Freer Housing Is ‘Fairer Housing.’ Yowza!

townhouses
Casas adosadas, Seward, Alaska, Estados Unidos, 2017-08-21, DD 06 photo by Poco a poco is licensed under CC BY-SA 4.0
Is zoning really the only thing preventing multi-unit housing?

It’s not often that we copy exact chunks of headline from an article we’d like you to explore. (Not the Yowza! That’s all our own work.) But otherwise, the chunk is so evocative.

Born free! A craggy cowboy in chaps pursues a herd of wild houses across the prairie, roping one by the chimney and towing it back to the homestead: free in spirit and free in price, fairer by far to all those who own a horse.

Does that make much sense? Not really. And it doesn’t make any more sense when it’s part of the headline of the article linked below.

Sandwiched between the title, which means pretty much what anyone wants it to, and the duplicitous last paragraph that invokes a law that isn’t a law, there’s a recent opinion piece in The Hill with an explanation about the shortcomings of the federal Affirmatively Furthering Fair Housing (AFFH) rule, which was finalized during the Obama institution.

The AFFH rule was put in place to link HUD funding preferentially to communities that could demonstrate they were taking meaningful strides to address the housing inequality that pervades so many American cities.

Since its inception, the AFFH rule been largely ineffective in showing any improvement in the lending practices known as ‘redlining’ that deny funding to poorer neighbourhoods. Quite the opposite in fact.

Now HUD is considering significantly rewriting the rule rather than strengthening it. (Strengthen an Obama creation? Get serious.)

Why the rewrite? Because the real problem, and the focus of the rewrite, is apparently the restrictive community zoning practices that prevent greater density. HUD is leaning towards funding only those cities that have battered open the iron grip of zoning. Once the ‘free housing market’ is restored, the laws of the market place will ensure that enough affordable housing is built everywhere.

How will this happen?

It will happen because of the supposed reality of the market place, as expressed in the last paragraph of the article linked below: “We cannot repeal the laws of supply and demand in housing.” That’s apparently a rather negative way of warning us not to impede the laws of supply and demand. Unimpeded, they will neatly balance the housing industry supply with the community demand, all necessary housing will get built and housing crises everywhere will vanish.

But . . . news flash. . . those laws that some treat with the reverence due to an unstoppable force of nature — those laws so powerful they cannot be repealed . . . have indeed already been repealed by the housing industry.

Even Adam Smith, who invented the free market, together with its ideas of supply and demand, knew that his theories were fallible when manipulated by a monopoly, or an ogliopoly — in other words by one or a few players. To a considerable extent, local housing markets are controlled by ogliopolies1.

When a few players control home-building and/or the land supply in a housing market, they can do pretty much what they want. That’s not what so-called laws of supply and demand are supposed to deliver, nor what the community necessarily wants or even needs.

In a city under siege, or a neighbourhood, what fool would rush to the gates to open them to all comers without demanding some accounting of their purpose?

HUD, it seems, would have neighbourhoods everywhere do so, placing faith in a free market system already sabotaged beyond recognition by developers claiming to be neighbourhood and city saviours.

So, if you’re inclined to buy the Brooklyn Bridge to install as a backyard amusement, or hankering for a 48 story luxury high rise looming over your bungalow and shading your begonias, by all means wallow in the promise of zoning-free and protection-free affordable living as explored by the The Hill in: Freer Housing Is ‘Fairer Housing’ — Hud Should Tie Funding To Looser Zoning

Footnotes

  1. Try: US Affordable Housing Supply — Sabotaged!