Because of work obligations, I listened to only about a third of today’s Cato Institute discussion on urban sprawl. I heard some of Randall O’Toole’s talk and some of the question-and-answer period.
O’Toole said high housing prices don’t correlate with “zoning” just with “growth constraints.” But the cities with strict regionwide growth constraints aren’t necessarily high cost cities like New York and Boston, but mid-size, moderately expensive regions like Seattle and Portland.
He says that if land use rules raise housing prices they violate the Fair Housing Act. Maybe this should be the case, but it isn’t. Government can still regulate in ways that raise housing prices, but just have to show reasonable justification for those policies under “disparate impact” doctrine.
He also says cities would be less dense without zoning. Is he aware that most city regulations limit density rather than mandating density?
O’Toole says growth constraints are why American home ownership rates are lower than in Third World countries and that the natural rate of home ownership is 75 percent. But why are home ownership rates so low in sprawling Sun Belt cities? For example, metro Houston’s home ownership rate is about 59 percent – higher than New York or San Francisco, but lower than Philadelphia or Pittsburgh. The highest home ownership rates are in Rust Belt regions like Akron, I suspect because of low levels of mobility.
Some things he gets right: 1) public participation in land use process is harmful because it leads to more restrictions, not less; (2) the mortgage interest deduction doesn’t make much difference in home ownership rates.
Even here in Oregon, cities tend to push for ‘less dense’. It’s the state, and its UGB process that can push back against cities: “add infill or we won’t grant your UGB expansion”. That’s exactly what has happened here in Bend.
By the way, if I read the numbers correctly, Houston actually has a lower home ownership rate than Portland!
I’m not following. NYC and Boston are definitely constrained in their ability to grow geographically.
I’m not that familiar with Oregon but are we sure it’s “add infill” and not “allow infill”? If the city allows infill (instead of prohibiting it as most cities do by default for the last 100 years) and there is a line up of developers to build and a line up of customers behind them to buy/rent, that indicates the prospective residents are just fine with infill and don’t need pushing one way or another.
There are certainly willing buyers and sellers, but local (city level) regulations mostly get in the way of infill, rather than encourage it. Oregon is not special that way – it’s like pretty much anywhere else. It’s the state, with the UGB process that has some power to push back.
The mortgage interest deduction has definitely affected home ownership rates for people of color, who historically have not had the same access to this deduction.