December 28, 2015

What's driving me is driving you

A number of people have asked me to respond to Steve Randy Waldman's post "Home Is Where the Cartel Is" and I'm struggling a little because I'm not sure I can identify the core area of disagreement. My thesis on housing, to be clear, is this: It would be good if high-cost areas of the United States (especially coastal California and the northeast, but to an extent other places too) changed their zoning codes to allow for the construction of more housing units. Waldman largely seems annoyed by some of the rhetoric of "market urbanism" which is not my coinage. My view is that I like allies, and if "market urbanism" gets more right-of-center people bought in then I like it. My personal family heritage involves a lot of far-left politics and ties to Latin America, so I sometimes like to think of it as "radical land reform" in the sense of the Latin American left.

Redefining property rights

One area where I think we are in agreement (and where I wish he had acknowledged that this is what my book says) is that it's too quick to characterize zoning disputes as pitting big government regulators against property rights. It's better to say that it's a question of what the property rights should be. Right now, my ownership of a Toyota Prius gives me extensive (though not unlimited) rights to do what I want with my car but almost no right to bug my neighbors about what they do with their car. If someone wants to park an ugly yellow car on my block, I can't stop them. If I want to paint my car an ugly yellow color, my neighbors can't stop me.

By contrast, my ownership of some property on Q Street NW gives me much more limited control over what I can do with the land that I own. I can't, for example, build a taller structure on the land. On the other hand, I have extensive rights to be a busybody about what other landowners on the block do with their land. Property rights are (in my view at least) creations of legal regimes, not facts of nature that legal regimes constrain.

But rhetoric and framing devices aside, the problem with the current property rights regime in America is that it leads to the systematic under-development of the most valuable parcels of land. That's bad and we should change it.


Learning from Singapore

One area where I think we have a more profound disagreement is with the suggestion that the US could learn lessons from Singapore, which makes much more extensive use of public housing as an element of its housing policy. On a superficial level, I think references to Singapore in this regard appeal to people with left-wing intellectual commitments because it feels like a more left-wing solution than simply legalizing rowhouses and apartment buildings. But the thing you have to remember about Singapore in an urban planning context is that since it's a country, it has a different relationship to "outsiders" than a city like Los Angeles or London.

What Singapore does is allocated affordable public housing to citizens of Singapore while leaving immigrants to obtain housing on a super-expensive private market. American cities, obviously, aren't countries. The idea of Massachusetts trying to ensure that housing is affordable to native-born citizens of the Bay State but not to "immigrants" from Ohio (or whatever) doesn't really make normative, practical, or constitutional sense. And it especially doesn't help solve the problem that people born in Kentucky would have more economic opportunity if it were easier for them to move to the richer parts of the country.

Studying Singapore is always interesting, but in this case I really think it's "the exception that proves the rule" -- an oddball situation that makes an unusual policy approach viable with maybe some lessons to teach Norway but not a lot that's broadly applicable.

Learning from Germany

By contrast there is something important that I think we could learn from Germany, namely that you can have a rich and prosperous country without the US obsession with homeownership. Their homeownership rate is about 11 percentage points lower than the US rate, and since the Germany population is older than the US population it's much lower in demographically adjusted terms. And it seems to work out quite well. In general, the political economy of US homeownership is a mess.

But you don't get out of a path-dependent situation with a magic wand. If we could redo the past 80 years of US housing policy, that would be great. If we could reform the federal tax treatment of home mortgages, that would also be great. But if we could change zoning to allow for more density and more multifamily construction, that would also be great! All these measures would, I think, tend to reenforce each other.

Song of the day

Soho Dolls, "Trash the Rental."