Supply & Demand

Eviction Moratoriums Didn’t Solve the Housing Crisis

A “For Rent” sign is placed in front of a home in Arlington, Va., June 8, 2021. (Will Dunham/Reuters)
There is demand; we need to unleash supply.

Justice Brett Kavanaugh recently used peculiar logic to uphold the CDC’s eviction moratorium, a policy he himself agreed was improper. However, the CDC’s moratorium will be lifted in just a couple days, and the housing crisis is only getting worse. More Americans are renting than ever before, and, as building costs skyrocket, the result for many renters could be a disaster. More government money will not solve the root problem, however, and the U.S. needs a real solution soon.

The housing crisis in 2008 created a number of challenges, one of which was the spike in renters and rental housing. From 2008 to 2016, the renting population increased by about 5 percent and has continued to rise to a record 43 percent today. However, as Business Insider found in 2016, the increase in renting was uneven, concentrated on the East and West coasts. This presents an obvious problem for many in our nation’s biggest cities, where high overall living costs make high rent even harder to pay.

A 2020 report from the Aspen Institute found that nearly 25 percent of all households were spending over half of their income on rent each month. Such renters were far more likely to be at or below the poverty line. According to the Aspen Institute, these high costs meant that 30 to 40 million people were at risk of being evicted amid the COVID-19 pandemic.

To stave off a wave of evictions, local, state, and federal governments implemented a variety of controversial eviction moratoriums and rent-forgiveness programs. However, these programs do little to solve the underlying problem that housing is too expensive. Many on the left realize this and are pushing radical plans they think will remedy the problem. The socialist Jacobin magazine recently explained the rationale behind a complete housing overhaul:

The first step in elevating people over property interests is to immediately remedy the shameful fact that only one in four eligible families receive federal rental assistance. As the National Low-Income Housing Coalition and other advocates have demanded, we must guarantee rental assistance to every eligible household. … We should move our housing billions out of the private market and into social housing, built on a foundation of full public-sector ownership and management. In so doing, we will commit to democratic control of housing, which will minimize costs and include mechanisms to remedy race and income segregation.

While the idea of public-sector housing may sound like a pipe dream, California’s plans to pay off renters’ debt and build public housing for the homeless aren’t far from Jacobin’s ideal. Other prominent cities such as Portland have adopted similar types of solutions and are signaling they may continue them into the future.

Unfortunately, this approach is flawed. Eviction moratoriums do nothing to solve the problem of high housing costs; in fact, they make the problem worse by disincentivizing new construction. Further, government-built housing is unlikely to solve the problem at scale and without significant cost overruns. Luckily, there are better solutions to the housing shortage that are more politically feasible and can be implemented without significant government overreach.

The most important step is to address the regulatory burdens on construction that currently stunt it and drive up costs. A study by the University of California, Berkeley found that building costs in California have risen 25 percent in the last decade.

These trends are in large part tied to local regulations and approval processes. In a striking example of how ludicrous it’s become, one developer was denied a permit for a new San Francisco housing project because the building would cast a shadow over a local park. According to Curbed, the new building might obstruct 18 percent of the park at certain times, which was enough to get the project canceled.

In Washington State, the State Environmental Policy Act has delayed some housing projects for up to 13 years. The law, passed in 1971, requires an initial 16-point environmental checklist, each with numerous sub-points. One part requires developers to document whether their building will impact animal-migration routes. Once this first review is complete, and if the building plan is approved, SEPA allows any citizens to request further environmental examination, which can take months.

A pervasive “Not In My Backyard” mentality, meanwhile, hampers development. Professed concern for the environment can easily be wielded against new projects.

Rolling back needless regulations, while electing local officials willing to cut through the red tape to solve the housing problem, is critical. For example, two years ago in North Carolina, state lawmakers passed Session Law 2019-174 which streamlined local regulatory burdens and required that local governments review residential plans in under 15 days. Raleigh has also relaxed local regulations to allow more varied housing developments. This kind of reform is sorely needed in tight housing markets across the nation.

The eviction moratoriums set forth by local governments and the CDC were, at best, stopgap measures. However, we have a real housing need, and our policies at the local, state, and federal level are not helping developers solve the problem. Drastic deregulatory measures are needed to incentivize construction by reducing the cost of building. There is demand; all we need to do is unleash supply.

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