Libertarians on Property Rights, NIMBYism, Affordable Housing

Recent article regarding confronting NIMBYism in the goal of affordable housing…

Libertarians believe the best way for government to support affordable housing would be reduce zoning, regulations, permits, building codes regarding building and rental properties. In addition, reduced regulations for realtors and lenders to allow more people/firms to compete in the space. Land owners should be able to do as they see fit with their land/property as long as their usage doesn’t directly impact their neighbors ability to use their land/property. This would encourage more landowners to open their homes for rent and/or produce more units while being more secure that their projects will happen with less costs and time involved resulting in a higher supply of living spaces at a much lower cost. When more newer units are produced, the older units then become more affordable. 

NIMBYism and Libertarian’s on Free Trade and Property Rights

Libertarians do not support NIMBYism. Libertarians believe in free trade and believe respect for property rights is fundamental to maintaining a free and prosperous society, it follows that the freedom to contract to obtain, retain, profit from, manage, or dispose of one’s land/ property must also be upheld. Libertarians would free property owners from government restrictions on their rights to control and enjoy their property, as long as their choices do not harm or infringe on the rights of others. Eminent domain, civil asset forfeiture, governmental limits on profits, governmental production mandates, and governmental controls on prices of goods and services (including wages, rents, and interest) are abridgements of such fundamental rights. For voluntary dealings among private entities, parties should be free to choose with whom they trade and set whatever trade terms are mutually agreeable.

High Taxes

Futhermore, towns and the state should reduce property taxes, income taxes, sales taxes and other taxes to help allow people to keep more of their pay to better afford housing. At the very least, governments should restrict themselves to increases to match inflation only.

Essentially, the high costs of taxes and regulation in the state makes it difficult for many to afford basic housing and/or causes them to go homeless.

Here is the Libertarian Party Platform for more info.

Some selected viewpoints below:

Excerpt from “Zoning Laws Hurt the Poor the Most“

Zoning regulations and urban renewal have greatly reduced low-cost opportunities such as boarding houses and residential hotels, where 30 percent or more of the urban population once found shelter. When the supply of housing is reduced, job opportunities are also lost by crafts workers and laborers in the housing industry.

Rigid applications of zoning regulations drive up home values. Then, when a downturn occurs, homeowners who find it difficult to sell because of the artificially inflated value of their home abandon their homes, but they may still end up paying to cover any difference between what the home eventually sells for and the mortgage note.

A report on foreclosures prepared for the US Senate listed a cost to homeowners of $7,200. Neighboring homeowners may experience costs averaging $3,000, while the cost to lenders may be as much as $50,000. And the city may end up paying for police services because of increased crime in the area, as well as other services ranging anywhere from $400 to $34,000 while seeing property taxes decline.

A Rand Corp. study found that single-use commercially zoned blocks in Los Angeles have crime rates that are 45 percent higher than similar blocks that include residential uses. We can expect to see similar problems in areas where a number of homes have been foreclosed on. Then there are the families that are affected by the foreclosures. It isn’t always just dollars and cents. A study from the American Journal of Public Health, as reported on the web site Citylab found that suicides spurred by severe housing stress—evictions and foreclosures—doubled between 2005 and 2010.

With zoning limiting the supply and the price of housing increasing, the chance of foreclosure goes up during an economic downturn. The stress on families increases, which can lead marriages to break up. In turn, we see an increase in domestic problems, suicide, and children with problems in school. All of this often leads to more government involvement, from simple things like unemployment benefits to child services agencies.

One estimate suggests that more than 8 million children were affected by the recent foreclosure crisis. During the Great Recession, “… food stamp program–renamed the Supplemental Nutrition Assistance Program (SNAP),” grew from “$30.4 billion in 2007 to $71.8 billion in 2011,” the Federal Reserve Bank of Boston noted in 2012.

When the supply of housing is reduced, job opportunities are also lost by crafts workers and laborers in the housing industry. That loss of workers will have an impact if the industry rebounds, and the loss could lead to other problems, such as homelessness.

Foreclosure affects local government from the schools to the courts, all of which bear some financial part of the burden imposed by inflexible zoning laws.

We can work together to break down rules that stand in the way of building new housing and that keep families from moving to growing, dynamic cities, President Obama, remarked to the US Conference of Mayors in January 2016.

The costs of the regulations may reduce the supply of homes, driving up the cost of existing homes that are on the market. Those who can afford to buy will pay a higher cost. Others who can’t will do without and continue to rent or even become homeless. As a result, homeowners may pay higher property taxes, and the local business community will miss the disposable income local homeowners no longer have.

Repealing the mandatory single-family style of housing found in many cities will allow a greater variety of housing to be built. This will provide low-income workers with an opportunity to find housing closer to work and reduce their travel expenses.

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Excerpt from “LPF Calls for More Affordable Housing“

Dennison said the 2016 Housing Development Toolkit correctly illustrates the barriers to affordable housing. Among the key findings were increases in rezonings from residential to commercial property uses and increases in regulatory constraints on property use. The report suggested many of the constraints, while well-intentioned to some, throttles availability of housing affordable to more residents.

“Local policies acting as barriers to housing supply include land use restrictions that make developable land much more costly than it is inherently, zoning restrictions, off-street parking requirements, arbitrary or antiquated preservation regulations, residential conversion restrictions, and unnecessarily slow permitting processes. The accumulation of these barriers has reduced the ability of many housing markets to respond to growing demand.”

The same report found that just in the past 10 years, the share of very low-income renters paying more than half their income for rent increased to 7.7 million households nationwide. Since 1960, the percent of renters paying more than 30 percent of their income for housing more than doubled.

The report offers several solutions familiar to Libertarians and a few we oppose. It suggests streamlining the construction approval process would get more housing on the market quicker, reducing cost of ownership. However, one recommendation is to force owners of vacant land to pay higher taxes. Libertarians strongly oppose any regulatory coercion.

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Excerpt from “We Can Make Housing More Affordable“

Several factors affect housing costs, and there’s little to be done about some of them: Nobody is making more land, for instance. On the other hand, governments are making more regulations—and the price of housing would shift dramatically if they would just stop.

You don’t have to be a bleeding-heart libertarian to think that, either. Even the Obama administration has come around to that view; in September Politico reported the White House was urging localities “to rethink their zoning laws, saying that antiquated rules on construction, housing and land use are contributing to high rents and income inequality, and dragging down the U.S. economy as a whole.”

It has good reason to say so. In recent years new-home prices generally have been at least a third higher than resale prices. This summer The Wall Street Journal cited “several recent studies (that) have documented how increased regulatory and permitting costs” have driven them up. The rules cover everything from impact fees and stormwater runoff to species surveys and architectural mandates.

Even building permits matter. An analysis by the real-estate tracking firm Trulia recently showed that housing prices correlate highly with the length of time it takes to get a permit: the longer the wait, the higher the price.

Planners claim the price of real estate and market swings matter a whole lot more, but it’s striking to note two figures: 33.8 percent, which is the growth in new home prices from 2011 to 2016, and 29.8 percent, which is the growth in the regulatory costs of new home construction during the same period.

Those numbers help explain why modestly priced new homes—those that cost under $200,000—now make up only 19 percent of the market. That’s precisely half the share of the market they enjoyed just five years ago.

By contrast, Houston has been enjoying record growth in jobs overall, middle-class jobs, STEM jobs and population—and may overtake Chicago as the third-largest city in America within two decades.

Kotkin and Cox note that net migration between California, New York, and Texas has all been to Texas’ benefit: an influx of young, well-educated and socially diverse people. The most diverse county in America is now Fort Bend, on the edge of Houston. Low home prices have helped make that possible: 52 percent of Latino households own their own home in Houston, which is twice the rate in New York (in L.A., it’s 38 percent).

And low regulation has helped make those low housing prices possible. Houston famously has some of the most relaxed zoning and land-use regulations in the country. That doesn’t mean hog-rendering plants sit cheek-by-jowl with hospitals, but it does mean developers face fewer roadblocks when they want to knock down old buildings and put up town homes.

Such an absence of restrictions has produced “a mash-up of architectural styles,” notes another piece in City Journal. “Everything about Houston screams spontaneous.” That no doubt would curl the hair of Virginia’s historic preservationist class; Richmond’s Commission of Architectural Review claims jurisdiction over everything from porch railings to paint colors.

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Excerpt from “A Libertarian Response to Seattle’s Homelessness Crisis“

We believe that there are a number of ultimately revenue-positive policy changes the city could make that can have dramatic effects on improving the housing supply in Seattle, long term and short term:

1. Upzone. Most of Seattle is zoned for single family homes, creating a massive shortage of land to develop on even as developers are lined up to build more housing. We need to stop straight-up outlawing the housing development needed to meet demand.

2. Permit. Permit delays are unacceptable; by law they should be 90 days or less, but developer after developer has told us normal permitting times are 12-18 months. Nobody wins from this. It’s just a year wasted on redeveloping valuable property that could be bringing down prices and freeing up resources for more development. The city needs to do its job and issue permits in a timely manner.

3. Reduce regulatory overhead. We’re fine with making sure that nobody is falling through their floor because some contractor cut corners, but we don’t need to add $200,000 in regulatory overhead for every single unit of housing. We have smart people. Figure out how to not waste tons more money than every other city—because we assure you, that wasted money gets passed on to buyers and renters. Examples include lowering parking requirements. This would have the added benefit of encouraging more people to move close to transit.

4. Take a market-based approach to development instead of a democratic socialist approach. Market urbanism rocks and avoids getting into the sorts of development ditches that we have gotten into with 1-3. Let bad ideas fail and good ideas thrive. It works everywhere else.

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