“Over the course of the pandemic, home prices have skyrocketed; the underlying issue is simply that there are not enough homes for the people who need them (in particular in the places where people need to live for their jobs). This supply crisis is forcing a growing number of people to bid on a small number of available homes, thus increasing prices.
But not all “housing investments” are created equal. Generally, there are two ways you can attack an affordability crisis: 1) You work to make the item itself less expensive (supply-side policies), or 2) You give people more money to be able to afford the item (demand-side policies).
Both have their place in policymaking. But if you pursue demand-side policies when you are facing a massive supply shortage, you end up increasing prices, not decreasing them. And the nation is facing an estimated 3.8 million unit shortage.”
…
“The major constraint on building housing in the places where people are demanding it the most is zoning laws. These laws restrict what kinds of homes can be built and where, and regulate the size of homes to the point that smaller or “starter” homes are becoming incredibly scarce. For instance, a law mandating that lots of land be no less than 4,000 square feet means that starter homes (smaller than 1,400 square feet) are illegal. The history behind these laws is complicated, but essentially they are a way for some homeowners to block change in their communities, and in their original form were a tool of segregationists.
Beyond even small, single-family homes, it is illegal in most of the United States to build duplexes or small apartment buildings that could bring down the cost of housing. The White House has repeatedly acknowledged this problem, but in the Build Back Better bill, Democrats have metaphorically thrown up their hands, abrogating responsibility for the driving force behind skyrocketing home prices.
The best way to have tackled this problem would have been to tie the dollars in the bipartisan infrastructure framework to zoning reform. Iowa law professor Greg Shill suggested tying existing highway dollars to zoning reform, quipping that “there’s no reason Iowans should be subsidizing a highway from Silicon Valley to SF when the Valley makes it illegal to build homes under $1M.”
Essentially, if California wants federal dollars to build highways or transit, it’s going to need to reform policies like parking minimums and minimum lot sizes to get it. Instead, states are being handed money from the federal government to construct transportation networks that exclude large swaths of the American public from using them.
The federal government has held highway funding hostage for other reasons in the past — notably was the 1984 National Minimum Drinking Age Act, which “requires that States prohibit persons under 21 years of age from purchasing or publicly possessing alcoholic beverages as a condition of receiving State highway funds.” President Ronald Reagan also conditioned highway dollars on setting a national minimum speed limit; this was later repealed, which one study shows may have cost over 12,500 lives
If Democrats are serious about attacking housing inflation, they should put real money into incentivizing states to hold localities accountable. States are ultimately in control of local zoning policy “
“Now that President Joe Biden has signed the Infrastructure Investment and Jobs Act (also known as the bipartisan infrastructure framework, or BIF) into law, the federal government faces a new challenge: getting the funds out to states and cities.
In the coming months — and years — federal agencies will distribute billions of dollars for everything from bridge repairs to public transit expansions to bike paths. Most of this money will go directly to state governments, which will have significant discretion over which projects they’d like to fund.”
“Apple’s aggressive lobbying efforts in Georgia, the extent of which were previously unreported, highlight a pattern that has played out with little national attention across the country this year: State lawmakers introduce bills that would force Apple and its fellow tech giant Google to give up some control over their mobile phone app stores. Then Apple, in particular, exerts intense pressure on lawmakers with promises of economic investment or threats to pull its money, and the legislation stalls.”
“Contrary to what the Times reported, that policy is not “legally shaky.” It relies on the well-established anti-commandeering doctrine, which says the federal government cannot compel state and local officials to enforce its criminal laws or regulatory schemes.
That doctrine is rooted in the basic design of our government, which limits Congress to a short list of specifically enumerated powers and leaves the rest to the states or the people, as the 10th Amendment makes clear. That division of powers gives states wide discretion to experiment with different policies, some of which are bound to offend the Times.
The paper suggests that defending state autonomy is disreputable, because that argument was “deployed in the past in the South to resist antislavery and civil rights laws.” But federalism does not give states a license to violate rights guaranteed by the Constitution or to flout laws authorized by it.
Although the Times tries to tar the anti-commandeering principle as racist, the same basic idea was a crucial weapon for Northern states that refused to help the federal government enforce the Fugitive Slave Act. Today that principle likewise means that state and local officials have no obligation to participate in the “deportation crackdowns” that the Times decries.
Similarly, the ongoing collapse of marijuana prohibition—a development the Times welcomes—would be impossible if states were obligated to participate in the federal war on weed. While both progressives and conservatives might wish that federalism could be limited to achieving results they like, that is not how constitutional principles work.”
“nearly a decade after the Supreme Court ruled that states could choose whether to expand their Medicaid programs, the fight over whether to do so is far from over. So far, 38 states and Washington, DC, have expanded Medicaid, covering nearly 15 million people. In the dozen states that have not, 4 million people are uninsured who would receive Medicaid coverage if their state expanded eligibility under the ACA. More than 95 percent live in the South, they are disproportionately Black, and many are not eligible for subsidies to buy private coverage on the ACA markets.”
“One of the first things on the agenda this year for Kentucky Republicans was figuring out how to kneecap Democratic Gov. Andy Beshear. They dropped legislation in January that placed new limits on the governor’s emergency executive powers, quickly passed the bill, overrode his veto and then fought him in court.
In the months that have followed, lawmakers across the country — from Maine to California, Oregon to Florida — have proposed and, in many cases, passed similar measures to curtail the sweeping powers bestowed on their state executives.”
…
“Most governors insisted throughout the crisis that they were being guided by evolving science and trying to navigate uncertain terrain as best they could. But patience appears to have worn out for many legislators consigned to the backseat.”
…
“In some states, it has been a continuation of philosophical differences that have played out over the course of the still-ongoing pandemic. That dynamic has been particularly evident in places sporting Democratic governors contending with GOP-controlled statehouses like Kentucky, Kansas and Michigan, where conservative outrage over Democratic Gov. Gretchen Whitmer’s pandemic mandates put her in physical danger last year.
But for other governors, it has been members of their own party who have been the ones trying to wrestle back control and deliver emphatic rebukes of their state’s leadership, as was the case in New York and Ohio last month.”
…
“Generally speaking, however, the GOP has tilted far more toward limiting what governors are allowed to do by law than Democrats to date.”
“In their 2017 tax bill, Republicans partially closed a tax loophole that mainly affected higher-income people in high-tax areas — i.e., relatively well-off people in blue states. They capped the state and local tax deduction (SALT) people can take when calculating their federal income tax at $10,000. People can still deduct state and local taxes from their federal tax bill, but only up to that point.
Many Democrats — namely, those from states such as New York, New Jersey, and California — want to repeal the SALT deduction cap and go back to the old regime, where people could deduct all (or at least more) of their state and local taxes. They argue the cap unfairly drives up their constituents’ tax bills, might keep their states from implementing more progressive tax regimes on high-income people, and was a vindictive move by the GOP in the first place.”
…
“But some Democrats, Republicans, and economists are saying hold the phone.
“The vast majority of the benefits of repealing the SALT cap would go to the people at the very top. It would also be costly — and for that amount, we could finance much more worthy efforts to support American families and workers. We can say we are for a progressive tax code and for fighting inequality, or we can support the SALT deduction, but it is really hard to do both,” said Sen. Michael Bennet (D-CO) in a statement to Vox. When the Senate took up a vote on whether to repeal the SALT cap in December 2019, he was the only Democrat to vote against it.”
“The state, which has no income tax, pulls about a third of its budget from the federal government, a higher share than many other states, he said. That’s partly due to agricultural assistance and federal aid disbursed after natural disasters, but also because Texas has a large share of enrollees in entitlement programs like Medicaid.”
“Most of these bills are not as aggressive as Georgia’s, but they all undermine localities’ ability to self-rule. In this way, Illinois State University political scientist Lori Riverstone-Newell told FiveThirtyEight, they’re part of an increasing trend of states preempting local government in order to retain power for themselves: Conservative legislatures, in particular, have passed several laws in recent years that limit the types of laws municipalities can pass, including sanctuary-city protections, anti-LGBT discrimination ordinances and minimum-wage increases (especially in the South). These laws can often have what Riverstone-Newell calls a “chilling effect,” where the mere threat of having their power taken away makes local officials afraid to govern as they see fit.”