Tuesday, May 28, 2019

Vox: One Expert's Seven Principles for Solving America's Housing Crisis

In a recent The Weeds podcast by Vox, senior correspondent Matthew Yglesias sat down with Jenny Schuetz, a housing economist and David Rubenstein fellow at the Brookings Institution, to explore an issue that’s resurfaced on the national agenda for the first time in a couple of generations.

Yglesias summarized Schuetz' key ideas as follows:

  1. There are two only partially overlapping housing affordability crises in America, one that affects low-income households in all parts of the country and another that affects a larger share of households in a minority of markets (mostly in coastal metro areas) that suffer from an acute shortage of housing.
  2. To help low-income families, we should make housing assistance an entitlement — like SNAP or Medicaid — that’s available to every family that meets the income eligibility standards.
  3. We probably shouldn’t tie housing assistance to local housing costs, because high local housing costs reflect housing scarcity, which means extra subsidy will be captured by landlords. Instead, we should tackle the shortage.
  4. In California, the Northeast Corridor, Greater Seattle, Greater Portland, and, to a lesser extent, Greater Denver and many college towns, there is simply not enough housing being built to meet the demand to live in these areas, creating problems that no amount of subsidy or rent control can really solve.
  5. Many of these supply-constrained metro areas do in fact feature building booms in select areas — downtown or in gentrifying neighborhoods — but the vast majority of urban and suburban land is generally set aside for single-family homes and has almost no construction happening in it.
  6. The most socially and economically valuable place to build new housing would be in the most expensive, most affluent neighborhoods and suburban towns — but to make that happen, state governments will have to override local zoning regulations.
  7. Federal policymakers hoping to incentive more house-building need to look beyond funds from the Department of Housing and Urban Development, which are not a very strong carrot, and consider using transportation money as a lever to influence state and local policy.

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