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Category Law

Homeownership and the Warren Housing Bill

Elizabeth Warren’s housing bill has received a lot of love from those who favor of land use liberalization. Like Cory Booker’s housing bill, the Warren bill would seek to encourage state and local land use reform using federal grants as an incentive. Warren’s bill would significantly increase funding for the Housing Trust Fund and provide a small increase in allocations for public housing maintenance. However, Warren’s bill also includes new subsidies to homeownership and policies that could reduce the production of new renter-occupied housing relative to owner-occupied housing. There’s a trade off in housing policy between promoting homeownership as a wealth-building tool and promoting affordability that politicians, including Warren, have failed to confront. Rather than promoting housing affordability by rolling back policies that subsidize homeowners at the expense of renters, Warren’s bill seeks to reduce exclusionary, suburban zoning at the same time it introduces new policies to incentivize homeownership. First, Warren’s bill would require most foreclosed homes to be sold to new owner-occupants, rather than to landlords who would rent them out. The intention of the bill is to prevent institutional investors from profiting from foreclosures, but this approach has a strong anti-renter bias. When changes in economic conditions, demographics, or preferences lead to an increase in the proportion of Americans who want to rent rather than own, this policy would stand in the way of homes being adapted to meet new needs. Second, the bill would provide down payment assistance to first-time homebuyers who live in, or were displaced from, historically redlined neighborhoods. All levels of government have played horrific roles in excluding minorities from white neighborhoods and subsidizing wealth-building through home equity for white households alone. The victims of these policies deserve to be compensated for this unfairness. The Justice Department and the Department of Housing and Urban […]

The Progressive Roots of Zoning

by Samuel R Staley Before the twentieth century land-use and housing disputes were largely dealt with through courts using the common-law principle of nuisance. In essence if your neighbor put a building, factory, or house on his property in a way that created a measurable and tangible harm, courts could intervene on behalf of a complainant to force compensation or stop the action. This pro-property rights approach maximized liberty and minimized the ability of citizens and elected officials to politicize the development process. This changed with the Progressive movement. Beginning in the late nineteenth century, Progressives argued that government should become more professional. Rather than being limited, government should use its resources to pursue the “public interest,” loosely defined as whatever the general public decided through democratic processes was the proper scope of government. Legislatures and, by extension, city commissions made up of elected citizens would set policy and goals while a cadre of trained professionals would use the techniques of scientific management to implement policies. One of the leading Progressives of the day, Woodrow Wilson, was skeptical of the value of elected bodies such as Congress because they interfered with scientific management of government. While many in the twenty-first century might be tempted to dismiss this public-interest view of government—indeed an entire academic subdiscipline, Public Choice, has emerged to demonstrate the foibles of governments and explore “government failure”—Progressive ideas held a lot of appeal at the turn of the twentieth century. In addition to national concerns over industries such as oil, steel, and railroads, local governments were rife with corruption, waste, and inefficiency. Reforms, such as the city-manager form of government, civil-service exams, and in some cases even municipal ownership of utilities, were thought to provide more transparency and accountability than the patronage-laden times of political bosses. (Today municipal […]

The Color of Law: A Forgotten History of How Our Government Segregated America

Richard Rothstein’s “The Color of Law: A Forgotten History of How Our Government Segregated America” should be required reading for YIMBYs and urbanists of any ideological stripe. Rothstein argues that housing segregation in the US has been the intentional outcome of policy decisions made at every level of government and that the idea of segregation as phenomenon driven by spontaneous self-sorting is largely a myth. Two major themes permeate the book: (1) the ways in which government has consistently intervened in the housing and land markets and (2) how these interventions were designed to pick winners and losers. The federal policy of underwriting loans for specific kinds of development (single family detached housing) and for specific people (whites) is an example that the author explores in depth. And after reading his account, I can safely say that I have a far better understanding of how nearly a century’s worth of policy interference has distorted markets and doled out privilege and oppression in equal measure. Throughout the book, Rothstein brings in the stories of specific people and places to add depth to his account. This both keeps things interesting and serves to humanize the story in a way that many tracts on policy fail to do. When he’s describing the lives of black Americans who were forced into soul crushing commutes because they were legally prohibited from living near their jobs, or families who had their houses firebombed for daring to move into a segregated neighborhood while police stood on their front lawns and watched…you remember that policy matters because it affects real people. And that real people suffered terrible wrongs for no other reason than the accident of their birth. Again, if you care about US housing policy, you must read this book. It’s impossible to understand where we are […]

People Over Process: Why Democracy Doesn’t Justify Exclusion

Some people accept the idea that restrictive land use policy is just as bad as all the research suggests, but persist in supporting the status quo. They argue that if a community chooses to regulate its built environment, that choice should be respected as having moral weight because it’s the outcome of a democratic process. This argument, though, is as logically confused as it is normatively problematic. And in the following few lines, I intend to demonstrate exactly why. No decision making process is value neutral. Whatever way we choose to go about collective decision making, we will always privilege certain voices over others. Institutions beget outcomes and the internal logic of our institutions will always favor some outcomes (and therefore voices) over others. The same individuals with the same preferences asked to make the same decisions through different procedures will produce wildly different outcomes. Imagine a U.S. Presidential election based on the popular vote or representation in the U.S. Senate proportional to state population and you should begin to see how the public will is as much a product of procedure as it is aggregated individual preference. Taking the Bay Area as a land use specific example, our system heavily favors the voices of incumbent homeowners to the detriment of everyone else. Land use decisions take place at the municipal level which–given the fact that we have 101 different municipalities–is a hyper local affair. When a new development is proposed, it only takes a handful of angry neighbors to impact decision making. Were land use set at a higher level of government, the typical number of people that get angry over an individual project would be far less effective at killing new housing. Fifty angry homeowners might matter to the Palo Alto City Council, but they’d be quite a […]

The Other Broken Window

My first article for TheFreemanOnline dealt with the “broken window fallacy.”  But in the literature on social theory, there’s actually another important idea that also uses the metaphor of a “broken window.” In his comment on The Freeman’s Facebook page, Flavio Ortigao raised this point when he wrote: …I do not quite follow the putative analogy with broken windows theory. In many case[s] “broken windows” has been used as an analogy for the necessity of not allowing the degradation of public space/utilities. Inferring that there is a psychological effect that compounds the problem. I think [it] is very important that cities do not surrender to vandalism. This has little to do with the situation of Haiti, struck by a natural disaster. Mr. Ortigao is right.  The idea to which he refers does not directly relate to the Haitian earthquake or to other situations in which destruction is supposed to create wealth.  That’s a different “broken window.” The typical way to commit the broken-window fallacy is to argue that a natural disaster, war, or economic crisis is actually good for an economy. The idea is that if the event causes an increase in spending on infrastructure or war materiel or what-have-you, the “new” demand will stimulate the economy and create more wealth than there would have been otherwise.  But that’s not what Mr. Ortigao is referring to. One of the articles I assign to my students is George L. Kelling and James Q. Wilson’s “Broken Windows” (1982) in which they say:  “…one unrepaired broken window is a signal that no one cares, and so breaking more windows costs nothing.”  This would also apply to trash left on the sidewalk or drunks sleeping on benches, that sort of thing.  And because “disorder and crimes are inextricably linked,” a community that tolerates minor […]

Parking In A DC Bike Lane Is Extremely Cost-effective, For Drivers

This month, the Washington Area Bicyclist Association (WABA) published an analysis citing traffic ticket data to illustrate the following point: Of the 723,237 parking tickets issued in this 5 month period, only 2,420 were for parking in bike lanes. That’s about 3 out of every 1,000 tickets. That comes to about 16 tickets per day, spread over more than 70 miles of bike lanes, or one ticket per day for every 4.5 miles of bike lane. This extreme lack of parking enforcement jives with my biking experience, during which I routinely have to dangerously swerve, often abruptly, out of the bike lane into car lane traffic due to a car or truck in the bike lane. I wanted to answer, though: What percentage of bike lane parking violators do DC police actually ticket? Let’s use my anecdotal experience to make some simple back-of-the-envelope calculations. There are 70 miles of DC bike lanes that function 24 hours a day. This comes out to a total of (70 miles) * (24 hours) * (60 minutes / hour) = 100,800 bike lane mile-minutes per day. Here are two measures based on anecdotal evidence: Observed area: My commute to work each day, 95% of which is in bike lanes, takes roughly 10 minutes each way, meaning I experience: ((10 minutes) * (1 mile) * (2 daily trips ) * (95% of trip in bike lanes)) / 100,800 total bike lane mile-minutes = 0.01885% of all DC bike lane mile-minutes per day. Violations: On my commute, I see on average 5 parking lane violations each way for a total of 10 daily violations. These infractions come in many shapes, most often: cars waiting outside a building or sitting idle in traffic, trucks or vans parked while making deliveries, or buses forced to cut across the bike […]

The Cato Institute Goes After Arbitrary Historic Preservation Laws

Historic preservation rules are part of the regulatory framework of most major American cities. But the historic districts in which they are generally applied get little inquiry from economists, meaning little is known about their nationwide scope and economic impact. And even between municipalities they can vary, depending on the precedents set by different circuit courts. Now the Cato Institute, a libertarian Washington think tank, is filing a brief that aims to bring consistency to these laws nationwide. In a 2014 study by the National Bureau of Economic Research, a group of urban economists led by Ed Glaeser found that historic districts in New York City experienced less construction, and affected where in the city developers build. More importantly, the economists found that preservation laws were costliest in neighborhoods where redevelopment would have been most valuable. Another paper, published in 2016 by NYU, to mark the 50th anniversary of New York City’s preservation laws, explored the relationships between historic districts and the type of buildings built, the type of buildings preserved, demographics of the residents in historic districts, and more. The evidence presented in both studies suggests that historic districts do indeed alter the human geography of cities. It validates William Fischel’s observation that “historic districts thus operate as another example of the double-veto system that state land use regulations add to municipal regulation except that in this case the potential veto arrives prior to municipal review rather than afterward” (Zoning Rules!, Page 62). In Nectow v City of Cambridge, the Supreme Court held that Massachusetts violated due process by “arbitrarily and unreasonabl[y]” imposing restrictions on certain land, in a way that did nothing to protect the public (which was the original rationale for land use regulations under the earlier Supreme Court case Euclid v Ambler). That said, the rules about which historic […]

The Stealth Guide To Nimbyville

Hovering somewhere just beyond all the land use zoning regulations, building codes, finance mechanisms, aspirational comprehensive municipal plans, state mandates, and endless NIMBYism lies… reality. If you happen to want to live in certain parts of coastal California you need to come to grips with a serious supply and demand imbalance. Demand is endless. Supply is highly constrained. And there’s a huge amount of money on the table. Horizontal growth is essentially verboten. A powerful coalition of existing property owners, environmental groups, resource allocation schemes, and multi-tiered government regulations stymie new greenfield development. The personal interests of conservative Republicans and liberal Democrats line up exactly when anyone attempts to build anything near them. “Over my dead body.” It’s understood that if a town accepts endless low density horizontal development the overall quality of the area will decline. You can’t have expansive large scale suburbia without paving over the countryside, creating a great deal of traffic congestion, and inducing strip mall blight. At the same time, no one wants infill development on existing not-so-great property that’s already been paved over and degraded. The neighborhood associations break out the pitch forks and firebrands at the suggestion of multi-story condos or (Heaven forbid) apartment buildings. The population of any older suburb could double or triple without using a single inch of new greenfield land. But that kind of growth is feared and hated. So the aging muffler shops and parking lots linger in the middle of a massive housing crisis. Google Google Google On the other hand there’s radically less regulatory or community push back against expanding and improving existing suburban homes. Google Street View makes it possible to observe how a little post war tract home was transformed into a substantially larger residence. This kind of growth is entirely acceptable. The building […]

9 Barriers To Building Housing In Central City Austin

The Austin area has, for the 5th year running, been among America’s two fastest-growing major metro areas by population. Although everybody knows about the new apartments sprouting along transportation corridors like South Lamar and Burnet, much of the growth has been in our suburbs, and in suburban-style areas of the city. Our city is growing out more than up. How come? The desire for living in central Austin has never been higher. But Austin, like most cities, has rules that prevent new housing from getting centrally built. That makes it easier to buy and build on virgin land in the suburbs. Here are some of those rules. 1 MINIMUM LOT SIZE Historically, expensive houses were built on expensive, large lots; cheaper homes were built on smaller, cheaper lots. Austin decided that new houses can’t be built on small lots. Even if you want to build a small, cheap house, you still need a lot with at least 5,750 square feet. In central Austin, that costs a lot of money, even without the house! If somebody owns a 10,000 square foot lot, they aren’t allowed to split it into two 5,000 square foot lots and build two medium-sized houses, let alone three 3,333 square foot lots with three small houses, let alone three 3,333 square foot lots with triplexes! In 1999, Houston reformed its minimum lot size laws. Since then, environmentally-friendly central-city urban townhomes have flourished.         2 MINIMUM SITE AREA For areas that are zoned for apartments and condos, there is a cap on the ratio of number of apartments to lot size known as “minimum site area.” 3 IMPERVIOUS COVER MAXIMUMS Impervious cover is any surface that prevents water from seeping into the ground, including buildings, driveways, and garages. There is a cap on the ratio of impervious cover to lot size. 4 FLOOR-TO-AREA RATIO MAXIMUMS Floor-to-area ratios (aka FAR) maximums are a cap on […]

Reforming Zoning in a Kludgeocracy

To market urbanists and many others, it’s clear that there is a positive relationship between high housing costs and land-use restrictions and that liberalizing zoning would lower housing costs relative to what they would be in a more regulated environment. Given this relationship, reducing zoning would improve efficiency in the housing market by allowing consumer demand to drive the amount of resources that are put into housing development. However, land-use reform would also affect other policy areas such as public schools, transportation infrastructure, and sewer and water provision. Predicting how a liberalizing reform in one policy area will affect the complete public policy landscape is as impossible as predicting how one private sector innovation will affect other markets. Political scientist Steven Teles coined the term “kludgeocracy” to describe the complexity of contemporary American policy. For example, zoning has become a tool to make high-performing public schools exclusive, even though land-use policy and education policy are seemingly unrelated areas governed by different agencies. Because providing zero-price quality education to every child in the country may be impossible, zoning is a kludge that allows policymakers to provide this service to their high-income and influential constituents. Teles describes this policy complexity: A “kludge” is defined by the Oxford English Dictionary as “an ill-assorted collection of parts assembled to fulfill a particular purpose…a clumsy but temporarily effective solution to a particular fault or problem.” The term comes out of the world of computer programming, where a kludge is an inelegant patch put in place to solve an unexpected problem and designed to be backward-compatible with the rest of an existing system. When you add up enough kludges, you get a very complicated program that has no clear organizing principle, is exceedingly difficult to understand, and is subject to crashes. Any user of Microsoft Windows will immediately grasp the concept. […]

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