The YIMBY-Libertarian Convergence
A eminent domain case out of Rhode Island shows how YIMBY regulatory reforms and libertarian constitutional law activism work in tandem.
Happy Tuesday, and welcome to another edition of Rent Free. This week's stories include:
- D.C's "worst landlord" is the district itself.
- The backlash to the use of YIMBY reforms in California's wildfire rebuilding process
- A reform allowing developers to build apartments in commercial zones nears passage in North Carolina.
- The limits of a CEQA reform?
But first, our lead item on what a property owner's win in an eminent domain case out of Rhode Island tells us about the YIMBY-libertarian convergence on housing policy.
What a Rhode Island Eminent Domain Case Says About the YIMBY-Libertarian Convergence
Last week, a federal district court judge in Rhode Island slapped down the town of Johnston's efforts to seize an empty parcel of land via eminent domain to stop an apartment project.
Rent Free Newsletter by Christian Britschgi. Get more of Christian's urban regulation, development, and zoning coverage.
The ruling against the town and in favor of the Santoro family of developers, who owned the lot in question through their various companies, is welcome given just how egregious the town's behavior was.
After Johnston Mayor Joseph Polisena threatened to "use all the powers of government" to stop the Santoros' 254-unit project (while promising to "roll out the red carpet" for single-family development on the site), the town created its own bespoke eminent domain process to effectively take the property in the dead of night without any prior notice given to the owners.
You can read the whole ruling here, as well as Reason's past coverage of the case here, here, and here.
What's especially interesting about the case for our purposes is that it serves as yet another example of the convergence between libertarian legal activism and YIMBY ("yes in my backyard") regulatory reform.
The Santoro family was represented by the Pacific Legal Foundation.
Libertarian-leaning public-interest law firms like the Pacific Legal Foundation and the Institute for Justice have long litigated takings cases on behalf of property owners. Their legal activism has helped establish limits to governments' powers to take property by eminent domain or to demand it during the permitting process.
Where property rights litigation has been less successful is in creating new limits on the assumed ability of governments to pass whatever zoning laws they please.
Since the Supreme Court's infamous 1926 decision in Village of Euclid v. Ambler Realty, state and federal courts have generally put few constitutional limits on governments' power to impose whatever use and density restrictions they please.
Where legal activism against zoning has stalled, however, political activism has been increasingly successful.
For the past decade or so, the modern YIMBY movement has made tremendous headway in converting zoning laws from just a fact of life (and a go-to example of a boring issue in sitcoms) into a high-salience issue.
YIMBY activism has encouraged a growing number of states and cities to pass laws liberalizing zoning regulations and/or allowing developers to bypass local land use restrictions when building housing.
That's the case with Rhode Island, which passed reforms in 2023 allowing developers to build denser projects than what local zoning laws permit, provided they include some affordable housing units in their projects.
The Santoro family made use of that law when proposing their project. Because the town couldn't use its zoning code to stop it, they resorted to eminent domain and ran into all the constitutional limits that restrict localities' property seizures.
One should expect more and more states to pass workable YIMBY zoning reforms. When they do, more localities will be in a position of having to approve projects they'd rather not or trying to stop them via high permitting fees and eminent domain seizures.
When they try that latter option, property owners can make the constitutional argument that this permitting condition is an unconstitutional exaction or that taking is pretextual.
In short, YIMBY political reforms are making more projects possible on paper, and libertarian constitutional activism is ensuring those projects make it through the approval process unscathed.
D.C.'s Worst Landlord Is the District Itself
NOTUS has a new investigation on the dreadful condition of housing units managed by the D.C. Housing Authority (DCHA).
The news site notes that DCHA has over 2,500 unresolved violations issued by the city's building department, totaling $2.2 million in owed fines. The housing authority owns and manages 8,500 units district-wide.
That number of unresolved violations outstrips any other private owner, making DCHA the city's "worst landlord," according to NOTUS.
The Housing Authority has a bad track record. A damning 2022 federal investigation detailed units infested with mold and pests, and an authority so incompetent it couldn't even say which of its units were vacant or occupied. An estimated one-fifth of public housing units sat empty.
City councilmembers described the agency then as "completely dysfunctional."
D.C. Councilmember Janeese Lewis George, the winner of the district's Democratic primary and the presumptive incoming mayor, is a major proponent of building more city-owned, mixed-income "social housing."
One wonders how well that experiment will go given the district's failure to manage the housing units it already owns.
The Backlash to YIMBY Reforms in Wildfire-Ravaged L.A.
Politico has a detailed new story on local and state politicians' efforts to prevent developers from using recent state housing reforms to replace burned-down homes in the Los Angeles–area wildfire zones with denser housing.
Some 16,000 homes, businesses, and other structures were destroyed in the January 2025 fires. Some affected homeowners, many of whom were likely underinsured, have decided to sell their land and move on.
That's opened an opportunity for investors to purchase these properties and redevelop them into more housing. To do that, some have attempted to use recently passed state housing laws that make it easier for developers to subdivide residential properties and build duplexes in single-family zones.
As the Politico story details, this has provoked opposition from local residents and their representatives who see this development activity as unfair and opportunistic. Lawmakers have introduced legislation that would prevent wildfire rebuilds from using state housing reforms.
Developers themselves counter that they are providing the capital and resources necessary to build back areas that burned. If they can't use state reforms to build more homes, they'll build fewer, more expensive homes that local rules permit.
"We can have seven homes or we can have 70 homes. So the question is, which one helps the neighborhood recover from the fire more?" said one developer to Politico.
The general approach of policymakers to construction in the wildfire zone has been to streamline approvals for fire-affected homeowners rebuilding exactly what was lost while imposing new restrictions on anyone else attempting to build anything else.
Gov. Gavin Newsom has used executive orders to limit "speculators" purchasing fire-affected properties and to suspend the state's duplex law in the wildfire zone.
The top-line result of this approach is that rebuilding has been a slow process. As this newsletter reported the other week, only 28 certificates of occupancy have been issued for completed wildfire rebuilds.
It's a predictable result of squeezing capital and profit incentives out of the rebuilding process, instead relying on financially strained homeowners to do all the rebuilding.
North Carolina Legislature Advances Residential-in-Commercial Reforms
Most state legislatures have wrapped up their business for the year. But in North Carolina, lawmakers are going at it. They might close out their session by passing one of the year's biggest housing reforms.
Buried in the state's sprawling regulatory reform package is a provision that would allow property owners to build apartments in commercial and light industrial zones.
North Carolina's omnibus regulatory reform bill includes a section allowing property owners to redevelop commercial and light industrial properties into homes and apartments.
The residential-in-commercial provision of the wide-ranging Senate Bill (S.B.) 445 would require local governments to approve these redevelopments by-right, meaning builders wouldn't need to apply for special discretionary approvals from local officials or undergo public hearings.
Local governments would be forbidden from applying a height limit of less than 60 feet to these redevelopment projects.
The law would apply to cities of at least 50,000 people that are located in counties of at least 275,000 people.
Additionally, the bill would also allow homeowners to add accessory dwelling units to their properties.
The policy is similar to Texas' S.B. 840, which passed last year. That bill allowed developers to build apartments in commercial zones in large cities located within large counties.
As The Texas Tribune recently detailed, the law is proving relatively productive in its early days. It's enabled the construction of an estimated 8,400 new units in the state. While multifamily permitting has generally fallen across Texas, it's increased in the 19 cities where S.B. 840 applies, reports the Tribune.
That's despite some local governments' efforts to limit the impact of the law by requiring that S.B. 840 projects meet minimum density standards and be built with luxury amenities like Olympic-sized swimming pools.
Similar gamesmanship might limit the effect of North Carolina's pending reform. The legislative text is fairly short and simple, which could give localities wiggle room to slap cost-increasing requirements on residential-in-commercial redevelopment projects.
On the flip side, the North Carolina Legislature passed a sweeping parking reform bill that relieves new development in noncoastal areas of the state from having to be built with a minimum number of parking spaces.
Parking minimums are often a major impediment to new apartment development. Surface parking lots consume a lot of land. Underground or elevated parking garages are incredibly expensive to build.
Jurisdictions like Minneapolis that have lifted parking minimums have seen a boom in small apartment construction.
S.B. 445 passed the Senate unanimously last week, reports the local CBS17. It now goes to the House, where it is reportedly likely to pass.
If CEQA Is Defanged, Will Project Opponents Just Find Another Way To Stop Development?
On California's November ballot is an initiative that would substantially streamline the environmental reviews required of projects by the California Environmental Quality Act (CEQA).
CEQA, readers will probably know, is frequently used by project opponents to delay the construction of infrastructure, new housing, new energy facilities, and much, much more.
The Building an Affordable California Act (BACA), sponsored by the Chamber of Commerce, would greatly limit the scope of CEQA reviews and set binding timelines for completing those reviews and deciding legal challenges to them.
Legal commenters have argued that BACA would effectively end CEQA as we know it for the wide swath of projects it would apply to, from new highways to new suburban subdivisions.
At Legal Planet, Eric Biber has an interesting post detailing some of the practical implications of BACA, sweeping as it is.
BACA's requirement that project sponsors pay union wage rates would limit the value of expedited review for private projects that are not currently subject to those requirements, he notes. Cities' general plans could still thwart projects that require zoning changes too, he says.
More broadly, Biber argues that if CEQA reform makes the law less effective at stopping projects, opponents will simply shift to other legal and political means to hold up development.
"The veto that litigation under CEQA provided as a symptom, rather than a cause, of broader public resistance to major public works projects. Without CEQA litigation, I think that resistance will use other channels, many of which already exist, such as lobbying, ballot initiatives, and litigation under other legal tools," he writes. "Those approaches may (or may not) be less effective than CEQA lawsuits, but they will not go away."
That's certainly true, but one should still expect BACA's significant CEQA reforms to speed along projects.
One would assume that today's project opponents use CEQA because it's the most effective means they'd have to hold up development. If it weren't, they'd already be leaning on alternative delaying tactics.
Should BACA pass, project opponents will have to shift to using second-best strategies that are more costly or less likely to stop projects or create delays.
One has to assume that, post-reform, more projects will be approved more quickly.
In addition to speeding more projects to completion, BACA would be a good discovery mechanism. It would reveal all the other anti-growth weapons lurking in California law that are also in need of reform or abolition.
Quick Links
- The Cato Institute has a new study showing the costs of zoning in the Greater Boston area.
- A new study in the Journal of Public Economics finds that implicit land taxes increase population density and business formation.
- The Argument has a good piece detailing new research finding that inclusionary zoning requirements have a massive negative supply effect.
- San Diego neighborhood activists are up in arms about a proposed 23-story development in the city's Pacific Beach neighborhood. The size of the project is the result of a quirk of San Diego zoning law that allowed the developer to classify some of the units as hotel rooms. Interestingly, Rep. Scott Peters (D–Calif.), a frequent sponsor of pro-supply housing legislation in Congress, is opposing the project. In a letter to San Diego Mayor Todd Gloria, he warns a project of that size will polarize people against other infill housing projects.
- Santa Fe is considering hiking development fees to increase affordable housing production. Good luck.
