Americans Voted Their Way into a Housing Crisis

Having RTFA: I think it's an interesting take to centralize zoning at the state level. Houston (which has no zoning ordinances) is a terrible place to live, but it's definitely an affordable place to live.

The incentives at a state level around housing might actually balance differently because at that level economic activity, jobs, etc. matter more than property taxes. Something that isn't often mentioned, because the focus is always on California or the US, is that property values are directly tied to the overwhelming majority of municipal budgets via property taxes incurred as a percentage of that value. Not only do constituents vote for more expensive residential property, local governments want expensive residential property even if their voters didn't.

This is exactly why California has been trying to move some of this power to the state level: local governments are fighting tooth and nail to hold on to their tax revenue.

ETA: The property tax thing is more complex, but still applies. States like Florida and California cap how much tax assessments can increase for property you own that is your primary residence.

This still encourages these states to drive up property values because it tempts you into cashing out via selling. Every state with this sort of cap also immediately reassesses real estate to the price it sells at the following year. A high property value versus the tax assessment is just a deferred revenue stream, so it's a driver to encourage consistent turnover in the market. The only real way to do that is to constantly drive prices up, which drives the cost of living up, which turns over the residents faster.

So capping tax assessments like that, just makes the cycle even more viscous, in my experience living in Florida for a time.

I have such a hard time explaining this to people :(

If you aren’t breaking down the status quo and moving toward something more equitable, in what way is it progressive? I don’t believe “feel good” equates to progressive - maybe more affirmative? As a renter of course I prefer areas that have rent control, but I understand that it’s not smart economic policy. Zoning isn’t smart economic policy either but I feel like it gets far more flak because it benefits the haves way more than the have-nots.

I mean, this also suggests that part of the way out of this is to change that perverse incentive structure.

Fund municipalities more from the state level, through progressive income taxes (and/or potentially other funding sources). Property taxes don't have to go away, but if they're no longer the sole or primary source of funding for the municipality where they're being levied, that removes a very obvious source of problems.

Just as obviously, it will introduce other problems, but in my experience, when you come to recognize that a particular structure in finance/government/rules/etc is causing problems, it is easier to get in a mindset of identifying similar problems in the structures you set up to replace them. This does require a certain minimum degree of competency and a certain maximum degree of willingness to upset everyone else's applecart for one's own benefit among the powers that would be making the decisions, of course, which cannot always be a given.

The article you reference paints a distorted picture. The survey it’s reporting on is specifically limited to properties purchased to be flipped, not the entire market. It also lumps BlackRock with family owned LLCs. Quoting the original article:

“When combining closings between both larger, private equity and smaller, independent operations, investors accounted for 44% of the purchases of flips during the third quarter, the data reveals.” https://www.businessinsider.com/big-investors-purchasing-mor...

The impact of investors on the larger market is much less clear: https://www.minneapolisfed.org/article/2024/rise-in-investor...

I found the original submission worthwhile because it moves beyond these sorts of discussions. I didn't view it as focusing on zoning, but on highlighting how our local democratic structures themselves contribute to these issues. It has implications that go beyond just housing.