Jimmy Carter was the “great deregulator,” says Reason magazine and Nobel economist Vernon Smith, a president who enabled firms in “the airline industry, along with interstate trucking and freight rail, to compete for business.” Economic writer Noah Smith points out, “When it comes to actual deregulatory policies implemented, Carter did substantially more than Reagan. He deregulated airlines, energy, trucking, railways, telecommunications, finance, and more.” The Wall Street Journal notes that Carter’s deregulation efforts in brewing “sparked America’s craft beer industry,” especially important in Colorado.
Carter substantially understood what many Colorado Democrats today pretend not to understand: Government regulations often get in the way of prosperity and economic progress. In many areas Colorado Democrats rush to impose new regulations on business and property owners with barely a thought to the harms those regulations could cause, or how the underlying problem often is some other bad government regulation. Colorado’s Democrats should more often borrow a page from Carter’s deregulation playbook.
Land-use socialism
To take a key example, the most important economic issue now facing many Coloradans, and people elsewhere in the country, is the sky-high cost of housing. I personally know families who have left the state because they could not afford to buy a house here. Countless others decline to move here because they can’t afford to live here. This is a Big Deal. As a recent CPR headline summarizes, “Fewer people moving to Colorado [is] one reason for the state’s slower economic growth.”
The fundamental cause of high housing costs is local land-use socialism, rules that violate property rights to restrict the building and provision of housing and create artificial scarcity. It is simple supply and demand: When government restricts the supply of housing, the cost goes up.
The fundamental solution to high housing costs, then, is to repeal or reform the land-use regulations causing the problem. So, of course, the approach of some Colorado politicians is to ignore or downplay the root cause of the problem and rush to impose yet more ill-conceived regulations on property owners and builders.
Credit where due, though: Last year the Democratic-led legislature passed an important free-market reform that rolls back some land-use restrictions by “legalizing accessory dwelling units in much of the state,” as the Colorado Sun summarizes. Still, the housing market continues to be tightly constrained by anti-building rules.
Another measure aiming for denser housing near transit might create a building environment closer to what a market would look like, but it does so by imposing new mandates rather than by rolling back old ones. Why not just give people the freedom to develop their properties how they want, within broad guardrails?
Government as the problem
Elsewhere the legislature took a step in the wrong direction. “Under House Bill 1098, landlords can no longer refuse to renew a tenant’s lease without cause to do so,” the Sun reports, where “cause” is defined by the government, not by those who actually own the property. Such restrictions violate the rights of property owners, protect abusive renters, and add to the hassle and expense of providing housing. The only real protection that renters need is a robust free market in housing.
Now, rather than focus on removing the extensive regulatory barriers preventing the supply of more housing and keeping costs high, the legislature seems poised to obsess about management services that some property owners use to set rents.
The Denver Post’s Seth Klamann claims that, according to a White House report, Denver renters paid “$136 on average” per month more “in 2023 because of a profit-maximizing algorithm that Colorado lawmakers unsuccessfully tried to ban” in 2024.
What Klamann mentions nowhere in his news article is that the report in question concedes “the root cause of high housing costs is the under-supply of housing.” If the property management software in question really is a problem, it is so only in the context of a government-created housing shortage. So why are we talking about minor details rather than the root cause of the problem?
Nor does Klamann mention that the report relies on “several simplifying assumptions and limited data.” It is making an educated guess based on the prior assumption that the software services in question are bad. But this is all more than enough for Rep. Javier Mabrey to rush to impose new regulations on the housing market.
Allow me to spin an alternate story that is at least as plausible: People who use the software in question to help set rents really do tend to charge higher rents, but those are precisely the people who most care about maximizing their revenues and so would charge higher rents regardless. All the new regulations would do is violate people’s rights to free association, add to the hassle of renting properties, and so ultimately discourage and further drag the housing market.
Even if we take the $136 figure at face value and (implausibly) say that banning the management services in question would drop rents by that amount, the costs of anti-housing regulations dwarf that figure. I don’t have a great estimate for the added costs of land-use regulations in Colorado, but we can safely say the magnitude is several times that of the alleged effect of software management tools.
What would Carter do?
A couple years ago, Pew pointed out, “Strict land-use policies appear to be contributing to Colorado’s housing shortage. Across the state, many jurisdictions restrict large amounts of residential land only for the most expensive type of housing—single-unit detached housing, often with large lots and significant parking requirements.”
This is such an important issue that I intend to write to every city councilor, county commissioner, and legislator in the state of Colorado and offer them a free copy of economist Bryan Caplan’s book “Build, Baby, Build” (about which I’ve written), up to available funds. I hope that Rep. Mabrey and others read it.
The problems of land-use socialism is only one example, although a profoundly important one. Yes, sometimes government needs to step in to prevent force and fraud and to ensure that contracts involve genuine consent. Generally, though, Colorado politicians, Democrats and Republicans alike, would do well to first ask, “How can we stop government from screwing things up?” In other words, ask, on his best days, what would the “great deregulator” Jimmy Carter do?
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.
