An article just published in City Journal, “Is Texas’s Affordable Housing Endangered,” describes how housing prices in Texas are becoming unaffordable. The article notes how the average house price in the Austin metropolitan area has doubled in just ten years, and how in the Dallas suburbs ten years ago over 50 percent of the homes sold for under $200,000 compared to only 4 percent today.
One of the reasons people move to Texas is because homes are affordable, and the author evokes California as a cautionary example. Because Texas relies on high property taxes instead of having a state income tax, if property values surge, there is a risk Texas voters will follow the example of set by the 1978 tax revolt in California. That revolt, which prevents annual reassessments of home value, could lead to Texas needing to raise income taxes, which would penalize productive activity.
There’s a lot of dominoes in that theory, however, which may or may not make it predictive. For example, if housing prices rise, the Texas legislature could simply lower the property tax rate, since higher assessments and lower rates can offset, resulting in a revenue neutral impact. But the author, Connor Harris, really goes off the rails in his discussion of policies to mitigate rising home prices.
Claiming “the main culprit for the rising prices is legal restrictions on housing,” Harris blames single family, residential zoning for the housing shortage. His solution is for the state legislature to pass a law “capping minimum lot sizes in undeveloped areas,” and requiring all cities to allow small “auxiliary dwelling units” in single-family residential areas.
It’s troubling to see what Harris is advocating published by the conservative City Journal, because it is further evidence of a libertarian/progressive consensus forming on housing issues that rests on flawed premises and hidden agendas. The biggest flawed premise is the idea that low density suburbs are somehow causing climate change. The libertarian response is “stop building suburbs that subsidize the car.” The progressive response is “densify cities.” But low density suburbs are not bad for the planet.
The greenhouse gas theory – that longer commutes result in more automotive emissions – should have been put to rest by the pandemic. Americans realized, if they hadn’t already, that a huge percentage of the workforce can work from home. But even before the pandemic hit, cars were getting greener, and jobs follow people into the suburbs. And in the future, driverless cars will form up in high-speed convoys in smart lanes, moving far higher numbers of people on the same stretches of road. Eventually, passenger drones will take additional pressure off roads. Getting from far flung suburbs into urban cores is going to get easier in the future, not harder.
The other premise surfaces further on in Harris’s essay, where he writes “when central areas of cities become unaffordable, jobs move to the richest suburbs—typically less accessible for working-class residents.” There’s a lot buried in that sentence that will escape the uninitiated. Basically it is a innocent sounding echo of a progressive litany, which is to mandate “inclusive” zoning in order to atone for the “exclusionary” zoning of single family residential suburbs.
There’s nothing wrong with converting, organically and in accordance with local sentiment, residential neighborhoods in urban centers from single family use to higher density. But when state mandated high density affordable housing is imposed, wherever it may be, the result is the destruction of neighborhoods where people have worked their entire lives to earn the right to live with a certain quality of life.
To better understand the danger posed by this growing movement to stigmatize, and then destroy, intact suburbs, consider the layers of abuse that accompany these mandates. It is bad enough that people who struggle to make a mortgage payment in order to have a home in a spacious suburban neighborhood suddenly have to deal with the random demolition of homes up and down their street to build apartments, or find the backyard behind their own backyard suddenly has a second home and driveway coming nearly up to the property line. And it isn’t unfair to mention that, especially in Texas where property taxes are reassessed for everyone, every year, people who pay mortgages on four bedroom homes are going to have divergent lifestyles and expectations compared to people who rent one bedroom apartments. And to be clear: This is not an issue of race. It is an economic fact that should be respected. Plopping low income housing into middle income neighborhoods is not fair to the people, of all races, who have worked hard to move up and out of low income neighborhoods.
But this is just the first layer. “Inclusive” zoning is rarely market based. In California, where it has become impossible to build affordable housing of any kind without subsidies, developers take advantage of tax credits and direct subsidies to pad their already inflated costs. The result is the average “affordable housing” complex in California costs over $500,000 per unit. At this price, the supply will never equal demand, rents are always subsidized, and admittance is by some form of a lottery.
The solution to housing affordability is indeed to increase the supply of housing, but state mandated densification is not the answer. If Texans are not careful, the next restriction, already well established policy in California, will be to cordon off every urban area, making new construction of any kind extremely difficult outside the “urban service boundary.” The moral premise: Save the planet. The hidden agenda: Artificially elevating home values, which creates collateral for homeowners to borrow against so they’ll consume more, higher property tax revenue to government, and an ongoing goose to real estate investment portfolios.
Instead of using state mandates to cram the burgeoning population of Texas into the footprint of existing cities, allow cities and town councils to decide at the local level how and where they want to increase density. At the same time, and this is absolutely critical, continue to take pressure off of urban housing stock by new construction of suburbs and entire new cities on open land. Focus on building enabling infrastructure – energy, water, roads – and minimize regulatory obstacles to new suburbs: excessive building code mandates, punitive fees and permitting delays.
Protecting America’s middle class requires not only nurturing a strong economy to create good paying jobs. It requires deregulation designed to lower the cost of living, and nothing impacts the average American’s ability to pay their bills so much as the price of housing.
The vision of progressives, abetted by libertarians, is to open the borders and admit at least another 20 million people into the United States within the next twenty years. Depending on border enforcement, that number could be much higher. Obviously there is a robust debate over the economic and demographic impact of this policy, but regardless of where one may stand on the issue of immigration, one thing is clear: If we’re going to expand our population, we need to build new towns, cities, and suburbs. And when the price is right, “market demand” is for detached single family homes. We’ve done it before. We can do it again. There’s plenty of room.
Ultimately the policies surrounding housing come down to a basic question: Are we going to nurture an economy of competitive abundance, or one of scarcity and rationing imposed by monopolistic business interests that hide behind environmentalist and anti-racist rhetoric? Even if the choice is to nurture abundance, there is no clear ideological polestar from which to design policies. Libertarians are right to want deregulation. They’re wrong to oppose local zoning laws. Progressives are right to care about the planet and about the disadvantaged, they’re just wrong in almost every possible way they’ve come up with to address those challenges.
This article originally appeared on the website American Greatness.
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Edward Ring is a contributing editor and senior fellow with the California Policy Center, which he co-founded in 2013 and served as its first president. He is also a senior fellow with the Center for American Greatness, and a regular contributor to the California Globe. His work has appeared in the Los Angeles Times, the Wall Street Journal, the Economist, Forbes, and other media outlets.
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