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EDITORIAL: Biden, ‘affordable’ housing and the regulatory burden

Democrats have come to the realization that government policies cause housing shortages. This is a step forward.

President Joe Biden’s $2.3 trillion infrastructure proposal is a central planner’s dream and has little to do with repairing crumbling bridges and roads. But — in a tip of the cap to the blind squirrel — it does include a few worthwhile concepts.

Most notably, the White House offers an explicit admission that an overactive regulatory state can drive up housing prices by limiting construction and burdening builders.

“Exclusionary zoning laws — like minimum lot sizes, mandatory parking requirements and prohibitions on multifamily housing — have inflated housing and construction costs,” a White House release notes. “President Biden is calling on Congress to enact an innovative, new competitive grant program that awards flexible and attractive funding to jurisdictions that take concrete steps to eliminate such needless barriers.”

California is Ground Zero for bureaucratic roadblocks.

“We’ve seen building costs growing in a number of different markets, but California stands out,” Elizabeth Kneebone of UC Berkeley’s Terner Center for Housing Innovation told PolitiFact in 2019. “And by some measures it has become home to some of the most expensive, if not the most expensive, markets to build in.”

The Terner Center calculated that in 2015 “impact fees” assessed to developers added almost $24,000 to the price of every home built in the Golden State. That cost is passed directly to homebuyers and has certainly increased in the past five years. Add California’s notoriously energetic administrative state to the mix and it’s little wonder that builders and buyers face significant challenges there.

“The state has an overregulation problem that’s contributing to the housing affordability crisis,” James Broughel and Emily Hamilton of George Washington University’s Mercatus Center wrote in a 2019 op-ed for the Los Angeles Times. The researchers note, “There’s no doubt that zoning rules are a key driver of California’s sky-high housing costs.”

The Biden plan is to speak to local officials in a language they well understand: money. The administration proposes to lavish federal funds on jurisdictions that remove barriers to affordable housing and to financially punish those that don’t. It’s a tried-and-true tactic by Washington politicians who live to wield the power of the purse to manipulate behavior.

The first step toward fixing a problem is acknowledging it exists. Now that the Biden administration and other Democrats appreciate how many affordable housing shortages are self-inflicted, perhaps there’s hope for progress on this front.

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