As we anxiously await the start of the legislative session next month (it begins on January 16), and we all take a break during the holidays, here are a couple of odds and ends that I found of interest.
The first is legislatively related, an opinion piece by Jared Whitley (a longtime DC politico, having worked as a writer and a communications guy in the US Senate and White House. In 2018, the Utah Society of Professional Journalists named him best blogger for his contributions to Utah Policy) in Utah Policy. Echoing the observation of many that our state legislature has a lot of members who are involved in real estate and development, he opines, Is the day of the developer-politician over in Utah?
While many of Whitley’s observations are factually accurate:
As recently as 2016, the Federal Housing Finance Agency (FHFA) found that Utah had the 6th best Housing Price Index (HPI) in the nation. But just a few years later we’ve dropped to 51st – the worst in the nation.
… 26 members of Utah’s legislature – or about one-quarter of them – are professionally involved in the real estate industry – whether it’s “development, investment, consulting or management.”
Utah faces two enormous challenges. One, we’re such an undeniably well-run state in so many ways, there’s massive desire to live here. Two, while the state is very big, much of the land is super-remote, owned by the federal government, undevelopable, or all of the above.
The conclusions Whitley draws are … well, something I don’t necessarily agree with completely. For example, he says,
Sure, we need developers. But maybe we don’t need developers who overwhelm local land use to massively enrich themselves.
The example he uses to show how they are enriching themselves is a particular bill in last year’s session:
…we saw one bill (SB 295) that would essentially, “create a new class of political entity that would not be governed by elected officials in the creation of those entities and would have property tax authority.” That is to say that the state could override the will of local leaders and their constituents to build whatever they liked. (It did not become law.)
Whitley’s analysis is not completely accurate. While this bill would have allowed for financing and taxing outside of local government control, the point was to build infrastructure needed for new housing that the local government was not able to build, at least not yet. Another similar bill is proposed for the upcoming session, with changes that would address some of the problems with SB295, and get the needed infrastructure (that would comport with local infrastructure plans) to accelerate the building of housing.
I also have to say that some of the legislators I have worked with over the years who were associated with the real estate/development industries were actually pretty good and responsive (not all, but many).
And finally, after reading Whitley’s piece, I don’t think he answers the question posed in the title – I don’t think I see from what he says how this presages the end of developer domination of the legislature.
Anyway, it’s still an interesting read.
The other odds and ends piece is one about whether zoning reform – the increase of density and housing diversity – actually results in more affordable housing. This is a question I see being raised more and more by local officials as they contemplate making changes to their land use codes and zoning.
Written by Planetizen contributor Todd Litman, it is about Upzoning Affordability Impacts: The Latest Research.
Litman cites a number of studies that have looked at the question, with such conclusions as:
Recent studies support the conclusion that broadly-applied upzoning that allows more compact housing types (townhouses, multiplexes, and multi-family) in multimodal neighborhoods, with complementary policies such as reducing parking minimums, can increase housing supply, drive down prices, and increase overall affordability.
But Litman also notes,
This research has not prevented skeptics from arguing the opposite; that upzoning increases rather than reduces housing prices and reduces affordability. Such skepticism is understandable: housing prices tend to be higher in dense urban areas and a parcel’s value tends to increase if it is upzoned.
The bottom line of Litman’s summary is something that I have felt all along – the law of supply and demand will likely apply to housing as well, but we are a long way from having it actually make an impact because so much additional housing needs to be built to actually have an effect. Yes, at some point we may have been able to build enough new housing to affect the price, but it’s going to take a while and a lot of building. Litman acknowledges this point in his summary:
… upzoning a large urban area has very different effect: it creates a competitive market for land prezoned for higher density housing which minimizes lane value increases, as discussed in UCLA Professor Shane Phillips’ report, Building Up the “Zoning Buffer”: Using Broad Upzones to Increase Housing Capacity Without Increasing Land Values.
Recent publications shed more light on these issues. NYU professors Vicki Been, Ingrid Gould Ellen and Katherine O’Regan just released Supply Skepticism Revisited, which updates their 2019 report, Supply Skepticism: Housing Supply and Affordability. They conclude that, “rigorous recent studies demonstrate that: … (5) Easing land use restrictions, at least on a broad scale and in ways that change binding constraints on development, generally leads to more new housing over time.” However, they also conclude that upzoning alone cannot achieve affordability goals; it must be implemented with other policies.
Lots of interesting stuff in this, definitely worth reading if you’re considering “zoning reform.”