Physical Address

304 North Cardinal St.
Dorchester Center, MA 02124

Emily Hamilton

Emily Hamilton

  • Joined: May 21, 2025
  • Articles: 154

The Role for State Preemption of Local Zoning

Urbanists have increasingly turned to state-level preemption as a tool for reducing the barriers to new housing supply, recognizing the improved incentives for land-use policy relative to the local level. In a piece for the Atlantic Cities, Nolan sums up the potential for preemption to address current inefficiencies in urban policy. In addition to being a pragmatic tool to increase the supply of housing where it’s needed most, state-level preemption of local land-use rules is grounded in the American system of federalism that relies on higher levels of government setting limits on the extent to which lower levels of government can legislate or regulate away individuals’ rights. As legal scholar Michael Greve explains in The Upside-Down Constitution, American government is designed to rely on the threat of residents (and their tax base) leaving jurisdictions that enforce exploitative policies. When residents are free to enter and exit jurisdictions, the places that provide the policy environment, business opportunities, and quality of life can expect to gain residents at the expense of those that don’t. The opportunity for residents to “vote with their feet” by choosing to live and work in the places where they can best pursue their own version of the good life is essential to the American system of competitive federalism. When jurisdictions must compete with each other for residents and wealth, they tend to enact policies that support broad-based prosperity. Absent this competitive pressure, policymakers are more likely to implement policies that privilege special interests because they face a diminished threat of their tax base leaving the jurisdiction. Preemption can play an important role in supporting competitive federalism as opposed what Greve calls cartel federalism — when special interests and policymakers benefit at others’ expense. For example, with the 14th Amendment, the federal government restricted the potential for state governments to […]

TILTs for Income Mobility

Land-use scholars have offered a variety of policy proposals that attempt to identify institutional reforms to reduce the incentive for homeowner NIMBYs to protest development. For example, in a 2013 paper law professor David Schleicher proposed a policy called Tax Increment Local Transfers (TILTs). When  a municipality permits a new development, the new construction will increase its tax base by an amount called the tax increment. Schleicher suggests that the tax increment could be transferred to  NIMBY homeowners to buy their support for new housing. But homeowners aren’t the only vocal opponents to new housing. Anti-displacement activists are also prominent opponents to new construction. What if we also dedicated TILT revenues to anti-displacement causes? Making new housing construction feasible in the cities with the best job opportunities is of serious importance for economic opportunity and mobility. Research by Peter Ganong and Daniel Shoag (covered here by Sandy and me and here by Matt Yglesias) demonstrates that restricted housing supply in the U.S.’s most productive cities has resulted in less income mobility over the past 40 years. Ganong and Shoag explain that during the high-mobility period of 1940 to 1960, people moved from low-income to high-income states. In the process, the labor forces in high-income states grew, putting downward pressure on their wages relative to low-income states. As income increased across all states during this time period, it grew fastest in the lowest-income states. Ganong and Shoag show that the negative relationship between income growth rates and average income across states has broken down since 1980 with the rise of land-use regulations that have severely limited housing supply growth in the country’s most productive cities. Specifically, they find that if income convergence had continued at its 1940-1960 rate through 2010, hourly wage inequality would be eight percent lower today. While homevoters are responsible for the lion’s […]

Is Inclusionary Zoning Legal?

Market Urbanism may soon have a hearing in the Supreme Court. Two of my colleagues at the Mercatus Center, Sandy Ikeda, half a dozen other professors, and I argue that the Court should take up the case 616 Croft Ave., LLC, v. City of West Hollywood. The case is an opportunity for the Court to determine whether inclusionary zoning violates its standards for legal exactions from developers. Inclusionary zoning requires developers to rent or sell some units in new projects at below-market prices. The Court has established that local governments can only require benefits from developers when these benefits offset a public nuisance from the project. Inclusionary zoning fails this test. The facts of the case could have played out in many American cities. Real estate developers Shelah and Jonathan Lehrer-Graiwer purchased two single family homes that they replaced with 11 condo units. West Hollywood’s inclusionary zoning rule required them to either make 20 percent of the units in their new project available at below-market prices or to contribute $540,000 to the city’s affordable housing fund. The Pacific Legal Foundation is representing the Lehrer-Graiwers suit.  They have petitioned the Supreme Court to review earlier decisions from California courts that upheld West Hollywood’s policy. West Hollywood’s inclusionary zoning policy states that its purpose is to “off-set development impacts” that new housing construction causes. This justification is based on the false assumption that new housing development raises housing prices by replacing older, cheaper housing with newer, more expensive housing. This fallacy may seem reasonable at first glance. New construction is often more expensive than the older homes it replaces. But as these once-new houses age, they become affordable to lower-income residents. New construction is the only way to increase housing supply, and new units have the potential to become market-rate affordable housing over time. Housing economists call this process “filtering.” One estimate puts the […]

What makes Philadelphia so affordable?

In 2005, Joseph Gyourko published an economic history of Philadelphia. He explored the economic and policy factors that contributed to its population and job loss during the twentieth century. Gyourko’s outlook for Philadelphia was pessimistic. He argued that the city lacked the supply of skilled labor that would allow it to adapt to the rise of the service sector. However, in the year following Gyourko’s publication, Philadelphia’s population growth rate reversed, driven by foreign immigration and college graduates choosing to stay in the city where they went to school. In spite of this growth, the city has maintained an impressive level of housing affordability. Philadelphia obviously hasn’t had the level of demand pressure other coastal cities like New York or San Francisco have seen, but since 2005, it has experienced steady population has growth from 1,400,000 to 1,550,000 people.  Among potentially comparable mid Atlantic and midwest cities, only Pittsburgh has lower prices. During its decade of population growth, Philadelphia’s home prices essentially tracked the rate of inflation. Unlike newer cities that have the option of relatively cheap greenfield development, the Census designates nearly all of Philadelphia’s neighborhood as urban, the densest designation. The city’s population growth has been accommodated through infill development and the renovation of old homes rather than through greenfield development. It’s not the case that Philadelphia’s zoning regime accommodates as-of-right growth. Philadelphia developers have to deal with a complex web of outdated Euclidean zoning rules and myriad overlays. But developers have generally been able to get the variances they need to provide a supply of housing that keeps prices from rising in response to population growth. Philadelphia doesn’t have organized political opposition comparable to NIMBY activity in more expensive cities. Residents’ reaction to calls for community involvement in the development process demonstrates the city’s anti-NIMBY tendencies. In 2012 the city implemented zoning […]

Government-Created Parking Externalities

In new research on parking policy in the Journal of Economic Geography, Jan Brueckner and Sofia Franco argue that residential developers should be required to provide more off-street parking in places where street parking contributes to traffic congestion. They argue that because traffic congestion is a negative externality, off-street parking requirements improve urban living. But street parking only contributes to traffic congestion when policymakers underprice it. Rather than addressing the externality of a government-created problem with new regulations, cities should price their street parking appropriately. Brueckner and Franco’s argument relies on the assumption that off-street parking will be under-provided without government intervention. They argue that because drivers circle their destination looking for free or cheap street parking, minimum parking requirements make people better off. The authors are correct in arguing that street parking contributes to the problem of traffic congestions. Parking guru Donald Shoup estimates that drivers who are circling around looking for parking spots make up 30 percent of downtown traffic. Cruising for parking imposes an external cost on others by causing everyone to waste time in slow traffic. While, Brueckner and Franco actually cite Shoup’s work on street parking and traffic congestion, they ignore his insight that when parking is priced appropriately, cities can eliminate this externality. The incentive to cruise for parking originates with public policy when city officials provide street parking at below-market prices. When parking prices are high enough, drivers will leave some parking availability on each block, eliminating the cruising problem without the need for minimum parking requirements. San Francisco’s SFPark program provides an example of successful implementation of variable pricing based on demand. SFPark has the goal of maintaining one to two available spots on each block so that drivers don’t contribute to traffic congestion while they’re looking for parking. When street parking is priced high […]

Market Urbanism Is Still Underrated

New data keeps coming in that shows that increases in housing supply tend to be followed by declining rental rates, even in the cities facing the highest demand. After a boom year for apartment construction in 2016, rents are falling in New York City, San Francisco, and Washington, DC. Median rents for one-bedrooms across New York City fell by 9.1% in the past year. Even in San Francisco — the most productive city in the country — a burst of new supply in 2016 has led to falling rents. Estimates put rent year-over-year decline in prices at 1% to 9%. Rising vacancy rates and quarter-over-quarter declines in Seattle’s rental rates are a sign that it’s leaving a period of double-digit annual increases. A decade of increasing construction rates in DC has leveled off rent prices. Los Angeles has not seen the apartment boom that has benefitted renters in other expensive cities, and its rental rates are the fastest rising in California. Scott points out the striking correlation between housing construction and house prices in in-demand cities. This trend of declining rents is some very preliminary evidence against Tyler Cowen’s claim that densification in expensive cities will result in economic growth, but not falling rents as more buildings draw in more business activity and talent. A New York developer echoes Tyler’s view: “There are so many units, but then they all get eaten up. That is the way New York works.”

Conflicting Affordable Housing Policies

Inclusionary zoning allows a few people to live in desirable, new construction buildings for much less than market rates. But it also carries with it a slew of perverse consequences. Because it’s a tax on construction, it reduces supply. Inclusionary zoning also leads developers to build higher-end buildings than they would otherwise, further squeezing out lower- and middle-income tenants. While inclusionary zoning makes life easier for a few middle- and high-income residents lucky enough to secure below market-rate units in expensive cities, it also contributes to the regulatory mess that constrains housing supply in general. This in turn drives up the cost of housing. The effects of these supply constraints fall hardest on low-income residents who can least afford artificially high housing costs. By placing further constraints on housing markets, inclusionary zoning makes it so that resources dedicated to providing housing for the truly needy don’t go as far as they could in a less regulated market. Subsidies to middle-income residents come with the unfortunate side effect of making it more difficult for non-profits and government programs to make housing accessible to the truly needy. Recently I presented on a panel at Chapman University on the future of housing in Orange County. Our panel highlighted the tensions between housing programs designed to help low-income and homeless households and those designed to help middle-income households. While my talk focused on regulatory barriers that make housing unaffordable for people across the income spectrum, Maria Cabildo — a former non-profit developer for low-income housing — talked about her experiences building housing for the homeless and very-low-income families. Maria pointed out that market-rate housing is too expensive for minimum wage earners in every single county in the country. In expensive markets, policies designed to subsidize housing for middle-income people drives prices even farther out of reach for low-income […]

If Landlords Can Profit, Homes Must Be Great Investments, Right?

  Homeownership boosters use many arguments in favor of buying rather than renting, one of which is that purchasing a home is a key part of the path toward a lifetime of financial success. They often say that renters are helping landlords profit when they would be better off paying their own mortgage instead. But a more nuanced analysis shows that it’s possible both for landlords to profit and for renting to make more financial sense than buying for some people. Someone purchasing a property to rent out will be purchasing an investment rather than a home — an emotionally fraught purchase often fueled with American Dream mythology. Because of the large transaction costs in buying and selling houses, people tend to buy the home they foresee wanting for many years after the purchase date. A childless couple might purchase a four-bedroom home in a good school district for the future, meaning that they end up over-consuming housing for their yet unborn children. If this hypothetical couple decided to rent until their children were school-age instead, they would likely be able to save and invest a substantial amount by spending less on housing in the near term. Would a landlord purchase this couple’s single family dream home? Probably not. Rather, with the same money, he might purchase a small apartment building in a  less desirable part of town. These differences in purchasing decisions help to explain why landlords can profit in the same cities where people may not come out ahead by buying instead of renting. In addition to having disparate motivations when purchasing property, a potential landlord likely has other comparative advantages that make him more likely to profit from real estate relative to the average homebuyer. He may have above-average knowledge of which neighborhoods are likely to see […]

Book Review: The Well-Tempered City

  This book review is part of a TLC Book Tour. The Well-Tempered City: What Modern Science, Ancient Civilizations, and Human Nature Teach Us About the Future of Urban Life by Jonathan F. P. Rose   In The Well-Tempered City, real estate developer Jonathan F. P. Rose offers a sweeping history of cities and equally grandiose policy proposals to improve urban outcomes. In the vein of Jane Jacobs and F.A. Hayek, Rose identifies that cities are “wicked” problems rather than engineering problems that policymakers can solve through tinkering. In spite of this recognition of the complexity of cities’ interrelated systems, Rose asserts that cities need visionaries to address problems from obesity to climate change from the top down. Rose leads with the most interesting section of his book on the origins of early cities. In support of his theory that great cities are built by visionaries, he focuses on ancient cities that were founded around religious sites, including Uruk and Teotihuacan, downplaying the path of great cities emerged organically from trading posts, like Venice or Rotterdam. He advocates for the benefits of orderly urban layouts like Hippodamian plan or the magic square that ancient Chinese cities followed. A theme running throughout the book is that American urban planning has embraced the Western values of individualism and free will while giving short shrift to the Eastern value of harmony, such as the unification that comes from top-down urban design. In support of more cohesive plans, Rose downplays the incredible progress that has been possible through decentralized urban and economic development. Throughout the book, Rose argues that American cities are suffering from a lack of vision from their planners. Unlike ancient leaders who built grand temples and imposing walls, today’s planners focus on enforcing rules rather than defining a city’s aesthetics. He writes: It turns out that a city can pick any […]

Urban[ism] Legend: A Home Is A Good Investment

Despite its poor track record, homeownership is the bad investment idea that never seems to die. Even though the financial crisis revealed the risks that homeowners take on by making highly leveraged purchases, policymakers are still developing new programs to encourage home buying. Both the Clinton and Trump campaigns are continuing the political support for homeownership that dates back to the Progressive Era. Since the New Deal, homeownership has been touted as a tool to reduce poverty and as a route to wealth-building for the middle class. Even before the subprime-lending crisis revealed the risk that low-income borrowers took on with homeownership, researchers have explained the problems with using homeownership programs as a poverty reduction tool. Joe Cortright recently pointed out that homeownership is a particularly risky bet for low-income people who may only have access to credit during housing market upswings, leaving them more likely to buy high and sell low. Even for middle- and high-income households, homeownership is a weak investment strategy. Politicians across the political spectrum tout homeownership as key to a middle-class existence, but homeownership will make many buyers poorer in the long run compared to renting. The real estate and mortgage industries have popularized the claim that “renting is throwing your money away,” but owning a home comes with a steep opportunity cost. Renters can invest the money that they would have spent on a down payment in more lucrative stocks, and they don’t take on the risk of home maintenance. The New York Times created a popular calculator designed to determine whether renting or owning makes better financial sense. The calculator’s defaults assumptions are overly optimistic in favor of homeownership as the better strategy for most households. They include a 1% rate of house price increases after accounting for inflation, but the historical average is just 0.2%. Similarly, the calculator defaults to a […]

Trending now

A self-defeating argument
Texas MUD
gentrification
Only 2 Ways to Fight Gentrification (you’re not going to like one of them)
The problem with “public” transportation