Urban planner and Mercatus Center scholar M. Nolan Gray joins Brian Anderson to discuss municipal zoning’s past, present, and future. His new book, Arbitrary Lines: How Zoning Broke the American City and How to Fix It, is out now.
When I say “decommodification” I mean removing housing from the realms of speculative investment and rent-seeking. To do so means recognizing that the person(s) and/or firm(s) occupying the real estate are using it properly, and that landlordism and mortgages are not proper. And then we craft policy based on that.
1. Ban foreigners and corporations (or non-natural persons) from owning houses. Corporations can only own the real estate they are operating out of, aka properly using. No real estate-as-investment.
2. Individuals own the home they live in. Not only does this entail a ban on rents, but it also entails limits on how many homes an individual can live in. How exactly this is decided (ex: individuals can only own 2 homes, or individuals must occupy their home for 30 weeks each year to demonstrate they’re still using it, etc) is up for debate. My personal belief is that we can use scaled land value taxes to make it prohibitively expensive to own multiple homes. You can pass a further limit such as “no one can own more than 3 homes.”
3. A 100% capital gains tax on selling your home. This is, as one might imagine, rather controversial. But renting is not the only problem with real estate. The problem is real estate becoming an investment. If you improve your house, yes you are allowed to sell it for more, as the cost basis of the property is now higher. But other than that, individuals and firms cannot see real estate as a way to make money, but rather as a place for them to live or operate from.
4. Housing should be part of a holistic community. In that vein, I propose offering subsidies for individuals who, for example, want to buy houses near their parents or extended family. The exact size of these subsidies can vary, but I believe that we should be helping people live in more robust communities so that they may live more fulfilling lives.
Profit, Property, and People
Over the past two decades, a policy known as “Housing First” has come to dominate the government response to homelessness. Housing First has two chief tenets: (1) the most effective solution to homelessness is permanent housing; and (2) all housing for the homeless should be provided immediately, without any preconditions, such as sobriety requirements. The movement to “end homelessness,” in which hundreds of communities have participated, is centered on the implementation of Housing First. More recently, the Trump administration has begun modifying the federal government’s commitment to Housing First. These changes have been prompted, in part, by the fact that, in California and elsewhere, community efforts to end homelessness have failed even to arrest its increase. Though the changes thus far have been modest, they have been strenuously criticized by advocates who sense a weakening in the Housing First consensus. This report contributes to the debate over homelessness policy by assessing Housing First’s rhetoric—the claims made by proponents—in light of the available evidence. It argues that proponents overstate the ability of Housing First to end homelessness, the policy’s cost-effectiveness, and its ability to improve the lives of the homeless.
Just 7 percent of the people in Los Angeles’s Echo Park encampment found permanent housing after it was cleared. Almost half are missing. Seven are dead. That’s not a failure of homelessness policy; it’s an example of the system working exactly as intended.