Federalist Society National Lawyers Convention Panel on Zoning, Property Rights, and the Housing Crisis

I participated along with James Burling (Pacific Legal Foundation), Prof. Peter Byrne (Georgetown), and Prof. Sara Bronin (George Washington University).

Andrii Yalanskyi/Dreamstime.com

 

Yesterday, I participated in the Federalist Society National Lawyers Convention panel on "Socialism or Sensible Protections? Zoning, Rent Control, and the Housing Crisis." Although I proposed this topic to the Federalist Society Executive Committee on Property Rights (of which I am a member), I did not pick the title. The panel wasn't really about socialism, except tangentially. But it certainly was about zoning, rent control, and housing! The other participants were James Burling (Pacific Legal Foundation, author of Nowhere to Live: The Hidden Story of America's Housing Crisis), Prof. Peter Byrne (Georgetown), and Prof. Sara Bronin (George Washington University, author of Key to the City: How Zoning Shapes Our World). My own presentation was partly based on my recent article "The Constitutional Case Against Exclusionary Zoning" (coauthored with Josh Braver). We also published a shorter, nonacademic, version in the Atlantic.

For such an ideologically diverse group, there was considerable consensus on a variety of issues, especially the extent to which exclusionary zoning and other regulations are major factors. Obviously, there was also disagreement on such questions as the extent to which judicial review should be used to break down regulatory barriers, and whether zoning deregulation should be combined with housing subsidies for the poor and lower middle class.

Below is a video of the panel. Viewers may wish to skip over parts of the first 15 minutes, where the moderator spent more time than necessary recounting the participants bios.

Comments

[NvEric]

What housing crisis ???

[ThePublius]

My sentiment, exactly. It's only a crisis if you believe in perpetual crises, which is the bread and butter of progressives. Not being able to afford something is not a crisis.

I might concede that there's a crisis if we frame it in terms of the government's restraint of housing development, and their presumption of control over same. Ever more restrictive building codes play a part, driving up the cost to develop.

[Sarcastr0]

It's only a crisis if you believe in perpetual crises

Not do immigration.
And foreign trade.
And the national debt.
And building the wall back in the first administration.

You have a consistency issue on how easy it is to make a crisis.

[ThePublius]

Don't criticize me, you dick, just express your own opinion on this.

[Sarcastr0]

I don't care if you call housing a crisis or not, it should be delt with. Deregulation, government housing projects, etc.

I like The ROAD to Housing Act. Co-sponsored by Tim Scott and the Ranking Member, Elizabeth Warren.

https://www.banking.senate.gov/imo/media/doc/road_to_housing_act_of_2025_section_by_section.pdf

[ThePublius]

There's no problem so big that the federal government can't make worse and more expensive.

Just what we need, more and more layers of regulation and government meddling.

[Sarcastr0]

You do know that the government has to pass a law to deregulate once it's gotten into the regulation business?

Click on the link, maybe. Knee-jerk knownothingness does you no favors.

[ThePublius]

I did click on the link and read that summary, that's what prompted my comment, jerk.

You do realize, of course, that to implement that thing they'd have to build an entirely new bureaucracy?

[Sarcastr0]

No, I'm not. What thing are you even talking about - it's a bunch of little separate things, many of which are cutting red tape. None of which require an entirely new beurocracy.

You and I likely agree that deregulation will help a lot with housing supply. This bill does that at the federal level, and via subsidies encourages that at the state and local levels.

And it's not new subsidies - it's revectoring already existing subsidies to encourage state and local deregulation.

Quit being such a reactionary and read shit.

[thesafesurfer]

“If you put the federal government in charge of the Sahara Desert, in five years there’d be a shortage of sand.” Milton Friedman

Source: Interview in The New York Times Magazine (June 3, 1962), and repeated by Friedman in numerous lectures and books (e.g., Free to Choose, 1980).

[jb]

Found the Boomer.

[ThePublius]

What a jerky comment that adds nothing to the discussion.

[jb]

I'll do the work for you.

My point is that current housing policy is great if you already own a home, and is terrible for everyone else. And considering that the median age of homebuyers at this point is up to 53, this means that current policy disproportionately benefits old people. Go talk to a Millennial or someone from Gen Z and you'll get a very different perspective on whether the housing market is working well than Boomers who have spent their entire adult lives using their houses as ATM machines.

[ThePublius]

"I'll do the work for you."

I'll try to sort you out.

"My point is that current housing policy is great if you already own a home, and is terrible for everyone else."

Don't you realize that virtually no one in major cities owns a home, they all rent? Some may own condos, but they are the rich ones.

"And considering that the median age of homebuyers at this point is up to 53, this means that current policy disproportionately benefits old people."

Have you accounted for people retiring and downsizing?

" Go talk to a Millennial or someone from Gen Z and you'll get a very different perspective on whether the housing market is working well than Boomers who have spent their entire adult lives using their houses as ATM machines."

All of my kids are millennials. Half of them own homes, one with rental units. Hard work and saving have a lot to do with that.

As far as your Boomer comment, fuck you! They have worked hard, invested, and are now reaping the benefits. Paying down a mortgage over 20, 25, 30 years has that effect.

[Sarcastr0]

Hard work and saving have a lot to do with that.

Sure, it was all hard work. Anyone could do it!

[jb]

Wow, all the Boomer tropes in one post! You guys really do a great job of patting yourself on your backs for all your hard work while making sure your kids are the first generation since the Great Depression to be worse off than their parents.

Don't you realize that virtually no one in major cities owns a home, they all rent? Some may own condos, but they are the rich ones.

I'm not sure why you think this is relevant. Rental prices are sky high too, and for mostly the same reasons--restrictions on construction that exist largely to prop up property values for the people that own homes.

Have you accounted for people retiring and downsizing?

That may explain part of it, but the median age of a first time home buyer is up to 38, so it doesn't come close to explaining the entire phenomenon. That's up from 28 in 1991, so Millenials have to wait a decade longer to buy a home than the last of the Boomers had to.

As far as your Boomer comment, fuck you! They have worked hard, invested, and are now reaping the benefits. Paying down a mortgage over 20, 25, 30 years has that effect.

They have systematically made the American economy worse for everyone else while enriching themselves. Under their watch, the deficit has exploded, basics such as education, health care and housing have become vastly more expensive, real wage growth ground to a halt, and income and wealth inequality became worse, to a large degree because Boomers hoarded all of the money for themselves.

Every generation works hard, but Boomers worked hard in an era of unprecedented opportunity. Younger generations aren't falling behind because of lack of motivation or worse habits than the Boomers; it's because they face an economy that is designed to take their money and give it to old people.

[Krayt]

It's ironic capitalism would happily build all the housing neceesary, even as those in government, who happily get in the way, then blame it and offer the solution of rent control if not full government housing, aka housing built when they exempt themselves from the burdens they plagued it with.

[Sarcastr0]

rent control if not full government housing

These are the things you think 'people in government' generally offer?

Your really don't work very hard to learn about the stuff you write about, eh?

[bernard11]

It's ironic capitalism would happily build all the housing neceesary,

No. It wouldn't. There are neither practical nor theoretical reasons why that would happen.

It takes a certain amount of money to build habitable housing, even at the low end. There may easily be people who cannot afford that.

And while rent control has supporters, it is widely regarded, even on the left, as a bad idea.

[ThePublius]

"It takes a certain amount of money to build habitable housing, even at the low end."

1. No shit, Sherlock;
2. What's 'habitable housing,' as opposed to any other new housing?

[Stephen Lathrop]

To the extent there even is a housing crisis it is necessary to define it. Once defined, the policy emphasis ought to be on making the crisis go away, not to reach some predetermined outcome, such as building more housing.

What defines the crisis, to the extent there is one? Excess market demand for more housing at lower prices in small urban areas characterized by superior access to employment, and an especially attractive range of urban amenities. The crisis is thus a market problem which policy could address in at least 3 geneeral ways, with variations:

1. Encourage an increase in housing supply in crisis-affected areas.

2. Suppress market demand in crisis-affected areas.

3. Ease access to employment and amenities in crisis-affected areas, by building more access instead of more local housing.

Of course the three ways mentioned might also be used in combination, and developed in more detail.

What obstacles confront policy attempts to alleviate the crisis:

1. Market demand for access to housing in especially attractive urban areas is not merely local, but global. That means the supply side of the problem will be hard to address. Excess demand in every particular market is driven by, essentially, all the wealth in the world. Whichever market leads the way toward a solution by building more housing supply will become selectively the preferred place to direct more wealth, thus swamping whatever meager housing additions can be crowded into inherently limited geographic locales. But to do it that way is an especially developer-friendly policy, because a swamped market is a high-priced market, which is what developers want. That is paradoxical in context of a goal to increase affordability, but much-favored politically among free-market ideologues.

2. Think about open access to real estate purchase by anyone from anywhere. That is the market dynamic which mobilizes vast pools of wealth available world-wide, and directs wealth toward particular domestic markets. Perhaps that is amenable to improvement by policy. Simply outlaw foreign ownership in crisis-affected areas, and police that policy with rigor. Demand falls, and presumably lower prices will follow.

3. Use rent controls. That is effective policy only to the extent that it degrades housing quality and perceived neighborhood quality, and thus undercuts over-demand for housing in the degraded areas. It works especially well for repelling housing competition from the rich. But it is hardly optimal, and nearly impossible to maintain over intervals long enough to make buildings unlivable for want of maintenance. Nevertheless, it continues to get political reconsideration, for want of other alternatives.

4. Choose policies to encourage multiplication of units in existing structures, by making each rentable or purchasable unit smaller. That is a de facto policy already widely applied to local demand created among, for instance, university students.

It works for those partly because they tend not to be raising families, partly because they tend to be young adults who sometimes enjoy the social opportunities thus afforded, partly because that pattern encourages density to support high-amenity businesses to develop, especially restaurants, and partly because few such residents expect to live their lives indefinitely in such crowded conditions. In short, it is a policy which has not been thought through, but which developed willy-nilly by market principles.

5. Thus, No. 4 above raises a question whether policy to encourage development in existing structures of larger per-person unit sizes could increase sizes somewhat, while leaving them small enough to considerably multiply the number of units in a crisis-affected market. Markets characterized by under-utilized structures would be striking candidates. For instance, as in the cases of residential redevelopments in disused factory spaces—a trend already on the increase based on market principles, and possibly capable of broader application with policy encouragement.

Consider what might result if such remodeled units were encouraged financially for landlords, or if policies to encourage such renovations in targeted neighborhoods made omission to supply them more expensive. That might deliver multl-fold unit-number increases in some areas, while also enabling increased landlord profits.

6. Stop focusing on housing close to amenities, and focus instead on making amenities more convenient to access from housing built farther away. In short, develop his speed rail, and extend it far enough outward to make land prices a less influential factor in housing costs. Simple geometry increases land-area availability exponentially with radial distance from any amenity concentration. That does not mean that formerly-rural land targeted for such development would not increase in price. Policy could anticipate that, and turn it to advantage to fund needed transportation developments.

Note that among the solutions mentioned above, only the first and least promising is likely to win approval from free-market advocates. The others are all to greater or lesser extent regarded among free-market advocates as more socialistic. One way to process that is to reject everything except the first option—essentially Somin's advocacy in every such thread offered here. That makes Somin's advocacy developer-friendly, politician-friendly, and nearly useless as a practical means to address what he terms the housing crisis—however useful it may prove to mobilize politicians' support for high-end developers.

A more sensible way to think about those cases is to notice that numbers 2–6 promise better results, more realistically. Maybe if the housing crisis is real, and worthy of solution, more socialistic policies which promise to work better ought to get tried.

[ThePublius]

David, I was tempted to just reply "TL;DR" to your note, but several things struck me as just wrong, or at least amusingly contradictory.

"What defines the crisis, to the extent there is one? Excess market demand for more housing at lower prices...."

There is always excess market demand for anything at lower prices. That's exactly how capitalism works. I mean, who doesn't want to pay less?

Regarding item 3., that is simply not how that has worked in many places, NYC in particular. We had wealthy people sitting on nice apartments that were rent controlled, in, for example, Stuyvesant Town and Peter Cooper Village, and even subletting them, which I think was against regulations. And, they stayed nice, and the rich didn't give them up. Rent control did a lot of bad things, including inhibiting turnover.

[Longtobefree]

Rent control is great.
I had an in-law type relative who lived in a rent controlled unit his entire working career. When his health got worse, he got the landlord to pay all his moving expenses to his hometown, the "initiation" fees to a care facility, and a few thousand dollars more.
He was in the last unit of the building not converted to condo, and the landlord had been trying over a decade to bribe him to leave.

[David Nieporent]

David

No.

[ThePublius]

One recent phenomenon that will alleviate this supposed housing crisis, and perhaps to a large degree, is the self-deportation and forced deportation of illegal immigrants in the U.S., who, when Trump regained office, numbered at perhaps 40 million. The governments (primarily state) pumped huge amounts of money into this, raising prices for housing generally. People were even evicted from low cost hotel and motel 'flop houses' to make room for illegals for whom the state paid exorbitant rates. There are hotels and motels all over Massachusetts that participated in this. One knock-on effect was that one couldn't get a hotel room or host an event in local hotels that used to provide this accommodation.[1]

Removing the illegals will certainly ease availability and cost of housing.

[1] Migrant influx pushing Mass. shelter costs past $1B in FY25: report

[ScottK]

Chad F. Mizelle (you know what the F stands for) said federal judges not on the Trump train should be impeached. Guess Josh wasn't in that room.

[thesafesurfer]

Lawyers who have never worked in residential real estate or built a housing development in their lives discussing "the housing crisis."

Next we will have judges discussing "plumbing regulation in the single family dwelling."

Staying in their lane is a concept completely lost on the entire legal profession.

[thesafesurfer]

It is absolutely amazing reading the comments in this thread how utterly ignorant the legal profession is on real estate, aka housing.

The entire discussion of the current housing market begins in 1997 with the Tax Payer Relief Act of 1997 that literally changed housing from abodes into investment vehicles.

The act destroyed the concept of housing as a domicile in a number of ways.
First, by increasing the capital gains exemption by over 300%.
Second, by eliminating the once in a lifetime exemption to a repeatable exemption every two years.
Third, it eliminated any age requirement for the exemption. Previously you had to be 55+.

Before the law, a 55+ year old homeowning couple could once in a lifetime claim a $125,000 capital gains exemption from selling a home.

After the law, any couple could claim an exemption up to $500,000 every two years without limit on the recurrence.

Before the legislation, your home was a place to raise a family and once you were an empty nester you sold it, downsized, and added the once in a lifetime exemption to your retirement.

After the legislation, housing became the most attractive investment vehicle in the United States overwhelming stocks and bonds. Real estate equity could be extracted over and over again without tax penalty. Flipping became an industry.

If you want people living in homes quit treating homes as investments. Ignoramus lawyers are completely clueless about the housing market.