Housing crises? They’ve been with us for decades – and the answers to them are no secret. It’s not that the solutions that are in short supply, it’s the political will.
I have in front of me a book that’s been on my shelf for more than thirty years…
Every answer to this present housing crisis in there, and has been known for decades. You can see just from the chapter headings that that because the causes of virtually every housing crisis are political, the solutions to every housing crisis are the same:
- Part I: The Underlying Contributing Factors
o Chapter 1: The Exclusionary Effect of Growth Controls – Bernard Frieden
o Chapter 2: Zoning & Other Land-Use Controls – Norman Karlin
o Chapter 3: The Economics of Building Codes & Standards – Peter Colwell & James Kau
o Chapter 4: Private Housing Starts & the Growth of the Money Supply – Robert Weintraub
o Chapter 5: Residential Development & the Cost of Local Public Services – Jon Sonstelle & Alan Gin
- Part II: Land-Use Policy Responses
o Chapter 6: The Irony of ‘Inclusionary’ Zoning – Robert Ellickson
o Chapter 7: An Estimate of Residential Growth Controls’ Impact on House Prices – Lloyd Mercer & Douglas Morgan
o Chapter 8: An Economic Analysis of Zoning Laws – Carl Dahlman
o Chapter 9: The California Coastal Commissions – Economic Impacts – H. E. Frech
- · Part III: Housing & Construction Policy Responses
o Chapter 10: Rent Controls & the Housing Crisis – Thomas Hazlett
o Chapter 11: Rent Control Voting Patterns, Popular Views, and Group Interests – Stephen DeCanio
o Chapter 12: Condominium Conversions & the ‘Housing Crisis’ – Richard Muth
o Chapter 13: Information and Residential Segregation – Perry Shapiro & Judith Roberts
- · Part IV: The Crisis & the Legal Status of Property Rights
o Chapter 14: Property, Economic Liberties, and the Constitution of the United States – Bernard Siegan
o Chapter 15: Property Rights & a Free Society – Roger Pilon
As you can see just from the chapter headings, all the usual suspects are there: excusionary zoning driving up land costs and restricting the types and locations of new housing; gold-plated building codes protecting monopolistic suppliers; green belts and ‘conservation estates’ that unreasonably privilige the interests of existing home-owners over would-be home-buyers; the way new money is borrowed into existence for new mortage lending; the way infrastructure planning and development has been made (by law) the province of the incompetent; the dearth of real property rights strangling any real market response to the crisis ….
You see, all the causes of this houding crisis and virtually every other have been known about and talked about written about in detail – both the problems they cause and how to unravel them – quite literally for decades. Perhaps the only lessons that have been learned in all that time are the dire effects of racial segregation and rent controls.
The only two causes either not mentioned or not fully developed in this book are
- the risk-free windfall profits delivered to rental investors by the likes of the Accommodation Supplement; and
- the way the way new money is borrowed into existence for mortage lending – around two-thirds of all new money created in this country every year: out of thin air, and straight into second-hand housing. (But there are other books and writing that cover that.)
And you can read what I’ve been writing on the crisis for the last twelve years at my various archives on housing, especially here, here and here – and for the last twenty years at places like this and this and this.
The solutions are neither new nor particularly complicated. They include things like replacing zoning with voluntary covenants; replacing council-controlled infrastructure with private supply and development bonds; exchanging gold-plated and nonsensical govt rules and standards and council-run inspections that place ratepayers on the hook with those agreed to and run by the insurance companies who actually take the risks; limiting (or even prohibiting altogether) the amount of new money that banks can simply borrow into existence; and of course the full and complete legal protection of all real property rights. Taken together they would make it possible once again for every builder to build affordable homes at a profit – which is the only way this crisis will eventually be resolved.
These solutions are not new. What’s needed all up is gumption – something in short supply around Molesworth St and the country’s town planning faculties. As short supply as the houses that are so desperately needed, and that their policies and rules have made all-but impossible to inexpensively provide.
A kick up the arse is the least those pricks deserve; all of them who have caused, dithered and exacerbated the situation where a whole swathe of this country is now being crucified on a cross of brick, tile, weatherboard and exclusionary zoning.