talks/20??-??-??-land-use-policy/notes.org

* https://forum.effectivealtruism.org/topics/land-use-reform
The problem

Laws at the local level in the United States and many other countries impose
strict limits on how much total floor area can be built on a plot of land. Such
zoning laws constitute a major obstacle to the construction of dense housing.
The resulting increase in housing prices reduces economic efficiency by creating
significant deadweight loss; increases inequality by transferring wealth from
renters to landowners; and reduces both wages and total economic output by
preventing workers from relocating where they can be most productive.

The effects of zoning laws on housing prices can be estimated by comparing the
sale price of housing to the associated costs of land and construction.[1] Open
Philanthropy has combined these estimates with rent data and some additional
assumptions to conclude that the aggregate "tax" on renters in five large
metropolitan areas amounts to over $100 billion in deadweight loss per year.[2]

A study by economists Chang-Tai Hsieh and Enrico Moretti examines the costs
resulting from the reduced flow of workers to more productive regions within the
United States due to rising housing prices. The authors conclude that land use
restrictions depress annual U.S. wages by $1.27 trillion and output by $1.95
trillion.[3][4]

If land use restrictions create these problems, why do they persist? In part,
the costs of restricting land use in a given location are incurred by workers
who would benefit from moving to that location, and who as such do not yet live
there. Since restrictions are created at the local level, they are insensitive
to the interests of these workers, who do not vote in those jurisdictions. Other
costs of restricting land use—such as reduced economic output—are dispersed
across society as a whole. Public choice theory explains why governments neglect
these costs and instead focus on the concentrated benefits to landowners—even
if, in the aggregate, the costs vastly outweigh the benefits.

Possible solutions

Open Philanthropy and 80,000 Hours have proposed a number of solutions to the
problems caused by land use restrictions, which are quoted below. Policy options

Promising options open to policymakers include the following:[2]

    "Local governments in high-wage high-regulation metropolitan areas could
    simply 'upzone', permitting more and denser development." "Local governments
    could change the process by which they decide how to regulate land use. For
    example, they could adopt a 'zoning budget' targeting an overall level of
    housing growth, so that restrictions in one area would have to be balanced
    by expansions elsewhere. This would help align incentives of advocates for
    individual projects to support greater overall growth." "Decision-making in
    land use policy could be re-assigned from local to regional or state
    authorities, which would likely be less susceptible to neighborhood pressure
    to oppose new development."

Funding options

Promising options open to funders include the following:[5]

    Fund existing local groups, such as YIMBY Action, California YIMBY or Open
    New York, or potential new groups in key housing markets. "Fund a campaign
    to move land use decision-making power from the local to the regional or
    state level. We are not aware of any existing arrangements of this form in
    the United States, or of any active efforts to promote them, so this would
    likely be an exercise in 'active funding.'" "Support the development of a
    policy consensus (for example, by convening conferences or sponsoring work
    on this issue in prominent think tanks). This would have the benefits of
    both encouraging coordination on this issue by policymakers, and improving
    our understanding of what policy changes are most likely to be beneficial."

* https://www.openphilanthropy.org/focus/housing-policy-reform/
We seek to reduce the harms caused by excessively restrictive regulations on
local housing.

Local laws often prohibit the construction of dense new housing, which has
contributed to rising housing prices and lower affordability for renters and
buyers.

Ratio of median house price and median household income in the US, 1967-2021 (US
Census Bureau). House price data is MSPUS; median household income is from
Income in the US Table D-1.

These price increases are pronounced in large, high-wage metro areas (e.g., New
York, Boston, San Francisco, Los Angeles, Seattle, and Washington D.C.). More
permissive policy which enabled a greater supply of housing in those areas could
unlock value by:

    Encouraging economic growth through greater innovation and agglomeration.
    Increasing the earnings of individuals moving to high-wage jobs in those
    areas. Enabling more people to live in denser areas, which have lower carbon
    emissions. Redistributing wealth and income to lower-income households and
    supporting access to housing for lower earners.

Changing housing policy laws is unusually valuable because there is a huge
amount of private capital and firms dedicated to building new homes. Removing
restrictions on building — especially denser construction in cities — unlocks
that capital to be deployed much more efficiently without requiring
philanthropists or government to directly subsidize construction. Indeed, the
evidence is clear that “upzoning” (removing restrictions on denser housing) can
lead to increases in supply and reductions in prices, and several recent studies
conclude that building new homes (even market-rate homes) tends to make housing
more affordable, including for low-income households.

Considering these potential gains, we think that working toward more permissive
housing policy from a public-interest perspective (as opposed to lobbying for
specific developments) appears neglected in those key regions. We began making
housing policy grants in 2015 and were early supporters of the YIMBY movement,
which supports people to advocate for permissive zoning and development in their
local areas. Since that time, we have seen significant growth in the movement
and notable policy breakthroughs. Successes our grantees have been involved in
include: the growth of Accessory Dwelling Unit (ADU) reform in California and
Seattle, bills supporting middle housing and ADUs in Washington state, and
further legislative success in California for housing on commercial corridors
and removing parking mandates near transit.