My Hoover colleague Lee Ohanian, an economics professor at UCLA, wrote a piece on Hoover’s website on Tuesday titled “California’s Failed Soviet-Style Housing Mandates Should End Now.” In his article, Lee argued that we’ve had central planning of housing in California since 1969. He writes:
Top-down command-control programs fail because they violate the basic market forces of supply and demand and because they suppress individual freedoms. California started down the command-control rabbit hole regarding housing with a 1969 state law that created the Housing Element and Regional Housing Needs Allocation (RHNA) program. This program mandates that every California community must plan for its housing needs, regardless of income.
The five words “housing needs” and “regardless of income” tell you all you need to know to understand why this program has failed. What are “housing needs,” exactly? Millions would love to live in the areas overlooking the beaches of California, particularly if income weren’t a factor. Does this mean that millions of Californians have an unmet “need” to live in Malibu? Or San Diego? Or Santa Barbara? Or Laguna Beach? And what of the millions more who live outside of California but would flock to the state if they had opportunities to live in some of the most expensive communities in the world, regardless of their income?
Already that tells me something I didn’t know. And it does sound a lot like central planning.
But a guy named Adam Gurri, whom I’m guessing many readers have heard of, went on Twitter and did a nasty. He called Lee “braindead.” Well, I know Lee Ohanian, Lee Ohanian is my friend, and Adam, you’re no . . . Oops. Wrong rebuttal.
Let me try again, more briefly. Lee Ohanian is not braindead. Not even close. I went on Twitter and made that point. Gurri didn’t try to argue that the evidence Ohanian gave above is not central planning. Instead, Gurri went after the weakest part of Ohanian’s argument, the part where Lee tried to justify my favorite NBA player Steph Curry objecting to lower-income housing being built near his house.
So who’s right: Gurri or Ohanian? Both are right. And both are wrong. Ohanian is right that having the state government tell each locality exactly how many housing units they must allow does smack of central planning. Which means Gurri is wrong to say it’s not central planning. Gurri is right to say that individual homeowners, no matter how powerful, should not be able to prevent a house or an apartment block from being built. And in the following quote from his article, Ohanian is both right and wrong:
Much more housing within California would be built if legislators were to rewrite the state’s antiquated environmental laws; reduce regulatory burdens that drive constructions costs on affordable housing projects to levels that exceed those of luxury homes; and provide communities with financial support and incentives where more housing, particularly high-density housing, makes sense, with projects that achieve community buy-in.
He’s right in the clause that ends with the word “homes.” And he’s wrong in the final clause. Why should a state government tax us to give financial support for housing? And what’s this about “community buy-in?” It seems to imply that for housing to be built in various California communities, a majority of people in that community must approve. That doesn’t exactly sound like central planning. But it certainly doesn’t sound like respect for property rights.
Here’s a suggested middle-of-the-road compromise between Gurri and Ohanian. Get the state government out of dictating to communities how much housing they must allow to be built. And take away the power of people in those communities to have any say whatsoever in whether housing is built.
The pic is of part of Atherton, the town in which Steph Curry and his family live.
Postscript: I don’t often go on Twitter but when I do most of the tweets I read, along with the mobs that follow, remind me of the popular high-school kids who thought they could dispose of an argument by calling people an idiot or, in my day, a fag.
READER COMMENTS
David Seltzer
Feb 9 2023 at 2:12pm
“high-school kids who thought they could dispose of an argument by calling people an idiot or, in my day, a fag.” It seems when one’s beliefs are countered with facts, they resort to ad hominem. How many times have you been flipped off by a driver who cut you off?
John hare
Feb 9 2023 at 4:11pm
Florida has a few problems with housing I would like to see addressed. We are planning to build a small house for cash. 620 square feet 1/1. Between engineering, septic permit required in order to apply for permit, survey to get the septic company to get the septic permit, and foot dragging on county issuing permit, we are almost a year and a half in and not started yet.
Plus product acceptance means we can’t use the doors and windows from my partners remodel work. Doors and windows from multimillion dollar houses are better than the Home Depot stuff we will end up with. plus a lot of other things we know how to do that are not approved.
it’s basically illegal to build a cheap house.
BC
Feb 9 2023 at 8:03pm
The obvious way for Steph Curry to protect his family’s privacy is to buy up the neighboring property, or at least the relevant units within the proposed building that will have sight lines to his property, or the right to approve the people that live in those units, etc. Coasean bargaining would seem to work here because Curry is the only one who cares about the “externality” of paparazzi neighbors. Curry could also build an opaque wall.
Btw, saying that “Curry and his family have legitimate safety and privacy concerns,” does not necessarily imply that government regulations should prohibit construction on the neighboring property. Only Big Government proponents assume that legitimate concerns call for government measures to address those concerns. Curry and his family would have a “legitimate” reason for wanting to pay the neighboring property owner not to develop it. A charitable reading of Ohanian’s article, read in its entirety, is that the government mandate compels Atherton property owners to build more housing, even though most (according to the article anyways) don’t want to. Indeed, if Curry did try to buy the neighboring property to keep it undeveloped, then it would be that much harder for Atherton to meet its mandated new housing quota. So, the article in its entirety is best understood as a critique of CA’s, yes, central planning of mandated housing quotas rather than an endorsement of using NIMBY regulation to block construction of neighboring housing that might threaten one’s privacy.
Scott Sumner
Feb 10 2023 at 5:26am
I’m also in the middle. Gurri’s remarks are unfortunate. But I’d add that the penalty when cities fail to come up with an approved housing plan is deregulation. I wish we had more such “penalties”!
https://www.ocregister.com/2023/02/09/developers-propose-576-homes-in-orange-some-at-the-mall-others-by-hospital/?utm_email=E5A325A36585946D74AEB4B5AB&g2i_eui=P1S8ydwhNdj8%2f9GoHGLZHT63ND4ykGpl&g2i_source=newsletter&lctg=E5A325A36585946D74AEB4B5AB&active=yesD&utm_source=listrak&utm_medium=email&utm_term=https%3a%2f%2fwww.ocregister.com%2f2023%2f02%2f09%2fdevelopers-propose-576-homes-in-orange-some-at-the-mall-others-by-hospital%2f&utm_campaign=scng-ocr-localist-eve&utm_content=curated
David Henderson
Feb 10 2023 at 3:14pm
Ah, good point.
Andrew_FL
Feb 11 2023 at 10:10am
Disagree. Individual homeowners should be able to…if they’re willing to bear the market cost. If Curry is willing to buy out the property owners who want to build apartments near him at a price they’re willing to sell, where’s the foul? In real life, the problem is Curry wants to control property without paying for it.
David Henderson
Feb 12 2023 at 6:19pm
You’re right. I would never argue against someone’s right to buy property from a willing seller. I thought that was obvious, but maybe it wasn’t.
Comments are closed.