« The Weeds

The year of housing reform

2020-02-21

Mercatus' Emily Hamilton on what's working and what isn't to increase housing abundance.

Guest:

Emily Hamilton, (@ebwhamilton) Research Fellow, Mercatus

Host:

Matthew Yglesias (@mattyglesias), Senior correspondent, Vox

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This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
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your essential tools into one place where you can prioritize tasks: collaborate in Docs chat with your team and track goals, so companies like uber and web flow use click up. Is their mission control Center, replacing every other app that we're using before click up even guarantees to help you save one day week and get more done. It's completely. Customizable is free forever, so try click up today at click up dot, com, slash the weeds. If you know me, you know my podcasting, my writing, my tweets at all. You know that I love housing policy, Emily Counter just one of my favorite thinkers writers. On the subject of housing, she said the Mercator since do which studies state local government, as she's gotta, you know of real libertarian market urbanists perspective on this. I have learned a lot from her over the years and I think we will
hello. Welcome to another episode of weed on the box media podcast network, I'm Matthew, Glacius, my guest today, Emily Hamilton is a research fellow at the Mercatus center. She does a lot of stuff on state and local housing policy, which is a loved topic of mine, as weeds listeners know and this has been a really sort of exciting winter and would receive a lot of state level. Legislative proposals come out on zoning deregulation. Basically, I know I've written about one bill, that's in that's in Virginia, but you were just telling me this avenue, Nebraska and elsewhere me. What's what yeah thanks a lot for having me Matt in addition to the Virginia bill. Just last week, a legislator in Nebraska introduced a bill that would allow for,
missing middle housing type policies, so things like duplexes, try, plaques small apartment buildings that have maybe four units in them to be lt everywhere, that single family homes are allowed in the state in towns. I have at least five thousand people and were also acting a Marilyn bill that would similarly allow for small, multi family types of housing to a belt and parts of the state where transit serves people well, as well as neighborhoods that have particularly high income residents or particularly high concentration of jobs. Ok read so those are the Miami. These are sure to one that contrasting, but, like slightly different philosophies, obviously reflects the different situations. I think, if you tried to Jane Zoning near transit,
Nebraska you're going to get a lot done that way right exactly do they have a pick housing, affordability, problem in Nebraska? Actually they do Omaha and Lincoln have seen pretty rapidly rising prices in in recent years, and they have about forty percent of their renters Omaha are caused bird and meaning they spend more than thirty percent of their income on rent each month, and I imagine Alma has existing sir built environment is a lot of single family land to at random. It's it's a city by Nebraska standards, but not like you know, a towering metropolis, that's right, primarily single family housing for sure, although, since the financial crisis, like the kind,
as a whole Omaha has seen an increase in multi family permanent, but also broadening out the sort of scope for for doing that in Omaha, Lincoln would make it would make a real difference. Yes, yet so best answer that the Virginia bill, which was interesting. I first read about this and our goal of a friend of mine wrote that quoted you? The idea here was to say you could build duplexes, basically anywhere, all throughout all throughout the state, which is interesting, just the sort of lack of targeting at all in that vision and some level sort of appeals to me, but doesn't seem to where most politicians have have taken. This yeah, delicate Semira in Virginia has two bells are one that would allow duplexes across the entire state. As you said, on all land, that's currently zone for single family housing and
Another that would allow all single family homeowners to add accessory dwelling in it, so they're, both bills. That would essentially allow people to go from one united, two units on single family zone land across the state and, as you said, unlike what we've seen in in California, or on what we, their Marilyn Bell will look like the Virginia, oil is very broad, has no focus on transit or income or any other factors, but just allows two units across the entire state. I think that's actually makes a lot of sense, particularly on the EU side, because health Affordability is a problem in rural and urban communities in all parts of of the state, and eighty use can be a really flexible. How form that homeowner can build for saying
aging relative or an adult child two's moving back home, regardless of where they yes or a uses, interesting idea that I think we have an added embodying onto to talk about but cut. California has made big eighty. You changes in recent years and- and I think that has given people the sense that this is maybe lower hanging fruit. You not politically that then some others have. So what what is this mean like an accessory dwelling unit, as I think that like a Tom, regular people. Leftism there has probably not an accessory dwelling unit, means a an additional home on that. On a homeowners, property or or up landlords property. In some cases that has one kitchen and bathroom and is distinct from the the principal dwelling, but it can be a basement apartment. That's the most common type of accessory dwelling,
unit in DC or in LOS Angeles, we're seeing a lot of ads being Tat are at grudge, conversions or just separate backyard cottages that can be arranged it out or given to a family member. Yes or I am actually be the owner of an accessory dwelling unit exciting staff and, and so in D C, woods, woods, com and right is a lot of the neighborhoods. These kind of four story, warehouses and you can build them to be a worthy there like three stories in a semi basement. If people
are not familiar with, but DC not, and so you could have. The whole for story is for your family. Another thing you see is a lot of them are cut to be like two to four Munich right that are either condos are randalls, but then another common thing, like my house, is you have the top three floors are usually where the homeowner and his family lives and in whose abasement that runs out to two other people and that at least the this spirit of the accessories dwelling unit is that it's like a basement towards a garage. Some part of your house that you have then renovated to have its own entrances on kitchen, its own sort of supplemental thing. People snows call it like Grannie flats and went with with the idea that it would be a family member, but in these bills have they don't actually require that right. I mean the ideas to to use the concept, but really just to generate extra rent
That's right! Some jurisdictions have kind of outdated accessory dwelling unit language where they'll say it cannot be out. It can only be used for gas. Sir, you are. Hair or made or whoever he whom I want to live at your house, but these newer bills that are focused on allowing a new path for relatively affordable rental housing do don't require them to be free, they can they can be rent, and one thing that the California experience has shown is that it is important not to have owner occupancy requirements for the principal house it when allowing accessory dwelling units, because that makes it more difficult to get financing for them, because if the homeowner work to foreclose and the bank were too oh, my house, they wouldn't then
able to rent out the little guy. Ok, yes, those who has this is an important new ones right. Ok, so one where you could think about it read sit sit up like the big picture. Is people are looking to find ways to increase the supply of housing right? It does not freak out the problem, too much rain, and so ok, if you're a homeowner, you should be allowed to convert your garage into an apartment that sounds pretty nice, most single family homes occupied anyway. So me We can stipulate the owner. Occupant needs to be living in the main dwelling right, but the problem is you want people to be able to get loans in order to do these conversions and the bank? The reason you can borrow money for home renovations for mortgages on relatively affordable terms is, if worse comes to worst. The bank can take your house
and those renovation have then added value so was safe for the bank to make that went so I saw a normal. You know: construction loan processes like the loan officer that they look at your plan. Read the disease, make any kind of sense, or is he just stealing my money in the same now he's renovating now and so either how pay the loan or else will get the new renovated house right. But because the bank is not known or occupant, it can't lending money to build and eighty you, if one in four clauses on you it then can't rented right right. Homeowners may be able to get cash out, refinance and wore a home equity line of credit to build that. Eighty, you without having the eighty you as as collateral, but that that serves the bank, but it is definitely makes it more difficult for the Virginia bill would pre empt.
I can see requirements from the outset where did so, and so that makes it easier for people to just go. Do them and the appeal this I mean so: these these coming units, they tend to be small and relatively cheap as well. Just supply makes things cheap, but also doesn't it doesn't change? The sort of luck of thick stem try right right. Typically, if it's a back our cottage, you might not even be able to see it from the street. I did he's basement apartments. Look the same whether or not there being rented out as as separate units. So there there are very mild way of of allowing more housing to be built from a visual perspective. Right. Andy and those delegates mirrors build the duplex his bill. Even is sort of the same in that regard right, like he's
not changing the rules about what kinds of structures you can build, just saying that it could be it to unit rather than a big house as I right. That's he will leave it up his bill would leave it up to localities to determine things like setback requirements. So that's how far the house or duplex can be set free. Property line. How many Finland has to be as well as things like design standards and parking requirement right. So in some ways that are more limited, its very broad change right he's not limiting it to particular areas, but it's a sort of modest tweak and in some ways right? It's not like you can the aid that the ideas it like like neighbour, important practical sense. They words were not necessarily one looking very different under that were Ghana tried it would really be. To the local rules. How much change in combating would be allowed yonder, and I think the experience
California who could get carefully it now. There are a lot of new eighty use being built right, but it actually suited the they passed a bunch of different laws before that happened, because you can, you can do one regulatory change, the local governments at la of discretionary powers that they can sort of swill been and and start use, unless you sort of keep knocking it down. That's right, particularly in LOS Angeles. There are quite a few accessory dwelling units being built of a couple thousand a year seems to be the current rate, but that's only recent. Yet the first state bill that attempted to make homeowners be able to your belt accessory dwelling in its in California was passed in nineteen eighty two, but the heathen several bells to actually make it feasible on a broader,
yeah. I mean when I thought about that when it when I was reading about that that the smear bill in Virginia, because if you leave parking requirements and local governments hands, They can pass a law that says well, you know you can build duplex. If you want that the state requires that, but you need twelve parking spots and ends so then you can't actual that's very trail, and particularly when we're talking about accessory dwelling units. These are something that homeowner are building. These are not development professionals their typically a very marginal decision that only going to make sense for the homeowner. If it's very clear they can make money by Putting this investment in and construction costs in high cost of living cities are, are very high, it's difficult to make it feasible and make it worth while to build accessory,
going units that are profitable. So when local governments come in and say you have to build an extra parking spot, you have to pay a twenty thousand dollar fee in order to hook up your accessory dwelling unit to utilities, these rules that might seem pretty minor, can almost eliminate the feasibility of excess redrawing units for him and so it comes down to both like do the local governments like actually want there to be more housing and then secondarily, if they don't like, can the state like take several bites at the apple until you break break the will sort of nimby, local governments and make them give in, seems like that's what started to happen and in like the local was angels political cultures very hostile to housing cook compared even to the other big California cities, but isn't enough new eighty you as were pass than now now they can't stop
yeah. I think that's right. So you know so I ve been so it's if it's interesting to see is sort of other states start to get started, get interested, but it will be it'll, be kind of a long journey, let's take a break, and then I want to talk about so your new research so you don't rush hours in the day to get everything done. It might be because you're missing out on three of them. Where does where's girl. They probably fell into a deep dark. A bits opens up when we switch between work address three hours to all the productive time we miss out, thanks to add home distractions, disorganization fatigue. It's no wonder the days feel too short. Work should work and with click up it does cook up is a flexible productivity platform. That brings all your work into one place. That's all you chat, apps, docs and tasks. One place kind place like mission control companies like and Google use click up to make their days more productive and manage projects, people and goals more effectively,
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as weeds and join the over one million people who have taken charge of their mental health with the help of an experienced better health professional I've got a number of guests on the show. I think talk about housing. I think mostly from a sort of left liberal perspective. Although everybody, I only allow people on here who think we should have more houses for people, you come from more of a free market, institutional background, ideological background, and I know one of the things you've been working on is inclusionary zoning regulations which had become adding pray popular in liberal areas of the country, and I have always sort of wondered. You know like what what does, including his own mean likely houses were yeah. This is the term inclusion area. Zoning indicates that its intended to be the opposite of x,
Generic zoning, exclusionary zoning are all the regulations that make it difficult and expensive to add new housing, so minimum lot size requirement single family zoning. Those are all types of exclusionary rules inclusionary zoning either requires developers to build a certain percentage of below market rate units as a component of a new housing project or tries to incentivize them to build some below marking market housing requirements through density bonuses, most enclosure zoning programmes have a density bonus component, so say a develop wants to build a hundred unit apartment, the locality might say you can build a hundred and twenty unit apartment. But thirty of those new units have to be subsidized for,
people making a certain amount of income, and so I mean basically this is, I guess nobody wants to raise taxes. This is sort of an alternative to having an explicit like tax, and then the government would create subsidize housing is to say, ok, landlords as not little builders as a condition of building need to sort of take the laws on creating a number of subsidized units and, and that is supposed to generate affordable housing and also Market has yes, yeah. That's right the ideas that it allows more housing as a whole to be built, but requires that some of that housing in subsidies and that's a man to answer the sort of
section that out of this new staff that the people are building lecture units, new housing is more expensive than old housing. This is doing anything to help the people who really need you say: ok, here's like a direct benefit right. We high axe subsidized units coming on as part of this project So it's good right, but has a good well. So I studied including rezoning zoning in the Baltimore Washington Region, where about half of the jurisdictions about twenty something of the jurisdictions in the region, have inclusion area zoning programmes. And I find that the mandatory inclusionary zoning programs can be expected to increase market rate home prices by about one percent per year. That program is in place, so that's a pretty significant increase in market rate house prices to compared compared against the relatively few units that
he's owning programmes have produced of you. So it generates new sub market units, but it raises the price of market rate housing exactly and is that because less stuff gets built because you have to pay for the cross subsidy? What's the with the mechanism? So one thing that developers say that that's borne out by my research is that under inclusionary zoning programs. They can only build very high end new homes that are able to subsidize those below market rate units and in order to take advantage of the density, bonus, sometimes developers are moving from a walk up building to an elevator building which is much more expensive to be built, so under their inclusion rezoning programme, their building of,
very high and new Margaret homes in order to allow for the below Marguerite units to pencil out and the housing market as a whole becomes more expensive. Even though a few new units are below Marguerite prices read. So if you try to think about this mathematically- it's like the structure class, a certain amount to build, and then there's gonna be an average Wendell income by right across the street. And, if you say some share of those units have to rent out at a very low price that creates an incentive to push up. The
the price that you need so tat when people say some right, eight people sometimes get obsessed with the high and finishes and and whatever else, but it doesn't. It further doesn't make sense to just sort of bill like blah housing. If some of it is going to have to be went it out at law us, then you need to sort of make it up by making the fanciest thing you can do yes gathered right. An optional programmes that I looked at in the Baltimore Washington region are also really interesting, There are nine optional programmes across the region, but only two of them have produced any units, that's Alexandria and false church, so it wouldn't yet what do but makes an optional increase
zoning? So under these programmes, developers don't have to provide below market rate units, but they can if they find that the jurisdictions density bonus, makes it worth it so that the density bonus is worth more than the cost of providing these units. The developers will say sure okay and both the Alexandria and false church programmes that have produced a few units under these programmes have produced about a hundred so not not allowed by the stretch of below market rate units and either to jurisdictions that otherwise have very exclusionary zoning. It's a very high cost jurisdictions that are close to DC and offer lots of nice quality of life features but its very difficult to build housing in any other place because of lots of single families. Zoning and lots of historic preservation,
girly in Alexandria, I mean it s the issue there is: it's gonna come into how biggest density bonus by actually that's that's one piece of it, but is also so how? Overall exclusionary is the jurisdiction? Zoning policy? If you have a jurisdiction where home builders can build as much housing as is profitable, that density bonus doesn't do them any good, they're, already building as much housing as they want to. But if you really ratchet down the amount of market rate housing, you allow to be built that density bonus can become very valuable ball, because housing is so constrained and prices are so high as a result. Right so I mean it's a bit. It's a question of like the the delta right between like. What's the exam
staying regulatory constraints, and what are you actually allowed to do as as a bonus, so I mean in theory, you could take like the most exclusionary part of metro area and say as long as ten percent of the units are affordable. You can build, however densely you want, and I would probably generate like a lot of affordable units right- yes, but that's not how it's done is typically pretty minor density bonuses. Right right, but I mean that's just to say it's like people, sometimes ask me about inclusionary zoning, and I never know what to say, because it well a because I have a research
tell her big, as I always tell them my great actually Japan's black book, would you do specifically relic what I just sketched out like that, would be inclusion or donating it. Just nobody does the right right like that that that's not like the actual intention, I think, of these programmes right. I am very cynical him how local policymakers intentions with inclusion areas owning programmes. They allow policy makers to appear as if they care about having affordability and are doing something to improve it without reforming.
Exclusionary zoning rules that are causing the problem in the first place. Where, where it again, I mean you know- and I think you saw a version of this in New York. What went to Bosnia was first elected and I think he thought his administration seem to take at face value. Community complaints about development in New York, where you people say different thing: is about why they don't want new housing to be built depending on where they are and what's considered acceptable locally. But if you go into like a very blue city- and you want to build staff and people need to give you reasons why should be allowed to, they will often say that they would be more open to your development if there was more affordable, and I just feel like the experience that they had their newer with inclusion with inclusionary and and propose like that. That is that that's on actually true right leg,
When will you come in with I'd sure we're gonna, greatly increase density, but some of the units will be subsidized like that that doesn't like suddenly transform it everybody's happy right, sometimes from there. The argument moves too, we only want a hundred percent affordable everything or or in other directions of concerns about new housing and waited go higher and higher and it's you know it's different right. I mean, if you come into like a republican suburb and you say let go, we should build apartment buildings here. People will just say, like no widow wouldn't want that to be a lot of, like in, like big liberal cities, people give you a lot of fake reasons and then- and then you know I don't know you know it's like again like in theory, you could do it right, like in the most exclusion in places like you could say like a like we're, gonna have broken, have inclusion, zoning and decide. Then you can do you not go, not spilled
but but in practice they're not generating right and, as you said, one thing that's appealing to local policymakers about about inclusionary zoning is that they don't have to spend any tax money on it. There are no fiscal trade offs being made, but if they, if it's worth having this, these mixing whom buildings it's worth paying for tax dollars and a wooden in that case then have to be a new construction buildings. Localities could purchased condos, or give tenants income to rent apartments in what would become mixed income buildings, but they generally prefer to go with the tax. Free wait, and I think it's a good. It's a good test of like what's really at issue here right, because if you
when you do things regular band aids, you get a little bit of what you mandated, but you also just get less construction and often times that can beat up the reason. It's like you. Don't you don't really want the community benefits you want developers to say no, I'm not going to provide the community benefits and then he gave the permanence right right is the point of clarification and my study, I actually don't find a significant effect on the construction site. I just fine that it's a tax on on housing met seems to be borne out through higher construction costs of other research. I inclusion Arizona has found both that the programmes have reduced building permits and lead to higher pay okay. There you go all kinds of it right, and so, if you know, if you say like look, we want to create more affordable housing, it's gonna cost x dollars we're gonna. I mean you could raise
taxes also allowing market reconstruction increases your tax base right absolutely right. So it's it's not it's on a problem, if you're sort of willing to accept that, but people generally so who is who is like the worst inclusion, zoning So that's a tough question. Harford county in Maryland has a mandatory inclusionary zoning program with no density bonus, so they're not trying to the the cost of providing the below market rate housing units at all. So that's that's! A pretty bad one the other thing that I used to live in a candle building in DC that was built under an inclusion zoning.
Four and then they were having this weird weird. But it was like because it was a kind of building. They had to get tenants who could buy the condos, which meant they had to get people who get loans from banks, but also he was supposed to be for poor people who I've Erin if they could get the mortgages like they wouldn't be qualifying for the programme at all, and so is it was vacant for year I mean eventually they they got somebody into the units, but it was a very strange kind of situation and I think genuinely not what anyone like intended from this system right. The owner, occupant inclusionary, zoning programs are difficult, and so they require someone who has enough money to purchase the. And oh, but a low enough income to qualify for the inclusion areas owning programme so oftentimes. These are people who perhaps
the trust, fund and low paying. You know our job in the arts. I like that, not that not the people who we should be most concerned about being able to afford safehouse sort of intended beneficiaries of these eggs. Ok. So, but what would be a better thing for jurisdictions? To do like say, say you do you around the city council? You are very worried about housing, affordability, you you want to do the right thing, but what should focus on ensuring that more housing is is being built in that lower cost type policies are being allowed, so missing middle housing like we we talked about earlier, is typically the the lowest cost mix of land that shared across multiple households, but also isn't as expensive to build as
high rise apartments are condos and then subsidized those households that meet it with money, not through weird regulatory programmes that have at best ambiguous effects on affordability over all other, such about construction costs and and missing middle cause. That's not, I think, that's also a term that a lot of people know so, what's what The middle. What's missing about so missing middle housing is anything that's between a detached single family home, and a large apartment building, typically an elevator building. His is where the cup point is
That could be an accessory dwelling unit. It could be townhouse as it could be, walk up apartment buildings and these these types of homes are are much less expensive to build than highrise apartments on a per square foot basis, because there are typically stick belt, which means there not dealing with steel construction, which is more expensive and they don't have elevators which are expensive both just to build an because they are taking out some of the space in your building. That can then be used for housing of you. So basic single family home in America is built out of wood by distance, would forums big apartment. Buildings are stealing concrete right as though, and bigger farm buildings of elevators signals.
My homes, don't as it was at the missing middle right to think about it. It's not a single family home, but it's probably built at a word, doesn't have an elevator right right, and so it's cheap like a single family home, but uses land efficiently like a taller apart, yet and that's that that's why it's cheap right? Basically- and I guess it's probably when she ran- Means cyclists walls- I don't know. If that's true, I got you get
your sharing, a lawyer, sharing a roof and their more energy efficient. Also for that reason, rats, so that's the sort of cheapest type of per unit to construct is like a like little apartment, buildings or town houses. Things like that an and we say missing middle because it's become typical for cities to require single family like almost everywhere and then have like a couple. More, like signature development projects, where huge towers get back, that's right and it's a partly just a factor of how much land is is designated toward multi family housing. If you have two percent of your jurisdiction, that's where multi family housing can be built, and you have high costs that land is definitely going to accommodate, is, as many apartment says, the developer can pack onto it.
If you allow for multi family housing to be built across the jurisdiction will tend to see more of a mix with high rise development, men's where land is most expensive, but then missing metal being built in places that are a little bit less expensive, and I think the fact that missing middle housing is missing itself generates a lot of sort of misperceptions in people's minds. They He'll say like it sitting. I hear often about yeah, all or washing. You see other cities that do have a substantial sort of tower building happening is like this crazy construction going on coral quote everywhere and then, when you ask them, is a wall like how much of the city has big apartment hours when building you, of course,
Not that much. But it's a! U can't even conceive of what else could be happening in neighborhoods that, like aren't central enough to have that kind of thing right I live in Arlington Virginia, which I think is the poster child fur missing metal housing because It really has allowed a lot of highrise construction along its metro line corridors. I live in one of those buildings, It's it's really a national model for that type of transit Orient Development, but our ten single family neighborhoods have accommodated basically zero housing. And we're seeing a lot of single family homes in county being replaced by new, extremely expensive single family homes, where as if missing metal were allowed, we would see those older single family homes being replaced by duplexes.
Townhouses, maybe even you know, mid rise apartment construction when a builder can assemble a couple of single family homes together. Your lives is crazy. At a great example, that's so this is you know this sort of closest in suburb of DC when Metro was being built out. Measures new, unlike you know, New York, Subway or Chicago L is built in the seventies and a lot of the suburban jurisdictions wanted to build it s kind of like commuter rail system. Running and Medians park and rides, but it was like kind of visionary. They said they will pay the extra rate to tunnel it. So boulevard at the stations are closely packed, then they re zoned, but where the stations are, and so now
If you, if you read the metro to clear and in and you come out, you're back, this- isn't the suburbs now there's like tall buildings around. But then, if you walk like ten minutes perpendicular to the metro line, it is really the suburbs right. Yes, you ve got com, Vienna, single family homes that cause tonneau money and often, if you post, to them. If they're older, they're, like not that fabulous or anything right, just the land is really expensive right. So one thing you could do with that: expensive land is put like four like okay houses on it right, but that's not a lot. That's right, yeah and that's why has the land is so expensive and people who can afford to buy a single family home in Arlington have a lot of money. That's why we're seeing brand new homes replacing older one right, so it's the the other alternative is, is fine. I mean it's. It's people like to an alarm
ten in which people want to move there and by old houses and replace them with super extensive houses like good, you think, but like another natural thing to do with expensive land would be to continue that process. The juicy right next to the Metro station and you dont elevate ride like parts of DC that aren't right by metro stations are still pretty dance right, right, yeah, DC's row house neighborhoods are still fairly dense and walkable, but but is really missing that that in between density- so that's that's like the missing metal and that's also in principle, they could kind of be like scattered around right and I guess, like not super principled way. Right, like a big suburb, could just have some quadplexes hither
right right. You would tend to happen gradually, as as a home owner decides to leave the county that individual house will be replaced by something a little bed denser. I won't be entire neighborhoods at a time of it. Let us take a second break and I want to bring this back around two to state level. Action support for this episode comes from visa, helping you rethink how you drink. Cuba is a web based program that works by helping you noticed the negative thought patterns you might experience in your relationship to alcohol and then the tools you need to break those patterns rooted in weight of behavioral therapy for veto is designed to help you prepare for the future by arming you, with techniques, to help you drink class, it's totally private one percent web based, so you can occur from anywhere. You can try
viewed at risk free with sixty day money back guarantee. Now I? U s dot, for visa dot com support for this episode comes from America's leading beverage companies who are working together to reduce plastic waste in our environment. Not all plastic is the same. America's beverage companies are carefully designing. One hundred percent recyclable plastic bottles, including the cap's their bottles, are made to be remained, and they are investing in community recycling programmes to help get more bottles back, so they can be turned into materials used to make new bottles that completes the circle and reduces plastic waste. Please help get every bottle back, learn more and every bottle back dot org. So I guess in a week we didn't talk about their said at the beginning, but why is state government portent to this whole question, because women talk about zoning at this is something local governments do. We are talking about our
damn you know they ve made the choices they made the little bit idiosyncratic, definitely not the worst of any place in the country, even if it's not ideal. So what why two states want to get involved in this yeah housing. Affordability is a huge problem across not just coastal jurisdictions attend to get the most attention, but in all kinds of cities and rural and and small town areas across the country. I most optimistic about this problem being solved at state level rather than through local reform or through federal incentives to improve, and that's because localities get their authority to regulate land use from their state governments. No states setting limits on how much localities can restrict the housing development are on a very solid legal ground and they have better incentives.
Create pro housing policy than local governments do, because the cost of of building new housing is born extremely locally, and I know when you have a new new house or New building going up next to you that construction is annoying, does last awhile, and then the parking, and new new neighbours are are also cos borne by the people living right next to the new development? Better me, this is where the phrase, not in my back Yard Canada say, like look, I'm all four. We should have more affordable housing, but, like literally, if the housing is on my street, then it is harder to park. My car realism
traffic right here right and it's not like up is elegant ideological question right. It's just like literally true that more people live right where you live. That creates certain practical logistical problems for you right, right and because the status quo bias in housing is enormous. People tend to focus on only the negatives of not new construction, not that their best friend might be similar, then next door or that their needs. Head. Retail will be more likely to be able to stay in business with a few. More neighbours are supporting it, but at the local level, because the costs of housing are so local you can get mayors who say we don't need any more people here. We don't need any more jobs. We don't need any more property tax revenue, we're fine. The way we are
but you're not going to find a governor in America who's going to say I don't care about job growth in the state. Every every governor, every state, policymakers by and large support growth, support, economic development and support a growing state so see making at the state level is where are those costs can be put in perspective and the benefits of allowing new housing to be built on a more widely recognised wait, and I also think from a sort of business perspective. Right I mean if you're an employer in some measure area is probably bad for you if housing costs for your staff for potential new staff or length. The roof I'll bet you're, so dont care at all like about which particular town.
That housing might existing rights of this, like that. That potential voice ride, like like, like a business voice for growth, doesn't manifest itself at the local level in any kind of reasonable way. Read like you, you would look genuinely not make sense right for the ceo of Like Enormous Corp too, like be worrying about what some particular supper is doing. If the state legislature is considering a bill right that well, like greatly, will make it much easier to recruit people like that seven, they might actually care about right right. And you know- and I think it's in I don't know like how much some, how much progress do think we we can really see in this idea, because it does seem also but pretty new random, and I feel like three four years ago,
there was nothing absolutely yeah. A few years ago, I was much more pessimistic about the potential for housing reform than I am today. I think that we talked about earlier with California's accessory dwelling unit experience it's going to take time for states to pass all laws that are going to be required to get rid of huge barriers to building new housing, but I think it will be really interesting to watch the experience of Oregon passed a law allowing missing middle housing and much of the state last year. I am to see how much effect that has alone and work, barriers remain. Just a been interesting to me is that I think a lot of what you have seen done so
I mean that the Oregon bill definitely sort of had I had a foot pretty firmly planted in the progressive camp and sort of came through as part of a package of housing reforms that included a rent control law VON Stuart who's. Talking about introducing a zoning reform Bill Maryland, like he's a varied left wing guy, I think had an hour revolution endorsement. What, when he first when for that sea and again like wants to package as with a lot of other progressive ideas. Tenant protection laws cannot mean things like that industry, showing that it would be more straightforward and a lot of ways for edgy regulatory initiative to be a conservatives to the middle idea, rather than ever,.
I left hodgepodge and I wonder, what's your perspective, you know coming from marketers. As till I wait. What do you think's going on? That is really interesting question I like to see that that Housing doesn't follow partisan, why there are plenty of of Democrats and Republicans, who support allowing more housing to be built at lots of price points and Democrats and Republicans who up who oppose that You think that the Oregon model is really interesting, that it was able to succeed as a combination of of deregulation and a tenant protections Ibrahim Samir is there in Virginia, is also part of a package of of housing bills. And if you know,
like in Oregon a mild rent. Stabilization law passes with a law that allows more housing to be built. I think that's a worthwhile compromise for sure, No I mean it. It seems perfectly reasonable to me. It just is also egg. It's been strange for much I play out. That is. That is not what I would have predicted. The sort of outcome would be and I wonder how to go
interesting wage costs would Oregon did was it was its. I think, sepia plus seven percent rang Control CAP right, which I guess from of her free market perspective in principle, to not like that idea. But that's a pretty loose cap red light like in a practical sense right, whereas like Bernie Sanders, has a proposal that does have a significant, actually bring electoral reform element, but would have a very strict when control and which I want like it's our clear that, where he'll to overly foot accomplish anything yeah, that's right. Some of these democratic lad housing bells have gotten a lot of attention, deservedly xo, because their being introduced in very high cost states. But there have also been asked him for
state moves toward promoting local land use regulations. My colleague, Mercator Swing Firth has written about some of these Arkansas, for example, passed a law, pre empting local design standards, which is really important because when you're in a place where land isn't super expensive, the way that you exclude lower Can people from living in your jurisdiction is by doing things like requiring brick, citing rather than vinyl, Satan and so Arkansas said we're not going to allow design standards that are related to her? and safety, so is like in Arkansas, like almost all the land in Arkansas is cheap you can say: will you can only build fancy houses You can only use expensive methods round. And so, and so that they're, not in that banks, yeah and in that case, is more of a stream,
word deregulatory move supported by our people, who support free markets and housing by home building by the Bye realtors, but in a blue states, the coalition's included, the laughter, and I feel that the winner that the dog that keeps now barking in in this is the state legislature of Texas, which I feel like as a disposition matter, loves overriding blue laws. There is unusual because, like I mean every state in America has like it's more conservative parts and it's more progressive parts and the progressive parts are usually cities, but Texas has really big. It is still a very conservative state and Austin now has become very expensive housing market, and I was just looking at it and it's like even like
Dallas dislike, not not what it used to be more in terms of affordability as it as its grown and even though TAT taxes raised sprawl friendly, Tori environment. So you, you know you, you can find some place to build houses, but the infidel rules in in Dallas and in particular in the doubt, the sort of fancy northern suburbs. There are actually quite strict, and there is a lot you could do to deregulate. Gatt Texas nastier did path a shock bell that requires localities to give builders a yes or no answer within. I believe thirty days yeah, that's an important step toward reducing the time that it takes to get housing approved, which is a really
flee process fur on developers and landowners sitting on alone, the whole time they're waiting for for their project to be approved. But yeah Texas are particularly in parking requirement. That would be a huge step toward allowing more housing He's about to build bridges. Popular requirements are a kind of its like back door, prevent you from building town houses in a lot of situations and at night, mall apartments right, right, yeah Houston and has done a great job of making infill development feasible. They reduce their minimum lot sizes down to a one thousand four hundred and fifty square feet, so that made it possible to place. A single family homes and desirable close in neighborhoods to be replaced by three town houses, but their parking requirements mean that the ground for of all of those is typically a two car garage
which doesn't make a very attractive. Really, I'm really weird. Looking astern townhouse, neighborhoods yeah an end in the also takes up valuable living space as mandatory car storage right You know, and I think we owe your time. I met missing middlemen and two to my mind, I gonna like twice a year to Austin for various reasons and like that is really a city you see them. The missing ness of the missing metal like everybody's perception, is that there's like an insane construction boom and is True I mean they're. There are lots of cranes and stuff, but, like still the bulk, even of of Travis County, is single family homes. By law and they're, getting more more expensive and there's lots of places This is where you know
more time. People who know how to do construction could be building small multi family units instead of just select portions of downtown. Getting these like incredible towers, read I don't know that, qualify as keeping Austin weird awash, but it would be. It will be different from what's happening now, which is like the construction of this, like stark dichotomy between like gleaming tower downtown and what's gonna, become like incredibly vanilla suburbs right. And we were talking about the objections people raised to new housing being built in Austin. A big one is that people don't want trees to be cut down in their neighborhoods for gay and environmental reasons, but it's much more environmentally friendly to cut down some trees within the city of Austin to make room for more housing round
then having people having to live farther out and commute much further in right? Yeah I mean you know. Infidel is always a minute. I guess every every loss, trees, a tragedy, but info is inherently less environmentally impact fall. Then you know growth of the develop area, and I mean I I can never tell of people mean this stuff in good faith or not. But there's like a huge difference between accordingly green space and, like a forest right. Why? This is a wildlife? You know like living in your two trees in your backyard right, the absolute so ok. So I was I to close these things out by Bascombe guest, and what did I miss? What what should I have asked? You hear what what people need to know that that hasn't been in the chair? so, going into a little bit more detail on the million different ways that localities can stand in the way of housing. Some new Jersey towns are a really interesting example of
king. What jurisdictions can do to make the housing feasible or unfeasible under roles that look very similar, so Palisades Park. New Jersey is a really interesting town that has to families zoning and has seen the majority of their single family housing stock, be replaced by duplexes that have a part. At the bottom and then too attached homes above but other jurisdictions that also have to family zoning in New Jersey have done it in ways that appear as if they allow it to be done, but don't actually so they might. They might if they might require the two homes to be only uptown duplexes rather than side by side like those which makes them more difficult to condo ended eyes, just a less appealing way to live, for a lot of people, because you have upstairs noise from your neighbors, so it really
depends on the sentiment of the policymakers, if they're going to create rules, way that allow lots more housing to be built or if they're, going to create rules that apply as if their allowing more housing to be built without actually doing so- and this is also just why in general I mean I don't need to convince somebody from up there is real value in just like having less strict rules. Even if it's not obvious to you the person reading it like what difference does it make if allow uptown versus side by side like it turns out, there is a difference right it would be hard for me to judge just looking at like a whole bunch of different provisions like which ones are important and which ones aren't it's easy to say like. Is this a bona fide safety requirement or not right, right, yeah or is this result?
And in places with high land costs, getting warehousing ran or not in that way, that does the other thing is that I think it's a point. You know if you are interested in these different servant, scent of ideas which some people are. I think you need to try to based on outcomes rather than on regulatory inputs, because a New Jersey example is a great one right. It's like it's really hard to say but good, what's gonna matter, but you can tell ok, duplex getting built here, and they aren't there right yeah, and if policy makers want to create an environment where more homes are allowed to be built, that's really the metric. We should be looking to alright there. You go okay, thank you! So much Emily Hamilton, Mercatus Center thanks Malachi Brodus, our engineer checks and
our producer and the wheels will be back on Tuesday.
Transcript generated on 2021-05-21.