The Volokh Conspiracy
Mostly law professors | Sometimes contrarian | Often libertarian | Always independent
Last week, Kate Vershov Downing wrote a public letter of resignation from the Palo Alto Planning and Transportation Commission in which she highlighted the problem of restrictive land use regulations that artificially drive up the cost of housing:
This letter serves as my official resignation from the Planning and Transportation Commission. My family has decided to move to Santa Cruz. After many years of trying to make it work in Palo Alto, my husband and I cannot see a way to stay in Palo Alto and raise a family here….
It's clear that if professionals like me cannot raise a family here, then all of our teachers, first responders, and service workers are in dire straits. We already see openings at our police department that we can't fill and numerous teacher contracts that we can't renew because the cost of housing is astronomical not just in Palo Alto but many miles in each direction….
Over the last 5 years I've seen dozens of my friends leave Palo Alto and often leave the Bay Area entirely. I've seen friends from other states get job offers here and then turn them down when they started to look at the price of housing. I struggle to think what Palo Alto will become and what it will represent when young families have no hope of ever putting down roots here… If things keep going as they are, yes, Palo Alto's streets will look just as they did decades ago, but its inhabitants, spirit, and sense of community will be unrecognizable. A once thriving city will turn into a hollowed out museum.
Downing notes ways in which Palo Alto and other communities in the area could make housing more affordable by relaxing land-use restrictions:
I have repeatedly made recommendations to the Council to expand the housing supply in Palo Alto so that together with our neighboring cities who are already adding housing, we can start to make a dent in the jobs-housing imbalance that causes housing prices throughout the Bay Area to spiral out of control. Small steps like allowing 2 floors of housing instead of 1 in mixed use developments, enforcing minimum density requirements so that developers build apartments instead of penthouses, legalizing duplexes, easing restrictions on granny units, leveraging the residential parking permit program to experiment with housing for people who don't want or need two cars, and allowing single-use areas like the Stanford shopping center to add housing on top of shops (or offices), would go a long way in adding desperately needed housing units while maintaining the character of our neighborhoods and preserving historic structures throughout.
The issue Downing identifies in Palo Alto is part of a much broader national problem. There is now wide-ranging agreement among economists and land-use experts across the political spectrum that restrictive zoning is a major obstacle to affordable housing for the poor and lower-middle class in many parts of the country. Such restrictions also often make it difficult for people to move to areas with greater job opportunities. Ironically, some of the worst culprits are relatively liberal jurisdictions, despite liberal Democrats' longstanding concern about the problem of affordable housing.
The problem is partly mitigated by the ability of people to "vote with their feet" in favor of jurisdictions where zoning is less restrictive, some of which also have good job markets. But there would be much greater scope for effective foot voting if there were more such areas.
Despite the efforts of policy experts on both right and left, this problem has largely failed to penetrate the public consciousness. Neither major political party has taken up the issue. Widespread political and economic ignorance probably make it difficult for even many well-intentioned voters to appreciate the nature of the problem, and force politicians to do something about it. The more cynical explanation is that the incumbent property owners who control many local governments care more about keeping property values high than helping the poor, regardless of their rhetoric. But narrow self-interest is not the main driving force of voters' opinions on most issues, and it would be surprising if this were one of the exceptions. Moreover, even many current residents might benefit if rents were lower and more businesses and workers could move in to their communities.
Downing's powerful letter has attracted a great deal of interest in the Bay Area and even nationwide. Well-known economists John Cochrane and Alex Tabarrok are among those who have written interesting commentaries on it. Hopefully, the letter will help focus more attention on this important issue.
UPDATE: In a story about Downing, reporter Zelda Bronstein takes me to task for not giving her an exact figure on how much "market-rate housing" needs to be built in Palo Alto for prices to fall to "affordable levels." She, however, omits the reason I gave her for refusing to cite a specific number. Here it is, taken from my e-mail to Bronstein, in response to her request for comment while she was working on her article:
I would suggest that we should try to avoid thinking in terms of advance predictions of how many housing units should be built where. No planning agency (and no academic!) can really know that with any kind of precision. One of the advantages of reducing regulatory restrictions on land use is that it allows developers, property owners, and others to respond to demand as it arises, thereby keeping costs down, and quantity up. That's exactly what has happened in cities which have relatively loose zoning (or in the case of Houston, no zoning), which have managed to respond to major increases in demand without the kinds of skyrocketing costs that we see in more restrictive jurisdictions (of which Palo Alto, and others in the Bay Area, are particularly extreme examples).