How the federal government can help on housing

Useful ideas are out there

I wouldn’t expect to hear the President of the United States, in a State of the Union address, talking about federal regulations on manufactured housing, the allocation of western water rights, or state building codes.

So I wasn’t disappointed, exactly, that those topics didn’t make the cut last week. But, the White House did reach out to journalists who write about this subject in advance of the housing policy proposals they put out the day of the speech, leading some of us to believe we might hear about them that evening, only to see the one part that made it into the speech was a proposal to create some kind of starter home tax credits.

That’s a sort of easy, comprehensible policy proposal that got folded into the president’s budget request. And I don’t think it’s a terrible idea or anything — it’s certainly not crazy to think that interest rates first tumbling during Covid and then soaring post-Covid has created a lot of frozen inventory that could be productively unlocked. But this also obviously isn’t the crux of America’s housing policy problems, and to the best of my knowledge, the Biden administration is aware that it isn’t the crux of America’s housing policy problems.

As Biden tweeted on Tuesday the core issue is, “we have to build, build, build.”

That’s why back in May of 2022, the Biden administration released a housing supply action plan and why, when Biden first took office, they pushed the bill that became the Bipartisan Infrastructure Law to address supply-side housing constraints, only to find out that congressional negotiators didn’t want to go there.

So whatever the calculus, the issue isn’t that the Biden administration doesn’t “get it.”

I, meanwhile, was pretty ambivalent about the idea of the White House trying to address housing supply in a serious way. Thursday’s speech ended up being a rollicking partisan stemwinder, which I think was great for Biden’s reelection campaign.

But by exactly that token, I don’t think it would have been a good venue to introduce constructive policymaking. Housing supply seems like a mostly non-partisan issue that benefits from being non-partisan, and thus doesn’t really benefit from high-level presidential involvement, except in very specific circumstances. But since public perceptions of supply-side housing reform are highly sensitive to small changes in framing, I kind of would like to hear the president say something generic and mod-sounding, like “we need to cut the red tape and bureaucracy that limits housing supply” without offering any real details.

But in the real world, details do matter. And months ago, Slow Boring helped the Federation of American Scientists solicit specific federal policy ideas to increase housing supply. A lot of people submitted ideas, and the winners are now out in vetted workshopped form. And I think what we see there underscores that even though this is traditionally a local government issue, there’s a lot that congress could do to make housing more abundant and the country more prosperous.

Some nuclear options

First, though, I wanted to mention two things that are not on the FAS menu because I think they are generally considered too extreme.