The federal government should unleash DC housing

Height Act repeal and more

Even as the topic of housing abundance has gained traction and visibility in national politics, the conversation around federal-level reform seems to have basically stalled out. Ed Glaeser had an op-ed in the New York Times last week arguing that the best federal fix for supply-side regulatory barriers to housing is tying federal transportation dollars to land use. I agree with almost everything he says about this (it’s the signature federal policy proposal of my 2012 book, “The Rent Is Too Damn High”), but he characterizes it as a more novel idea than it really is.

As I wrote in August, Cory Booker and James Clyburn wrote a bill that (among other things) would have done this back in 2019. Joe Biden endorsed it in his 2020 presidential campaign. And there was an effort to incorporate it into what became the Infrastructure Investment and Jobs Act.

That went nowhere, and we’ve been in a holding pattern ever since.

Lots of suburban Democrats don’t like the idea, everyone electorally minded is (legitimately, in my view) nervous about the implications of putting this on the partisan agenda, and Republicans just aren’t interested. In particular, Senator Todd Young of Indiana, who is clearly the leading YIMBY voice in GOP circles, thinks it’s bad for the federal government to intrude on state authority in this area. Which I mention not to make Young out to be a bad guy — he’s one of the highest value over replacement senators around — but just to note that especially if you’re a center-right economist with GOP ties like Glaeser, trying to talk this over with Young’s team would be more helpful than writing New York Times op-eds.

The main practical result of Booker-Clyburn was that Trump started personally paying attention to land use issues for the first time, in a bad way.

Early in his term, nothing was really happening on housing issues, but Trump administration officials (like Obama administration officials before them) formally endorsed the proposition that land use regulations were an economically significant barrier to housing supply. Then, Trump got wind of the Booker-Clyburn bill and started running around the country, talking about how Joe Biden and Cory Booker want to ruin the suburbs, and Project 2025 ended up including a NIMBY manifesto. More recently, I saw Trump say that he was going to “slash regulation” and increase homebuilding. That’s a good idea, but I have no idea what regulations he has in mind. The land use rules he’s pledged to support? Biden has embraced some trade ideas that are bad for construction, but those are largely policies he inherited from Trump, and Trump is promising even higher tariffs. At any rate, I think conservatives should see YIMBYism as deregulation and embrace the policies Glaeser and Booker and I are talking about. But they need to work that out amongst themselves.

There is one area where Congress could deregulate housing supply without raising GOP hackles about federalism, though: land use in the District Columbia.

Congress could go so far as to override all kinds of local land use rules, though that would, of course, raise home rule objections on the left. But right now, there are federal regulations that constrain land use in DC, and eliminating those would be pro-local control and anti-NIMBY.

The Height of Buildings Act is bad

One of the great shames of my life was when we took my then-preschool-aged son on a family trip to Syracuse, New York, and he remarked, “Wow, what a tall building!” as we drove through downtown. Because Washington, DC does not have any tall buildings.

The tallest building in the District, The Cairo, is a few blocks from our home and clocks in at a shrimpy 164 feet, which admittedly was pretty tall by the standards of 1894 when it was built. Such tall construction scandalized the neighbors, and the Height of Buildings Act of 1899 (later amended by the Height of Buildings Act of 1910) was passed to prevent the construction of such tall buildings in the future. Under current law, the tallest allowable building height in the city is 130 feet, and in most cases, they have to be shorter than that. The tallest building in Billings, Montana is 272 feet. In Bismarck, North Dakota they have a building that’s 242 feet tall. Or looking at an even more reasonable comparison like Charlotte, North Carolina, a medium-sized city in Sunbelt sprawl country — they have 61 buildings that are over 200 feet tall.

DC has nothing like that, even though it’s a dramatically more compact and transit-oriented city.

This has always bugged me, as an urbanist, because transit systems by their nature are spiky. A small number of locations in the city — Farragut Square, Metro Center, L’Enfant Plaza, Chinatown, and Union Station — have dramatically better mass transit access, because they exist at the convergence of multiple Metro or commuter rail lines. You can sort of draw a triangle between Farragut, L’Enfant, and Union Station that includes the other transfer stations, plus the White House and the Capitol. Basically all the office jobs related to politics, government, and media ought to be concentrated in tall buildings inside that triangle.

But for years, whenever I would raise this with players in city politics, they perversely countered that the status quo had some upside. Basically, the inability to fit everyone into the central business district meant that there was always artificially high demand for office space in secondary centers. There are offices out in the commercial corridors of Upper Northwest and in Georgetown and DuPont Circle. And during the course of my time here, the city has built out a series of essentially new greenfield neighborhoods — NoMa, Union Market, Navy Yard, the Ballpark, the Wharf — and each of these has an office component alongside residential. The developers of these large-scale projects liked being able to include offices in the project, because it spread out risk, diversified revenue sources, and made the ground floor retail leases more valuable since you could ensure a lunchtime customer base.

Still, that always struck me as missing the forest for the trees, making individual projects easier to finance and market at the expense of making commutes worse and reducing the agglomeration power of the city.

That whole argument, however, is now obsolete. DC, like most American cities, is suffering a huge negative shock to office demand thanks to Zoom and remote work after Covid. We now find ourselves with a looming budget crisis thanks to falling commercial real estate values, even as we also face a housing crisis due to constrained supply. What we and other cities need to do is change rules to allow more market-rate housing to be built, thus stabilizing the tax base while residential demand remains high. If we allow high demand to be translated into growing supply, then we will garner additional property tax, income tax, and sales tax revenue, and the city will be fine. If we don’t, we’ll need to reduce services and raise taxes in ways that may kill off the residential demand, and the city may repeat the cycle of decline that we saw in the 1960-2000 period.

Height Act repeal can help with this

There are many places in DC where more housing could be built, and if I ran the city, I would allow for greater density in the affluent neighborhoods west of Rock Creek Park. I stand by that suggestion 100 percent and hope it will be adopted in the upcoming Comprehensive Plan update. But the least politically controversial way to add new housing these days is with office-to-residential conversions. If people don’t want as much office space as they used to, the obvious solution is to turn that space into apartments. This is now happening to some extent, and I’m glad to see my council member, Brooke Pinto (whose district includes most of the office zone) cheerleading for new housing supply.

Unfortunately, the economics of office-to-residential conversions are just not as good as city officials would like them to be.

In an ideal world, you could make fairly superficial renovations — move some internal walls, build kitchens, install bathrooms that include showers and baths — and turn an office into apartments. In practice, though, office buildings tend to have the wrong shape and incorrectly locating plumbing infrastructure to create conventional floor plans. Cities ought to become more flexible in terms of what kinds of floor plans are allowed so that some developers can experiment with unorthodox approaches that are cheaper to execute on. But in a lot of cases, you’re really looking not at “conversions,” but at tearing down existing structures and building something new on the land that is better-suited to residential use. That’s expensive. Even a half-empty office building with falling rents can be more lucrative than a teardown project that generates zero revenue and lots of expenses.

A risk for DC (and other cities) is falling into an equilibrium in which many office buildings are not worth investing in maintenance or upgrades, but still too valuable to tear down and replace with new residential structures. In the long run, buildings will become non-functional and eventually come down. But if that process takes too long, demand will collapse to the point where offices are replaced by surface parking lots rather than apartments.

One easy way to speed the building replacement cycle is to make it more lucrative to build something new, by allowing larger buildings. Across most of the city, local zoning rules are stricter than the federal Height Act, but in swathes of terrain in or near downtown, the Height Act binds.

If you repealed it, the opportunity to build new buildings would be more valuable and conversion projects would be more likely to happen. Of course, the city government could do its part by changing the zoning in the West End and other places adjacent to those pink zones. But the Height Act itself really is a distinctly federal barrier to housing.

Speaking of zoning…

The other thing about local zoning in DC is that it’s not truly local.

The Home Rule Act that created the District’s elected government not only allows Congress to override local legislation when it wants to (something that rarely happens), it also reserved certain political powers for the federal government. For example, the current Zoning Commission has two DC Mayor appointees, one vacant mayoral seat, one person appointed by the Architect of the Capitol, and one person appointed by the National Park Service. The NPS seat appears to be in the hands of an earnest park ranger type, while the AOC’s designee has spent his whole career in planning and designing federal buildings.

They’re more or less the kind of people you’d expect to see the AOC and NPS appoint. But they don’t have to be. The federal government could just send people who love housing. There’s also a separate Board of Zoning Adjustment that has one federal appointee among its five members. These federal voices aren’t determinative in most cases, but they do matter.

Most importantly, though, the federal government is a huge user of office space in the District of Columbia. In the context of Height Act reform, it’s not just that the economics of replacing office buildings with apartments improve if you’re allowed to build taller, it’s also that the federal real estate portfolio could be reconfigured. Certain agencies occupy iconic historic structures (Treasury) or have unique security requirements. But a lot of what happens in the federal government is pretty generic office work done in fairly generic offices that are arbitrarily scattered around because the buildings here are so low slung. The FAA operates in two separate buildings, neither of which are colocated with the rest of the Department of Transportation. The Administration for Children and Families occupies a separate building from the rest of HHS. The CFTC, SEC, FCC and many other regulatory agencies are just hither and yon in random buildings. You could consolidate agencies into a smaller number of taller buildings — buildings that would actually count as tall in a normal city — and free up plenty of land for housing.

This is is all marginal in the total national housing picture.

But more and more people involved in national politics are interested in talking about housing. There’s even going to be a new YIMBY Caucus in Congress! And people want to know what the federal government can do on housing, much of which is hard without contravening federalist principles. Repealing the Height Act, appointing pro-growth people to DC zoning boards, and taking advantage of Height Act repeal to reconfigure the federal real estate portfolio all fit the bill, though, and Congress should do it.