What Biden’s plan to tackle housing prices is missing

“Bans on duplexes, fourplexes, accessory dwelling units, and apartment buildings ensure that the only homes that get built are single-family residences that are necessarily more expensive. The laws that dictate this are referred to as “exclusionary zoning.” To estimate the impacts of these policies, one study looked at Silicon Valley, where demand to live surged starting in the 1970s (but population between 1970 and 2010 “grew at less than half the rate that California did”). At the time, house prices there were only slightly above the national median. But its suburbs undertook a “multifaceted” effort to restrict the types of homes that could be built and “limit further densification.” Now, half a century later, house prices in Silicon Valley are “commonly ten times the national median.””

“As part of the $2 trillion infrastructure package the administration introduced last week, Biden proposed a “purely carrot and not stick” program to allocate $5 billion to a new competitive grant program that “awards flexible and attractive funding to jurisdictions that take concrete steps to eliminate such needless barriers to producing affordable housing.”

The approach is similar to President Barack Obama’s Race to the Top program for education, which also set aside a few billion for states to compete over. And in some ways, modeling zoning reform similarly to education reform makes sense — both have been designated as local issues, and a lot of the infrastructure for direct reform exists at the local level.

However, while with education everyone has the same goal of “better schools” or “better-educated children” even if they disagree on methods, not everyone agrees with the goal of ensuring abundant housing.

At the local level, cities and suburbs (often with a high proportion of Democratic voters) have enacted policies and procedures that drive up the cost of housing, often due to aesthetic preferences for single-family homes and the people who usually reside in them.” 

“Many of the most exclusionary localities are uninterested in the extra money changing these rules would give them. After all, they’ve already left potentially billions on the table: According to a 2015 study by University of Chicago economist Chang-Tai Hsieh and UC Berkeley economist Enrico Moretti, researchers find that because metropolitan areas have made it prohibitively expensive for middle- and low-income Americans to move to high-productivity areas, US aggregate economic growth was lowered by more than 50 percent from 1964 to 2009.

“It doesn’t mean it’s a bad idea; it just means that it’s limited in its ability to impact change,” Yonah Freemark, senior research associate at the Urban Institute, told Vox. “The fundamental problem we’re facing is the cities and suburbs that are most interested in excluding people are also the ones that are least needing of additional grants to pay for things.”

If Biden and his administration want to truly “eliminate exclusionary zoning,” as they claim, they’ll need a stick to go along with their carrot”


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