Over the last couple of weeks, I’ve been struck by the increasing appearance of housing and land use issues in the general political discussions going on locally, nationally, and even internationally. It has become one of the major issues of the politics of our time!
I want to run through some examples to demonstrate my point.
Locally, of course, I’ve been linking to and commenting on numerous news stories on this topic for months, even a couple years now. Just the latest iteration is this opinion piece this week in the SL Trib by Bill Knowlton, a Salt Lake real estate attorney and affordable housing developer, in which he says:
Utah’s housing shortage is no longer a crisis — it’s a full-blown emergency. And the time for polite suggestions has passed.
We must act boldly, immediately and without excuses.
… much more work needs to be done to change the two forces most responsible for this inflection point: outdated zoning laws and underutilized federal housing programs.
Knowlton (not Ted!) goes on to say:
One practical step is to modernize outdated single-family zoning. By allowing duplexes or smaller-lot homes in areas currently limited to single-family use, we can create more housing options without overhauling neighborhoods overnight. A smart approach might be to start with two-family zoning and, if it works well, gradually scale to triplexes or fourplexes where appropriate. It’s a way to grow with intention — preserving neighborhood character while making room for the next generation of Utahns.
On July 4, longtime Deseret News columnist Jay Evensen wrote about Why House Prices Keep Climbing. After documenting the state of housing costs in Utah’s metropolitan area, Evensen does a good job describing some of the many factors that have contributed to the rise:
The No. 1 reason is that demand is outpacing supply. Cities simply aren’t building fast enough. They quote Josh Hirt, senior U.S. economist at Vanguard, saying part of the reason is that builders stopped focusing on starter homes in the early 2000s, when foreclosure rates were high and supply was plentiful. Now, the opposite is true, but it’s hard to play catchup.
Also, recent interest rate hikes have caused a lot of people to stay put when they otherwise would move up.
Evensen goes on to note that building material costs have increased considerably, and construction labor shortages are having impacts as well. And then he, too, hits local land use:
Many cities nationwide, including in Utah, could do more to loosen zoning restrictions and allow more starter homes, condos and high-density construction, where appropriate.
Looking around nationally, there’s lots happening. On the Greater Greater Washington website (a community-driven media site and advocacy organization focused on land use, transportation, and housing in the Washington, D.C. metropolitan area), a post titled How re-legalizing starter homes cuts new house prices notes:
Proposals to lift bans on “missing middle housing” in suburban areas often result in scoffs from residents: “I do not see how the missing middle framework as planned is going to bring down prices,” Arlington single-family homeowner Julie Lee told the Washington Post’s Teo Armus. Montgomery County councilmember Kristin Mink recently expressed similar sentiments, citing “significant doubts that the zoning changes would even produce housing at the affordability levels we most need.”
The post author, GGW board member Payton Chung, offers the following advice to area political leaders:
Legalizing middle housing allows homebuilders to “make it up on volume” – sell a higher volume of units, each at a lower price, by lowering the cost of inputs per unit. Those lower costs come from both dividing land and materials between multiple units, and building smaller units that use fewer materials.
In an area as built-up as much of the Washington area is, redevelopment presents opportunities to bring about more affordable housing:
The Post’s Aaron Wiener sums up the trade-off: “When an older, smaller house is torn down, a developer often replaces it with a 4,000- or 5,000-square-foot mansion that sells for multiple millions. By allowing developers to instead build a triplex or quadplex, you might end up with several homes on a lot that sell for six figures — within reach of middle-class households”.
Chung goes on to recount the history behind large-lot zoning:
For decades, exclusionary zoning practices like single-family-only zoning and minimum lot sizes have put an artificial floor under housing prices. Even back in 1952, a Planning Advisory Service report surmised that the goal of minimum lot sizes was economic segregation rather than health or safety. What planners knew was that mortgage underwriting guidelines long made it difficult to purchase a house where the “land value ratio” exceeded 30% (i.e., a house worth less than three times the value of the lot beneath it). By requiring a certain amount of land under each house, zoning could ensure that only large, expensive houses would get built.
Yet even as metropolitan land prices steadily rose, minimum lot size zoning requirements remained stuck in that era of abundant land – preventing “starter home” sized houses from getting built. Despite a much larger population, the absolute number of small detached houses built in America has fallen by almost 90% over the last 40 years.
The solution, according to Chung:
Repealing those minimum lot sizes could re-create the starter house market, writes Emily Badger in the New York Times: “If communities struggling with [the affordable housing crisis] want to rebuild the entry-level end of the housing market over time, that will almost certainly require allowing a new generation of starter homes that look more like duplexes or condos, or small homes on subdivided lots.”
At the end of June, a piece appeared in The Atlantic by staff writer Roge Karma, The Whole Country Is Starting to Look Like California: Housing prices are rising fast in red and purple states known for being easy places to build. How can that be? Karma’s basic premise is that the economically hot coastal cities have been making it difficult to build new housing, or much of anything, really, for some time, helping to drive more growth inland. But now those inland areas are starting to do the same as what those coastal cities did. One interesting observation he makes:
Glaeser and Gyourko go one step further. They hypothesize that as Sun Belt cities have become more affluent and highly educated, their residents have become more willing and able to use existing laws and regulations to block new development. They point to two main pieces of evidence. First, for a given city, the slowdown in new housing development strongly correlates with a rising share of college-educated residents. Second, within cities, the neighborhoods where housing production has slowed the most are lower-density, affluent suburbs populated with relatively well-off, highly educated professionals. In other words, anti-growth NIMBYism might be a perverse but natural consequence of growth: As demand to live in a place increases, it attracts the kind of people who are more likely to oppose new development, and who have the time and resources to do so. “We used to think that people in Miami, Dallas, Phoenix behaved differently than people in Boston and San Francisco,” Gyourko told me. “That clearly isn’t the case.”
There’s lots in Karma’s piece, but he ends it with this conclusion:
The forces opposed to new development are just as vehemently opposed to the kind of reforms needed to avert a future crisis. Many local and state governments across the Sun Belt have tried and failed to implement lasting pro-housing reforms. But the recent spike in home prices across the region has put even more pressure on lawmakers to act. The Texas legislature recently passed several pieces of legislation that will, among other things, reduce the minimum lot size of new homes, limit the power of the “tyrant’s veto,” and allow multifamily housing to be built on land currently zoned for offices and retail. Red states like to portray themselves as free from the pathologies that have made housing such a problem in other parts of the country. Now they have an opportunity to prove it.
A subsequent interview with Karma published in The Atlantic a few days later drew this comment:
One thing that became really clear to me was that these places that seem so different are actually suffering from the same affliction. I was surprised to find that the zoning regulations in some Sun Belt cities weren’t actually that much better than those in the coastal cities—that a lot of laws on the books were very similar and very restrictive. The way that Sun Belt cities were able to get around it was just by sprawling, and now that they’re starting to hit the limits of their sprawl, those same laws are a lot more binding.
Policy isn’t going to change people’s psychology, but here’s what it can do: It can change laws that allow people who have this NIMBYism tendency to have outsize influence. If a state decides that they don’t want to have as much development, that’s one thing. If one or two homeowners get to decide to block development, that’s another thing. We can at least make it so that a small group of people aren’t able to block development that would help hundreds, maybe even thousands, of people.
The Sun Belt states can avoid becoming the next California if they take action on housing and zoning policies now.
And finally, this week on the American Enterprise Institute’s podcase Political Economy, AEI economist Ed Glaeser (I’ve quoted from him before) talks about the same issue as Roge Karma, the slowdown of homebuilding in Sunbelt cities. Glaeser notes:
If America had built the same kind of housing stock that it did between 1980–2000 between 2000–2020, we’d have 15 million more units than we currently have. There really has been this big change at the national level, and the change is particularly clear in these places that used to be the Sunbelt superstars: places like Atlanta, Miami, and Phoenix which, back in the ’50s, ’60s, and ’70s were building an unbelievable amount of housing. And all of these places have gotten much more similar. They’ve essentially gotten like Los Angeles. So the slowdown that we saw in Los Angeles during the ’70s, basically by the ’90s and 2000s, these other metropolitan areas were coming to look much like the City of Angels.
Glaeser, after having a lot of interesting things to say, concludes the podcast interview with this:
I will just say one final thing on this, which is, I go back and forth on what part of zoning offends me more. Some days it’s Euclidean, some days it’s minimum lot sizes that are egregiously high, sometimes it’s free parking requirements, but I think the basic notion that we’re going to get the cities that we should have, we’re going to get cities that are built for outsiders if we just reduce some of the regulation and we just make it a lot easier to build, I think there’s a lot of strength in that. There’s a lot of strength and freedom.
One final thing that I want to say, which is that one of the things that all these regulations do is they make sure that cities take care of insiders rather than outsiders. 40 years ago, Mancur Olson wrote a book called The Rise and Decline of Nations, and when I read that book about 30 years ago, its message of how, in stable societies, insiders managed to accrete power and they managed to figure out rules that keep outsiders out, and they sort of build a world that’s meant for them, that didn’t feel like a lot of America. … 30 years later, particularly as we see these Sunbelt Metropolises increasingly shut down building, I think Olson is just completely prophetic. In some sense, what we’re hoping for, if we’re going to see a reduction in regulation and building, is a world in which America, the American Sunbelt, and even the coast, becomes an America that’s built for outsiders as well as insiders.
Even at the international level, this issue of housing affordability and the implications of land use regulations, are playing out. In the last two issues of the British publication The Economist, what they call “planning reform” is a primary topic of the British government:
Of Britain’s growth blockages, the most important—and the one where Labour has put in the most effort—has been the planning system, which has long deterred housebuilding and inflated infrastructure costs.
But Labour has shied away from the tougher task of reforming Britain’s veto-friendly planning system wholesale. Rather than shift to a zoning system, where projects that meet a pre-specified code are automatically approved, Labour has opted for top-down housing targets.
In another issue a few weeks ago, in a story about the U.S. Democratic Party’s challenges and opportunities, housing and land use figure prominently:
Democrats could do a lot better with the power they hold. That makes getting anything done tricky, because there are so many veto points and collective-action problems. This is why fixing the housing problem in California is so difficult. While the state recognizes the need for more housing, most local politicians would also prefer it go somewhere else. “LA is just incredibly strange, convoluted and decentralised,” says Chris Elmendorf, a housing-law expert at the University of California, Davis. “They have a constellation of local interest groups that are super-powerful that don’t want new housing in their areas.”
Can Democrats change? Housing gives reason for hope. The state of California has passed dozens of pro-housing laws, imposing strict targets on local governments and chipping away at the many regulations that give leverage to unions and community-interest groups to stop development. These may at last be beginning to bite. In February Cambridge, Massachusetts, another expensive NIMBYish place, abolished single-family zoning, which banned developers from building apartments. It follows the example of Minneapolis, another city run by a centrist Democratic mayor, Jacob Frey, which started zoning reform in 2020. The city has seen enormous amounts of housing built, and falling rents too.
So there we go, fellow planners. I see stuff almost daily now about housing and land use in publications and social media from all over the world. This is indeed a hot topic. Why do I highlight all this? Because this certainly augers the continued efforts by political leaders to tinker around with the land use systems and laws. As I’ve said now several times, it ain’t over yet, not for a long time!