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Jeanne Kuang for CalMatters, "Abundance meets resistance: Are Democrats finally ready to go all in on building housing?". (Part of an ongoing series on housing, mostly in California. Now also at TheSchism.)
Those of you who have followed this series may remember the sad history of attempting to upzone around transit in California. It's a straightforward idea: transit infrastructure is expensive to build, more people will ride it if more people live near the stations, and it's a bad idea for cities to enforce apartment bans in those areas. California has made two major attempts in the last decade to fix this, and is embarking on a third.
First, 2018's SB 827, which didn't even make it out of committee. Then, 2019's SB 50, which was delayed until 2020 and then failed to pass the Senate. Since then, there have been some significant reforms; see 2021, 2022, and 2023. But the YIMBYs haven't taken another big swing since 2020, and they're doing that and more this year.
The latter two bills have been absorbed into the budget process, which is the Governor's way of pushing them forward. The former has not.
The politics are interesting. The SB 79 Housing committee hearing is worth watching; the chair, Aisha Wahab, was opposed to the bill, but it passed by a single vote. (This is called "rolling the chair", and it's a big lift.) And then it happened again, in the Local Government committee, the chair, Maria Elena Durazo, opposed the bill, and it again passed by a single vote; it's headed to the Senate floor for a likely vote in early June.
The stunning thing here is that, despite the years that have passed since 2018, the discourse among the bill's opponents hasn't changed. Because this is California, and most of them are Democrats, they oppose it from the left, and seemingly sincerely; Wahab talks about how "affordable" (i.e., subsidized) housing would be preferable, but there's no mention of how to pay for that, so in practice, the alternative is what we've been doing for the last couple decades, i.e., nothing. The Building Trades representative talks about any bill which doesn't mandate union labor as being tantamount to murder because the working conditions and the produced buildings will be unsafe. And there's generally an idea that market rate housing is bad, but affordable housing is good, and somehow if we outlaw the former, the latter will prosper. This has clearly not happened.
This rhymes with the current Abundance discourse, which has been extensive. (I can't do it full justice, but the basic idea is that we've regulated the government into an inability to accomplish anything, and we should stop doing that. It's most dire in housing, but the same idea applies elsewhere.) Reactions on a national scale oddly mirror the left-NIMBY discourse in California, ranging from Zephyr Teachout describing zoning reform as "relatively small-bore" to Robert Jensen suggesting that maybe poverty and death would be better for the environment instead. (As a treat, enjoy Sam Seder beclowning himself in front of Ezra Klein.)
My theory of this, developed over a series of infuriatingly circular conversations, is that there's a faction which is very attached to the idea that every problem is caused by a failure to write big enough checks or a failure to sufficiently tax (or if you're edgy, guillotine) the wealthy. So, if housing is unaffordable, it must be because we haven't sufficiently subsidized below-market-rate housing, or down payment assistance, or because rich people are hoarding homes and leaving them empty, and if you think otherwise, you must be simping for billionaires. This view is incompatible with understanding the details; for example, in that Sam Seder interview, Seder would talk about the corrupting power of money, Klein would talk about cartels of homeowners, Seder would say that that's just more corrupting power of money, but Seder's approach is very specifically to target oligarchs and corporations, not homeowners.
And this is the kind of equivocation I see in the best-regarded left critique of Abundance I could find, from Sandeep Vaheesan at The Boston Review. He gets the details wrong--he points to the government's support of nuclear power via liability limitation and ignores ALARA; he claims that upzoning doesn't actually produce more housing (so why do the NIMBYs fight so hard?); he defends the exorbitant rents in San Francisco by saying that it's a "superstar" city unlike Houston (is San Jose?)--but at its core, he wishes the book had clear villains like Thomas Piketty's "clear portrait of patrimonial capitalists and lavishly compensated executives thriving at the expense of everyone else". His proposed solutions are, naturally, to break up large corporations and to write bigger checks to bureaucrats so they can do more paperwork.
At each point, Vaheesan equivocates: about "deregulation" (if you want to end apartment bans, you must want poor people to live on Superfund sites!), about "democracy" (if you don't want to hand out veto points like candy, you must love oligarchs), and about the efficacy of reforms (upzoning and streamlining are simultaneously ineffective and giveaways to the wealthy).
"The future is already here; it's just not evenly distributed." This sounds like a promise, but in California's case, it's a warning. The problems, contradictions, and failures of blue governance are at their sharpest here, and if there's a way forward, it'll be here as well.
My rather unpopular opinion is that if housing wasn’t an investment most of these problems would solve themselves.
Nobody really wants more housing supply because it means that the one asset most middle class people can aspire to have — a house — at best stagnates in value and at worst declines in value. No politician want to be the person who made housing values fall. They’d have a hard time getting elected dog catcher if they approve enough new development to lower the cost of housing. Heck, people might not be happy if their house doesn’t increase in value. As such you have a problem that pits the owners of homes against the renters who want to own homes. You have to pick one.
The other issue with everyone trying to buy single family houses is that it’s acre for acre about the worst possible way to build housing. Condos are probably better for housing a lot of families in less space, apartments are cheaper but probably better suited for single people. If you want housing, it’s probably better to build for density and put more people in less acreage.
Land is perhaps the ur-investment, the one thing guaranteed that God (and perhaps the Dutch) aren't making more of. Even in societies where the government owns all the land, like in China, and merely hands out leases you have crazy real estate bubbles.
There is fundamentally no way to uncouple housing from investment because houses are expensive and take a lot of time and effort to build. There will always be fewer houses then there are people willing to buy them.
Whether it is an investment is beyond our ability to change. Whether it's promoted and protected as an investment is more malleable.
As an example, Canada's new housing minister said that prices don't need to come down. He is promoting housing as an investment instead of as shelter, and it doesn't need to be that way. He could've just as easily said "Prices need to come down because houses are for living in. To those who had planned on downsizing and using the extra money for retirement other purposes,
it sucks to be you, but too bad.we'll help you make a different plan. To the foreign investors who bought properties here, I'd like to saylol, thanks for the cash, suckersthat this will help us ensure sustainable growth that we can all benefit from."I live in Canada.
There's no amount of propaganda that can make land or housing an unattractive investment. If people want to live somewhere badly enough, it increases the subjective value. It is fundamentally a doomed proposition unless you adapt a communist system where the government decides where and how you live. Land is such a powerful store of wealth that the primary goal of wars - not just in human societies, but in apes, and all sorts of creatures who fight over territory - is its acquisition.
Even if you say: 'all land is no longer an speculative investment vehicle' - it will not change the essence of the fact that people will start exchanging property rights with bullets instead of dollars. Because that was the status quo, before the market.
I always liked the pithy Spanish "plata o plomo". Finally an equivalent English bon mot.
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