Back to Basics
Happy Tuesday, and welcome to another edition of Rent Free. This week’s newsletter takes a look at a few major housing developments in state legislatures. Stories include:
- How a California transit-oriented development bill survived a crucial committee hearing, while a missing middle bill wasn’t so lucky
- Montana lawmakers continue to perform more miracles on zoning reform.
- Washington legislators pass statewide rent control.
In Crucial Committee Hearing, California Lawmakers Consider Whether Supply and Demand Is Real
As the newsletter covered last week, two significant California housing bills, Senate Bill 79 and Senate Bill 677—which would respectively upzone land near transit and liberalize regulations on duplexes and starter homes—faced a make-or-break hearing before the Senate Housing Committee.
One made it, the other broke.
The committee rejected S.B. 677 and approved S.B. 79. The latter bill now heads to the state Senate’s Local Government Committee.
The immediate practical implication is that any serious reforms to the state’s signature missing middle housing regulations are a dead letter this year, while debates about whether or not to enable more transit-oriented development will continue.
The housing committee hearing itself included some tense, if exceedingly inside-baseball, drama.
S.B. 79 passed over the objection of Senate Housing Committee Chair Aisha Wahab (D–Hayward), who has repeatedly expressed skepticism about the ability of market-rate (i.e. unsubsidized) housing to ease California’s housing shortage.
“Rolling the chair,” as that is colloquially called, is considered an unusual and confrontational move.
When testifying in favor of S.B. 79, Sen. Scott Wiener (D–San Francisco), the author of that bill and S.B. 677, also spent a considerable amount of time criticizing the unusually negative committee report on S.B. 79.
This was a not-so-veiled swipe at Wahab, whose committee consultants prepared a report that included no recommendations for how to amend or improve S.B. 79, and instead just urged a simple “no” vote.
Wiener compared the report to a line from Marge Simpson’s aunt (he meant mother), who says in one episode, “It hurts to talk, so I’ll just say one thing: you never do anything right.”
Wahab, during her own remarks at the housing committee hearing, spared no criticism of S.B. 79, which she said was unacceptable so long as it didn’t include affordable housing mandates.
“Bypassing affordable units perpetuates socioeconomic segregation, which is de facto racial segregation,” she said at the hearing.
While California’s supply-side housing reformers can be happy that S.B. 79 did survive a hostile committee hearing, the nature of the debate is nevertheless a depressing reminder of just how little progress has been made conceptually on this issue.
In the state with one of the worst housing crises in the country, lawmakers are still having this very rudimentary discussion about whether enabling more housing production generally will lower housing costs.
This should be a no-brainer. Economic theory and real-world results from other, less regulated states make it abundantly clear that when more new housing is built, even when it’s expensive “luxury” housing, average prices fall. The people who can’t afford the newest, most expensive housing still benefit from falling rents on older, existing units.
The alternative idea that new housing has to be built as money-losing, below-market-rate housing in order for it to improve affordability is not just false, but gallingly so.
It’s easy to see the absurdity of that position when it applies to any other good. Imagine a lawmaker arguing in the middle of a famine that new land can’t be opened up for farming unless farmers are required to sell their crops at a loss.
That California legislators, let alone the chair of the state Senate’s Housing Committee, still don’t grok that very obviously true idea is equal parts alarming and sad.
On one of the most important issues facing California, legislators are still fighting over the basics.
Montana Builds on Recent Zoning Reforms
The good news is that lawmakers in other states have in fact grokked the basics on housing.
In Montana, lawmakers have built on last session’s housing reforms (the so-called “Montana Miracle“) with the passage of a slew of bills that pare back local parking minimums and height limits, while capping impact fees charged on new housing developments.
The parking reform bill, House Bill 492 authored by Rep. Katie Zolnikov (R–Billings), prevent
Article from Reason.com
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