2024 Leg Session, Ari Armstrong, Exclusives, Housing, Land Use, Uncategorized

Armstrong: Build, Colorado, build

Build, Baby, Build! That is the title of economist Bryan Caplan’s new graphic novel, subtitled “The Science and Ethics of Housing Regulation.” If you are a policy maker or influencer in Colorado, you need to read this book. If you are a resident concerned about sky-high housing costs, you should consider buying copies for your representatives in local and state government. You also can watch Caplan’s recent presentation at the Cato Institute, which published the book.

“Housing prices stay high in desirable areas because most governments strictly regulate new construction. In a free market, developers would indeed respond to high prices by building TONS of new housing. But we do not have a free market in housing. Not even close. Since regulation keeps quantity low, prices in the most desirable areas stay high,” Caplan writes.

Consider a game of musical chairs, Caplan suggests. In a regular game, the same number of people compete for fewer chairs. In the housing market, a growing number of people in desirable areas compete for housing that does not keep up with demand. Allow developers to build enough housing to satisfy demand, and costs go down and everyone has a place to live.

The costs of government restrictions on housing are huge. “Americans spend about 20% of their budget on housing” on average, Caplan writes, and perhaps half of the cost is driven by anti-building regulations. In some areas, such as San Francisco, housing costs are absurd. Around Denver, they are merely crazy.

Some people say they do not enjoy the esthetic of apartment buildings, condos, and high-rises. That’s easy to say if you’re rich or if, like me, you’ve owned a home for many years. I won’t even tell you what my family paid for a house in the aftermath of the mortgage meltdown, as I don’t want people now looking to buy their first home to suffer a breakdown of despair. Bluntly, my family would not be able to afford to live in our area if we were buying our first home today.

To nurse an esthetic preference, the “Not in My Back Yard” folks drive many starting families effectively into poverty, push some people into outright homelessness, suck away people’s time and clog the roads with long-distance commutes, reduce the walkability of cities and the feasibility of mass transit, and discourage moves to find better jobs.

I’m sorry, but if you turn to the guns of government to enforce regulations that do great harm to other people, all to protect a petty esthetic preference, then you need to rethink your priorities.

Of course, single-family homes with large yards will continue to exist regardless of the regulatory climate, and you are welcome to buy one and live in one (assuming you can afford it). You can live in an HOA that tightly restricts types of buildings.

The phrase “Not In My Back Yard” can be misleading in that what we’re really talking about is not a particular person’s own back yard, but everyone else’s back yard. You properly have the right to develop your own property, or not (unless it is part of a broader compact). You do not have the right to stop people from developing their own properties as they see fit (within broad guidelines controlling for pollution and the like).

I was particularly struck by Caplan’s point about housing restrictions discouraging moves. Historically, many Americans migrated “from declining regions to booming ones, enriching the country and themselves,” he writes. “In recent decades, however, housing regulation has CRUSHED this natural process. Why move to a ‘better’ job in California [or wherever] if extra housing costs eat up all the gain? . . . Housing regulation traps talent in low-producing regions.” This problem throttles the productivity of the entire nation.

Because housing restrictions discourage people to move to better jobs and artificially restrict construction jobs, the policies probably also contribute to “rising deaths from drugs, alcohol, and suicide” due to a “lack of meaningful work for working-class males,” Caplan writes.

But don’t we want to preserve Colorado’s natural beauty and outdoor spaces? Yes! And YIMBY policies promote that by encouraging denser housing on average. Preserving wild spaces and building housing for people are compatible goals.

Caplan’s 256-page graphic novel is a breeze to read (well, the 17 pages of notes can be dense), but I can hardly review all the points here. He covers Bastiat, rent control, “inclusionary zoning,” and much more. Whatever objections you might be thinking of, Caplan has anticipated them. And the artwork by Ady Branzei makes the book fun and accessible to a wide audience. Go read the book!

A roundup of Colorado housing bills

Caplan’s message is clear: Government artificially drives up housing costs, and the solution is for government to get out of the way. But the Colorado legislature is filled with Progressive Democrats who are at best skeptical of business and whose default position is always more political control.

Still, with Polis leading the YIMBY cause and many Democrats genuinely concerned about the high cost of housing, the legislature has made some important pro-market reforms, although mixed with some damaging anti-market measures.

After last year’s defeat of a major land-use reform bill, this year some elements of that bill made it through in smaller chunks. Jesse Paul and Sandra Fish review six bills that passed, four of which on net represent important pro-market reforms.

House Bill 1313 eases zoning restrictions in “transit-related areas.” This 62-page bill is way more bureaucratic than I’d like. It arbitrarily defines the areas in question, wrongly restricts owners’ associations, and arbitrarily favors some players with tax credits.

The legislature instead should have just reined in zoning restrictions across the state and created a uniformly low-tax environment. Still, friends of markets (a group that often excludes Republicans) welcome the easing of zoning restrictions on building, even if limited in scope.

House Bill 1152 eases restrictions on the building of “accessory dwelling units” (“granny flats,” “mother-in-law homes”) on existing properties. This is good. My back yard, for example, easily could accommodate another small home, with plenty of yard left over. Unfortunately, the bill also includes a grant program, because Democrats just can’t leave people alone to handle their own affairs.

House Bill 1304 eases mandates on parking requirements. Let people interacting in a market figure out the right ways to handle parking. Unfortunately, the bill was “watered down,” reports the Sun, but it moves in the right direction.

House Bill 1007 eases restrictions on occupancy limits. This is an unambiguously good and libertarian pro-property-rights bill that, ironically, was sponsored by (among others) a couple of “Democratic Socialists.” Hey, I welcome these strange bedfellows to the cause.

As you can imagine, not only are the pro-housing reforms mixed, but the “Progressive” legislature passed numerous regressive measures that further damage the housing market.

House Bill 1098 is especially bad (sponsored by the same two “Democratic Socialists”). It flagrantly violates the property and contract rights of owners of rental properties by restricting the eviction of tenants outside of a rental contract. In the name of protecting renters, this bill punishes property owners and discourages the provision of rental housing.

House Bill 1175 lets local governments interfere with the sale of certain residential properties.

If you already own your house, good for you. Many people living here and hoping to move here are not so fortunate. I know people who have moved away because housing here is so expensive. My philosophy is that people are good. Economic growth is good. The pro-people, pro-growth, pro-liberty stance is build, baby, build.

Ari Armstrong writes regularly for Complete Colorado and is the author of books about Ayn Rand, Harry Potter, and classical liberalism. He can be reached at ari at ariarmstrong dot com.


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