Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
For over a century, policymakers have argued that homeowners take better care of their neighborhood and are just generally more desirable in other ways. As early as 1917, the federal Labor Department created a propaganda campaign to encourage home ownership. And in 1925, Commerce Secretary Herbert Hoover wrote “Maintaining a high percentage of individual home owners is one of the searching tests that now challenge the people of the United States…The present large proportion of families that own their own homes is both the foundation of a sound economic and social system and a guarantee that our society will continue to develop rationally as changing conditions demand.” In many ways, Hoover was successful. In 1920, about 45 percent of households lived in owner-occupied housing; today, about 64 percent do. Mass homeownership might have had no negative side effects in a society in which most people live in the same house until they are dead, and as a result are not overly concerned with the house’s resale value. But in modern America, people often hop from one house to the other, selling houses when they move, retire, or just add another child or two to their families. And when people expect to sell their homes in a few years, they naturally want those homes to get more expensive (or to use a common euphemism, to “appreciate in value” so homeowners can “accumulate wealth”). To help achieve this goal, homeowners have a strong incentive to lobby government to use zoning codes and other regulations to limit housing supply, in order to help homes get more expensive (or in zoning-talk, “increase property values”). And because government has been quite successful in doing exactly that, housing costs have exploded in many metro areas, which in turn means that more and more people cannot afford […]
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.