Can we do a "Race to the Top" funding rule for housing, like Obama did for education?
You'd condition state access to federal funding: to get the money, the state has to issue at least 10 housing unit permits per 1000 existing houses each year, in those municipalities that have both rising rents and restrictive zoning.
(Why 10 per 1000 per year? Because the charts suggest that's usually enough new housing to stop rent increases. Why only in municipalities with rising rents? Because Detroit has a good reason for not many housing starts. Why only if there's "restrictive" zoning (by some regulatory standard)? To give an out for states that have genuinely fixed their rules, but haven't got enough permits just yet.)
More housing is good for states even when it's inconvenient for neighborhoods. You'd think a decent pot of federal money would be all the excuse states need to cooperate with a federal upzoning/pro-housing plan.
Of course, some states haven't expanded Medicaid yet. So things wouldn't be that simple. Still seems worth a try.
Seems to me that there are three main issues: (i) construction financing, (ii) defect litigation and (iii) purchaser financing.
A result, at least in my neighborhood which has been upzoned, is that when SFH owners decide to make an investment in their land, it's usually by splitting the parcel into two SFHs rather than use the new zoning to create ~6 condo units. (I have no data behind this.) Individual owners often aren't prepared to deal with the financing and litigation issues mentioned in that article, nor are they able to handle delayed purchasing of units. They want to invest, construct and get out.
This feels a lot like something the dimwit on the midwit meme might think of, but could we just authorize some federal agency to build a limited number of gigantic housing towers in a limited number of very large, very expensive cities (basically just targeting NY, LA, SF)? But this wouldn't be "public housing" as we normally think of it - the agency would just build the buildings and then be authorized to auction them off to private companies. The federal government isn't subject to local zoning, so it can build whatever it wants wherever it wants. Maybe you could get conservatives on board with this because (1) the spending on the project would be offset by the revenues from selling the buildings, (2) none of their constituents would be affected as you'd only be quote-unquote "screwing over" the hated limousine libs in NY, LA, and SF.
The FHA has a lot to do with both (1) incentivizing the use of housing as a store of wealth, and (2) disincentivizing the underwriting of mortgages for all property types that *aren’t* SFH.
Wall Street has become super dependent on the streamlining and standardization of these mortgages, which has trickled down into banks just not knowing how to write mortgages for the Missing Middle and/or condos.
We should focus on reforming FHA standards in the short to mid term, and getting the FHA out of the market’s way in the long term.
Take advantage of negative polarization to do some good. Create a scheme called the “President Trump American Community Award” that gives high marks for cities with restrictive zoning. Then put up billboards in the “winning” cities congratulating them for making life tough for immigrants.
A 10:30 PM PST post?! Matt should make this the normal posting time so us west coast people have a chance to comment...
Here is a wild idea: The government should launch a massive ad campaign (or pay someone else to run the adds). promoting normal condo ownership. Most people believe multi-unit housing is apartments that are rented out to occupants, not owned by occupants. But most American's want to own their home, not rent, and that is where condos can be useful, but there doesn't seem to be a lot of positivity toward condos amongst the general public. Promoting condos positively may help.
Doesn't seem like any of these categories relate to expanding the pool of trade workers which is a big problem in some (many) markets.
Building code reform could be a blue ribbon commission opportunity? Most other countries' building codes are legislated or run out of quasi-public agencies, where as the ICC is a private industry trade group, and the "international" in the building code applies to the US, and a couple latin american and persian gulf countries. Canada doesn't have it's own baseball league, but even they have their own building code.
Honestly, it seems Trumps idea of building new cities works the best it works around the inherent political problem of resident resisting new housing, that seems to be intractable. Use tax breaks for remote workers and corporation to lure citizens to these new high density cities, and even offer digital nomad visas to foreigners. As the cities gain their own inhertia, take tax breaks away slowly. You can even allow for forgotten cities lie Baltimore, Detroit and Milwaukee to apply for these tax benefits if they, give their zoning authority to the federal government.
I know this is impossible , but I think the answer is to strengthen property rights instead of further weaken them with federal laws.
The owner of a property should be allowed to do anything they choose with their property according to law. Allowing non-owners to veto owners' choices is the root of the problem.
Homeowners associations, voluntarily accepted when moving to the neighborhood, take care of most cases, and self-interest handles most others.
I think empowering the government to further restrict individual choice is unlikely to succeed.
Only thing I can think of is to follow the model of the speed limit or drinking age. The Federal government has zero direct control over these things, but used the power of the purse over highway funds. Given the amount that the Federal government is likely to give out in the coming decade on housing and infrastructure projects, make that contingent on following a key set of changes in the relevant state and local regulations. The major difference to the highway funding example is that this is not 1 Fed vs. 50 states but 1 Fed vs. thousands of local municipalities. Even if you target the 20 cities with the worse housing problems, each of those cities breaks quickly into its core and surrounding suburbs. Part of this would need to be a major communications program so that local residents KNOW that their taxes are higher for the sake of retaining legacy regulation and zoning. One thing people like as much as NIMBY is low taxes. Give any local Dem politician a platform to run on this stuff against the legacy incumbents. Maybe incentivize states to take over key provisions in the Gavin Newsom model...
This is a very unformed idea, but if we start from the premise that a major source of NIMBY sentiment is incumbent homeowners wanting to protect their primary source of wealth, the federal government should adjust the tax code to discourage building wealth this way and encourage more pro-social alternatives (such as index funds). This would most likely piss off almost everyone, but some big structural changes are needed to gain momentum in a better direction.
Require sufficient soundproofing in multi-family buildings. Now, people try hard to avoid them due to unlivable neighbor noise and the nasty disputes that it leads to.
There are lots of things that would work, but the list of options that don’t slay sacred cows is much shorter.
In short, the problem isn’t the ability to develop innovative ideas in this space, the problem is overcoming all the political obstacles that favor the status quo.
The affluent suburbs engage in hypocrisy where they restrict new housing through elaborate bureaucracy and then have DEI teams bragging about inclusion. They’re all full of shit!
Can we do a "Race to the Top" funding rule for housing, like Obama did for education?
You'd condition state access to federal funding: to get the money, the state has to issue at least 10 housing unit permits per 1000 existing houses each year, in those municipalities that have both rising rents and restrictive zoning.
(Why 10 per 1000 per year? Because the charts suggest that's usually enough new housing to stop rent increases. Why only in municipalities with rising rents? Because Detroit has a good reason for not many housing starts. Why only if there's "restrictive" zoning (by some regulatory standard)? To give an out for states that have genuinely fixed their rules, but haven't got enough permits just yet.)
More housing is good for states even when it's inconvenient for neighborhoods. You'd think a decent pot of federal money would be all the excuse states need to cooperate with a federal upzoning/pro-housing plan.
Of course, some states haven't expanded Medicaid yet. So things wouldn't be that simple. Still seems worth a try.
No federal funding for any school district which restricts the construction of housing.
Any ideas to solve the problems mentioned here? https://www.urban.org/urban-wire/housing-market-needs-more-condos-why-are-so-few-being-built
Seems to me that there are three main issues: (i) construction financing, (ii) defect litigation and (iii) purchaser financing.
A result, at least in my neighborhood which has been upzoned, is that when SFH owners decide to make an investment in their land, it's usually by splitting the parcel into two SFHs rather than use the new zoning to create ~6 condo units. (I have no data behind this.) Individual owners often aren't prepared to deal with the financing and litigation issues mentioned in that article, nor are they able to handle delayed purchasing of units. They want to invest, construct and get out.
This feels a lot like something the dimwit on the midwit meme might think of, but could we just authorize some federal agency to build a limited number of gigantic housing towers in a limited number of very large, very expensive cities (basically just targeting NY, LA, SF)? But this wouldn't be "public housing" as we normally think of it - the agency would just build the buildings and then be authorized to auction them off to private companies. The federal government isn't subject to local zoning, so it can build whatever it wants wherever it wants. Maybe you could get conservatives on board with this because (1) the spending on the project would be offset by the revenues from selling the buildings, (2) none of their constituents would be affected as you'd only be quote-unquote "screwing over" the hated limousine libs in NY, LA, and SF.
The FHA has a lot to do with both (1) incentivizing the use of housing as a store of wealth, and (2) disincentivizing the underwriting of mortgages for all property types that *aren’t* SFH.
Wall Street has become super dependent on the streamlining and standardization of these mortgages, which has trickled down into banks just not knowing how to write mortgages for the Missing Middle and/or condos.
We should focus on reforming FHA standards in the short to mid term, and getting the FHA out of the market’s way in the long term.
Get rid of the mortgage interest deduction.
Take advantage of negative polarization to do some good. Create a scheme called the “President Trump American Community Award” that gives high marks for cities with restrictive zoning. Then put up billboards in the “winning” cities congratulating them for making life tough for immigrants.
A 10:30 PM PST post?! Matt should make this the normal posting time so us west coast people have a chance to comment...
Here is a wild idea: The government should launch a massive ad campaign (or pay someone else to run the adds). promoting normal condo ownership. Most people believe multi-unit housing is apartments that are rented out to occupants, not owned by occupants. But most American's want to own their home, not rent, and that is where condos can be useful, but there doesn't seem to be a lot of positivity toward condos amongst the general public. Promoting condos positively may help.
Doesn't seem like any of these categories relate to expanding the pool of trade workers which is a big problem in some (many) markets.
Building code reform could be a blue ribbon commission opportunity? Most other countries' building codes are legislated or run out of quasi-public agencies, where as the ICC is a private industry trade group, and the "international" in the building code applies to the US, and a couple latin american and persian gulf countries. Canada doesn't have it's own baseball league, but even they have their own building code.
Honestly, it seems Trumps idea of building new cities works the best it works around the inherent political problem of resident resisting new housing, that seems to be intractable. Use tax breaks for remote workers and corporation to lure citizens to these new high density cities, and even offer digital nomad visas to foreigners. As the cities gain their own inhertia, take tax breaks away slowly. You can even allow for forgotten cities lie Baltimore, Detroit and Milwaukee to apply for these tax benefits if they, give their zoning authority to the federal government.
I know this is impossible , but I think the answer is to strengthen property rights instead of further weaken them with federal laws.
The owner of a property should be allowed to do anything they choose with their property according to law. Allowing non-owners to veto owners' choices is the root of the problem.
Homeowners associations, voluntarily accepted when moving to the neighborhood, take care of most cases, and self-interest handles most others.
I think empowering the government to further restrict individual choice is unlikely to succeed.
Only thing I can think of is to follow the model of the speed limit or drinking age. The Federal government has zero direct control over these things, but used the power of the purse over highway funds. Given the amount that the Federal government is likely to give out in the coming decade on housing and infrastructure projects, make that contingent on following a key set of changes in the relevant state and local regulations. The major difference to the highway funding example is that this is not 1 Fed vs. 50 states but 1 Fed vs. thousands of local municipalities. Even if you target the 20 cities with the worse housing problems, each of those cities breaks quickly into its core and surrounding suburbs. Part of this would need to be a major communications program so that local residents KNOW that their taxes are higher for the sake of retaining legacy regulation and zoning. One thing people like as much as NIMBY is low taxes. Give any local Dem politician a platform to run on this stuff against the legacy incumbents. Maybe incentivize states to take over key provisions in the Gavin Newsom model...
This is a very unformed idea, but if we start from the premise that a major source of NIMBY sentiment is incumbent homeowners wanting to protect their primary source of wealth, the federal government should adjust the tax code to discourage building wealth this way and encourage more pro-social alternatives (such as index funds). This would most likely piss off almost everyone, but some big structural changes are needed to gain momentum in a better direction.
Require sufficient soundproofing in multi-family buildings. Now, people try hard to avoid them due to unlivable neighbor noise and the nasty disputes that it leads to.
There are lots of things that would work, but the list of options that don’t slay sacred cows is much shorter.
In short, the problem isn’t the ability to develop innovative ideas in this space, the problem is overcoming all the political obstacles that favor the status quo.
The affluent suburbs engage in hypocrisy where they restrict new housing through elaborate bureaucracy and then have DEI teams bragging about inclusion. They’re all full of shit!