News and Commentary
Kevin Erdman’s third post on the dynamics of landlords in the housing market is on why owner/occupancy is so common in the U.S. He argues that due to agency costs inherent in the tenant/landlord relationship, especially when the landlord is a larger company with different agents responsible for different tasks. Because the returns from rent, rather than the price necessarily, are so important in housing affordability, landlords are best able to economize on the costs associated with having tenants by either building large apartment complexes, otherwise the market is mostly limited to small-scale local landlords.
When a neighborhood “gentrifies” in the absence of an expansion of housing supply, it creates displacement and exacerbates the affordability and homelessness crisis. One idea to fix this would be to set aside tax increment funds (TIFs) from gentrifying areas to finance more affordable housing options.
Brookings’s Jenny Schuetz has a post on why homeownership shouldn’t be the end-all-be-all for financial security. The focus on homeownership makes renting look like a “last resort” for many, when in reality it’s a perfectly reasonable option, even for those who plan to live in an area long-term. Additionally, homeownership does come with some risks, especially when it’s usually the overwhelming majority of someone’s portfolio. Other policies are often preferable for building wealth than homeownership.
Jenna Chandler in CurbedLA writes about how affordable housing often becomes market-rate, leaving those tenants out in the cold when prices increase. More liberal zoning policies would not only keep rents down in the long-run, but also increase the possibility for a steady supply of new affordable units to replace those that change to market-rate housing.
The Santa Cruz Sentinel ran an op-ed from Mark Primack writes about the policy failure that is single-family zoning. It increases sprawl, keeps rents expensive, and progressive support for it (or rather, opposition to liberalization of regulations) undermines many other important parts of the broader progressive agenda.
Here’s a great episode of Macro Musings featuring the Mercatus Center’s Sailm Furth and David Beckworth talking about zoning, NIMBYism, and how to reform laws to make the housing market more equitable and less favorable to already-wealthy entrenched interests.
Republican Indiana Senator Todd Young has introduced the YIMBY Act to require recipients of Community Development Block Grants to explicitly justify why they are choosing to maintain zoning regulations that increase inequality and segregation while decreasing housing affordability.
The always-excellent Alex Baca has a piece in Greater Greater Washington on the “entitlement” of residents of D.C.’s Dupont Circle. A recent development near a Masonic Lodge has led to a Stalingrad-esque conflict spearheaded by entitled residents fighting tooth-and-nail to stop necessary developments, perpetuating intergenerational conflict and wealth inequality.