New Jersey, a primarily suburban state, has some of the highest housing costs in the country. According to HUD, a family that wants to rent a “safe and modest” two-bedroom in the Garden State must bring home about $51,000 to afford it. A solid majority of the state’s renters fall short of that mark. The best remedy for such high rents is fairly simple: Let developers build more housing. But in most cases, suburban planning boards stand in the way of new development that would make housing more affordable.
A planning board is generally a group of local homeowners who enforce land-use regulations. They’re people with a pronounced interest in keeping property values high, and who have at their disposal the official tools—height maximums, parking minimums, and other density restrictions—to make that happen. And when regulations don’t avail, they’re quite content to reject new building projects on vague and flimsy “health and safety” grounds, then dare the spurned applicants to sue. (As a housing attorney who works in New Jersey, I’m all too familiar with this game.)
Planning boards are among the most spirited government regulators out there, so you might think that conservatives would be their natural enemies. You’d be wrong. In New Jersey, the fight against efforts to deregulate is led by Governor Chris Christie. Typically a friend to markets and foe to regulation, he is in this instance an ardent supporter of “home rule”–a euphemism for letting the planning boards do whatever they want. There is something deeply curious about this. Perhaps more than any other form of regulation, land use restrictions have the effect of distorting markets, infringing on private property rights, and stifling economic growth. They are actually worthy of the epithet “socialistic.” Nevertheless, any attempt to relax planning restrictions in the suburbs (in order to, say, develop a small multifamily building among detached single family homes) is liable to be met with protests reminiscent, in their tone and logic, of “Get Your Government Hands Off My Medicare.”
Urbanists and the activist left don’t see the issue any more clearly. Urban community advocates have inherited from Jane Jacobs the mistaken belief that the best way to prevent displacement in gentrifying neighborhoods is to keep housing stock old and small in scale. California environmentalists thwart construction in cities and along the suburban coast, not realizing that they’re diverting development to the Sun Belt with its longer commutes and full-blast air conditioning.
Into this rare zone of agreement between urbanites, suburbanites, Tea Partiers, and Occupy-types, steps Matt Yglesias, columnist for Slate and prolific lefty blogger, to tell all of them they’re wrong. The message of his short new e-book, The Rent is Too Damn High: What to Do About It and Why It Matters More Than You Think, can be boiled down to: “Cheaper housing would be beneficial to America, and this is best achieved by relaxing anti-density restrictions.”
Supply and demand applies to housing, and density is supply. In places like New York, DC, Coastal California, and suburban New Jersey, housing is expensive. In a reasonably free market, a developer builds units when demand sends housing prices higher than constructions costs. When bulk requirements cap density, or when activists oppose development, this market response isn’t possible, and prices get bid up. This dynamic, rather than a simple surge of demand, is where expensive housing comes from.
Yglesias doesn’t just deal with the microeconomics of the issue–i.e., the prices families and individuals pay for housing and the life decisions they make because of it. Following academic economists like Ed Glaeser and popularizers like Ryan Avent, he stresses the macro costs of restrictive land use regulations to our economy and the environment.
High housing costs, he argues, reduce GDP appreciably. Productivity isn’t simply a factor of how hard or effectively you work. It also depends on where you are. Especially in a service economy, locating oneself in a dense, prosperous place is analogous to farming on fertile soil. All else equal, increasing the density of a place is akin to adding fertilizer.
But as it is, the recent pattern of migration in the United States is toward cheap housing rather than toward prosperous, highly productive places—two paths that diverge in today’s America. Between 2000 and 2010, the ten fastest growing metropolitan areas were Western or Sun Belt cities with median incomes and productivity well below the national average. Aggregate the millions of decisions to move to Raleigh instead of Boston, or Phoenix instead of San Jose, and you’re talking serious domestic product loss and a partial explanation for median wage stagnation.
Raleigh and Phoenix are also less green than Boston and San Jose. Dense cities are green. Mild, coastal climates are green. Commutes in dense areas are shorter and often by foot, bicycle, or mass transit. Energy use for heating and cooling is less intensive. Land saved by building more densely can be used for parks or natural habitat. A wider-gauge environmentalism would love cities and more intense development where development already exists.
Two things that Yglesias, to his credit, does not do: He refrains from the ranty moral-aesthetic judgments about suburban living that often make books on this topic – such the works of James Howard Kunstler – so exhausting. And he doesn’t advocate government-supported building projects of the sort popular among some big-city mayors.
He accepts that many people prefer suburbs to dense cities. For the many others who either live in cities or would like to, his solution is market-driven and simple. Private developers would gladly build housing for them if density limits were relaxed to make that possible. Yglesias wants the government to get out of the way to let people and developers do what they already want to do anyway. The market, while not magic, will do a pretty good job of providing for people across the range of preferences.
But the political battles over increased density raise the obvious question: If a rainbow coalition of urbanites and suburbanites, Tea Party and Occupy-types, are all united against deregulation, how do we know people really want it? Is land-use reform one of those wonky attempts to impose on a clever solution that people actually hate?
Here, it’s useful to locate the primary political fault-lines. As we’ve seen, it’s not so much right-left as insider-outsider. The suburban planning board, the historic preservationist, the community activist, the environmentalist—they’re all attempting to prevent changes to a status quo in the places they live. Viewed from a slightly different angle, they’re all incumbent beneficiaries bent on preserving and extending the benefits they enjoy to the exclusion of potential entrants and to the detriment of everyone else.
Planning boards and other such bodies are basically an example of regulatory capture by local homeowners. They love when excess demand sends housing prices skyward. It means their largest assets are appreciating. Same goes for urban homeowners. (Yglesias notes that his ideas will be a hard sell as long as people continue perversely to cheer when housing costs rise.) As long as local homeowners get to make the decisions, their narrow preferences will trump laudable regional or national policy goals.
The questionable justice of such arrangements is a theme in much of Yglesias’s other writing at Slate. See his posts on occupational licensing requirements or the attempts of bricks-and-mortar restaurateurs to use “health and safety” regulation to stifle competition from street vendors and food trucks. This concern is also the angle into land use for libertarian writers like Steven Smith of the blog Market Urbanism and Tim Lee at Forbes. The contest over anti-density regulations may not have the ready-made appeal for libertarians of a good old eminent domain fight, but the stakes for markets and private property rights make them Yglesias’s and other market-friendly liberals’ natural allies.
Yglesias’s book suffers just a bit from the “last chapter problem” that afflicts many policy books. He lays out the problem with admirable clarity. He presents a vision of a more rational policy regime. But merely proposing that state and local governments ease off height restrictions, lot size minimums, and parking requirements elides a lot of intervening political struggle and the clever or muscular policy mechanisms necessary to make that happen.
Some who oppose greater density simply misunderstand its effects, and books like this can help to refashion the debate. But there’s undeniably a great deal of old-fashioned, unenlightened self-interest at play here. Even if exposed to the full force of Yglesias’s arguments, it’s doubtful that homeowners or historic preservationists would give up even $1 of home value, one sight line, or one mediocre example of Moorish Revival stonework for the good of the national economy or the global environment.
Yglesias proposes to tie federal infrastructure funding to partial deregulation at the state and local level. Federal leverage has worked in the past in other policy areas, and it’s an interesting proposal here. If state governments really want to unlock the benefits of greater density, they’ll either have to impose deregulation from above, with its attendant resentment costs, or they’ll have to engage in regional land use decision-making, weakening local planning boards and forcing NIMBY groups to make their case along with large employers, state policy groups, and others with wider perspective.
In big cities, high rents can be a political problem for mayors, some of whom recognize the need to increase housing supply. The Bloomberg administration has doggedly pursued over one hundred “upzonings”—i.e., increases in permissible density—around transit hubs and areas with the infrastructure to handle more people. Naturally, NIMBY groups in each neighborhood have fought these upzonings with the intensity of Iwo Jima.
In this urban context, a couple of promising potential solutions have emerged: Law professors Roderick Hills and David Schleicher, consistently two of the most interesting writers on land use issues, have proposed a “zoning budget” to alter the NIMBY dynamics typical of citywide efforts to increase density. Cities, in their proposal, would set a hard target for increases in permissible density. They would then be required to match any downward deviation from that level with an equivalent “upzoning” elsewhere. NIMBY groups would be forced to compete with one another for limited political victories. Ed Glaeser proposes something similar for historic preservation: a cap on the number of buildings that can be protected. If activists want to put a new building on the register, they’d have to free up room by kicking another building off.
Small-bore solutions aside, the real value of Yglesias’s book lies in its explanatory power, and in its potential to recast an important issue – from one that’s purely local in concern, and consequently dominated by a narrow constituency, to one in which the discussion at least acknowledges the regional, national, and global implications. An updated debate along the lines suggested by Yglesias would be a large step toward the worthy goal of balancing the concerns of local homeowners with the interests of literally everyone else.