EDITORIAL: Removing ‘needless barriers’ to affordable housing

The $1.2 trillion infrastructure package remains a vast exercise in pork, although a slightly less worse version of the original bill thanks to Republican input. Only about $150 billion is actually dedicated to rehabilitating traditional infrastructure such as roads, bridges, ports and the like, The Wall Street Journal notes.

The bill also includes an interesting admission from the Biden administration. Buried deep in the legislation, the Unlocking Possibilities Program acknowledges that over-aggressive regulation plays a significant role in housing costs. The program provides $4.5 billion to fund grants to states and local governments to “take concrete steps to eliminate … needless barriers to producing affordable housing.”

Of course, it’s a bit bizarre to spend billions in federal tax money to bribe local jurisdictions to do something they should be doing in the first place. If local officials — including those in Southern Nevada — are truly serious about addressing any perceived housing problem, they should be laser focused on increasing the supply of housing regardless of whether the Biden White House bribes them to do so.

But to the extent that the Unlocking Possibilities Program highlights the problem of rigid and arbitrary zoning codes or other myriad barriers that communities have imposed to strangle housing development, it may prove somewhat useful. The devil is in the execution.

“Effective federal grants must be based on metrics that reflect localities’ actual openness to lower-cost housing construction,” Emily Hamilton, director of the Urbanity Project at George Mason University’s Mercatus Center, argued in The Hill, “rather than superficial reforms that may not lead to real-world results.”

In other words, there must be accountability tied to the grants to ensure that communities accepting the money actually show a tangible increase in housing stock.

“Federal policymakers should use a formula to rank localities based on their housing affordability and the number of new homes they permit,” Ms. Hamilton advocated, “The key is to offer the largest grants to the highest-performing localities and none to those that obstruct low-cost housing construction the most.”

A concern raised in September by Ms. Hamilton’s colleague at the Mercatus Center, Salim Furth, is that House Democrats have watered down the program to include virtually anything that falls under the amorphous umbrella of “urban planning,” making it less likely that the money will be used effectively.

We’ll see. But it’s a small step forward that a Democratic bill pursued by a Democratic president and passed by a Democratic Congress includes a tacit admission that regulatory interventions often trigger additional problems. Perhaps it’s too much to ask that this epiphany be more broadly applied to the economy at large.