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Opinion
Longboat Key Wednesday, Nov. 6, 2019 1 week ago

The antidote for unaffordable housing: Deregulate

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The lack of affordable housing in Sarasota County is an increasing problem that has potential to be helped.
by: Matt Walsh Editor & CEO

Over the past two weeks, our editorial staff addressed one of the most vexing issues in Sarasota and Manatee counties: the lack of affordable housing.

It’s increasingly becoming a threat to the health of the economy going forward.

As prices rise, middle- and lower-income citizens become increasingly unable to live close to work, adding to the stress for more and bigger roadways and more vehicular traffic.

As prices rise, it becomes increasingly difficult to attract employees. Affordable housing is essential to having a thriving rising and middle class.

As this week’s report on possible solutions to increase the supply of affordable housing shows, you’ll see our various government institutions are attempting a variety of strategies to help increase the supply of affordable housing.

Unfortunately, too many of the solutions are relying on the big hand of government involvement, government spending and government regulation.

There are better ways.

Four years ago, Observer columnist Adrian Moore, the vice president of the Reason Foundation, wrote a column in the Observer with his prescriptions. They are worth repeating. The following are excerpts from that column, which you can find online: YourObserver.com/article/our-view-you-want-affordable-housing:

 

RIGHT RECIPE: DEREGULATE

What really drives housing affordability is supply and demand. We have no shortage of demand in Sarasota. Supply is the problem. Like so many places, Sarasota has throngs of people who have moved here, purchased their home and now want to put a stop to any more growth. They got theirs, and now they want to shut the gate on everyone else.

This stance is unfair and morally bankrupt. Moreover, it simply violates the property rights enshrined in our Constitution, which are crucial to our way of life.

All who buy a parcel of land have equal right to build a home on it, so long as they don’t impose an undue burden on any others in the process. The fact that the economy involved developers to make this process more efficient doesn’t make the rights any less fundamental.

High home prices outside of downtown and on the keys can be squarely laid on the shoulders of land-use restrictions.

Over the past decade, researchers at Harvard and the University of Pennsylvania studied this problem and found that housing price differences between cities are not attributable to variation in land prices or construction costs but to regulatory differences, primarily zoning and building restrictions.

Similar research for the Lincoln Institute of Land Policy found that “house prices in cities with stricter regulatory policies rose 30% to 60% relative to less restrictively regulated cities over a 15-year period.”

A great example of this is Portland, Ore. — a bastion of new urbanist planning policies and one of the most stringently controlled housing markets in the US. These policies have been disastrous for affordable housing there.

 

SENSIBLE FEES

The recipe for affordable housing is to deregulate markets for land and allow market-driven densities and development, especially in the suburbs. It means getting rid of costly elements, such as building codes that serve arcane interests rather than measurably improving public health and safety. All those do is result in higher home prices.

It also means setting impact fees sensibly. These fees are supposed to mitigate the effects of more housing, such as increased traffic, but they have become a way for government to force builders to do their bidding. Remember, whenever developers are forced to pay more fees, that cost is eventually passed down to the homebuyer. So these impact fees should not be a bargaining chip, but a data-driven assessment of unusual impacts with fees set commensurate with addressing those impacts.

Those fees should be spent only on addressing those impacts effectively. Using high fees to limit growth or waiving or reducing fees to incentivize certain developments only distorts the market and makes the affordability problem worse.

There is no silver bullet. The lack of a clear definition of affordable housing means it will always be a messy policy area. But we have decades of experience showing that interfering with housing markets makes homes less affordable, while working with the markets puts homes in the reach of ever more people. That is my definition of affordable housing policies.

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