Debates 2020

Democratic Candidates Acknowledge Poor Housing Supply, but Not How Government Causes It

More federal spending won’t make housing more accessible as long as regulations and zoning drive up prices.

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Billionaire environmentalist Tom Steyer, Sen. Elizabeth Warren (D–Mass.), and Sen. Cory Booker (D–N.J.) all weighed in some of the affordable housing challenges faced by residents of American's biggest cities during tonight's Democratic debate. And while they all acknowledged the problem, they also all seemed to believe that more government intervention is a solution to the problem and not its cause.

Steyer was asked about affordable housing first, and to his credit, he was very quick to point out that it is California's own policies that have created the housing shortage currently driving up rents in San Francisco and Los Angeles, but he didn't really get into detail and instead pivoted to his concerns about the environment and sustainability.

Warren said she believed that the housing shortage is due to the federal government's failure to provide more homeownership subsidies and racial discrimination in lending. And yes, she has a plan for that—an expensive one involving $500 billion in federal spending to create affordable housing.

Booker yelled "gentrification" without really explaining what he means and used the opportunity to promote his tax credit for those who have to pay more than 30 percent of their incomes on rent.

All of these answers missed the fact that government interference in housing development plays a massive role in keeping affordable housing out of big cities. Nobody said the word "zoning," and in places like Los Angeles and San Francisco, entrenched residents in traditional homes and the city officials who serve them use zoning laws to prevent the construction of denser apartment complexes that would serve lower-income residents.

Screaming "gentrification," as Booker did tonight, is actually a popular tool used by NIMBY residents to actually block an increase in housing supply with the absurd (and factually untrue) claim that allowing more housing actually drives low-income residents out of their neighborhoods.

Labyrinthine building regulations in big cities push developers into catering to wealthy customers because only they can underwrite the government-mandated costs of developing urban housing. Making it hard to build housing means it's expensive to build housing; in turn, housing that costs a lot to build costs a lot to reside in. The equation is not complicated.

What's more, the federal Davis-Bacon Act—which requires that contractors working on federally funded projects essentially be paid at a rate set by local unions—means that Warren's and South Bend, Indiana, Mayor Pete Buttigieg's plan to federally subsidize housing will further drive up costs by eliminating competitive construction bids. The federal government is forbidden by its own laws from building housing that is naturally as "affordable" as it would be in a competitive market.

Of course, the union giveaway that is the Davis-Bacon Act is off the table for Democrats. Meanwhile, the oppressive zoning policies of America's big cities are local problems that no president can solve. But it's telling that the candidates don't know what's causing the problem or how to fix it.

NEXT: Elizabeth Warren Seems To Fondly Recall Era of Not Knowing Whether Your Brothers Died in War

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  1. The only housing shortage they know involves the White House. I’d be quite happy building them replicas, with fake War Rooms where they could play to their hearts’ content.

    1. first the fact that no one has had a raise in 25 years means income didn’t keep up with housing costs

      2nd all the incentive govt give to biz to locate mile from where people live mean they have and added commuter expense

      Amazon was bribed to bulild in suburbs

      nIMBY is largely a wealhy popeles construct. otherwise the would locate landfills nearby

      4th , mtg interest deduction incentivizes 2nd, 3rd ,4th homes , folks residing in part time , if at all

      5h . failure to build mass transport so a person could live in affordable surronds and get to work in under and hour

      5h the pile of money invested in things like roads for shopping centers or stadiums make those locations , formerly affordable now for the neavu riche.

      infrastructure spending, road repairs and police always wind up disproportionately in tony neighborhoods

      Houston has no zoning and no regulations and a 1 bdrm near places of employment cost $1200/month.

      so I refer u back to 1. no one has had a raise in 25 years,

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  2. The answer to every problem for them is to confiscate more money and address the issue in a directly childish manner. There is no thought of outcomes, just a desire to show that they “care” by throwing money at a problem. Surprise! Their actions cause and exacerbate the problems while robbing the people of resources and freedoms

  3. Most of those big cities with onerous zoning laws and ridiculous building regulations are run by Democrats.

    But it’s a complete mystery why things are so expensive…

    1. I think you shoot down your own argument with “most.” If GOP-run cities can also have this issue, then maybe it’s not the political affiliation to blame as much as other factors.

      Another thing big, dense cities have in common is low supply of land and high demand for it. Suburbs, as we’ve learned over the past few decades, have diminishing returns as commutes to the city center worsen and fewer people want to endure that daily grind.

      And finally, even in Democrat-run cities, the biggest NIMBY voice comes from people located near proposed re-development without regard for political affiliation.

      1. The top 15 most expensive cities for housing in the US are (according to CNBC): White Plains NY, Washington DC, NYC, Denver, Boston, Seattle, Naples FL, Long Island NY, Los Angeles, Boulder CO, San Diego, Honolulu, Anaheim, San Francisco (shockingly only #2), and San Jose CA.

        Every one of those cities has a Democratic mayor/executive and a majority (or entirely) democratic council (where applicable). So, I don’t think your assertion that it’s independent of political affiliation holds water. Now, I think that it’s more correlation than causation – the democrats are far more likely to support restrictive land use rules, low-density zoning, and particularly rent control. So I think it’s specifically the policies they enact that create the problem, not just having a D after their names. But if you look at the contrast between the Houston metro area and Los Angeles or SF, it’s pretty clear that major metro areas can be quite affordable, despite NIMBYism, if the NIMBYs aren’t offered the tools they need to prevent new housing supply.

  4. But it’s telling that the candidates don’t know what’s causing the problem or how to fix it.

    Is there any issue where this is not true for Donkeys?

    1. Meh. “The problem” in the quote is assumed to be “not enough housing” but that’s not really what the candidates don’t want to address; they’re smart, educated, experienced, and accomplished people. What they don’t want to talk about is the really hard stuff which isn’t housing but growing inequalities and the evaporation of the middle class. The housing shortage is merely the most painful part of a large and highly complex systemic problem with how the wealthiest have effectively captured government.

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  6. But it’s telling that the candidates don’t know what’s causing the problem or how to fix it.

    Any presidential candidate could offer an easy first step that would apply nationwide. Eliminate all the distortions in the tax code and monetary policy that favor existing homeowners at the direct expense of everyone else. Which basically means eliminate all the incentives we have created to divert investment/savings into housing that doesn’t even fit ‘shelter’ needs anymore cuz its all a tax/crony game now.

    Course that would go over like a turd in a punch bowl to many voters and esp the donor class. So of course that is why no pol is gonna touch that.

    1. aye..tax reform should have waxed the mortgage interest deduction. of course all the associated lobbying groups would have had a meltdown.

      and i say this as a homeowner. i’ll take the equity ding to end awful policy.

      1. The mortgage interest deduction inflates prices which can inflate profits for people who build homes. That seems counter to the idea that the mortgage tax deduction prevents housing supply from approaching demand.

        In California, the issue is NIMBYism. Current home owners don’t want their single-family neighborhoods upzoned and filled with apartments. Mortgage tax deductions have no impact on that.

        Further, in the areas of California in most dire need for more housing, the recent Federal cut to the mortgage interest deduction had no measured impact on home values; they kept going up. This may be because people buy homes based on what they can afford each month and not the net monthly cost after annual taxes.

  7. Solve the housing “crisis” by spraying for homeless in every city like you do cockroaches – and along the border with Mexico, too.

  8. Comments concerning no wage growth or the decking middle class are not completely true. Wages and hours have gone up. More people have moved from the middle to upper income class accounting for inflation. Governments ruin markets by trying to control, equalize and invariably hurt the targeted consumer. Move!

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