The Government-Created Housing Shortage

The American spirit is synonymous with a can-do attitude—we are builders, creators, and innovators. The remarkable construction of New York’s legendary Empire State Building symbolizes that spirit: from start to finish, the completion of this American landmark took a single year.

But that spirit now seems diminished. Many U.S. cities face a housing shortage thanks to prohibitive and heavy-handed regulations pushed by local governments—and the shortage has pushed median rents and purchase prices too high for ordinary incomes to afford.

The way to make housing more affordable is to build more housing. Americans of yesteryear could have made short work of the problem: build, baby, build!  But as PLF’s cases show, property owners and developers today must navigate a minefield of land-use regulations that stymie or punish development. The result? Dwindling new construction of homes, higher costs, and, ultimately, stagnation.

Consider a few examples:

  • For years, PLF litigated against “urban growth boundaries” in Seattle, which constrained the supply of housing by effectively prohibiting homebuilding beyond a politically-established ring drawn on a map around the city.
  • Or PLF’s recent case involving small developers Jonathan and Shelah Lehrer-Graiwer in West Hollywood, California. They bought several lots with older single-family homes, which they wanted to demolish and replace with an 11-unit condominium complex. City officials welcomed the project because it increased the housing supply. The city then demanded an extraordinary fee of more than a half million dollars as a condition of the building permit to subsidize a government-run affordable housing program.
  • Or consider a case out of Berkeley, California, where the city blocked the construction of a large, modern apartment building by abusing an “historical preservation” ordinance to prohibit the property owner from first razing a smaller, aging apartment building. The city justified its decision on the grounds that it was important to preserve the last wood-shingle-sided apartment building in the city.

These anecdotes merely hint at the gauntlet property owners face today when exercising their right to build on their own land.

Cities and counties throughout the country routinely require lot sizes of one, five, or even more acres per home; they demand the dedication of free “open space”; they prohibit multi-family housing in large segments of a community; they demand all manner of studies, fees, and restrictions under the guise of environmental restrictions with dubious connection to public health or safety; and they wield zoning ordinances so detailed that they effectively allow the government to control the style, building materials, and even landscaping of every home proposed.

In New York, an estimated 40 percent of today’s buildings could not be built again under the state’s complicated and prohibitive land-use laws. Some of America’s most loved historic neighborhoods in other large cities, like the Los Feliz neighborhood of Los Angeles, Boston’s Beacon Hill, or New Orleans’ French Quarter are effectively outlawed in our modern regulatory state. Beyond cities, many suburban land-use policies are arguably worse, as the cases of Seattle and West Hollywood above suggest.

All this has the predictable result of creating skyrocketing prices in the most regulated cities. Prohibitive local regulations act like a tax, sometimes adding 50 percent or more to housing prices, according to Wharton economist Joseph Gyorko. Left-leaning economist Paul Krugman has pointed out that California’s high housing prices “owe a lot to policies that sharply limit construction.”

But it doesn’t have to be this way. Houston, Texas, for instance—one of America’s largest and fastest growing cities—has one of the nation’s most lightly-regulated housing markets, allowing for an orderly but relatively free market in housing production.

Many people today find their budgets stretched to put a roof over their head—maybe including you or your children or your grandchildren—and can’t afford to live in the neighborhoods where they grew up. The root of that problem is regulation, which needlessly limits the supply and raises the cost of housing. The only long-term solution lies in respect for property rights and a renewal of the American spirit of building.

Pacific Legal Foundation Article  of April 07, 2020 By LARRY SALZMAN

 

 

 

Restrictive housing policies put low-income city residents at risk during COVID-19

In the 19th century, epidemics and crowded tenement housing went hand in hand. Cholera, smallpox, and even the bubonic plague swept through America’s slum housing in numbers that make the COVID-19 epidemic seem like a case of the sniffles.

Unfortunately, today’s housing policies in many urban areas make low-income and minority city residents most at risk of catching infectious diseases. And as the COVID-19 pandemic’s tragic results in cities like New York have now made clear, housing and zoning reform is one of the best ways to protect many city residents.

As early as 1820, the link between overcrowded housing and health was established in official reports, according to A History of Housing in New York City, by Richard Plunz. He notes that one out of every 27 New Yorkers died in 1859, as a result of “urban killers” like cholera, smallpox, typhoid fever, malaria, yellow fever, and tuberculosis.

In 1890, an influential reformist book, How the Other Half Lives, by Jacob Riis, chronicled tenement living with as much contempt for the bad housing as for the people who lived there. Riis described, block by block, the overcrowded, unsanitary housing, while criticizing the poor, ethnic residents as “content to live in a pig sty,” ignorant, lazy, thieves, beggars, tramps, drunkards, greedy, stupid, and so on.

Riis noted that the tenements were “hot-beds of the epidemics that carry death to rich and poor alike.” And that prejudiced outlook drove much of the urban housing reform movement: It was one thing for the “contemptible” classes to die in their slums but quite another for their diseases to spread to “respectable” Americans.

Housing reform throughout the 19th and 20th centuries had a common tactic: The best way to address the problem was by getting rid of the poor, and the best way to get rid of the poor was to get rid of their dwellings. Indeed, the primary reason conservative members of the Supreme Court voted to uphold one of the nation’s first zoning laws in 1926 was to prevent the spread of “apartment houses,” as the slum tenements were known, because they would become parasitic nuisances in otherwise-nice neighborhoods.

In more recent times, “urban redevelopment” and central-city highway construction had a particularly adverse impact on minority neighborhoods. Much poor and working-class urban housing was destroyed, but little was rebuilt.

But whether it was early reform efforts to punch windows in airless apartments, mandating air shafts, or setting minimum building standards, there were gradual improvements. These reforms, combined with economic growth and modern medicine, did much to relieve the urban overcrowding and disease so prevalent in the 19th and early 20th centuries.

That history makes today’s zoning and land use policies appear quite ironic. Instead of allowing people to create and move to lower-density housing if they so choose, today’s planners and politicians strive to pack more people into denser cities, serviced by crowded rail and bus systems. This is all necessary, we are told, to protect environmental habitat and save the climate.

Thus, urban growth lines have been drawn, outside of which—in some cities, such as Portland—it is nearly impossible to build. Urban economist Randal O’Toole has described this so-called “smart-growth” planning model as one that is not building for the American dream, but as the title of his book puts it, for the American Nightmare: How Government Undermines the Dream of Home Ownership.

But the irony on top of irony is that environmental and zoning restrictions have reduced new home and apartment construction in coastal regions to a fraction of what is needed to maintain existing population trends. As a result, existing housing has become outrageously expensive. Families once again are doubling up. Worse, our streets are filling with homeless encampments as bad as any of the slums of the 19th century.

And like those slums of yesteryear, the homeless camps are becoming beset by illness, through no fault of the people forced to live in them. Diseases once thought eradicated from America are back with a vengeance, as cases of antibiotic-resistant tuberculosis and cholera surge among the homeless. Now, with COVID-19, some of the homeless are being sheltered in empty hotel rooms in order to protect the rest of us. But how long will this stop-gap altruism last?

And even aside from the homeless camps, dense urban living is far from ideal. With greater density comes greater crime, worse schools, and more opportunity for disease. With COVID-19, who wants to ride on a crowded train or bus, if given a choice? How many social-distancing urban dwellers cooped up in small and crowded apartments would not rather live elsewhere?

Don’t let the past be our future. Unless we free up the housing markets and let people build and buy the homes they want to build and buy, conditions in the urban core will only get worse. Instead of planning our way back into the 19th century, we should build into the 21st.

Pacific Legal Foundation Article April 30, 2020 I By JAMES BURLING

Mar 30: EPA withdraws compliance order against Sacketts

Washington, D.C.; March 30, 2020: The U.S. Environmental Protection Agency has formally withdrawn an administrative compliance order it issued in 2007 against Michael and Chantell Sackett, removing the threat of crushing fines that the couple has lived under for more than a decade.

The EPA accused the couple of illegally filling a wetland under the Clean Water Act when they broke ground to build their house in a residential neighborhood near Priest Lake, Idaho. The EPA also told the Sacketts that no home could be built on the lot, despite never establishing that the lot is a wetland under congressionally mandated criteria.

The Sacketts have spent the past 12 years fighting the EPA in federal courts — including at the U.S. Supreme Court.

“The Sacketts are relieved that the EPA removed its years-long threat of ruinous penalties against them,” said Pacific Legal Foundation senior attorney Tony Francois. “This case is a dramatic illustration of how heavily the bureaucratic hand of the administrative state can fall on ordinary Americans. One day the Sacketts were trying to build a house in a residential neighborhood; the next, they were facing fines of up to $75,000 per day. The Sacketts’ resolve and perseverance in this case is admirable.”

Despite the welcome news, an important detail remains unresolved: whether the Sacketts can now build on the lot.

“While the compliance order is withdrawn, it’s not clear whether the Sacketts can build anything without permission from the EPA. The EPA’s determination that the Sacketts’ vacant lot is a federally regulated wetland appears to remain in effect,” Francois explained. “We will ask the Court of Appeals to resolve that question in the Sacketts’ favor if EPA won’t clarify it. Otherwise, the Sacketts remain under the threat of future enforcement action or a citizen suit if they proceed to build on the lot.”

Pacific Legal Foundation Article

The March KAPO Dinner is Canceled

Join us for Dinner at the Family Pancake House, 3900 Kitsap Way Bremerton Washington, Thursday April 30 at 5:30 PM.

More Info Contact Pat Ryan (360) 692-4750, pat,ryan58@comcast.net

Ending the Administrative State Is an Uphill and Necessary Battle for a Free Nation

James Madison defined tyranny as the “accumulation of all powers, legislative, executive, and judiciary, in the same hands.” Yet, according to many prominent progressives, this venerable principle that inspired our constitutional structure is an existential threat to the modern architecture of the federal government. Take, for instance, a New Republic article, which sees Madison’s remedy for tyranny as an evil plot to sink the entire federal bureaucracy.

In “The Plot to Level the Administrative State,” New Republic writer Matt Ford warns that some Supreme Court justices want to revive the nondelegation doctrine — a fancy term for the idea that Congress can’t punt its lawmaking power to a different branch of government. Many on the left fret that this revival poses an existential threat to the modern trend of bureaucratic rule. I hope they’re right.

This wicked plot began in 1787. That year, our Founders built a constitutional structure unique in history — a binding document that separated government functions into three distinct spheres: legislative, executive, and judicial.

Article I vests the legislative power in Congress and sets rules about how lawmaking happens. It splits the lawmaking body into two houses, determines how the lawmakers are selected, and requires that legislation pass both houses and be presented for the president’s approval.

Other rules abound, such as requirements that tax bills begin in the House and that no legislator can be appointed to a federal civil office during their tenure. These rules rein in the power to pass laws that bind the people. If Congress could abdicate such authority to the executive branch, which faces no similar constraints, then those constraints would be meaningless. The power to make laws would face few barriers to abuse. Yet that is precisely what is happening today. Continue reading

Rentals Everywhere, but No Place to Live

Government rules drive developers to build luxury apartments.

Good news: More new apartments will come on the market this year in the U.S. than in decades. Keep reading for the bad news. Builders are expected to complete some 371,000 new apartments in 2020, compared to 247,000 in 2019 and 119,000 in 2010, according to the real estate analytics firm RealPage. The problem is that many of the new apartments will be too expensive for lower- and middle-class families. RealPage data show that in many metropolitan areas between 60% and 89% of the apartments under construction are in neighborhoods known for higher-than-average rents.

Bernie Sanders blames this on “corrupt real estate developers” who are “gentrifying neighborhoods” and replacing affordable homes with “fancy condominiums and hotels that only the very rich can afford.” Elizabeth Warren says “developers can usually turn bigger profits by building fancier new units targeted at higher-income families rather than units targeted at lower-income families.”

Their solution is more government control of the rental market. But what if that is already the main problem?

In a December 2019 working paper, Harvard and University of Pennsylvania researchers measured land-use rules, zoning and permitting regulations and how many government entities must sign off on new construction, among other restrictions. Though outliers exist, the mismatch between expensive supply and affordable demand was significantly more acute in the places with the most severe regulations.

Meanwhile, the National Low Income Housing Coalition estimated last year that there were 30 or fewer affordable apartments available for every 100 extremely low-income renters in Washington, Oregon, California, Florida and Arizona. These states are home to seven of the 10 most restrictive metropolitan areas in the Harvard-Penn study.

RealPage and Harvard-Penn draw the borders of metropolitan areas slightly differently. But Fort Lauderdale, the Seattle-Bellevue area, Phoenix and Portland—all in the top 10 most restrictive regions—are also where 84.9% or more of new apartments are in neighborhoods with rent generally above the metro-area average. The restrictive cities of Miami, Washington, D.C., and its suburbs and Los Angeles are also in regions where only 18.7% to 35.8% of this year’s new rentals are being built in neighborhoods that low- and middle-income families can afford.

Last year, highly restrictive cities built ultra-luxury apartments at a higher rate than less restrictive ones, according to data from the real-estate market-intelligence firm Yardi Matrix. The most high-end classes of rentals accounted for 4.8% of the overall new supply in Manhattan, 3.8% in Phoenix, about 3% in D.C. and its suburbs, and 2.4% in Los Angeles.

But premium rentals are merely 0.3% of new supply in St. Louis, 0.1% in Cincinnati, Grand Rapids and Cleveland, and an even smaller share in Detroit and Rochester—all among the least restrictive building areas examined by the Harvard and Penn researchers.

The progressive solution to the lack of affordable housing—more government rules and controls—is damaging the very people they say they want to help.

Wall Street Journal Editorial Feb 5 2020

 

 

WA considers requiring new construction projects to improve the environment

A push in the state Legislature could make ‘net ecological gain’ the new standard for building.

In a move promoted by environmentalists and others as key to staving off the extinction of Puget Sound orcas — but opposed by the building industry —Washington may soon take a first, small step toward requiring that development benefit the environment.

The budget proposed by the Washington House calls for planners to begin preparing to replace the state’s requirement that construction cause “no net loss” to habitat with a higher standard backed by environmental advocates — “net ecological gain.” It appears Washington would be the first state in the nation to do so. The budget put forward by the Senate has no such provisions, however. Legislators in both chambers are expected to negotiate a final budget this next week.

The new standard would be something of a sea change for land use in Washington. Builders doing damage to the environment would be required to create or restore more ecological capacity than their construction destroys. The century-plus-long decline in Washington water quality and salmon abundance might begin to be reversed. “It sets a standard,” said Rep. Debra Lekanoff, D-Bow, the Legislature’s leading advocate for the change, “of leaving [the environment] better than we found it.”

Opponents contend the change amounts to government-sponsored theft, in that today’s builders would be paying for degradation — which occurred with the state’s blessing — from which others profited in the past. Local governments, too, are concerned thata shift in policy could prove expensive if they ultimately have to compensate landowners for the additional work.

Requiring additional environmental work would also slow homebuilding in the state while increasing construction costs, said Jan Himebaugh, government affairs director for the Building Industry Association of Washington. Washington’s housing inventory has not grown as fast as the state’s population, she said, driving housing prices to unaffordable levels in much of the state.

“It will slow that permitting process even more … and those costs that are already out of control will skyrocket,” said Himebaugh, whose organization, better known by its abbreviation BIAW, represents homebuilders in Olympia. “That’s not good for housing, and that’s not good for the people of Washington who need homes.” Continue reading