Land Use Regulation Reforms, Housing Accessibility on Biden Agenda
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A significant aspect of the current housing crisis in the US lies in land use regulation. It has proven to be an obstacle in the path to sufficient, affordable housing for all.
However, the Biden administration recently announced plans aimed at cutting land use red tape to increase the housing supply and ensure better renter protections.
Land Use Regulation: The Problem and the Solution
Land use regulation significantly impacts housing accessibility. Often, strict zoning laws, which are set locally, hinder new construction projects, creating artificial scarcity in housing, thereby increasing prices.
In an effort to rectify this, the Biden administration is taking steps to relax these restrictions, permitting more construction in previously restricted areas. The goal is to cut through the red tape and allow for an increase in the affordable housing supply.
How Housing Supply Increases Affect the Market
An increase in the housing supply has a profound effect on the market, all else equal. As the supply rises, it reduces the upward pressure on prices, theoretically making housing more affordable for many Americans.
The Biden administration's efforts to increase the housing supply despite record homeownership include measures to expand federal financing for low-income and middle-class housing. This will not only lead to more available housing but also, it's hoped, to increased affordability.
Conflicts of Interest With Current Homeowners
The record 67.9% of Americans who owned their homes in 2020 have a vested interest in the continuing appreciation of their properties as the market forces of supply and demand dictate.
Interfering with these forces potentially harms them for the benefit of others whom the Biden administration deems more of a priority.
Renter Protections: A Key Aspect of Affordable Housing Policy
In addition to efforts to boost housing supply, the administration is taking steps to strengthen renter protections. Improved renter protections will ensure that tenants are not subjected to undue rent hikes and evictions.
Through this, the Biden administration aims to provide a safer, more secure living environment for renters. Enhanced renter protections are expected to provide stability for tenants, while landlords will continue to receive fair compensation.
Counterpoint: Systemic Shortcomings of Direct Price Manipulation
Just as all living things must perform three functions—consumption, metabolization, and excretion of waste—to survive and propagate, so must the systems put in place that mimic these processes.
If a system cannot rid itself of waste products, such as by evicting non-paying tenants fairly and expeditiously, the system can become clogged, and incentives to own rental units can decrease. Renter protections, therefore, represent a trade-off of interests with others.
Issues and Hopes With the Administration's Plan
By addressing land use regulation and working toward a housing supply increase, the Biden administration is aiming to alleviate the housing crisis in the US. Coupled with strengthened renter protections, these efforts are expected to lead to improved housing accessibility and affordability for many Americans.
At whose expense, however, remains the question. With homeownership well above near-term lows and having peaked at over 69% only by lowering lending standards prior to the Great Financial Crisis of 2007 to 2009, small landlords rightly express concern over artificial supply and renter protections.
The impact of these policies will unfold for observation over the coming years (the total size of the program is only $85 million), but they represent a proactive approach toward one of the country's most pressing issues.
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