislature came back and did a very surgical fix and it didn't actually work," says Jennifer Hernandez, a land use attorney with the firm Holland & Knight. "The idea that CEQA wasn't going to be a problem for housing" was obviously wrong.
Forthcoming research from Holland & Knight that Hernandez shared with Reason shows that between 2019 and 2021, 198 CEQA lawsuits were filed against housing projects, as well as local government plans and agency regulations allowing for more housing.
Of those, 9 percent of CEQA lawsuits were filed against campus student housing projects. During those three years, lawsuits also targeted plans that would have allowed for one million homes. In 2020 alone, CEQA lawsuits targeting individual projects held up a total of 50,000 units (or half the state's housing production).
By revealing the limits of recent surgical CEQA reform, the appeals court decision in the U.C. Berkeley case raises the possibility that this is the year that more comprehensive structural reform might happen.
"The court is almost daring the state Legislature to use Berkeley as an example of why it has to reform CEQA," says Lewis. "This is the second ruling that has kind of found that CEQA allows anti-housing activists to categorize human beings as pollution."
A few more modest CEQA reform bills have already been introduced.
A.B. 1700, introduced by Assemblyman Josh Hoover (R–Folsom), would declare that noise impacts from housing projects aren't an environmental effect that has to be studied or mitigated for the purposes of CEQA.
While CEQA is often used to stop housing projects, the appeals court decision in the People's Park case was conspicuous because it required study and mitigation of already illegal noise impacts from a housing project based on the type of people who would occupy it.
That opens up a range of unsavory avenues for future CEQA litigation.
"Family housing, which may mean a colicky infant crying for the first three months of her life, is that a CEQA impact? How about crime rates for different kinds of housing?" says Hernandez.
A.B. 1700 is intended to stop those kinds of cases from popping up.
There's also A.B. 1633, introduced by Assemblyman Phil Ting (D–San Francisco), which would stop cities from effectively, but not officially, denying projects by keeping them in perpetual CEQA review.
State housing law requires cities to approve certain projects and gives developers the ability to sue to compel approval if their project is denied. Some cities skirt this law by keeping projects in endless environmental review, such that they're never officially approved or denied.
Ting's bill would treat some higher-density projects as denied if they spend a certain amount of time in environmental review without being approved. This law would be particularly helpful for getting "builder's remedy" projects popping up across the state approved.
More structural CEQA reform appears to be in the offing too.
Newsom's 2022 statement on the U.C. Berkeley decision criticized the result of the court's decision without calling for wider reform. His 2023 statement demanded more serious change to the law. The governor is not known as a policy wonk, however, and his statement seemed to put the onus on the Legislature to come up with the details for any CEQA fix.
Wiener, a longtime critic of what CEQA has become, says that his office has been working on a more comprehensive reform bill since a draft appeals court decision in the People's Park case was released in December 2022. He says he plans on introducing that bill in the coming weeks.
"I'm interested in fixing [CEQA] so that it's focused on the really problematic projects from an environmental perspective while not delaying or killing projects that we really need while not undermining climate action," he says, while cautioning that "we're not going to solve every problem."
Hernandez says that efforts to exempt urban apartments and bus lines from CEQA while still preserving the law as a climate action tool will mean the law still blocks a lot of housing, often in ways that undermine other state laws related to housing production and fair housing.
As an example, she cites the treatment of vehicle miles traveled (VMT) as a CEQA impact that needs to be studied and mitigated. Currently, developments that don't reduce per capita vehicle miles traveled by more than 15 percent below county averages are deemed to have significant travel transportation impacts that need to be mitigated.
Because wealthy suburban and exurban areas already have higher-than-average VMT, builders of new housing in those areas have to pay mitigation fees of as much as $700,000 per unit. Those fees make building new housing in those areas economically infeasible.
But reforming CEQA to make suburban greenfield development easier is something that would be opposed by lots of environmentalists, NIMBYs, and even the state's supply-side housing reformers who see more dense urban housing as good for both affordability and climate change but are critical of more suburban sprawl.
So, even within the universe of people eager to see more home construction, there is tension over CEQA. It's just another example of what a difficult task reform will be.
Lewis says that he doesn't think that there will be a single "aha" moment on CEQA, where policy makers decide to fix everything wrong with the law in one fell swoop.
Instead, he predicts reform will look more like time-lapse videos of snails eating a watermelon. After a million little nibbles, the fruit is gone. Likewise, it'll take continual work reforming CEQA on the margins until the law is put back into a more appropriate box.
The post Is This the Year California's Development-Killing Environmental Review Law Sees Serious Reform? appeared first on Reason.com.
]]>Oregon has one of the country's most centralized systems of land use planning, and some of the tightest local regulations on homebuilding. State lawmakers are now proposing to use the former to overcome the latter.
Working its way through the state Legislature with bipartisan support this year is H.B. 2001. It would require cities and counties to hit state-set housing production goals for both market-rate housing and subsidized affordable housing.
If localities don't hit those targets, the state could impose a wide range of remedies to boost homebuilding, from providing more infrastructure funding to making city hall issue building permits faster. Cities could even be required to adopt state-drafted model zoning amendments.
The bill's premise is twofold; the state should be building lots of both market-rate housing and subsidized housing. And because local governments like to oppose both, nudges and mandates from the state government are necessary to ensure building happens on a scale that will make sufficient room for future residents.
"The person who has almost no voice in fights about housing today is the person who doesn't yet live in the homes that aren't built yet. Because those people don't have a vote yet," says Michael Andersen of the Sightline Institute, a Seattle-based urban policy think tank. "The result is we've put one barrier after another to housing, driven up the cost of building it, banned it outright in some cases."
Oregon already has a rudimentary system for requiring communities to plan for more housing. Cities of 25,000 people or more must ensure they have enough buildable land to support projected household growth for the next 20 years. Cities can meet that requirement by expanding urban growth boundaries to allow more suburban housing, reforming their zoning codes to allow more dense infill housing, or both.
That sounds simple enough. Despite this arrangement, Oregon is one of the least affordable places in the country for both renters and homebuyers. Researchers estimate the state has underproduced somewhere between 86,000 and 111,000 housing units.
"It's become impossible to expand the urban growth boundary," says Dave Hunnicutt, president of the Oregon Property Owners Association, meaning new, cheap land isn't opened up for development at the pace it needs.
Additionally, he says, cities have largely been left to their own devices when it comes to approving housing they're supposed to be planning for. The result is absurdly long and expensive permitting processes.
"In a lot of cities, it's taking two to three years from the time you submit an application before you can get approval," he tells Reason. "Two or three years and seven figures of application costs and engineering and development costs."
Meanwhile, fair housing advocates criticize Oregon's current land use planning system for letting wealthy enclaves stay wealthy enclaves by having zoning laws that only allow for very expensive housing.
"If you have a community that is built on 10,000- and 15,000-foot lots and has 'X' number of homes and you're expecting 'X' amount of growth, they might say, well, we need 'X' number of 10,000- or 15,000-foot lots," says Allan Lazo of the Oregon Fair Housing Council.
Enter H.B. 2001, which would massively increase the state's oversight of local land use laws with the purpose of building more housing that's affordable to people up and down the income ladder.
To do this, it would create the Oregon Housing Needs Analysis (OHNA) system.
Under the envisioned OHNA system, the state's Department of Administrative Services (DAS) would conduct an analysis of housing needs based on projected regional job growth, population growth, and an "equitable statewide distribution of housing for income levels."
DAS would then use that needs analysis to hand down housing production targets to localities for both overall housing production and subsidized affordable and supportive housing for lower-income residents and the homeless.
Oregon localities would then have to come up with a housing production strategy for meeting their state-assigned targets. Their progress would then be posted on a public dashboard, which would also measure housing affordability and availability for a range of protected classes.
The framework bears close resemblance to California's cumbersome Regional Housing Needs Assessment (RHNA) system, which likewise requires local governments to continually adjust their land use laws and practices to meet state-set housing production quotas for both market-rate and below-market-rate housing.
California's RHNA has been on the books since 1969 and it's basically been a bust at facilitating new housing production. For decades, neither the state nor cities took it very seriously.
Cities would produce totally unrealistic housing elements predicting that profitable grocery stores and cemeteries would be imminently replaced by new housing. Bureaucrats in Sacramento would rubber-stamp these plans.
If a city did accidentally turn in a housing element that called for housing on a developable site, it could still erect all sorts of barriers to stop it from actually getting built.
There also never ended up being actual consequences for anti-development cities that had their housing elements rejected by the state either.
Sacramento never exercised its authority to strip housing and infrastructure funding from jurisdictions without an approved housing element. Nor did developers end up using their powers under the "builder's remedy"—which forces cities without state-approved housing elements to approve projects provided they contained some affordable units—to get their projects permitted.
In short, RHNA has failed to prevent California's current crippling housing shortage.
(A lot of California's housing reformers are bullish that this most recent RHNA cycle is actually getting cities to take their responsibilities to plan for more housing seriously, and failing that, some builder's remedy projects might actually happen. Still, getting to this point has required a flurry of new state laws amending the RHNA, the creation of whole new housing accountability units at the state level, and a statewide YIMBY revolution.)
Given RHNA's legacy of failure, one might think Oregon is crazy for trying to copy its southern neighbor's planning framework. The bet Oregon lawmakers are seemingly making is that they can learn from this history to get their own system right on the first go.
OHNA is "aspiring to learn from RHNA's mistakes," says Andersen.
Under H.B. 2001, cities that don't have a housing production strategy, aren't implementing their strategy, or are falling behind in meeting their housing production goals will get placed in a "housing acceleration program."
DAS will audit the cities in the program to determine what's impairing housing production. The city and the state will then ink an agreement to adopt measures to overcome whatever is gumming up homebuilding.
Importantly, these audits will be a routine part of the OHNA system. Contrast that with California, where it wasn't until last year that the state initiated a first-of-its-kind audit of San Francisco for its habit of shooting down housing projects in violation of state laws.
"Those accountability measures don't have to be punitive," says Hunnicutt, noting they could include things like funding for the infrastructure necessary to support new development. "The agency will have a wide range of tools in their toolbox."
But if a city doesn't abide by that agreement or demonstrates a pattern of adding "additional, unnecessary cost or delay" to homebuilding, the state could bring in the big guns. Oregon's Land Conservation and Development Commission would be empowered to order bad-acting jurisdictions to adopt state-developed model zoning ordinances, approve housing projects by right, expedite permitting times, forfeit state grants, and more.
That sweeping power lowers the potential for the OHNA to become a meaningless planning exercise. If a locality won't liberalize its development-killing zoning code, the state will go ahead and do it for them.
If the premise of the law is that cities have an incentive to fight new housing, this is a very direct way of overcoming their anti-growth biases.
But for free market types, these sweeping state powers come with a lot of risks too.
Given the equity and affordability goals in the law, there's the real possibility that the state could end up encouraging (or forcing) local governments to adopt policies that make housing production harder.
For instance, imagine a city that ends up being put in the state's housing acceleration program because it's not building enough new, subsidized low-income housing.
One possible outcome is the state requires the city to adopt an inclusionary zoning ordinance whereby new market-rate apartment buildings have to come with some below-market-rate affordable units. Since inclusionary zoning acts as a tax on new development, this remedy could mean less overall housing, not more.
H.B. 2001 also gives the state the power to force cities to adopt "anti-displacement" policies. If those include things like demolition controls or more limits on evictions, that could also impair housing supply.
"I could very easily see a scenario where an agency and a city create an enforcement situation where it becomes more difficult to build housing instead of less difficult," says Hunnicutt. Whether that happens, he says, will come down to how supply-minded staff at state agencies enforcing the law are and how courts interpret the law.
Andersen is less worried, saying H.B. 2001 is pretty clear that the goals of more subsidized housing and more housing generally are supposed to work in tandem. "The machinery of the bill is such that there would be a lot of pressure to not advance one goal at the cost of another," he tells Reason.
Libertarians may well blanch at the exceedingly bureaucratic system Oregon is proposing, with its state-determined housing needs, calls for subsidized housing construction, and plans on top of plans.
In a Rothbardian paradise where no zoning existed, none of this would be necessary, and the free market would be left to build the housing people want at prices they could afford.
We don't live in that world, however. For all its bureaucracy, H.B. 2001 offers the possibility of using state bureaucracy to overcome binding local regulations on housing construction.
Ultimately, how the bill works in practice will be determined by state agency rule making that'll take years after the bill's passage to happen. It won't be until the end of the decade that we could see the state taking enforcement actions against recalcitrant localities.
For Hunnicutt, that's the bill's main flaw.
"This bill does nothing to address our short-term issues," he says. Cities are still stuck with little ability to expand urban growth boundaries. Design review and public meeting requirements will continue to stop new housing where it's already allowed.
Other bills introduced into the Legislature do include more short-term fixes. H.B. 3414 would require local governments to grant requested variances from construction regulations for residential projects in residential zones (provided the variance doesn't endanger health and safety or ask for additional density allowances.)
Still, even if Oregon's proposed planning system manages to avoid the pitfalls of California's similar RHNA process or creating new problems of its own, it's still a far-off solution to a here-and-now housing crisis.
The post Will Oregon's Housing Reforms Spark a Building Boom or Be a Bureaucratic Bust? appeared first on Reason.com.
]]>New York has some of the most restrictive local zoning regimes in the country, resulting in rock-bottom rates of housing construction and sky-high prices.
Now, Democratic Gov. Kathy Hochul is proposing to fix this sad status quo by allowing developers to bypass city and town zoning codes altogether and get their housing projects approved directly by a fast-tracked state process.
"Through zoning, local communities hold enormous power to block growth," said Hochul in her annual State of the State address yesterday. "People want to live here, but local decisions to limit growth mean they cannot. Local governments can and should make different choices."
In her speech, Hochul announced a Housing Compact strategy that she says will lead to 800,000 new homes being built in the state over the next decade.
To make that happen, her plan would give local governments a goal of growing their housing stock by 1 percent every three years, or in the case of New York City and surrounding communities, 3 percent every three years.
Any new housing would count toward that target, although local governments would get bonus points for approving new below-market-rate, income-restricted "affordable" housing. Cities that miss their growth targets would have to show the state that they're proactively reducing zoning restrictions on new housing.
If a locality fails to remove zoning restrictions, developers would be allowed to bypass local officials entirely and get their projects approved via the courts or a new housing approval board. A fact sheet on Hochul's plan says projects appealed to that board "will be approved unless a locality can demonstrate a valid health or safety reason for denying the application."
Crucially, those projects wouldn't have to conform to local zoning restrictions. Developers could theoretically use this process to build projects of unlimited density anywhere in a city, although they would have to include some affordable housing units to qualify for state approval.
Hochul's proposal would, in effect, create similar arrangements to what exists in California and New Jersey.
In both places, the state requires local governments to plan for a certain amount of affordable housing. If a locality fails to meet these state requirements, developers can make use of what's known as a "builder's remedy" to get projects approved, even if the project would violate the zoning code.
In theory, this builder's remedy would allow a developer to propose a skyscraper in a single-family neighborhood or commercial area, and the local government couldn't use its zoning code to stop it.
Garden State developers have made occasional use of this builder's remedy. That's not the case in California, where no developer has managed to use the builder's remedy to get a project approved in the three decades it's been on the books.
One major reason for that is that the state's builder's remedy still ultimately leaves local governments in charge of permitting projects. That creates a lot of opportunity for antigrowth cities and towns to find reasons apart from their zoning codes to shoot down projects.
Localities could manufacture health and safety reasons to reject a project, for instance. Another tactic local governments use is demanding a project go through perpetual rounds of environmental review so that it's never formally approved or denied.
The impotence of the builder's remedy points to a general flaw with YIMBY zoning reforms: the state government tells antigrowth local governments they have to allow more housing but still leaves them in charge of approving that housing.
This kicks off a perpetual mountain cat-and-mouse game where motivated local governments find increasingly inventive ways to ignore state zoning reforms, and state lawmakers keep having to pass bills closing whatever loopholes localities find.
Hochul's proposal tries to avoid this dynamic by cutting local governments out of the process entirely. That would, in theory, afford the state's NIMBYs, and local governments they control, no direct ability to stop new housing. Localities could still raise health and safety objections, but those would have to be vetted by the proposed new board.
Libertarians might well recoil at the idea of the state effectively setting housing production quotas, but Hochul's plan would only force local governments to eliminate their own regulations. As proposed, it wouldn't require them to spend tax dollars building housing. Nor does it give private parties any mandates. Rather, property owners would have more flexibility to build.
The governor's idea of targeting overall housing growth is also simpler and more rational than California's equivalent system, whereby the state calculates local housing needs by income level and then gives local governments goals of how much low-, moderate-, and market-rate housing they should be building.
That's a convoluted process all premised on the false notion that cities will only become affordable when they're building new income-restricted housing for low- and moderate-income renters.
In contrast, Hochul's approach is far more market-oriented. It's premised on the idea that cities need to build more housing generally in order to become more affordable, and doesn't get too fussy about which kind of housing that is.
Whether this is all politically practical is a big open question.
Hochul used her 2022 State of the State address to call for the far more modest policies of legalizing accessory dwelling units, repealing state-set density limits in New York City, and encouraging more density near transit. None of those ideas went anywhere last year.
This year, she's proposing all those policies again as well as creating the aforementioned system of housing growth targets enforced by a builder's remedy.
Hochul's more radical proposals probably don't have much of a chance, but the fact that she's willing to call for such bold reforms is an encouraging sign.
The post New York Gov. Kathy Hochul's Housing Plan Avoids Common Mistake of Other YIMBY Reforms appeared first on Reason.com.
]]>City building games have gotten ever more intricate. But if it's realism you want, you can't go wrong with Sim Nimby. The online parody of Sim City doesn't have particularly impressive graphics or great gameplay. But it does teach users what it's like to be a big city developer in the real world of intrusive government driven by overreaching neighbors.
Anyone trying to construct an apartment building, road, or rail network will get hit with a series of obstructing pop-ups screaming "Won't someone think of the property values!," "Keep our local fiefdom weird!," or "Live, laugh, love showing up to these town halls and stopping your building." Eventually the player realizes nothing is getting built and quits.
The game, created by two Brooklyn ad workers fed up with anti-development sentiment, is as funny as it is accurate. NIMBY ("not in my backyard") activists have practically fossilized America's cities and suburbs with regulations and layers of bureaucratic process. As a result, new homeowners, renters, and small business owners pay inflated costs for their space. Short on cash, these cost-burdened urbanites can at least play Sim Nimby for free.
The post Review: Try and Fail To Build a Virtual City in <em>Sim Nimby</em> appeared first on Reason.com.
]]>Following months of increasingly contentious head-butting, officials in the mountain town of Vail, Colorado, are moving to seize a property from a local ski resort to prevent it from constructing new housing for its employees.
The property in question is a 5-acre site abutting a frontage road in the eastern part of the 5,600-person ski town. After nearly five years of rezonings, planning, permitting, and litigation, ski resort operator Vail Resorts is ready to move ahead with the $17 million Booth Heights project that would create 165 beds for its work force.
"It's been a multiyear partnership, collaboration, and process to get where we are with a fully entitled and shovel-ready project," says Vail Resorts spokesperson John Plack. "This is private property owned by the company and private dollars that the company is investing into the project."
Plack tells Reason that there's a deficit of some 6,000 beds for the county's work force. The Booth Heights development wouldn't solve that crisis, he says, "but every little bit helps."
Standing in their way is the town of Vail itself, which filed a petition in Eagle County District Court on Friday to invoke its eminent domain powers to seize the Booth Heights site and hold it as open space, Vail Daily first reported.
"It's unfortunate we've come to this place," says Vail Mayor Kim Langmaid of the eminent domain petition.
Vail, Langmaid says, is committed to work force housing and has several public-private partnerships to provide that housing currently in the works. But developing the Booth Heights property would threaten the area's bighorn sheep, who'd be at risk of starvation without that open space, she says.
When the town's last-ditch effort to buy the property for $12 million was rejected by Vail Resorts in early October, Langmaid said they had no choice but to move ahead with eminent domain.
"We've come to the end of our rope. We've tried so hard to find a situation that would accomplish everyone's goals," she says.
It's an about-face from the town government that previously endorsed housing on the site.
In 2017, the Vail Town Council approved Vail Resorts' requested rezoning of its entire 23-acre Booth Heights property. Some 18 acres owned by the company would be zoned for preserved open space, while the other 5 acres would be zoned for work force housing.
Since then, the town's design review board and the planning commission, as well as the town's Council itself, also voted to approve site plans, conditional use permits, and other development plans Vail Resorts needed to move ahead with its project.
In a letter rejecting the town's offer to purchase the site, Vail Resorts COO Bill Rock notes that the town and the company also jointly defended a lawsuit trying to stop the redevelopment of the site that was resolved in the town's favor in October 2020.
"While the Town of Vail has apparently and inexplicably made an about-face in the last several months, Vail Resorts' goal has remained the same for the past five years: to work with the Town to develop affordable housing," wrote Rock.
Langmaid says that the Booth Heights development has long been controversial in the town. Votes to approve the project have generally passed with the slimmest of margins. After the Town Council last voted to approve the project in 2019, a local election flipped the Town Council to a majority that opposed the Booth Heights development, reports Vail Daily.
When the Vail Resorts applied for one final approval from the town's design review board in April, the Council responded by passing a resolution authorizing condemnation and seizure of the property.
And after Vail Resorts received that last needed sign-off from the design review board, making its Booth Heights project shovel-ready, the town passed an emergency ordinance stopping development on the site through the end of November.
Its offer to buy the property was also rejected; the town is now proceeding with eminent domain.
Throughout the process, Vail Resorts has maintained that its project would not harm the area's bighorn sheep. Plack tells Reason the company has committed to paying $100,000 for habitat restoration and would install barriers around its property to prevent residents and pets from interfering with the sheep.
An environmental impact report prepared for the project concluded that it would not harm the area's sheep. Vail Resorts notes in a lawsuit challenging the emergency ordinance stopping construction of its project that the town has approved several large homes within the bighorn sheep's range.
"Why are luxury homes OK," asks Plack. "but affordable housing [is] not?"
Langmaid is dismissive of the company's mitigation measures. Converting the Booth Heights site to housing is still going to eat up needed open space, she says, and no amount of offset payments or fencing is going to change that.
Town residents themselves seem divided on the project. Public comments submitted to the Council when it was debating the use of eminent domain reflect a range of pro- and anti-development views.
"It is obvious that we are in a housing crisis and action needs to be taken immediately. This project is the first piece of what will be a long road to providing more housing opportunities to the workforce of the valley," said one resident opposing the town's seizure of the site.
"First, our wildlife is important to the character and attractiveness of this valley, not the least of which are the sheep," said an eminent domain supporter. "Second, the first view of Vail that visitors (and residents) coming down from Vail pass should see is the current one, not a massive and out of place apartment complex."
Langmaid tells Reason that the town has gone out of its way to identify alternative sites for affordable housing development that could serve Vail Resorts employees without disrupting wildlife. The town spent $2 million relocating a preschool from one site now slated for housing, she notes.
Plack says Vail needs affordable housing now, and it's ready to provide it.
"For us, this option is shovel-ready," says Plack. "A lot of the other options are five-plus years away and have who knows how many obstacles in front of them."
The post Colorado Town Seizing Ski Resort's Land To Stop It Building Employee Housing appeared first on Reason.com.
]]>Common sense needs a bigger tent.
LYRICS:
This could use a brand-new coat
That's not allowed, I'd warn you don't
That guy is crapping on the ground
Eh, it happens. Wait, how's that even allowed?
Because you're living in a clown world
A cool-to-pull-your-pants-on-down world
There's only one you can paint brown world
(You'll never guess which one in clown world!)
The cost of rent is getting dear
We should build our new neighborhood here
Zoning forbids new housing builds
We were actually just gonna throw up some tents and
You know, do some heroin?
Well, that's acceptable in clown world!
A can't-let-children-walk-downtown world
They're playing hopscotch—look around world!
They're avoiding needles…
Oh, it's OK in clown world
He saved that disabled lady
Risked his life to save two babies
And to his valor we're in debt
Wait—have you had your booster yet?
Well, I've had COVID and I had an adverse—
Looking for a new job in clown world
A risk-your-life-so-they-don't-drown world
A down-is-up and up-is-down world
Fired his dangerous butt from clown world
Oh we're all living in a clown world
A common-sense-cannot-be-found world
A you-can-paint-the-sidewalk-brown world
We're living in a clown world
Written and performed by Remy; video produced by Meredith and Austin Bragg
The post Remy: Clown World appeared first on Reason.com.
]]>In its opposition to a new state law that eliminates parking requirements for developments located near transit lines, the city of Newport Beach offered this whiny complaint to the Legislature: "We believe cities, not the state, are best suited to determine the parking needs of development projects in their jurisdiction."
Well, I'll one-up the Newport Beach City Council. I believe citizens and businesses, not city officials, are best suited to determine the parking needs of their customers as they propose new projects. Why fight over which level of bureaucrat will run our lives? Why not just let people make their own decisions? When it comes to local development issues, that's the central political question of the day.
Sadly, many Republicans have abandoned free-market principles in favor of culture wars, which often puts them on the side of the Not In My Back Yarders (NIMBYs) who oppose market-oriented housing policies. Equally weird, Democrats—who believe that more government is the solution to virtually every problem—are starting to learn about the value of deregulation.
Conservatives often depict Democratic efforts to jumpstart urban housing construction as a plot to force us all to live in "stack and pack" housing. They act as if single-family-only rules are sacrosanct, rather than being a government-imposed, post-World War II construct. Those who think that way should, just for fun, visit downtown Fullerton or Pasadena and note the diverse land uses that were common before modern zoning took shape.
Democratic inconsistency is equally bizarre. As my former Orange County Register editor used to say, "Everyone, Steve, is a libertarian on the 25 percent of things they really care about." Regarding housing policy, a majority of Democrats is so committed to increasing urban density and walkability that they are willing to do the unthinkable—reduce the role of government and allow markets to work.
Sure, some Democrats are in the "protect our communities" NIMBY group and some Republicans have admirably voted in favor of major housing-deregulation bills. Generally speaking, though, the housing debate has caused an ideological shift. Liberals are open to less government (because it yields the results they want) and conservatives want more government (because it yields the results they want).
The "get off my lawn" crowd still is fuming about last year's passage of two housing laws—and wealthy cities (including liberal and conservative ones) are trying to obstruct their implementation. Senate Bill 9 allows Californians to build duplexes in single-family neighborhoods on a "by right" basis—eliminating bureaucratic subjectivity and the heckler's veto from your nosy neighbor. Senate Bill 10 eases permitting of 10-unit developments near transit.
Other similar land-use statutes are coming their way. Gov. Gavin Newsom touts a list of 41 housing bills that he signed this year that should help jumpstart housing construction. Most of them offer minor legislative tweaks or include the usual array of subsidies. But a handful of them are as significant as SB 9 and 10—and worthy of applause.
I previously mentioned the parking bill, AB 2097. Current parking minimums are absurd (and designed for peak hours)—and a constraint on the market. If you own a store or are building condominiums, then you should determine the amount of parking your customers need. These requirements explain why so much of our built environment has the ambiance of an airport landing strip. By the way, the coolest downtowns I've visited have little parking—and the bleakest ones are a sea of parking lots.
It's an issue everywhere, of course. "Excessive parking obstructs housing development, impedes adaptive reuse of buildings, and hinders the creation of vibrant spaces that allow our community to flourish and feel connected," wrote Alaska Assemblyman Kevin Cross (R–Eagle Creek) in calling for Anchorage to reduce its parking minimums.
Newsom also signed Assembly Bill 2011, which "allows for ministerial, by-right approval for affordable housing on commercially-zoned lands, and also allows such approvals for mixed-income housing along commercial corridors," wrote California YIMBY (Yes In My Back Yard). Senate Bill 6 does something similar, but is more restrictive. Both bills passed as a compromise to placate competing union demands.
In plain English, the measures allow conversion of decrepit shopping malls into housing–provided developers follow a number of conditions related to the amount of "affordable" housing included in the project. I don't care for the "we're deregulating provided you follow all these new regulations" aspect of the laws, but they are more good than bad.
It was encouraging that both shopping-mall measures had overwhelming bipartisan support, as did two other new housing laws. Assembly Bill 221 further loosens the rules surrounding the construction of granny flats. Senate Bill 886 exempts from CEQA housing projects at public universities–made necessary after a community group used the environmental law to challenge Berkeley's expansion plans.
Perhaps the best news is it's getting increasingly difficult to be a NIMBY in Sacramento anymore.
This column was first published in The Orange County Register.
The post California's Housing Policy Fight Is Flipping Traditional Political Alliances appeared first on Reason.com.
]]>California's state government is coming to the aid of an Anaheim-based nonprofit whose plan to open a group home for formerly homeless women was shot down by the city at the behest of NIMBY neighbors.
It's a case that tests the power of California housing officials to set limits on localities' ability to say no to new housing. Should the state prevail, Anaheim could have to permit far more housing than just group homes.
On Monday, California Attorney General Rob Bonta and the state's Department of Housing and Community Development (HCD) filed an application to intervene in a lawsuit brought by the nonprofit Grandma's House of Hope against Anaheim in Orange County Superior Court earlier this year. That lawsuit challenged the city's refusal to issue House of Hope a conditional use permit to establish a 15-person group home serving formerly homeless women with mental health disabilities.
"The support and assistance that transitional housing providers like Grandma's House of Hope deliver are essential in addressing California's homelessness crisis and the shortage of housing for people with disabilities," said HCD Director Gustavo Velasquez in a press release. "Cities and counties across the state will be held accountable for attempts to evade fair housing and anti-discrimination laws."
For close to two years now, House of Hope has been locked in a contentious battle with Anaheim city officials and neighborhood opponents over its proposed group home.
Its original plan was to host up to 21 women at an 8-bedroom house in a single-family neighborhood on West Street near Anaheim's downtown. They'd receive therapy and other services from seven House of Hope staff members, several of whom would be on-call 24/7 to respond to emergencies. The plan would be to move these women into permanent housing within 18 months.
It's something House of Hope has succeeded with at its other group homes, including some in Anaheim. The nonprofit reports a 65 percent success rate at placing program participants in permanent housing within 9 to 18 months and has partnered with the Orange County government on various programs over the years.
But their proposal for an additional Anaheim group home proved controversial with a vocal set of nearby residents. They argued their neighborhood was already "oversaturated" with group homes and that adding another one would threaten public safety, strain sewer infrastructure, and overtask emergency services.
At an August 2021 Planning Commission meeting, 36 residents showed up to argue against granting House of Hope the conditional use permit it needed for the group home.
Despite a recommendation from city staff to approve the group home, the commission voted unanimously against the nonprofit's application. Their findings stated that the house would threaten public health and safety.
A similar scene occurred at an October public hearing before the Anaheim City Council.
At the hearing, House of Hope founder Je'net Kreitner tried to allay fears that a new group home would become a burden on the neighborhood. She said that House of Hope had agreed to reduce the number of people staying at the home from 21 to 16. Far from just picking people up off the street, she stressed that residents would only be placed in the group home after extensive screening and consenting to psychiatric treatment.
During the hearing, Kreitner held up a phonebook-thick binder that contained House of Hope's contract with the Orange County Health authorities outlining its transitional housing program and "good neighbor" policy as evidence that hers wasn't a fly-by-night operation.
"Our case managers are dedicated to following this by the letter," Kreiter said at that meeting. Anaheim had a growing homeless population that needed to be addressed, she said, adding, "we are trying to do that for you."
This did little to mollify opponents at the city council hearing. They complained that the neighborhood was already oversaturated with "lucrative" businesses like House of Hope. Speakers expressed fears that the formerly homeless women staying at the nonprofit's group house might wander around the neighborhood at night, create traffic through excessive GrubHub orders, and put undue strain on water and sewer infrastructure.
Those arguments proved convincing for the city council, which also voted unanimously to reject House of Hope's application.
All out of administrative options, the group sued the city in January 2022.
In the background of House of Hope's struggle to open its shelter has been a slow-burning dispute between Anaheim and state housing officials about the city's general treatment of transitional housing.
Back in 2013, HCD told Anaheim that its permitting requirements for transitional housing violate a state law requiring local governments to treat transitional housing the same as residential housing in the same district. Since Anaheim doesn't require conditional use permits for single-family homes, the department said it couldn't require them for transitional housing within single-family homes.
The city committed to bringing its transitional housing regulations in line with state law as part of its 2014 Housing Element—a periodic report that cities must produce outlining how they'll meet state-established housing production goals.
But that never ended up happening. Indeed, while House of Hope's doomed permit application was winding through the approval process, the Anaheim Planning Commission endorsed piling even more regulations on transitional housing.
Over the past two years, HCD has also been warning Anaheim in technical assistance letters, phone calls, and in-person meetings that its treatment of House of Hope specifically was illegal and could provoke more serious state intervention.
Anaheim continued to blow off these warnings, however. At most, the city said it would commit to changing its transitional housing regulations as part of its 2023 Housing Element.
Its patience exhausted, HCD, along with Bonta, asked the court earlier this week to let it join House of Hope's lawsuit against Anaheim.
Its lengthy petition repeats complaints that Anaheim is violating state law designed to streamline the approval of transitional housing. By committing to and then failing to remove illegal regulations on transitional housing in its Housing Element, the city is also in violation of the state's Housing Element laws, argues the state. Their application also claims that by shooting down a group home for mentally disabled women specifically, Anaheim is violating state anti-discrimination and fair housing laws.
The state is asking the court to prevent Anaheim from requiring conditional use permits for the House of Hope project or similar projects.
It's also asking the court to declare the city's 2014 Housing Element "not substantially" compliant with state Housing Element law.
That could open the door to even more sweeping state remedies.
Cities without substantially compliant housing elements can lose access to some state funding. The state's "builder's remedy" also prevents cities without compliant housing elements from using their zoning codes to deny housing projects with a certain amount of below-market-rate housing.
If the court declares Anaheim's housing element out of compliance, a developer could theoretically build a project of unlimited density anywhere in the city.
California, for all its housing woes, has many laws on the books intended to boost housing production and put some outer limits on cities' ability to shoot down new development. Until recently, those laws have largely gone unenforced.
That's starting to change, as the fight over the House of Hope shelter illustrates.
Both HCD and the State Attorney General's office have created new units dedicated to enforcing state housing laws. Increasingly, they're using whatever tools those laws give them to override local regulations and get housing built.
In August, the two departments launched an unprecedented audit of NIMBY capital San Francisco's housing policies and practices with the explicit intent of uncovering violations of state housing law.
The message is clear: shooting down individual projects for specious reasons or keeping blatantly illegal regulations on the books isn't going to fly anymore.
The post California A.G. Says Anaheim NIMBYs Can't Block Women's Group Home appeared first on Reason.com.
]]>For many California college students, navigating homelessness or overcrowding has become part of getting the degree.
Five percent of University of California (U.C.) students and 10 percent of California State University (CSU) students are homeless during the academic year, according to one state estimate. The two public university systems have a combined 16,000-person waiting list for on-campus student housing.
Meanwhile, those in search of private, off-campus housing describe a punishing months-long grind of Craigslist searches and competing with 40 other applicants for the chance to rent a single room in a 50-year-old home.
"You'd regularly see the street lined with students sleeping in cars," says Nolan Gray, research director at California YIMBY and a PhD student at UCLA. "I had students in classes that I helped teach who were sleeping in cars, sleeping two to three people to a bedroom while still paying $1,000 a rent. "
This has prompted some policy makers to remove regulatory obstacles to building more on-campus student housing.
On Wednesday, Gov. Gavin Newson signed a new bill, S.B. 886, that exempts some on-campus student housing projects from the arduous environmental review process mandated by the California Environmental Quality Act (CEQA).
CEQA requires government agencies to study the environmental impacts of projects, both public and private, that they have discretion over. The law also allows third parties to appeal or even sue over the approval of said projects if they think an agency hasn't done enough to study its environmental impacts.
Anti-growth activists frequently use the law to stop new housing, including new student housing.
In one 2018 case, UCLA agreed to shrink a new dormitory project by three floors—that's 200 beds—to stave off complaints from neighbors. That didn't stop those residents from filing a CEQA suit targeting the diminished project.
Sometimes these lawsuits stop students as well as the student housing.
Earlier this year, some Berkeley townies convinced the California Supreme Court to freeze student enrollment at U.C.–Berkeley on the logic that admitting more students was a "project" whose environmental impacts required studying under CEQA.
That lawsuit attracted nationwide ire, confirming for many the view that California's NIMBYs were successfully choking off progress and opportunity in the state. The outrage proved enough that the California Legislature—usually loath to touch CEQA—quickly passed a bill undoing Berkeley's enrollment freeze.
Some legislators at the time argued that such a narrow fix was insufficient.
"The triage legislation we passed today will solve that immediate problem. But it's not enough just to solve this immediate problem; we need to ask ourselves how we got here," said S.B. 886's author, state Sen. Scott Wiener (D–San Francisco), in a statement issued in March. "When it comes to CEQA, this UC Berkeley trainwreck isn't a bug. It's a feature."
To prevent future trainwrecks, the bill Wiener authored exempts new university housing projects from CEQA, provided they adopt stringent energy and environmental design standards, aren't replacing existing housing, aren't in flood zones and historic districts, and contain fewer than 2,000 units or 4,000 beds. The university would also have to hold a public hearing on the project.
That doesn't make all dormitories bulletproof from CEQA lawsuits. It wouldn't save U.C.–Santa Barbara's infamous 4,500-bed cube dormitory. But the legislation still routes around the worst forms of CEQA obstructionism for obviously necessary and environmentally low-impact housing.
As Gray notes, it doesn't fix a more general problem of low-density zoning near major universities.
"If you look at almost every U.C. campus, in many cases they are hemmed in by single-family zoning," he tells Reason. "That's a policy that makes it illegal to build apartments, which is exactly the kind of housing stock that students need."
To the best of my knowledge, every UC campus has single family detached housing directly adjacent to it. I think those people should be forced by the state to welcome a whole lot of new neighbors! pic.twitter.com/EU4jeSv9Oq
— Stan Oklobdzija (@stan_okl) September 28, 2022
Earlier this year, the state did implement a new law that allows homeowners in single-family-zoned neighborhoods to divide their lots in two and build a duplex on each half. But local governments retain the ability to block larger apartment buildings and the single-room occupancy housing that students would typically rent.
California's housing crisis is a multifaceted thing. It requires multifaceted fixes.
The post California's Housing Crisis Hasn't Spared the State's College Students appeared first on Reason.com.
]]>The White House made a big splash in May 2022 when it announced that its Housing Supply Action plan would use competitive transportation grant programs to reward jurisdictions that remove regulatory barriers to new housing construction.
The $1.2 trillion Infrastructure Investment and Jobs Act, enacted in November 2021, also dramatically boosted funding for these grant programs—giving the feds a lot more carrots with which to reward governments for removing red tape on new development.
But as the grant awards from these retooled transportation grant programs trickle out, there's little evidence the money is going to reformist jurisdictions.
Late last week, the U.S. Department of Transportation announced the recipients of $1.5 billion in grants from the Infrastructure for Rebuilding America (INFRA) program—one of five grant programs the administration said would be used to encourage zoning reforms.
Of the 26 INFRA grant awards this cycle, 19 are going to state transportation departments or port authorities that don't set zoning regulations or issue residential building permits. These bureaucracies can't be incentivized to change regulations they don't have any power over in the first place.
And the few INFRA recipients that do approve building permits don't appear to have been on the cutting edge of zoning reform. Some are actively fighting reform.
Rural Carver County, Minnesota, received a $10 million grant to widen a two-lane road into a four-lane highway. The county's most recent comprehensive plan calls for protecting its "unique and rural agricultural character" from new commercial and residential development.
Flagstaff, Arizona, received a $32.4 million grant to build pedestrian safety improvements. Officials there recently argued against the need to lower impact fees for new development and a more permissive zoning code to address an estimated 7,000-unit shortage of homes.
"We're looking for units that are affordable. Market units do not deliver that," the city's director of community development told the Arizona Mirror earlier this month.
New York City received a $110 million grant to build electric charging stations and refrigerated warehouses at the city's Hunts Point Terminal Produce Market. This is despite the city underbuilding housing for the last decade and actively adopting an "inclusionary zoning" policy that actively disincentivizes new housing construction.
Some of the projects funded in this latest INFRA grant cycle fit with transportation priorities many urbanist zoning reformers would like to see. That includes a $104 million award to the Michigan Department of Transportation to convert a stretch of interstate highway in Detroit to a slower-speed boulevard.
But Detroit is probably one of the few cities in the country with too much housing. It had a 18 percent vacancy rate in 2020.
In short, none of the INFRA grants appear to be going to high-growth areas that are proactively making housing development easier.
It was a similar story with $2.2 billion in RAISE grants awarded last month, another one of the programs the Biden administration said it would retool to encourage zoning reform. Few of the awards appeared to have much to do with zoning. One of the largest RAISE awards went to San Francisco, which is currently being investigated by California's state government for shooting down new housing in violation of state law.
Emily Hamilton, a senior research fellow at George Mason University's Mercatus Center, says there are inherent limits to the executive branch trying to bootstrap zoning reform incentives to existing transportation grant programs.
"If federal policy makers want to use grants as a tool to really encourage local zoning reform, what they would need to do is create a grant that is specifically intended to do that, not intended to achieve many other objectives at the same time," she told Reason last month.
An ideal version of that program would be available to all jurisdictions that permit housing, she says. It would also reward cities and counties for housing market outcomes (i.e., building more lower-cost housing), not policy proposals they plan to implement at a later date.
Creating such a program will require congressional action, says Hamilton. Lawmakers have proposed creating dedicated zoning reform programs. None have made it very far in the legislative process, however.
The post Federal Money Intended for Zoning Reformers Ends Up in NIMBY Clutches appeared first on Reason.com.
]]>In a sign of California's increasingly pro-development tilt, state housing officials are praising San Francisco Mayor London Breed for vetoing an ordinance that would have made homebuilding much more difficult.
The vetoed ordinance, passed in a contentious 6–4 vote by the San Francisco Board of Supervisors in July, was sold as abolishing single-family-only zoning, permitting four-unit homes (fourplexes) to be built instead.
That sounds sensible and deregulatory. But the bill was loaded with poison pills. Builders would have had to own their property for five years, or inherited it, before they could build a fourplex. The stated intent of this provision was to "discourage speculation." The effect is to exclude professional developers from the market.
The ordinance would have also required new fourplexes to be rent-controlled, further disincentivizing construction.
The sneakiest part of the legislation was an attempt to route around S.B. 9, a state law that allows property owners to divide single-family-zoned properties in two and build duplexes on each half. That law already effectively allowed property owners to build four units on single-family properties. It also required localities to "ministerially" approve lot splits and duplexes without public hearings and bureaucratic delays.
By abolishing single-family zoning, San Francisco's fourplex ordinance meant that S.B. 9's streamlining provisions wouldn't apply. Instead, newly legal fourplexes would be subject to the city's discretionary review process, which allows third parties to appeal building applications to the city's Planning Commission. Sponsors of legal, zoning-compliant projects that get hit with discretionary review must make the case for their development at public hearings where neighborhood critics get an opportunity to air their grievances. The planning commission has the power to impose new conditions or deny projects completely.
The process could not be more offensive to property rights or better designed to stop new housing. City and state officials have identified it as particularly burdensome in single-family-zoned neighborhoods.
In a surprise move, the California Department of Housing and Community Development (HCD) issued a statement that "applauded" Breed's veto.
"The ordinance would maintain the existing discretionary approval process and impose more onerous conditions and requirements when compared to S.B. 9," reads the HCD statement. "These regulatory hurdles will render such projects financially infeasible."
California has many laws that theoretically limit local governments' ability to say no to new housing. Prior to the rise of the "yes in my backyard" (YIMBY) movement, these laws went unused and unenforced. The past few years have seen state officials do more to hold local governments accountable. The HCD's statement is more evidence of the state's interest in allowing more building.
The post As California Embraces Development, San Francisco Mayor Vetoes Fake Housing Reform Bill appeared first on Reason.com.
]]>Shortly after news broke that Los Angeles developer Leo Pustilnikov was intent on acquiring and converting an aging power plant in the beachside community of Redondo Beach, California, into new shops and apartments, a business acquaintance offered him a strange form of congratulations.
"You must be smarter than me," the acquaintance told Pustilnikov at a New Year's event in the city's harbor, he recounts to Reason.
"Why?" asked Pustilnikov.
"Because Redondo only fucked me for $1 million," the friend responded. His point was not that the city was an easy place to build things.
Redondo Beach has developed a reputation as a growth-skeptical—its critics would say "not in my backyard" (NIMBY)—stronghold in Los Angeles and the state generally.
It's a place where local activists have called for erecting a "firewall" against unwanted development, and the typical home goes for $1.5 million. Despite occupying 1.5 miles of prime coastline along Santa Monica Bay, only 1,000 new homes have been permitted there within the past decade, according to federal permitting data.
A focal point for this growth opposition has been the gas-powered, smoke-belching AES power plant that's long been slated for closure. Its World War II–era technology sits idle most of the time. Environmentalists have taken issue with its use of ocean water to cool equipment, which damages marine life.
While state officials have kept pushing back the plant's closure date—arguing California's power grid needs all the spare capacity it can get—local residents, developers, and city officials have been sparring over what to replace it with.
The 51-acre, ocean-abutting site is an irresistible prize for builders. When the former AES plant owners put the property on the market in 2016, it attracted over 200 offers with already-signed confidentiality agreements, reported CoStar in 2020. A successful listing typically attracts 20 or 30 such offers.
"How many 50-acre sites do you have across the street from the water in a dense community adjacent to beaches and parks?" says Pustilnikov, who finalized the acquisition of the site that year for a reported $150 million.
Local "yes in my backyard" (YIMBY) activists have likewise argued in letters to the city that it's the perfect place to fit new housing without displacing existing residents and businesses.
Opposing that vision are many Redondo Beach residents and most of their elected officials. Six times now, city voters have passed referendums that either stopped commercial and residential development there or endorsed replacing the AES plant with a park instead.
"This is the worst place for residential, as there are no ways for the residents to go to their jobs," says Redondo Beach City Council Member Nils Nehrenheim, warning of nightmarish congestion if the site is turned into new housing. "What we need here is balanced development in Redondo Beach as a whole. We are park-poor because we are so dense."
This anti-development fervor suggests Pustilnikov would be pretty crazy, and certainly unsuccessful, for trying to put a 3-million-square-foot megaproject there. Yet, this is exactly what he's proposing.
In an application filed August 10, and first reported on by the local Daily Breeze, several companies linked to Pustilnikov and his business partner Ely Dromy requested permission to build a massive project called One Redondo. It would feature residential towers up to 200 feet tall, containing a total of 2,290 units. That would be complemented by roughly 800,000 square feet of office, commercial, and hotel space, and over 5,000 parking spaces.
Their application frankly acknowledges that housing "is not currently featured as a permitted or conditionally permitted use" on the site. But that's OK, they say, because nearly 500 units in the new development would be affordable apartments provided at below-market rates to low-income residents.
The inclusion of those affordable units triggers a never-before-used but potentially game-changing provision in California law called the "builder's remedy" that could make Pustilnikov's One Redondo project bulletproof to local opposition.
Despite its well-justified reputation for wrapping new housing construction in paralyzing red tape, California has several longstanding laws on the books that are intended to thwart local governments' throttling of new development.
That includes a requirement that cities periodically produce plans showing how they'll change their zoning laws to meet state-set housing production targets. The California Department of Housing and Community Development (HCD) is responsible for setting those targets and then certifying that localities have come up with realistic plans, called "housing elements," for meeting them.
The state also created the builder's remedy to ensure housing gets built even if a local government fails to produce that housing element or allow enough housing to meet those targets.
In theory, the builder's remedy permits developers to construct projects of unlimited density anywhere in a city without an HCD-certified housing element, regardless of what the local government's zoning code says. Provided at least 20 percent of the new units are affordable for low-income renters or buyers, the city government can't say no to it.
This is exactly what Pustilnikov is trying to do in Redondo Beach.
The city had an October 2021 deadline for adopting a housing element that would allow for roughly 2,500 new homes. But the plan the city council approved was rejected by the HCD for not realistically meeting that target. In particular, the department took issue with the city projecting that existing offices and businesses would be shortly redeveloped into housing.
The city revised and resubmitted its housing element, which was rejected by the HCD again in April.
Enter Pustilnikov and his development partners. In August, they filed an application for the 2,300-unit project at the AES site. If it's approved, One Redondo will be the first successful builder's remedy project in California history. (Pustilnikov has a pending application for another builder's remedy project in Santa Monica.)
Despite the builder's remedy having been on the books since 1990, developers have universally shied away from its awesome red tape–cutting potential. A few reasons explain their hesitancy.
The housing element process that can trigger a builder's remedy has largely been a joke until recently. Cities often failed to file housing element plans without consequence. State officials rubber-stamped whatever elements were turned in.
The affordability requirements for builder's remedy projects also made these projects unprofitable, or at least unattractive.
Importantly, developers have also generally been loath to piss off city hall by trying to force through one project with a builder's remedy, knowing that it could mean their next one will be blocked.
"In the olden days, what was the special talent a developer had? The special talent was glad-handing. You got to be buddies with the city officials who had discretionary authority over your projects," said University of California, Davis law professor Christopher Elmendorf in an August Twitter Spaces event.
But all this is starting to change.
New state laws have forced cities to prepare more realistic housing elements. The HCD and a new army of YIMBY activists are more willing to call out their traditional housing element dirty tricks—like saying cemeteries and profitable grocery stores will be redeveloped into housing. This means more cities end up having noncompliant housing elements, opening a window for builder's remedy projects.
Rents have also gotten so high in California that developers can still make a tidy profit off a project in which a large percentage of units have to be offered at below-market rates. Lastly, some jurisdictions have garnered enough of an anti-housing reputation that developers see little benefit in trying to stay in their good graces.
Pustilnikov clearly thinks he has nothing to lose by playing nice.
"No one has projects in Redondo. I don't have to worry about Redondo," he says. One gets the impression that the motivations are partly personal. "The reason I chose not to work with the city is primarily out of my past experience trying to work with them, and their propensity to spread half-truths and outright lies," he adds in an email.
There's not a lot of love lost on the other side.
"Leo is a pure speculator and it's laughable that he would buy a piece of property and try to enforce his will onto this community," says Nehrenheim.
A registered Libertarian, Nehrenheim has twice now won elections on a platform of stopping overdevelopment and preventing the "Santa Monica-ization" of the city.
It's proven a popular message in Redondo Beach among an eclectic mix of supporters. His 2021 reelection campaign received donations from the local Sierra Club and the enthusiastic endorsement of the Libertarian Party Mises Caucus.
In an interview with Reason, Nehrenheim likens state laws that override local zoning controls to failed central planning schemes of old and a "Wall Street giveaway."
Redondo Beach, at 11,000 people per square mile, is already one of the densest coastal communities in the state, Nehrenheim notes. Adding more homes on the AES site would worsen already molasses-slow traffic, and cost the city the opportunity for much-needed green space once the power plant is closed, he says.
Nehrenheim also contends that Pustilnikov is just flat wrong about what state law would allow him to build on the AES site without the local community's consent.
This past week, the HCD at last certified Redondo Beach's twice-reworked housing element. With the city once again in the good graces of state housing officials, Nehrenheim argues its is under no obligation to approve a builder's remedy project.
Pustilnikov tells Reason in an email that because he filed his project application before the housing element was certified by the state, the builder's remedy still applies.
Elmendorf says that Pustilnikov is likely right on that point.
A 2019 law, S.B. 330 or the Housing Crisis Act, freezes the rules local officials can apply to a project once its sponsor files a preliminary application. The intent was to stop cities from changing regulations midstream to stop proposed developments that are already in the pipeline.
"There's a decent argument that if you file that preliminary application while the city's [housing element is] out of compliance, then it has to process your project as if it were out of compliance," says Elmendorf.
But, he cautions, a fatal blow to Pustilnikov's project could come from California's regulations on coastal development.
The decades-old California Coastal Act requires seaside localities to adopt plans governing what can be built in coastal zones. The California Coastal Commission has the discretion to reject projects in coastal zones as well. (It's a power the commission has zealously wielded against coastal property owners.)
"The question here is whether the local coastal plan is inconsistent with [Pustilnikov's] project," says Elmendorf. If it is, he says, the coastal regulations win out.
Brandy Forbes, community development director for Redondo Beach, says in an email that the AES site's zoning allows for a park or a power plant, but nothing else, and certainly not housing. Nehrenheim likewise argues that the site's nonresidential zoning makes it off limits for development, even under the Housing Crisis Act.
Pustilnikov says that it's not at all obvious that California's coastal regulations trump his builder's remedy project. He expects he and the city will eventually wind up in court, and that a judge will decide One Redondo's fate.
Any such ruling on the case could have major ramifications outside of Redondo Beach.
California's state government is showing an unprecedented interest in cracking down on what it sees as bad actor NIMBY local governments. The HCD and the California Department of Justice, under Attorney General Rob Bonta, have both created new units dedicated to enforcing state housing laws.
The HCD has been refusing to certify housing elements at an unprecedented rate this cycle. Bonta has also let enforcement letters fly against local jurisdictions trying to skirt recent upzoning bills by, in one instance, declaring the whole town a protected mountain lion sanctuary.
In August, the two departments turned heads when they announced an unprecedented audit of the nation's NIMBY capital, San Francisco, to determine why exactly its leaders keep shooting down new housing.
But it remains to be seen what practical effect this will actually have on enabling new housing production. On paper, there are a couple of sticks Bonta and the HCD can bring down on recalcitrant localities.
Cities out of compliance with state housing law can be stripped of affordable housing and infrastructure funds. But many of the jurisdictions most hostile to new development are small, wealthy suburbs that don't receive much of that money to begin with, and could afford to go without it. And even some YIMBY activists have questioned how politically practical it would be for the state to cut off large cities like Los Angeles and San Francisco from state funding.
State law gives courts the ability to appoint an expert to write a housing element for a city that's out of compliance. But that's a yearslong process and there's no telling how willing a judge would be to actually impose that solution.
That leaves the builder's remedy as the most immediate path for cutting through red tape in California's most anti-development jurisdictions relatively quickly.
It's a solution that has worked in East Coast states, particularly New Jersey. There, developers have made robust use of the builder's remedy to get housing approved. But the Garden State benefits from having pretty clear rules laying out the wheres, whys, and hows of its builder's remedy.
Swirling around California's builder's remedy law, meanwhile, is a fog of unanswered questions about what exactly it allows, how much control local governments retain over projects that make use of it, and how it interacts with other features of state law, including the aforementioned coastal regulations and state-mandated environmental review.
Pustilnikov concedes his Redondo Beach builder's remedy project raises more questions than it answers. But he says his past dealings with the city leave him few options other than rolling the dice on this uncertain solution.
"My experience in the last two years has resulted in me thinking there's really no other way other than letting my kids deal with it," he says. "Considering they're three, eight months, and negative three months, I'd figure I'd take a crack at it before they do."
The post This Renegade California Developer Wants To Build a 2,300-Unit Megaproject in a NIMBY Stronghold appeared first on Reason.com.
]]>Today, Virginia Gov. Glenn Youngkin took a surprising YIMBY-inflected ("yes in my backyard") swipe at restrictive development regulations that he says are making the state increasingly unwelcoming for renters and homebuyers.
"The cost to rent or buy a home is too expensive," said the governor in a wide-ranging speech before the Virginia Senate's Joint Money Committee today. "We must tackle root causes behind this supply and demand mismatch; unnecessary regulations, overburdensome and inefficient local governments, restrictive zoning policies, and an ideology of fighting tooth and nail against any new development."
The state of Virginia is short roughly 105,000 homes, according to a recent study from the housing advocacy group Up For Growth. Another report commissioned by the state government found that while the state's population had expanded by over 10 percent since 2008, housing supply had only expanded by 8.7 percent.
For fast-expanding regions like the northern Virginia suburbs of Washington, D.C., that's meant skyrocketing rents and home prices. The median home price in Arlington County, Virginia, is $836,806 according to the Zillow Home Value Index. That's up from $667,000 in 2017.
"The really big danger in northern Virginia is … this unwritten rule or expectation that if you don't have a college degree or you don't make $100,000 per earner in your household, you should just live somewhere else," says Luca Gattoni-Celli, founder of YIMBYs of Northern Virginia, a chapter of national housing advocacy group YIMBY Action. "And that would be a real shame."
Gattoni-Celli blames the northern Virginia region's pressing housing affordability problems on low-density zoning rules that often allow just one house per property.
Reform is in the air, however. Arlington County is currently in the process of developing a "Missing Middle" zoning reform that would allow as many as eight units of housing on formerly single-family zoned lots.
Nationwide, three states and even more municipalities have legalized "missing middle" two-, three-, and four-unit homes on all residential land in an effort to bring housing prices and rents down. These zoning fights have typically occurred in deep-blue areas between pro-growth liberals and progressive NIMBYs.
Youngkin's comments today are evidence that both the problem of housing affordability and the solution of deregulating housing construction are bipartisan issues.
"The last election reminded everyone outside of the places that voted for Gov. Youngkin that Virginia is still a very purple state," says Gattoni-Celli. "Having leaders of both political parties identifying the same solution to such a serious problem is really great."
But, he adds, "if [Youngkin] is serious about this, it will have to translate into legislative action."
A state bill that would have legalized duplexes on residential land statewide was proposed in 2019 but went nowhere in the Legislature.
The Virginia Department of Housing and Community Development has also been weighing a change to state building codes that would allow apartment buildings to be constructed with just one staircase. That seemingly small technical change could potentially goose apartment construction by enabling them to fit on smaller lots.
Time will tell if the governor's promising comments translate into more than just talk.
The post Glenn Youngkin Says NIMBY Regulations Are Making Virginia an Impossibly Expensive Place To Live appeared first on Reason.com.
]]>Marc Andreessen can't seem to decide whether he wants to fix America's housing crisis, make it worse, or creatively reinvent an untenable status quo.
On Monday, the billionaire venture capitalist announced that his firm, Andreessen Horowitz, would be a major investor in controversial WeWork founder Adam Neumann's new housing venture Flow. The New York Times reports that Andreessen's firm will plow $350 million into the new company and its as-of-yet unrevealed business model and that Andreessen will sit on its board.
In a blog post, Andreessen said that Neumann—who was ousted from WeWork in 2019 after a disastrous initial public offering—had the brains and vision to remake a residential real estate market characterized by overly expensive owner-occupied housing on the one hand and "soulless" rental options that build neither financial equity nor personal connections on the other.
"In a world where limited access to home ownership continues to be a driving force behind inequality and anxiety, giving renters a sense of security, community, and genuine ownership has transformative power for our society," writes Andreessen. "When you care for people at their home and provide them with a sense of physical and financial security, you empower them to do more and build things."
These are awkward words to hear from the billionaire investor who's taken a drubbing in the press recently for his own part in limiting access to homeownership and stopping people from building things.
Earlier this month, The Atlantic's Jerusalem Demsas spotlighted a June public comment submitted by Andreessen and his wife, Laura Arrillaga-Andreessen, to the planning department of Atherton, California, opposing a plan that would allow multifamily housing in the ultra-expensive San Francisco suburb where he lives.
Allowing new apartments, the two wrote, "will MASSIVELY decrease our home values, the quality of life of ourselves and our neighbors and IMMENSELY increase the noise pollution and traffic." The vast majority of the Andreessens' neighbors who filed public comments likewise opposed zoning for new multifamily housing in Atherton, and the plan was dropped by the city.
As Demsas notes, this kind of NIMBY (not in my backyard) opposition to new housing, and the restrictive regulations it births, is a primary cause of America's housing shortage, estimated at somewhere between 4 million and 20 million missing units.
Andreessen isn't unaware of the country's housing shortage, or all the problems of immobility, unaffordability, and instability it creates.
His blog post from Monday notes that the unattainability of homes near prime job centers is a product of cities not building enough housing. And Andreessen's famous April 2020 essay "It's Time to Build" also called out American cities' failure to construct enough housing as yet more evidence of our hopeless national stagnation.
"We can't build nearly enough housing in our cities with surging economic potential—which results in crazily skyrocketing housing prices in places like San Francisco, making it nearly impossible for regular people to move in and take the jobs of the future," he wrote then. "The problem is inertia. We need to want these things more than we want to prevent these things. The problem is regulatory capture. We need to want new companies to build these things, even if incumbents don't like it."
One might be tempted to see his investment in Flow as redemptive—a $350 million investment to fix a housing crisis clearly counteracts any damage his NIMBYism has done. Yet, from the limited details available, Flow won't try to tackle the problems of overregulation and undersupply that Andreessen has correctly identified as the root of our housing woes.
The Wall Street Journal reported last year that companies linked to Neumann have been buying up thousands of existing apartments in fast-growing cities like Nashville, Atlanta, and Miami. The New York Times describes Flow's business model as basically a property management company offering "a branded product with consistent service and community features."
Rather than build new housing, Andreessen describes Flow as a new way of managing existing units that combines a "community-driven, experience-centric service with the latest technology" to solve renting remote workers' loneliness and inability to build equity and community in a home they own.
There's a strong whiff of standard NIMBYism in this idea. The alleged failure of rented apartment units to foster community and good morals has long provided the spiritual case for banning their construction. Encouraging people to build wealth primarily through homeownership has also sometimes given incumbent homeowners (including the Andreessens, apparently) a financial incentive to oppose new construction in their neighborhoods.
This isn't to say that remote workers' loneliness isn't a problem, or that lots of people are renting only because they can't afford to buy a house. But both those problems are downstream of our failure to build.
The superstar cities that took the biggest population hits during the pandemic also happened to be the places that have been building the least. If New York or San Francisco had managed to add new housing anywhere close to the rate at which they were adding new jobs, perhaps fewer people would have left behind their offices and professional communities for a lonelier but cheaper lifestyle of Sunbelt remote work. Massive home price increases in metros that have grown substantially post-COVID are proof we need to be building there too.
The same regulations that drive up construction costs and housing prices work against the community that Flow is trying to foster.
The first victims of restrictive zoning regulations were boarding homes and single-room occupancy hotels, places where people shared kitchens and common rooms, with meals frequently provided by their hosts. Laws still ban dorm-like housing in much of America today. If the idea behind Flow is to create more congregate living arrangements, a good first step would be to legalize those arrangements.
Eliminating density restrictions on housing would mean that developers wouldn't have to choose between adding more apartments and adding more communal space and amenities in a new building. That could also foster the kinds of social connection Flow is aiming to create.
There's obviously plenty of room for different approaches to the management and financing of apartments. Andreessen has a long history of backing successful Silicon Valley breakout companies. Maybe Flow will be one of them.
But even if successful, Flow will only be working on the margins. The housing supply crisis in America isn't primarily a problem of technology or stagnant business practices. Rather, it's a pretty straightforward product of government regulations that prevent new home construction.
Solving it is going to require building much more housing, not just a sense of community with your landlord. In addition to writing checks to Neumann, Andreessen could also choose to write fewer letters to his local planning department.
The post Marc Andreessen's High-Tech Fix for the Housing Crisis Lets Him Keep Being a NIMBY appeared first on Reason.com.
]]>San Francisco's homegrown hostility to new development has made it the epicenter of California's housing crisis. It will now become a testing ground for a newly empowered state government's ability to force liberalizing reforms on a city that repeatedly refuses to build.
On Tuesday, the state's Department of Housing and Community Development (HCD) announced that it would be launching an unprecedented review of San Francisco's housing policies and practices "aimed at identifying and removing barriers to approval and construction of new housing there."
Over nine months, the HCD's Housing Accountability Unit will examine how exactly the city ended up with the state's longest approval times for new construction and its highest housing and construction costs.
"We are deeply concerned about processes and political decision-making in San Francisco that delay and impede the creation of housing and want to understand why this is the case," said HCD Director Gustavo Velasquez. "When we find policies and practices that violate or evade state housing law, we will pursue those violations."
That's a pretty clear rebuke of San Francisco officials' willingness to solve the city's sky-high housing costs or even follow state housing law.
Housing advocates are taking a victory lap at the audit announcement, saying it's yet more evidence that the state's young "yes in my backyard" (YIMBY) movement has succeeded in making it increasingly untenable for localities to just say no to new development.
"This doesn't just happen out of nowhere," says Sonja Trauss, director of YIMBY Law and one of the state's first YIMBY activists. "This happens when the governor, HCD, feel that they have enough political will on the ground to make [this audit] make sense."
Indeed, both San Francisco Mayor London Breed and state Sen. Scott Wiener (D–San Francisco) released statements welcoming the HCD's intervention.
The HCD's audit, while unprecedented, isn't necessarily surprising.
It follows months of mounting public warnings from the department to San Francisco's leaders that their decisions—from rejecting individual projects on specious environmental grounds to passing ordinances that purposefully made housing development more difficult—could attract state intervention.
Then, on Monday, the HCD rejected a draft housing plan San Francisco submitted to the state that was supposed to outline how the city planned to accommodate an additional 82,000 housing units—a move that sets the stage for far more sweeping intervention.
State law requires cities to submit housing elements once every eight years showing how they'll update their zoning regulations to meet their projected housing demand.
For a long time, the preparation of housing elements was a perfunctory and meaningless exercise. Some cities didn't do them at all. Others produced unrealistic plans that couldn't conceivably result in the predicted amount of housing actually being built.
In recent years, a series of legislative fixes require cities to produce more realistic housing elements. State officials at the HCD have proven increasingly willing to reject housing elements that don't meet these new standards. Grassroots scrutiny from YIMBY activists has also made it harder for cities to get away with their typical housing element dirty tricks—like claiming that new schools and cemeteries will be redeveloped into new housing within a few years.
An April 2022 comment letter from San Francisco YIMBY groups, including YIMBY Law, on the city's housing element pinpointed a number of ways that it would not lead to the housing production it predicted.
For instance, the city was claiming that a state law legalizing duplexes (which San Francisco's Board of Supervisors did everything it could to undermine) would produce 1,500 new units in eight years. The YIMBYs' letter noted that only 10 applicants had made use of the duplex law in the first three months it was in effect, and that it would likely produce only 40 units a year.
Their letter also called out the city for wildly optimistic projections of how many "pipeline projects" would actually turn into new housing. Pipeline projects are new housing units that have been proposed by a developer, but not permitted by the city.
The trouble is that San Francisco's Board of Supervisors and Planning Commission frequently vote to delay new projects or force them to undergo endless rounds of environmental review—effectively keeping projects in the pipeline in perpetuity.
The city's housing element claims that these pipeline projects will produce some 44,000 new units over eight years. The YIMBYs' comment letter says that past completion rates indicate pipeline projects will result in less than 10,000 new housing units.
These specific complaints all appeared in HCD's exhaustive 17-page rejection letter of San Francisco's housing element, which told the city it needed to more thoroughly examine the "cumulative impact of government constraints" on new housing—from a complex maze of height and density restrictions to fees that run $60,000 per new housing unit.
That letter provides something of a roadmap for the kinds of barriers that HCD's audit will try to spotlight. If San Francisco's politicians fail to meaningfully commit to eliminating those barriers in their next housing element draft, they could invite far more sweeping state intervention than a simple review.
The city could be hit with escalating fines or lose access to state infrastructure and affordable housing dollars. Courts are also empowered to appoint a planning expert to write San Francisco's housing element for it.
There's reason to think that neither of these remedies would actually be applied. The state might not find it politically practical to cut off one of its largest cities from infrastructure and housing funds. It could easily be accused of making San Francisco's problems worse.
Courts probably aren't eager to get involved in the weeds of housing element disputes either.
"The last thing in the world a court wants to do is to write a housing element," said University of California, Davis law professor Christopher Elmendorf during a Tuesday Twitter spaces conversation. "It's just so cumbersome, it's so tedious."
One state remedy that might be more impactful, Elmendorf said, is an as-of-yet untested "builder's remedy."
State law says that cities without a compliant housing element can't use their zoning code to reject projects that include some affordable units. Theoretically, this would allow developers to build projects at unlimited densities anywhere in a city. Someone could propose a skyscraper in a single-family neighborhood, and city officials couldn't stop it.
Despite being on the books for decades, no one has used California's builder's remedy successfully before. One reason for that is developers didn't want to risk pissing off city officials who could still make their lives difficult.
"In the olden days, what was the special talent a developer had? The special talent was glad-handing. You got to be buddies with the city officials who had discretionary authority over your projects," said Elmendorf.
But that's changing. A bevy of YIMBY-sponsored state laws that limit local governments' discretion to shoot down duplexes, granny flats, and affordable housing developments have created a new class of builders less dependent on the goodwill of city politicians. Elmendorf predicts this same class of developers might be willing to try to get a "builder's remedy" project approved.
There also exists a network of YIMBY nonprofits with a history of suing cities on behalf of (often reluctant) developers for rejecting projects in violation of state housing law.
This is all prospective. San Francisco still has until January 2023 to adopt a compliant housing element. A builder's remedy couldn't kick in until then.
But the specter of a builder's remedy still puts San Francisco's anti-development politicians between a rock and a hard place: Either eliminate constraints on development generally or forfeit all local control over a particular class of projects.
The fact that the city finds itself in this pincer is a testament to the pro-development machine the YIMBY political movement has become after less than a decade in existence.
Despite the complexities of reform, the cause of the housing crisis in America's most expensive cities is pretty simple. Local governments have established regulatory barriers that prevent the market from building new housing where its most in demand. That pushes prices up and people out.
The YIMBY solution to this sad state of affairs is to pass state laws that empower property owners to build and deprive localities of their once-unquestioned powers to say no to new development. California, for all its problems, has gone the furthest in implementing this approach. Other states are starting to follow suit.
The tools California's YIMBYs have created and sharpened are now being applied to the nation's NIMBY capital. If it works there, it can probably work anywhere.
The post Are San Francisco's NIMBYs Finally Getting Their Comeuppance? appeared first on Reason.com.
]]>A new lawsuit could end New York City's popular outdoor dining program.
The suit, which names New York City and New York State as defendants, was filed last week by around three dozen city residents in New York Supreme Court. The plaintiffs allege the city's continued operation of the Temporary Open Restaurant (TOR) program, which gave city restaurants a lifeline during the Covid pandemic by allowing them to create outdoor dining structures along the respective city streets and sidewalks where they operate, constitutes an "illegal encroachment upon [the city's] public sidewalks, streets[,] and roadways on the no longer viable ground of a 'public health emergency.'"
The plaintiffs claim the expansion of outdoor dining in the city under the TOR program has negatively impacted their quality of life. Among the various "injuries and indignities" and other "substantial externalities" the suit alleges are "increased and excessive noise, traffic congestion, garbage and uncontrolled rodent populations, the blocking of sidewalks and roadways, causing petitioners and others to be unable to safely navigate the city's streets and sidewalks, and a diminution of parking upon which some petitioners depend."
In response to the new lawsuit, New York City Mayor Eric Adams, a supporter of expanded outdoor dining options, said the program is essential for the city, but admits some changes may be needed. "[W]hatever I can do to help our restaurant industry that employs dishwashers, waiters, busboys and -girls, this is an important industry and it is an indicator of our city," Adams said. "And so the lawsuit is going to play itself out. But I'm a supporter of the outdoor dining."
New York City's TOR program, authorized under state law, has been in place since June 2020, when it was implemented under then-Mayor Bill de Blasio. It was intended to reduce Covid infections while helping restaurant owners and workers survive the one-two punch of the virus and related restrictions on indoor dining.
"The program has been so successful that lawmakers have moved to make it permanent," I explained in a column last fall in which I also noted more than 12,000 city restaurants had taken advantage of the program.
But as I also explained, around two-dozen Manhattan residents sued the city last September over the TOR program. That complaint was full of shopworn city-dweller complaints about noise, parking, traffic, rats, and trash on the one hand and superfluous objections on the other hand—including the laments of one plaintive plaintiff who said in an affidavit that her street was once home to many small mom-and-pop stores but that "[n]ow large corporations own a good number of the buildings." Other sources offered similar critiques of the lawsuit. As I also reported, Gothamist referred to many of the gripes found in the lawsuit as "a word cloud of common complaints" about city living.
In March a court ruled against the city, restaurant owners, and their workers and customers. In his ruling, Judge Frank Nervo determined the city was required to conduct a study on the TOR program's environmental impacts, "including noise, traffic and parking, sanitation, and neighborhood character." Rather than conduct a study, the city had issued an environmental assessment statement, which found "no significant environmental impacts in instituting a permanent dining program." In his ruling, Judge Nervo determined the city had "failed to consider the likelihood [of] ongoing environmental impacts" from the TOR program.
The complaint filed last week alleges that while other Covid-related programs and local mask and vaccine mandates have ended over the past year or so, the TOR program continues even though "[r]estaurants, bars[,] and taverns in New York City are again now permitted to utilize their indoor capacity at pre-pandemic occupancy levels, and they are doing so throughout the city."
Is there a way forward for restaurants and others to offer outdoor dining in structures located along city streets and sidewalks? The complaint itself, which rests largely on the presumption that "no public health emergency exists and, therefore, there is no premise for TOR," may suggest one. Though New York City may not have had a current public health emergency in place when this TOR lawsuit was filed last week, exactly one day after it was filed the city declared a new public-health emergency—this one over an outbreak of monkeypox. (A public health emergency exists, the city could argue in response to the complaint, and, therefore, there is a premise for TOR.)
A better way forward would see city officials address residents' complaints—which are, again, the same ones city residents have had for generations about rats, trash, parking, and the like—while continuing to allow outdoor dining structures to be placed along sidewalks and streets.
"I have no doubts that some of these resident complaints are valid," I explained in my column on the lawsuit that was filed last fall. "But outdoor dining didn't cause most of these problems, which predate the pandemic. New York City officials can and should do a better job addressing resident concerns. But the city also can and should use existing mechanisms to deal with rats, noise, trash, and other issues."
Allowing more spaces for outdoor dining was a great idea before Covid. It still is. And it's one I hope outlives the pandemic—in New York City and beyond.
The post Another NIMBY Lawsuit Seeks To End New York City Outdoor Dining Program appeared first on Reason.com.
]]>On Wednesday, protesters flooded People's Park in Berkeley, California, chanting, "Housing is a human right, fight, fight, fight!" The reason the crowd was protesting? The University of California, Berkeley, was set to begin construction on a student housing project, which would not only house 1,100 Berkeley students at below-market rates, but also provide subsidized apartments for 125 homeless people. And the protesters want to stop this project.
According to the Associated Press, protesters threw rocks, bottles, and glass at construction workers. They also removed several sections of the chain-link fence surrounding the park. On Wednesday, the university announced that it would pause construction of the park, citing protester violence.
"All construction personnel were withdrawn out of concern for their safety," Dan Mogulof, UC's assistant vice chancellor, said in a statement to NBC News. "The campus will, in the days ahead, assess the situation in order to determine how best to proceed with construction of this urgently needed student housing project."
The University has tried since 2017 to construct more student housing in a city where rents are often so high and student housing supply so low that some students have resorted to sleeping in their cars. The construction project would provide much-needed affordable housing to many students. However, the project has faced considerable pushback, including lawsuits to prevent the construction. In typical NIMBY fashion, the lawsuits claim that the University did not consider enough other building sites. According to The Real Deal, a San Francisco real estate news website, the University considered over a dozen.
"Ever since we announced plans for the People's Park project in 2018, I have been convinced that we have an opportunity for a win-win-win benefitting our students, unhoused people in our community, and our neighbors across the city," said UC Chancellor Carol Crist in a 2021 email obtained by The Daily Californian.
The main source of controversy is the housing site's location, People's Park, a university-owned plot of land with a history as an activist site. Most famously, the park was the site of "Bloody Thursday," a 1969 student protest-turned-riot that left 50 injured and one dead after police fired buck and bird shot into the crowd. Protesters thus view the park as a crucial historic site, and even though over half of the park will remain intact as a green space, many of them believe it should not be changed. The park is also the "home" of dozens of homeless people.
"Since its founding in 1969, People's Park has been home to countless houseless individuals in Berkeley," wrote The Daily Californian editorial board on Thursday. "It has served as the prime location for political events, performances and recreation, among countless other affairs. From these, a community bloomed, and it has quickly become a cultural and historical landmark."
Ironically, this oft-criticized building project would create housing for homeless people, not destroy it. According to the A.P., during the duration of construction, the nearly 50 homeless people living in the park were offered shelter (which almost all of them accepted) at a motel paid for by UC. When the project is complete, it will include 125 apartments for homeless individuals.
Those that oppose the housing project voice a uniquely Californian kind of NIMBYism when discussing homelessness. Sure, the project would provide much-needed housing for the homeless, but it would also displace the small number of homeless people who like sleeping in an open-air tent encampment with no running water. Apparently, we should prize the interests of a few—in the case of People's Park, the two or three individuals who refused shelter out of nearly 50—over the surely plentiful number of homeless who desperately want shelter and privacy.
"I think that it's really unjust what the university is doing trying to build housing here but at the cost of moving out all of these residents," UC student Sarah Hager told local news station KTVU. "You're causing significant amounts of harm by moving residents who have lived here forever and are absolutely integrated into the community."
If construction on People's Park is permanently stopped, cash-strapped students and homeless people will be the ones to suffer. Stopping the construction of new housing in a city with one of the worst housing shortages in America—below-market-rate housing aimed at students and the homeless no less—seems deeply at odds with the claim that "housing is a human right."
The post Protesters Declare 'Housing Is a Human Right' While Marching Against New Housing Construction appeared first on Reason.com.
]]>In a sign of California housing politics' increasingly pro-supply tilt, state housing officials are openly praising San Francisco Mayor London Breed for vetoing a local ordinance that would have made development much more difficult.
The vetoed ordinance, passed in a contentious 6–4 vote by the San Francisco Board of Supervisors earlier this month, was sold as abolishing single-family-only zoning districts in the city, permitting four-unit homes (fourplexes) to be built on properties where only one dwelling was previously allowed. On the surface, this may sound sensible and deregulatory. But the bill had so many poison pills stuffed inside of it that it would actually make San Francisco's housing shortage worse.
"Instead of cutting bureaucracy and reducing project costs," Breed explained in a statement Thursday afternoon, "the Board added many new requirements and imposed new financial barriers that will make it even less likely for new housing to be built."
Under the vetoed ordinance, builders would have to own their property for five years (or have inherited it from a family member) before they could build a fourplex on it. The stated intent of this provision was to "discourage speculation." The effect is to exclude professional developers from the market.
The ordinance would have also required that the new units be placed under the city's rent control program. That further disincentivizes property owners from taking on a fourplex project.
The ordinance was also an attempt to route around a 2021 state law, S.B. 9, that allows property owners to divide single family-zoned properties in two and build duplexes on each half. That law already effectively allowed property owners to build four units on single-family properties. It also required local governments to "ministerially" approve these lot splits and duplexes without endless rounds of public hearings and bureaucratic delays.
But by abolishing single-family zoning completely, San Francisco's fourplex ordinance meant that S.B. 9's streamlining provisions wouldn't apply anywhere. Instead, newly legal duplexes, triplexes, and fourplexes would be subject to the city's discretionary review process.
That process allows third parties to appeal building applications to the city's Planning Commission. Sponsors of totally legal, zoning-compliant projects that get hit with discretionary review have to make the case for their development at public hearings before the commission, where neighborhood critics get an opportunity to air their grievances. The planning commission has the power to impose new conditions beyond what the zoning code requires. They can even deny a project outright.
The process could not be more offensive to property rights or better designed to stop new housing construction. Both city and state officials have identified it as particularly burdensome in low-density neighborhoods where new fourplexes would have been legalized.
In a surprise move, the California Department of Housing and Community Development (HCD)—which is partially responsible for enforcing state housing law—issued a statement that "applauded" Breed's veto.
"The fourplex ordinance evades the City's obligations under SB 9 to provide ministerial approval for small-scale projects," reads the HCD statement. "Moreover, the ordinance would maintain the existing discretionary approval process and impose more onerous conditions and requirements when compared to SB 9. Taken together, these regulatory hurdles will render such projects financially infeasible."
California has decades-old laws on the books that theoretically limit local governments' ability to say no to new housing development. Prior to the rise of the YIMBY movement ("yes in my backyard"), these laws have mostly gone unused and unenforced. But the past few years have seen state officials do more to hold local regulators accountable. HCD's statement is yet more evidence of the state's interest in allowing more building.
Its praise of Breed's veto also comes at a crucial time in California's planning process.
Once every eight years, municipalities in the Golden State are required to come up with "housing elements" that describe how they will facilitate enough housing development to meet projected demand. Those housing elements are supposed to include plans for eliminating constraints on new housing construction. If they don't, HCD can reject the element—and a city without a compliant housing element can lose access to state grants.
A non-compliant housing element also triggers a provision of state law known as the "builder's remedy," which prevents cities from using their zoning codes to deny housing projects that include a certain number of affordable units.
Christopher Elmendorf, a law professor at the University of California, Davis, has argued this could potentially allow developers to build projects at unlimited density.
HCD is currently reviewing San Francisco's submitted housing element. Its praise of Breed's veto has a clear subtext, Elmendorf tweeted last week: "get real or face consequences."
In short, San Francisco politicians' queasiness about fourplexes could force them to permit skyscrapers instead.
The post San Francisco Mayor Slaps Down Clever Plot To Make Housing Crisis Worse appeared first on Reason.com.
]]>A bipartisan coalition of Not In My Back Yarders (NIMBYs) remains aghast at two of the most significant and praiseworthy new laws that California has approved in years. They are gathering signatures to qualify a statewide initiative that would overturn Senate Bills 9 and 10, which jump-start housing construction throughout the state.
S.B. 9 allows property owners to build two units in neighborhoods now zoned for single-family homes. It also allows lot splits that potentially allow four units where one house now exists. Few owners will take advantage of the rules, but it will mean—clutch your pearls time—some homeowners will have stylish new duplexes on their blocks.
S.B. 10 streamlines approval of 10-unit properties, such as small condominium projects near transit lines or on underutilized infill lots. Currently, local governments restrict duplexes and make it extremely difficult for developers to create condo developments thanks to the usual litany of state and local environmental and anti-growth regulations.
Opponents' hypocrisy is rich. These "get off my lawn" conservatives claim to be upholding the principle of local control by arguing that local government officials rather than bureaucrats in far-off Sacramento get to make development decisions. It sounds good in theory given the Jeffersonian concept that the government closest to the people governs best.
The better quotation (actually used by Henry David Thoreau but often misattributed to Thomas Jefferson) is "that government is best which governs the least." The goal—for those of us who value freedom—isn't to allow the right government functionary to control us, but to have less government control overall.
Local officials are easier to kick out of office than officials in Sacramento or Washington, D.C., but the locals can be extremely abusive. They know where we live, after all. I've reported extensively on California's defunct redevelopment agencies, and local tyrants would routinely abuse eminent domain under the guise of local control.
"Under S.B. 9, cities are required to approve these lot splits 'ministerially,' without any reviews, hearings, conditions, fees or environmental impact reports," complains my Southern California News Group colleague, Susan Shelley.
Oh, please.
Conservatives have for decades complained about the subjective nature of bureaucratic and public reviews, the evils of the California Environmental Quality Act (CEQA), and excessive fees. Now there's a law that fixes that, albeit in a limited manner, and they are grabbing their pitchforks.
S.B. 9 and S.B. 10 do not put Sacramento bureaucrats in charge of the locals. Instead, they deregulate certain development decisions, by requiring officials to approve a project "by right" provided it meets all the normal regulations. It eliminates subjectivity and defangs CEQA. Yet this greatly upsets them.
Conservatives are savvy enough to know the distinction between state laws that roll back government power and ones that exert government power. (That's why they often support pre-emption laws.) S.B. 9 and S.B. 10 do the former. This "local control" mantra is a way to sound principled when their transparent guiding principle is simply: Not in my neighborhood, you don't.
Local control is the principle when given the choice between, say, a regulatory edict from the U.S. Environmental Protection Agency or one from the South Coast Air Quality Management District, or a homeless program from Sacramento rather than City Hall. Conservatives' guiding principle should always be less government control, not more.
If conservatives seriously believe local control is the trump card, then they should lobby for the repeal of Proposition 13, which is a state-imposed restriction on local governments' authority to raise property taxes. I find Prop. 13 to be one of the best laws ever passed in this state. They should also oppose Republican efforts at the federal level to limit the ability of blue states to regulate the heck out of us.
Zoning laws are a creation of government regulation. Note how in older neighborhoods one finds a mish-mash of single-family homes, churches, apartments, and local stores. These often are among the most enticing neighborhoods, as anyone would attest who spends time in Old Town Orange or Pasadena.
There's nothing wrong with tract-house communities, but they didn't evolve naturally. Following World War II, the government decided to segregate single-family homes in one area, apartments in another, and shopping centers elsewhere. These new laws won't obliterate that historically unusual design, but they will loosen it up—not by edict, but by giving property owners more freedom.
As funny as it is to see conservatives upset at restrictions on CEQA and an expansion of property rights, it's even funnier to hear NIMBY liberals whine about the new laws. Even liberal cities are finding all sorts of half-baked reasons to impede these laws' implementation. They are for more affordable housing and diversity, but not around them.
Let's at least dispense with the idea that the opposition to S.B. 9 and S.B. 10 involves any principle beyond this one: Not In My Back Yard.
This column was first published in The Orange County Register.
The post How Demands for 'Local Control' Become an Excuse for NIMBYism appeared first on Reason.com.
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