Housing supply

First 100: Biden enters housing supply minefield

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Housing is a universal need, and it is so linked with personal enrichment, economic health (see the financial crisis), inequalities, transport, and even the climate that it quickly transforms into a subject of division. In reports Title string and the fate of foreclosure victims, I saw how much personal investment we have in our homes, how we use them to mark time and measure ourselves in society. People were scrambling to stay up to date on their mortgages ahead of their medical or utility bills; they would rather have a house than heat in that house.

What I’m trying to say is that the totemic value placed on housing, particularly in the United States, makes housing policy divisive. This will not necessarily change with the federal investment. And that’s the backdrop for one of the most tantalizing political strands of the US jobs plan, which is one of the few rollbacks from Obama’s 2009 stimulus.

The Biden plan pledges to “eliminate exclusionary zoning and harmful land use policies” through a “competitive grants program that provides flexible and attractive funding to jurisdictions that take concrete steps to eliminate these unnecessary barriers to the production of affordable housing“. The subsidies would be at least $5 billion.

The policy idea here is that local zoning control has led to things like mandatory parking and height limits and single family requirements that have reduced housing supply, especially in expensive cities on the coasts, and that addressing the shortage would follow demand and make these areas more affordable (or at least not completely overpriced). The response from opponents is that it destroys the character of neighborhoods and leads to gentrification and congestion and does not reduce the cost of housing or the displacement of low-income residents because replacement housing serves luxury markets. The answer to this answer is that these luxury units always obey the laws of supply and demand, and housing vacated by those who grab gentrified replacements is less expensive, and you can solve congestion by d other means, such as transit-oriented development. . And then it continues.

Political arguments are even more entrenched than most debates, for the sentimental reasons explained above. For this article, I want to talk about the politics of the Biden administration entering into this argument at the federal level. Because the template for that is called Race to the Top.

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Pretty much the only thing more important to people than their homes is their children, and at the end of the years there was a fierce separate center-left debate around “failing schools” and the need of educational reform. One side said bad teachers should be fired and tests should measure student achievement and non-traditional setups like charter teaching should be encouraged. The other said that teaching a test was not teaching and that charters selected their own students and that testing did not correlate with teaching and poverty and other factors playing into the ‘learning. And it just continued.

The Obama administration found itself in the middle of this debate with Race to the Top. Part of the 2009 stimulus and also priced in the $5 billion range, it was a competitive grant program that gave money to states if they changed their K- 12 to comply with the education reform program. These included supporting charters and rigorously evaluating teachers, redressing underperforming schools, and developing more testing and assessments. Nineteen states eventually received grants, and many standards were changed to acquire them.

At the time, states were strapped for cash due to the recession, and the Obama administration was exploiting that to make the education reform changes it wanted. Today, cities are more cash-strapped than states (and really everyone is in better shape now that US bailout tax aid is on the way), and the cash on hold would be helpful. if land use changes.

That’s what happened after Race to the Top is more notable. School districts backed out of the reforms, and eventually several states did the same. The backlash of low pay has rallied the nation to the cause of teachers, including in red states. And the education reformers pretty quickly lost their edge in the Democratic coalition. During the 2020 presidential campaign, every Democratic candidate distanced themselves from the charter school movement. Biden’s education secretary also marked a real shift from the Obama years. And when the Biden team initially added a competitive pandemic resource grant for schools to the US bailout, the rejection of it as “Race to the Top 2.0” was so furious that it was quietly deleted.

Part of the reason is that teachers are such a large and powerful constituency within the Democratic Party that deliberately antagonizing them was not going to work. But the model of a Democratic administration taking sides in an intra-party debate and using federal dollars to spur their desires has led to their side of the debate being left out of the party altogether. Is it better for Democratic education reformers to get a handful of states to change their education policies, some temporarily, if in exchange they give up virtually all of their in-party influence?

And could that happen with these competitive land use subsidies? All is not the same, of course, and zoning/housing exclusion fees arguably have more support among Democrats than education reformers. But although conservatives are paying more attention to it, the eddies of local control are pervasive and tensions are as high in housing as they are in education. The potential for a backlash is certainly there and housing policy is unstable. Supply-side reformers may want to be careful what they wish for.

Granted, there’s eight times as much money, about $40 billion, in the Biden plan for public housing investment, though much of that money will go to fixing existing dilapidated stock rather than ‘on offer. An investment in social housing, which would begin by repealing the Faircloth Amendment which literally makes it illegal to build new social housing without bulldozing old units, would do much to balance the scales on this. Faircloth’s repeal, drafted by AOC, passed the House in its infrastructure bill last year; I imagine it will reappear in the Democratic version of the Biden package.

By the way, this article is part of our Building Back America series, a deep dive into the Biden public investment package, and you can read all the stories by clicking here.

What day in Biden’s presidency is it?

Day 80.

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