After home prices surged and then crashed between 2003 and 2011, many of us hoped that the housing crisis was behind us. Instead, the relentless rise in rent — which, unlike home prices, barely fell during the Great Recession — has revealed a bigger underlying problem. And Republican politicians in Washington have taken the lead in the search for policy solutions that ease the housing crisis while maintaining local self-government.
As is often the case, the first step toward good policy is to repeal bad policy. The Tax Cuts and Jobs Act of 2017 took a meaningful step toward cooling off the most inflated home prices by moving more taxpayers to a bigger, simpler standard deduction. Old and busted: tax incentives that promote mortgage debt, high local taxes, and overpriced homes. New hotness: not paying extra taxes because you rent.
This year, President Donald Trump, Senator Todd Young (R., Ind.), and Housing and Urban Development (HUD) secretary Ben Carson have all gone further, taking national leadership roles in calling for less regulation of housing markets.
Carson and Young, along with Senator Cory Booker (D., N.J.), have singled out some Community Development Block Grants as subsidies to places that are actively undermining the purpose of the grants.
On June 25, Senator Young introduced the Yes In My Backyard (YIMBY) Act. If passed, the bill would require very little — just that grant recipients with strict regulations explain why they chose not to deregulate. Later the same day, President Trump signed an executive order directing federal agencies to promote housing affordability and work together with local and state governments to remove excessive regulation.
Secretary Carson is expected to introduce regulatory language in the rewrite of an ill-conceived 2015 rule, the “Affirmatively Furthering Fair Housing” policy, which managed to be cumbersome and ineffective at the same time. His public statements suggest that the rewrite will connect HUD’s mandate to promote “fair housing” to the basic availability of housing.
Some conservatives worry, reasonably, that more federal engagement with land-use regulation, traditionally a local issue, will quickly lead to federalized zoning. These worries overstate the ambition of the Young, Trump, and Carson proposals. And they miss the real contribution that these Republican leaders are making: leadership.
Secretary Carson showed leadership by crossing the aisle and praising a major deregulatory plan championed by Minneapolis mayor Jacob Frey, a Democrat and a leader on housing affordability. President Trump, less cordial, has shamed San Francisco and Los Angeles for their failure to address rapidly worsening homelessness crisis.
Conservatives in Washington could go further. In 1982, late Supreme Court justice (then a professor at the University of Chicago Law School) Antonin Scalia advocated a vigorous federal role in preempting state and local regulations: “I could multiply the areas in which one would expect economic conservatives to seek establishment of a federal policy excluding state regulation: The prohibition in some building codes of construction materials that are universally recognized to be safe. . . . The inaction has less to do with the merits than with the unfortunate tendency of conservatives to regard the federal government . . . as something to be resisted . . . rather than as a legitimate and useful instrument of policy.”
More modestly, Carson, Trump, and Young all appear to understand their roles as leaders: drawing attention to local regulations routinely intended to keep blue-collar renters (especially blue-collar renters with school-age children) out of affluent neighborhoods. They can promote best practices and remove perverse federal incentives. But the federal government should never draw its own zoning maps. The new conservative housing push leaves the hard work of rewriting exclusionary rules squarely in the hands of state and local leaders.