McNellis on Housing: It’s Not About More Money but Fewer Rules

A while back at a Urban Land Institute event I had a chance to meet John McNellis who writes brilliantly on housing in California. He’s singing my song yet again in his review of a bunch of legislation recently passed by the California legislature. I didn’t need to know a lot about the legislation to know that I agree with his assessment in the headline: it is a band aid. It always will be, mostly, from west coast legislatures that are controlled by Democrats.

When you don’t believe the market works, it becomes about wringing money out of market rate development. Always. It’s what distinguishes a true believer and a market skeptic. You can read my post about worries about lowering prices resulting in higher profits not lower prices. When a person doesn’t believe that reducing costs will lower prices, they always want more money for subsidized housing. Always.

It is not about more money. It’s about too many rules and pandering to the angry neighbors. Period. McNellis says:

To solve the housing crisis, the state needs to encourage market-rate housing through streamlining the zoning process, pay for low-income housing through general taxation and stand up to all of those who would either prevent new housing or render its cost prohibitive.

And those out there who always want to throw a bone to the non-profit housing industrial complex, go ahead and throw it. But that bone should be widely distributed taxes on property, particularly taxes on inefficient use of land, like large lots of single-family housing in the city. If you want to redistribute some wealth, take it from where it is: single-family neighborhoods. Otherwise all we’re doing is making the problem worse, adding costs, slowing production and then wondering why prices keep going up.

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