An article in the American Conservative argues that if there is one area in the next two years that Democrats and Republicans can work together on it is housing policy.
The crux of the article is this, housing prices have grown far faster than wages over the last several years and adjusting for inflation, the cost of a median home in the US has risen by more than 530 percent since 1950.
The publication argues that the cause is zoning restrictions where “many areas in the United States have very restrictive regulations on the heights of buildings and the use of land.” They write, “These rules, supported by well-connected, civically active homeowners, restrict the supply of housing and raise property values. Zoning regulations unnecessarily limiting construction are at the heart of the housing crisis in San Francisco and many other cities.”
You might be tempted to chalk this up as anti-environmental regulation from the right until you realize that these same arguments are coming out of housing movements in California and the Democratically controlled state legislature.
A critical point that the article makes and how this will end up pertaining to places like Davis: “Zoning restrictions are determined at the local level. Federal programs have proven useless without local reforms that allow the housing supply to expand and drive down prices.”
The article pushes back against the Low Income Housing Tax Credit (LIHTC) noting that while it provides benefits for developers to build apartments available to low-income tenants, it “is remarkably ineffective.”
The majority of housing projects that have received the credit “would have been built without the credit.” In other words, they argue, “the LIHTC is just a special tax benefit for developers. Additionally, the LIHTC has become increasingly inefficient over the past decade, building fewer houses even as program’s cost has grown by 66 percent.”
Similarly, “proposals to subsidize rents benefit landlords more than tenants—unless the housing supply increases.”
Increasingly then, politicians on both sides of the aisle “understand that to address the high cost of housing, the government must reform zoning regulations.”
You end up then with the particularly strange bedfellows of Ben Carson and Elizabeth Warren.
Housing and Urban Development Secretary Ben Carson has put forward a plan the would attack local zoning restrictions preventing the construction of large apartment buildings and multi-family homes. Under his proposal, cities could only be eligible for Community Development Block Grant if they reform zoning laws to allow for the building of new housing.
There is support for this idea on the left as well.
Senator Warren recently released a three part plan to address the housing crisis. Senator Warren’s bill, the American Housing and Economic Mobility act seeks to do three things: bring more federation money for construction. She is proposing $470 billion over ten years. Second, incentivize local governments to relax zoning rules, and pay for it by raising the estate tax.
While it is clear that Republicans will balk at $470 billion for more taxes and spending, both sides are on board creating federal incentives to reduce zoning regulations.
Senator Bernie Sander wrote in June that the country must work to “significantly” “increase federal investment in affordable housing and rent assistance for lower-income citizens.”
Senator Kamala Harris and Senator Cory Booker both introduced bills “that would offer refundable tax credits to individuals who spend more than 30 percent of their income on rent.”
Senator Warren’s Bill includes a $10 billion grant program that would enable communities to build “infrastructure, parks, roads, or schools,” under the condition that local governments reform land-use rules. According to an article in the Boston Globe, “The provision has earned praise from the so-called YIMBY (yes in my backyard) crowd, who contend that certain zoning restrictions on urban development hamper the construction of more affordable housing.”
“This proposal will attack the rising cost of housing by helping to roll back needlessly restrictive local zoning rules and taking down other barriers that keep American families from living in neighborhoods with good jobs and good schools,” she said in a statement.
Jenny Schuetz, a housing policy expert with the Brookings Institution, told The Atlantic that “the currently proposed grant program may not be enough to incentivize the communities with the strictest zoning rules, which tend to be wealthy and don’t need federal assistance for local projects.”
While it is easy to get lost in the specifics here, the major point here is the push on the left now exists to relax zoning regulations.
As the American Conservative notes: “both sides agree on creating federal incentives for zoning deregulation.” They believe, “A bill that focuses on consolidating existing, ineffective programs and turning them into engines for regulatory reform should thus have bipartisan support.”
These efforts could have a major impact on Davis – the interesting thing is that many are coming from Congress and the far left wing of the Democratic Party: Bernie Sanders, Elizabeth Warren, Cory Booker and Kamala Harris with backing from traditional conservatives who are have long sought to attack local zoning restrictions.
—David M. Greenwald reporting