Well, I originally posted the beginning of a series summarizing Tucker’s Zoning, Rent Control, and Affordable Housing in July. I’m just getting back to it now.
Recently, I summarized (and just today re-posted) Chapter 1 (Introduction) from William Tucker’s Zoning, Rent Control, and Affordable Housing.
In the first installment, Tucker’s regression analysis of likely causes of homelessness led him to conclude that supply of private housing stock is what matters most, and that limitations on supply (rent control, growth control) were suspect, as contributors to reduced housing supply, and increased homelessness.
Here’s a summary of Chapter 2, “Welcome to California.” Tucker considers California housing prices in 1970, when (despite a then-desirable reputation) California’s housing prices were “in line with the national average.” What changed? Tucker cites to a study from Katz and Rosen, finding that increases in housing prices came from (1) migration to California, (2) household formation by baby boomers, and (3), quoting the study, “a massive increase in the use of land-use and growth management techniques to slow and stop new housing production.”
Tucker also notes that Katz and Rosen found that farmland, often used for new developments, was not more expensive than in other states (less, actually in 1980 than some other states). In California, however, the land might cost no more, but the price of a building lot was significantly greater (over twice that of Florida or Michigan, and more than Illinois and New Jersey).
Why? The study concluded that “[t]he high cost of developed lots in California is not caused by the high price of rural farm land….In our view, the main explanation is…local land use regulations.”
The land-use regulations that one finds in the arsenal of a municipality increase housing costs. Zoning, lot size restrictions, or — worst of all — a moratorium on growth — reduce supply, and thus increase housing costs. Less, and what’s available, more expensive.
Whitewater is surrounded with land, suitable for development. Development of that land, and removal of zoning restrictions that prevent multi-dwelling units in the old city, would increase our housing stock, offering renters and homebuyers new and affordable accommodations.
(When, in a discussion of changes to Tratt Street, the Whitewater city manager suggested that lessening of zoning restrictions in one neighborhood might be balanced with additional restrictions else when in the city, his suggestion did Whitewater no favors. See, Planning Commission 10/20/08: The Administration’s Wages of Appeasement. No net change is a net loss in a community with too many zoning restrictions, and not enough supply of the housing buyers and renters want.)
Tucker observes how one kind of regulation, say, no-growth restrictions in San Francisco, leads to harms (not enough housing stock, high prices) that compel bureaucrats to look for other restrictions to mitigate the first regulation’s harms. These subsequent restrictions take two forms — rent control and zoning restrictions (whether exclusionary or inclusionary).
Exclusionary zoning in Whitewater, with futile debates about preserving R1 in one spot, against R3 in another, is no less troublesome because it’s been less discussed of late. We’ve made no progress on this issue, as our fundamental approach is merely to find ways to enforce restrictions that renters and sellers reject. Whitewater versus the Market (that is, the free desires of buyers and sellers): look how well that’s worked for the City of Whitewater so far.
The temptation in Whitewater, though, is to find one more restriction, one more regulation, that will repair all the damage and mistakes previous regulations have wrought. That kind of multi-step tinkering is no substitute for the vastly more subtle and responsive information that derives and spreads through prices, without any regulations at all.
We have barriers to growth, and exclusionary zoning, but far less inclusionary zoning, in Whitewater. Inclusionary zoning requires units to be set aside at subsidized prices for specific categories of people. Occupants may get in through a lottery, or a first come, first served, basis.
You can guess what more of this would be like in Whitewater.
As an experiment, I would encourage Whitewater to fund an inclusionary apartment complex for the poor, with occupancy established on a first come, first served, basis. I would fully support the proposal, on one condition: that the lucky residents receiving apartments be thereafter reviewed for political, social, or family ties to Whitewater’s town fathers. The apartment complex might be for the poor, but that designation would likely remain true only if one considered poverty to include family and friendship ties to Whitewater’s self-designated movers and shakers.
Exclusionary zoning expressly tells the community who must stay out; inclusionary zoning often pretends to bring others in, but those others may simply be friends of the list maker. A lot of exclusionary, a bit of inclusionary, and still high prices and inadequate housing stock.
Next: Rent Control. Not here, but harmful wherever it is.