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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.
See this is a problem with markets. Markets just aim for profits, that's what they're for and all they do. If you want anything more than profits (increasingly often highly short-termist profits), you need a non-market solution. We want deep, long-term investment and expansion of housing stock. That's good for the economy in the longterm, enables population growth, mobility, agglomeration effects. But you can't get there by just naively relying on markets to do their thing, that's how you get rentierism and ridiculously high property prices.
Naive state interventions aren't great either, regulation is much of the problem. Imagine a big state-owned corporation with the economies of scale and long-term planning to build housing en masse, build whole new cities. No stakeholder engagement, no endless procedural crap, no quotas for pregnant women or criminals, no building substandard housing and then shutting down the company when the cracks show to rinse and repeat later. No expensive consultants who charge by the hour running rings around bureaucrats who have no idea what they're doing, do everything in-house.
State-owned corporations are unfairly maligned by mainstream economics, they do plenty of excellent work. Nobody in the private sector, nobody on the planet can challenge China State Shipbuilding Corporation. Housing is simple, easy to build just like commercial shipping. Build in a factory, assemble on site. It's a perfect sector for a huge state-backed capital investment. Plus government has natural abilities regarding land, it's a match made in heaven. All that's needed is rigour and discipline.
...no, you literally just have to remove the zoning restrictions on building housing and the market will trip over itself to build more housing until the price of rent collapses. Then you simply remove prohibitions on racial discrimination so that people don't have to use unaffordability as a way to keep out the underclass.
This whole mess is caused by the government refusing to let markets solve the problem.
There aren't significant problems with race in Australia such that urban centres are very unsafe. But property here is even more expensive than in much of America, compared to income.
Productivity in the construction industry has been falling in Australia. It's been falling in America too. Regulations are partly to blame but the whole thing needs a reboot. There's an entire genre on tiktok showcasing the poor quality of new-build American houses, all this wonky or leaky, shoddy construction work. There are problems with price, quality and quantity.
Housing is the sort of industry where it makes sense for big companies to do it, not tiny little shrimps. Learning-by-doing is clearly needed and not happening. There has to be close coordination with government anyway to build out the infrastructure needed, dams, water, power... It should be managed by the state but in a capable, effective fashion. I realise that last sentence sounds retardedly naive but it is possible in principle.
When in doubt, copy Singapore. It's run with heavy state involvement there, 80% of the housing stock is public housing, they have construction productivity that actually goes up and housing is actually affordable. Per Claude:
They are 100% urban and 76% ethnic Chinese.
69% of Americans choose to live in suburbs. Ultra-urban state planning (even if competent!) won't work on us. It isn't relevant to our wants and inclinations.
This is like people who say America should be more like Japan because of their great health outcomes. On one hand, yes. On the other hand, we just aren't Japanese and a bunch of fat white people severely underperform them on health outcomes. There's no path from us to them.
Europeans (the supermajority population in most American suburbs) have lived in dense urban towns and cities for thousands of years too.
The American preference for suburbs also is less organic than many conservatives online suggest. Zoning laws effectively prevent mid-density inner suburbs of the European or even traditional American kind.
Not dense like modern Asian cities, or even modern European ones. I'm right now in a "city" in Europe that's less dense than the suburb (of NYC) I live in at home. For being a city it's surprisingly civilized; just not having so many damned people is a major advantage.
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