The most obvious ramification of overregulation is that it keeps housing supply too low and prices too high, so that affordable housing is less available. It also reduces geographic and economic mobility if people can’t afford to live where the best jobs are.
Some studies find that Americans move to different states less often than they once did. Other research finds no decline in these numbers.
But even this contrarian conclusion is less reassuring than it sounds, since it also finds that the wage gains from moving have increased — suggesting that interstate relocations might have increased if not for restrictions on housing. For a long time, such relocations helped to narrow the economic differences between regions of the U.S. In recent decades, those differences have been widening.
The cost of housing lurks behind other issues in U.S. politics. Racial segregation is one: The desire to keep blacks and whites apart formed part of the motivation of zoning laws, and they still advance that ugly purpose.
Our country’s low and falling birth rate, which leaves families smaller than people say they want, is also stirring increasing concern. Scarce housing, especially in job-producing areas, makes it harder for young people to attain their family goals.
Eric Kober, a retired city planner for New York City who is now a senior fellow at the Manhattan Institute, observes that zoning rules have also promoted age segregation by reducing the supply of new housing. “Older neighborhoods become retirement communities where young people can’t find housing,” he tells me. “You see it a lot on Long Island.”
Estimates of the economic cost of overregulation of housing are eye-popping. One paper found that if New York City and the San Francisco Bay Area had land-use practices as free as those in the median U.S. city over the last 50 years, the national economy would be at least 14% larger now.
The places with the tightest, and most consequential, restrictions tend to have progressive politics. Nodding to this fact, Richard Kahlenberg recently wrote an essay for the New York Times urging progressives to take up the cause of reform as a matter of social justice. They should ally with conservatives who want to deregulate land use, he urged, passing federal legislation that would prod localities to loosen their rules.
The liberal journalist Matthew Yglesias shares Kahlenberg’s interest in allowing more housing to be built. But he brought up some of the political difficulties with Kahlenberg’s project.
Framing zoning reform as a way to make suburbs advance racial justice will make it a hard sell to conservatives, who associate such phrases with policies they dislike. Talking about it in terms of liberalizing markets, on the other hand, will alienate progressives, whose reflex is to be suspicious of proposals that are described that way.
Then there’s the level-of-government issue. Zoning has traditionally been under the control of local governments. It’s the quintessential local issue. This arrangement allows for sensitivity to community tastes, but also creates a misalignment of costs and benefits.
A neighborhood that allows new home construction is inviting more traffic and noise, and may see reduced property values. The economic gains of this expansion, though, accrue to larger entities: cities, regions, states, the country as a whole.
Proponents of housing deregulation have therefore been interested in getting higher levels of government to intervene. Kahlenberg wants the federal government to use carrots and sticks to get localities to allow more housing, as does the conservative economist Edward Glaeser. But federal interference in a historically local function alarms a lot of conservatives, even if they favor fewer restrictions on economic development.
Nor does it solve the political problem. The federal government has long had the authority to use funding to change local housing policies. If voters in the Bay Area and New York are dead-set against allowing more housing there, it is hard to imagine that a Democratic administration, working in concert with a House speaker from San Francisco and a Senate majority leader from Brooklyn, is really going to force them to start.
None of this has to spell doom for changing the housing laws. Those residents of progressive places might change their minds if more permissive housing rules become more associated with social justice. In that case, though, progressive cities won’t have to wait for the federal government to make them adopt new policies. If they are willing, they can do it themselves.
Conservatives and centrists should do their part: Overregulation isn’t unknown in the red and purple regions of the country. But creating new housing opportunities depends most of all on the kind of people who shop at Whole Foods.
John F. Kennedy campaigned in 1960 by asking voters to “give us the opportunity to get America moving again.” It’s up to today’s progressives whether they want to take up that challenge, this time literally.
Ramesh Ponnuru is a Bloomberg View columnist. He is a senior editor of National Review and the author of "The Party of Death: The Democrats, the Media, the Courts, and the Disregard for Human Life." Read Ramesh Ponnuru's Reports — More Here.
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