housing matters
Red Tape and Rising Rents

The evidence that local land use regulations are a drag on the U.S. economy—driving up rents, rewarding the rich at the expense of the poor, and making it harder for people to move places where the job market is hot—seems to grow stronger by the day. And the fact that many sclerotic housing bureaucracies drag their feet in approving new construction makes the situation even worse. The Wall Street Journal reports:

The supply of new housing in the U.S. isn’t keeping up with demand in part because of local delays in getting building permits approved, according to new research set to be released next week by real estate tracker Trulia.

The study finds that in metro areas with longer delays in building and zoning approvals, developers are less quick to respond with new housing units when prices are rising and demand is high. […]

Las Vegas, Raleigh and Atlanta had average delays of about four months, compared with average delays of eight to 12 months in New York and coastal California markets.

In other words, as Kip Jackson recently argued, rents aren’t just soaring in deep-blue cities like New York and San Francisco because hordes of affluent Millennial hipsters want to move there. They are soaring because regulators smother new construction under paperwork and permit applications. And the result is an economy that is less fair, less equal, and less free.

Keeping housing affordable is one of the most important aspects of successful public policy, but our municipal governments are failing spectacularly. One starting point for reform, as the Trulia study suggests, is finding a way the construction permitting process. This is a relatively unsexy policy goal that is unlikely to get anyone’s blood boiling. But if done right, it will boost the economy improve millions of lives.

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