In a review of Golden Gates: Fighting for Housing in America, Brandon Fuller makes a good case for excessive regulations, including stringent zoning, as the root cause of the affordable housing crisis.
As the title of the book suggests, author Conor Dougherty focuses on the housing crunch California, where the affordable housing crisis is most acute. Fuller observes:
Mr. Dougherty, a reporter at the New York Times and, formerly, The Wall Street Journal, has a gift for telling the stories of people struggling to overcome California’s housing dysfunction: the teenager fighting a rent increase that would displace her family; the three brothers who share one room in a house that is already home to seven other people; the enterprising builder who assumes massive regulatory risk to experiment with modular housing; the Catholic nun who tangles with real-estate investors to buy up apartment buildings and deed-restrict them as forever affordable. Absorbed in these narratives, the reader hardly realizes he is receiving an education on the political economy of California’s housing market.
California is home to four of the five most expensive metropolitan areas in the country. In relatively affordable Raleigh, N.C., the ratio of the median house price to the median income in 2019 was 3.8. In Los Angeles, that ratio was 9. And for a state that desperately needs housing, California is bad at building it: In 2018 it ranked 32nd among states on new-housing permits per capita. The San Francisco Bay Area, the focus of much of Mr. Dougherty’s book, built one unit of housing for every 5.4 jobs added between 2011 and 2017.
So, if there is a housing shortage, a developer will build houses to sell, right? Not in California:
But in the 1970s the antidevelopment sentiments of existing homeowners, often masked by a facade of limits-to-growth environmentalism, began to harden. Coupled with the passage in 1978 of Proposition 13, which strictly limited the property-tax burden on appreciating home values, the homeowners whose voices and votes shaped local policy began to block more and more proposals for new housing.
As [Harvard labor economist Larry] Katz put it at the time: “I believe, regrettably, that this will require some sort of state or federal action.”
Instead, high school math Sonja Trauss launched what became the YIMBY (Yes in My Backyard) movement, aimed at creating more affordable housing in the San Francisco area, “a center of hostility to development.” As a result, affordable housing advocate Scott Wiener was elected to the state legislature.
Wiener authored a Senate Bill 50 that would have pre-empted excessive local zoning rules and permitted higher-density housing near job centers. g development near transit and job centers. The bill was three votes short of being passed in Sacramento.
Meanwhile, the Yes in My Backyard Act, coauthored by Democratic Congressman Denny Heck of Washington and Republican Congressman Trey Hollingsworth of Indiana, would require that cities applying for federal community development funds demonstrate that they are reducing regulations.
Obviously the name is a play on Not in My Backyard. It has passed the House. Fuller comments:
The Yimby Act aims to prod expensive cities and suburbs into accommodating more affordable housing. And though it won’t unleash a flood of pro-housing reform, the information the bill aims to collect will help the federal government better understand the problem.
It also signals a growing bipartisan consensus that regulatory burdens in local housing markets are a source of regional and national impediments to economic growth and upward mobility.
Read the entire review.