Housing Affordability

Libertarian Explanation Readings: Housing and Urban Development, Not in My Backyard, Removing Barriers to Affordable Housing (1991) (Heritage Foundation review of this study)Not in My Backyard, Removing Barriers to Affordable Housing (Heritage Foundation review of this study) Howard Husock Broken Ladder: Government Thwarts Affordable HousingBroken Ladder: Government Thwarts Affordable Housing Housing Hurdles: The Solution? by Thomas Sowell (February 5, 2004)Housing Hurdles: The Solution? by Thomas Sowell (February 5, 2004) "Sanity in 'Frisco" by Thomas Sowell Easy Money In California by Thomas Sowell (April 18, 2005)Easy Money In California by Thomas Sowell (April 18, 2005)

Libertarian…… Governmental Regulations that increase cost of housing and reduce supply Building Codes Restrictive Zoning Environmental restrictions on building Urban Growth boundaries Rent Control High property taxes and fees on new development

Liberal explanations for lack of affordable housing Restrictive zoning –fueled by racism and fear of crime and unequal schooling schools Lack of governmental investment in public housing Predatory lending Mortgage and insurance redlining Energy inefficient building

Liberal explanations for lack of affordable housing……….. Inefficient land use: suburban sprawl Gentrification NIMBY Subsidies for wealthy and middle class housing (tax deductions, highway subsidies)

Building codes Model building codes adopted either statewide or by local ordinance (with modifications) International Building Code National Electrical Code International Energy Conservation Code –National Association of Home Builders opposes many codes, favors voluntary codes.

Building Codes Safety Codes: Mandating Fire Sprinklers, Stairway codes Cast-iron plumbing Electrical conduit Environmental Codes –R-value codes for windows and insulation; –Appliance codes (water heater). {will save money in the long run; but raise initial costs}

Building Codes Other: –restrictions on manufactured housing –Siding and exterior restrictions (Chicago: Concrete block exterior prohibited)Concrete block exterior prohibited

Zoning Restrictions on multi-family housing (Oak Brook) Lot-size requirements Single-use zoning over large areas Limits on building height (stories) Solutions: Anti-snob zoning laws; New Urbanism zoning, DeregulationLimits on building height (stories)

Environmental Regulations Wetlands protection Endangered species regulations Energy – efficient building codes Critique: San Mateo County and The Environmental Protection Racket by Thomas Sowell (May 30, 2005) Counting the Costs of Government Regulation of Land Development by Thomas Sowell (April 7, 2004)San Mateo County and The Environmental Protection Racket by Thomas Sowell (May 30, 2005) Counting the Costs of Government Regulation of Land Development by Thomas Sowell (April 7, 2004)

Urban Growth Boundaries Liberal justification: more efficient land use, better transportation, reduces suburban sprawl, preserves farmland Libertarian critique: limits development, increases costs Protecting Your Property From Stupid "Smart Growth" Socialists by Edwin Feulner (May 8, 2005)Protecting Your Property From Stupid "Smart Growth" Socialists by Edwin Feulner (May 8, 2005) Organized Theft: Sustainable Development, Smart Growth and Kelo by Tom DeWeese (July 3, 2005)Organized Theft: Sustainable Development, Smart Growth and Kelo by Tom DeWeese (July 3, 2005)

Rent Control Liberal justification: prevents gentrification, unaffordable rent increases. Libertarian critique: Restricts rent increases, based on inflation rate (usually, just current tenants). When applied to just current tenants, requires restrictions on eviction. Discourages new development, decreases supply of housing. Discourages maintenance.

Rent control… "Cutting edge California retreats to old, failed ideas" by Thomas Sowell"Cutting edge California retreats to old, failed ideas" by Thomas Sowell " Sanity in 'Frisco" by Thomas Sowell" Sanity in 'Frisco" by Thomas Sowell

Policies Designed to provide affordable housing Restrictive zoning: Anti-snob zoning laws: permits developers of low income housing to appeal zoning decisions. Mortgage\insurance Redlining: Fair Housing Laws Predatory lending: Illinois HB 4050 – Traditional Mortgage regulation

Policies Designed to provide affordable housing see: Government housing policiesGovernment housing policies Investment in low income housing: –Public Housing, –Housing Vouchers –Low Income Housing Tax Credit Other policies (mostly middle class): –Mortgage interest deduction –Home sale income tax deduction –FHA mortgage insurance