Get Out of Their Way

Cities across the country are relaxing their zoning regulations, and particularly single-family zoning, to address the affordable housing crisis. Some cities, such as Minneapolis, have completely done away with single-family zoning. And the Biden Administration has suggested that local governments will be required to relax their zoning regulations if they want to receive certain federal funding.

Government officials have explicitly stated the rationale behind these actions: government land-use regulations stifle the production of housing and increase its cost. When government gets out of the way, developers, builders, and housing innovators will produce more housing in their desire to make a profit.

It is noteworthy that we don’t have an affordability crisis in regard to smart phones, televisions, or computers. Even the poorest Americans can afford these values. And the reason is, the manufacturers of these products have remained relatively free to profitably produce a wide range of products. The same can’t be said for housing producers.

Zoning, preservation ordinances, permitting and the associated fees, and a host of other regulations stifle the production of housing and add to the cost of that which is produced. These regulations make it virtually impossible to profitably build housing for low-income families. And so, builders and developers do what is rational—they don’t build housing for low-income families.

Housing producers, just like the manufacturers of smart phones, televisions, and computers, will produce a range of products for nearly every price point if they can do so profitably. But the only way that they can do so profitably is to get out of their way and let them do what they do best—produce housing. The only way that they can profitably build housing affordable to low income families is to spend their time building, not filling out permitting forms or pleading with zoning boards for permission to proceed with their project. The only way that they can profitably build housing affordable to low income families is to invest their money in producing housing, not paying permitting fees and holding costs due to regulatory delays.

We marvel at the wonderful gadgets that technology companies regularly produce. We marvel at the innovations that make our lives immensely better. We can experience that same kind of excitement in regard to housing. We can experience the marvel of what housing innovators can do to make our lives better. But to experience that, we must get out of their way.