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One Reason Why Subsidies Aren’t the (Only) Solution

November 24, 2016 By Michael Lewyn

I was rereading the Obama Administration’s surprisingly market-oriented policy paper on zoning and affordable housing, and saw one good point that I had never really thought about.

One common anti-development argument is that government should subsidize housing for the poor instead of allowing the construction of upper-class housing that might eventually filter down to the poor (or cause older middle-class housing to do so).  The policy paper points out, however, that “HUD’s existing project-based and housing choice vouchers could serve more families if the per-unit cost wasn’t pushed higher and higher by rents rising in the face of barriers to new development.”  In other words, high market rents make subsidies more expensive, which in turn means that government can subsidize fewer units with the same dollar.

In other words, high market rents make it harder, not easier, for government to subsidize housing.

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About Michael Lewyn

Michael Lewyn is a Professor at Touro Law Center, where he teaches property, land use, trusts and estates, and environmental law. Originally from Atlanta, he graduated from Wesleyan University and received his J.D. from the University of Pennsylvania Law School. His books include "Government Intervention and Suburban Sprawl: The Case for Market Urbanism." In addition, he has published dozens of articles, most of which are available at works.bepress.com/lewyn.

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