Housing Policy

Is America Finally Waking Up to Its Government-Created Housing Crisis?

Mainstream media is starting to embrace the idea of deregulating housing construction. Will policymakers?

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Is housing policy having a libertarian moment? One could be mistaken for believing so after scanning the mainstream media's coverage of the issue over the past couple of days.

Today, The New York Times published an exhaustive analysis of zoning in 10 U.S. cities, showing how these locales are making housing artificially expensive by restricting the construction of apartments within city limits and suburban homes at their urban fringes.

On Monday, Washington Post columnist Charles Lane argued the same basic point, even calling out the liberal politicians who are happily presiding over these restrictive regulatory regimes.

In the cities with the worst affordability problems, Lane writes, "Democrats are the party of government, but the housing crisis is in large part government-created."

"Blue American cities and counties need new rental housing, but local zoning, building codes, approval processes, and other regulations…hinder construction," he adds.

Even The New York Times Editorial Board—hardly a friend of unfettered free markets—is on board with this narrative. "The United States is suffering from an acute shortage of affordable places to live," reads their Saturday editorial. "Perhaps the most important reason is that local governments are preventing construction."

That zoning reform and housing deregulation have rapidly become salient mainstream issues is encouraging. More heartening still is that much of this media attention is responding to successful reform efforts already underway.

Both the Times' news story and weekend editorial devote a lot of space to discussing Minneapolis, where in December, the city council voted to allow two- and three-unit homes citywide. Previously, 70 percent of residential land was zoned for single-family homes.

In a handful of other places, municipal and state laws are starting to move in this more free market direction.

In March, the Seattle City Council upzoned 27 separate neighborhoods across the city, allowing for the construction of denser residential and commercial buildings. Currently working its way through neighboring Oregon's legislature is a bill that would ban single-family zoning in almost every community in the state.

These reforms all have their flaws, but they are nonetheless moving policy in the right direction.

Of course, as we learned with the other libertarian moment, one must be careful not to interpret a few positive examples as an unstoppable national trend. For every zoning reform effort that's succeeded, another has sputtered. Meanwhile, counterproductive policies that threaten to undercut future development are gaining ground.

Even as Oregon looks to legalize denser housing (while leaving its urban growth boundaries mercifully untouched), it has also become the first state to adopt a statewide rent control policy.

New York followed in its wake just last week, passing a slew of new regulations that make it harder to raise rents at rent-stabilized apartments in New York City, while allowing all cities in the state to adopt rent control policies.

California is hurtling in that direction as well. A statewide rent control bill managed to pass the state Assembly in May. It now heads to the state Senate, where another bill allowing for the construction of more apartment buildings near transit stops stalled a few weeks ago.

Meanwhile, the Golden State continues to produce a trickle of stories about housing developments being stalled over concerns that they'll cast too many shadows or kill too many birds.

Part of the explanation, perhaps, is that problems of housing affordability were allowed to fester for so long that more extreme, albeit counterproductive, measures like rent control can seem like a good way of responding to immediate pain. In addition, good ideas will always have to contend with well-entrenched interests like homeowners and anti-gentrification activists, both of whom cast a skeptical eye at any effort to loosen zoning rules.

Nevertheless, the country's housing woes are being talked about and the correct solutions are being identified; that's cause for a little bit of cautious optimism.

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  1. “‘Currently working its way through neighboring Oregon’s legislature is a bill that would ban single-family zoning in almost every community in the state.”

    So bans are libertarian now, huh?

    1. Ban the bans!

    2. Single family zoning restricts landowners from using the land in certain ways (building multifamily). Banning single family zoning is the state restricting local governments from restricting their residents. A double negative is a positive, a double ban is an unban, in this case.

      1. I haven’t read the details, but the libertarian in me wants to figure out how they’ll fuck this up. Like does the ban on single-family zoning mean that one can’t build a single family home in in every community?

        1. If they do it right, is should mean that you can build a single family home, but you can’t stop your neighbor from building a small apartment building.

        2. I’m sure they’ll screw it up some way, or rather the local governments will find a way around it (I can think of a few already) but it doesn’t ban a property owner from building a single-family home, it bans the local governments from requiring the property owner build a single-family home

          its libertarian (or at least libertarian-ish) in that it restores certain rights to the property owner

    3. Bans on certain types of government action can be.

    4. Bans on government use of force and coercion? Yes, that is and always has been an appropriately libertarian action, even if it is lower government that is being constrained.

    5. What’s next? Libertarians asking for bans on the initiation of aggression?

    6. Yeah it was clumsily written. I think they are banning exclusively single family zoning. So if you want to build a multi-family unit on your land zoned for single family only you can’t right now. The ban will change that so that you can build a multi-family building.

      Maybe a clever way for Oregon to get this passed, they love banning stuff from what I hear up there? Its not de-regulating, we are banning something for the consumer. If Obamacare can be called affordable why can’t a deregulation be a ban.

      1. No. Read the Reason article from May 31st. Seattle is not banning exclusively single family zoning. They are banning building single family homes, restricting landowners from using their land in certain ways.

        CB

    7. Oregon is also trying to pass, if it hasn’t done so already, rent control for the entire state. Not exactly a good policy when considering housing shortages.

  2. Is America Finally Waking Up to Its Government-Created Housing Crisis?

    FTFY

    1. Then I’m afraid the answer is “no”.

    2. Not when the article focuses on local zoning rules instead of federal monetary policy.

  3. Oregon’s legislature is a bill that would ban single-family zoning in almost every community in the state.”
    This type of reform will only hurt. this means you will have to build more than one home on every property which raises initial cost to get into a home and not everyone can afford to build multiple homes nor does everyone want to be a landlord, I know i don’t. Now if the bill has a cut out for you to build a single house on your property that would be okay but the city would still tax you for the value of two so again it puts homeownership out of reach which is the goal anyway. they actually want everyone to be a renter. that was the purpose of the 2007 market crash, to force people out of their houses so that corporations could buy blocks of housing below market value and then rent them at higher market value

    1. What you describe has nothing whatsoever to do with Oregon’s bill.

      The “ban on single-family zoning” does not mean that you will be compelled to build two or more homes on every property. All it means is that the local government can no longer stop you if you want to build multiple homes on your property.

      1. Oh, they’ll still be able to stop you if they don’t want your project to go forward, they just won’t be allowed to say it’s because it’s multi-family. They can perform traffic studies, environmental impact studies, storm water runoff studies, etc. They could place you before an architectural review board that might have some arbitrary requirements that aren’t required to be published anywhere in the local codes. They can still impose height restrictions in both feet and/or storeys.

        1. Right. The government can no longer stop you through zoning. But you are probably right they will find other ways if they really want to. Still seems like a step in the right direction. People are more free to use their property as they see fit.

      2. But that could mean your neighbor sells his house and they put up apartments right next you. And then all sorts of the wrong kind of people will move in and ruin the neighborhood. Why, some of these liberals might even end up living next to the people that they spend their lives protecting from those evil racists in the flyover states!

      3. Will it let you convert an existing large single-family home into a few apartments? That’s a major way to increase the stock of lower-cost apartments – with remodeling rather than new construction, once the owners’ kids have grown up and moved out. The costs are even lower if the mortgage is paid off, or if the owners can continue to live there and not need to hire an agent or superintendent.

  4. These reforms will last right up to the moment that major political donors see their property values decline. Then, no more building anytime, anywhere, ever!

    1. Until? You can be certain that these “reforms” will not decrease property values because that would be political suicide.

      Look at them long enough, and you’ll recognize that they are regulatory capture for home owners in one way or another.

  5. I wouldn’t hold up Oregon as an example of housing policy getting more libertarian. They’re not allowing you to build what you want, they’re banning single family zoning. And not moving the urban growth boundary is by no means libertarian — it should be eliminated.

    1. That’s what I’m wondering about here (message above). If you want to build a small, single family home and a picket fence on it, is that now banned? Or have they only banned the concept of a single family-only zone?

      1. No, your single home with a picket fence is not banned. Yes, they have only banned the concept of a single-family-only zone.

        Actually, I’m not sure about the fence – but I think that would be a different section of the code.

        And while I agree that Oregon is not a paragon, more libertarian is a relative statement. It’s like saying you’re looking better to someone just getting over a long illness. They’re still not pretty but they no longer look like they’re at death’s door. Oregon’s new policy is at least some better than their old policy.

  6. “Democrats are the party of government, but the housing crisis is in large part government-created.”

    s/but/and/

  7. “Democrats are the party of government, but the housing crisis is in large part government-created.”

    Mass immigration is the demand side of this problem.

    1. It’s really not

  8. “Meanwhile, the Golden State continues to produce a trickle of stories about housing developments being stalled over concerns that they’ll cast too many shadows or kill too many birds.”

    Is this the Onion? Seriously? The state that is putting up hundreds (thousands?) of windmills and giant solar panel arrays that are killing thousands of birds each year are worried?

    Give me a beak.

    1. True story.

      Ive recently read about two instances in San Francisco, which tends to try the crazy stuff first, then it always runs downhill to the rest of the state.
      In one instance someone got approval to build the house the way he wanted to, some enviro wackjob crowd looked down, saw their knickers all beknotted, filed a lawsuit to block the construction because the new structure would, literally, block the sun from a small patch of bare dirt.
      In the other, developer was building a new dwelling with lots of glass.. and this one was halted because too many birds would fly into the glass and kill themselves.

      I shook my head in wonderment at both of these, but then rmembered.. This is California they’re talking about. The head shaking wonderment segued into derisive laughter.
      No wonder a million folks a year move out of that insane place.

    2. @drz my thoughts exactly. They like to roast flying wildlife, before it’s killed in a merciful way. Hate those mirrored panels. Whoever okay’d that project has never used a magnifier to kill ants. The Law of Unintended Consequences never
      fails.

  9. “Is America Finally Waking Up to Its Government-Created Housing Crisis?”

    Of course not, especially with all those idiot republicans and democrats we have in Congress.

  10. Mainstream media is starting to embrace the idea of deregulating housing construction. Will policymakers?

    Absolutely not. And I will tell you why. If you substantially increase the supply of affordable housing, you decrease the value of existing homes. In any area where the majority of voters are home owners, that’s just not going to happen.

    1. That’s not really true though…

      In Seattle, if they had allowed WTF ever to be built, there is an almost 100% chance that prices would have STILL gone up a lot. Just not nearly tripled like they did in many areas.

      This stuff all takes time to filter through. The way to do it is to pass it, and it will take a lot of time for it to actually come to fruition.

  11. NY’s recent rent control law would argue that the answer is No.

  12. If only these dicks in Seattle had had the brains to upzone everything, then most of the coolest neighborhoods in the city wouldn’t have been completely destroyed for all eternity.

    The only upzoned a couple small areas, which with the flood of assholes moving here meant basically 100% of the lots zoned for higher density had to be developed. If everything had been upzoned everybody would have ended up with a few townhouses here, a small apartment building there, etc and no particular area would have been completely destroyed.

    It also probably would have kept property values from shooting up to such insane levels that it makes 6 figure salary earners have the standard of living that high school dropouts do in most of the country. Fucking assholes. They largely ruined this city with this one stupid mistake. SF and a bunch of others have the same problem too.

    How fucking hard is it to figure out that if you need a shit ton of housing, and want to keep it affordable… You have to allow people to build a shit ton of housing all over the place? It’s not rocket surgery.

  13. […] Even The New York Times Editorial Board—hardly a friend of unfettered free markets—is on board with this narrative. “The United States is suffering from an acute shortage of affordable places to live,” reads their Saturday editorial. “Perhaps the most important reason is that local governments are preventing construction.“READ MORE” […]

  14. […] to close their doors. Strict zoning laws prevent the expansion of businesses and housing. Harsh housing regulations prevent new developments, leading to a shortage of available housing, ultimately increasing the […]

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