Why Local Governments Underproduce Housing

Local control over land-use regulation means local governments focus more on the harms than the benefits of housing

As governments in California and across the United States wrestle with how to address soaring housing costs, a significant flashpoint has been the issue of local control.  Most land-use regulation in the United States is done by local governments: cities, counties, towns, villages.  In California, much of the legislation intended to increase housing production has sought to strip away or limit local control over land-use regulation.  Those legislative efforts have in turn received a lot of political and legal resistance – including lawsuits alleging that the state does not have the authority to limit local control over land-use, and activist groups challenging state intervention.

So, what should be the appropriate level of government to address land-use decisionmaking: state governments, local governments, or maybe something in between such as regional governance?  In a forthcoming article, we (myself, Giulia Gualco-Nelson, Moira O’Neill, and Nicholas Marantz) answer this question by examining how well the level of government (state, local, or regional) matches up with the impacts that housing produces.  The simple answer – which I will develop in more detail below – is that the negative impacts of building more housing are local, but the positive impacts of building more housing are regional or state-wide in scale.  That means local governments – which will focus on the local, negative impacts of housing production – are less likely to produce housing than a larger-scale government.

Why might local governments generally have less incentive to advance state-wide or even regional goals?  A key part of the reason has to do with the fragmentation of local government in much of the United States.  In many metropolitan areas there are dozens or hundreds of small local governments that have control over land-use. Indeed, many of these local governments exist at least in part because developers or residents sought to create a government with control over land-use that was separate from the larger central city – whether to facilitate racial exclusion and segregation, keep out lower-income residents, increase property values, or some combination of those factors.

Small-scale local governments are responsive to their constituents.  And those constituents will be acutely conscious of the negative impacts of housing development – the dust and noise of construction; increased noise and traffic from more people living in the area; reduced privacy and light and air because of taller buildings; more people using public services like schools and parks.

But housing developments have broader beneficial impacts.  At the regional or statewide level, more housing will reduce the cost of housing.  That in turn is beneficial to the regional or statewide economy.  More housing also provides opportunities for people who live outside the region to move into the region and find a place live.  Thus, more housing can provide an opportunity for socioeconomic mobility, as people can move into metropolitan areas that are increasingly the source of economic growth and prosperity in the United States.  Housing that is located in major metropolitan areas, rather than on the exurban fringe, will advance climate change goals that have national or global benefits – infill housing in urban and suburban areas allows for less auto-dependent lifestyles that reduce carbon emissions.

There is also good evidence from a range of academic studies in political science, economics, and planning that individual local decisions about housing combine to affect broader housing markets.  For instance, more fragmented local government systems are likely to produce sprawling exurban development, as development leapfrogs from jurisdiction to jurisdiction in response to local government decisions about zoning.  There is also ample evidence that local governments respond strategically to zoning decisions by other local governments – further supporting the existence of spillovers from local zoning and housing decisions.

There is also direct evidence that smaller jurisdictions have stricter zoning standards.  For instance, some of the strictest zoning in the country is in New England, where local government is extremely fragmented.  Recent empirical evidence shows that small cities are less hospitable to multifamily housing than medium or large cities.  Even for large cities, when the decision about whether to produce housing is devolved to a neighborhood level, housing production declines.

This evidence provides support for policies that affirmatively limit or shape local control over land-use.  Unbridled local control over land-use will result in underproduction of housing – just as we have seen over the past few decades in California.  That does not mean that there is no role for local control in land-use regulation and housing, but local governments should be required to ensure they meet regional and statewide needs for housing, and held accountable when they do not do so.  Our work strongly supports the efforts in states like California to advance legislation that gives greater state control over land-use and requires local governments to do their share to advance regional and statewide housing goals.

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Reader Comments

7 Replies to “Why Local Governments Underproduce Housing”

  1. I note with alarm that, near the beginning of his essay, Professor Biber states a clearly biased premise: “Indeed, many of these local governments [that are apparently impeding efforts to promote housing] exist at least in part because developers or residents sought to create a government with control over land-use that was separate from the larger central city – whether to facilitate racial exclusion and segregation, keep out lower-income residents, increase property values, or some combination of those factors.” The logical suggestion following this observation is that efforts to limit housing derive from these socially unacceptable motivations. While no-one with a reasonable knowledge of local land use will deny that these motivations did, and still do exist, to attribute those motivations to the great majority of local land use laws is to paint with too broad a brush. Rather, Professor Biber himself points to the primary motivation of avoiding “the negative impacts of housing development – the dust and noise of construction; increased noise and traffic from more people living in the area; reduced privacy and light and air because of taller buildings; more people using public services like schools and parks.” These motives are not less valid or important than those favored by Professor Biber. If Professor Biber and those who support his political philosophy want to achieve their housing goals, I suggest that they avoid advocating the reduction of popular democracy (in the form of “local rule”) in the bodies politic that are closest to the people. Whatever those methodologies may be, it is both inaccurate and disingenuous for advocates of that political philosophy to accuse a large part of those opposed to the dllution of home rule as racist, elitist, and unjustifiably selfish, and necessarily to associate those adversaries with others who do not share those socially, morally, and ethically unacceptable characteristics..

  2. Actually, its pretty obvious that state and local governments are acting in the interest of developers, resulting in dire, dangerous racist ghettos alongside of grotesque, rampant whites only developments, environmental destruction, zero local planning, chronic budget deficits, increasing debt burdens, and widespread inadequate services such as underfunded schools and hospitals.
    Developers work with local officials and County Councils work as a well oiled team for mutual profit and power. Low proffers and taxes for Developers. Local and County Councils who take their calls stay around.
    Instead of representing the public interest, local elected officials protect Developers, shifting the burdens of hit and run developments on to the affected communities, taking on debt funded by bond issues, opposing zoning limits, raising barriers to local controls with petty jurisdictional “Dillon rules”, rubber stamping blatantly inadequate Developer proffers.
    There is a great deal more to thissad, developer driven anti public interest dynamic, ubiquitous in America. No need to lay it all out here – just read your local newspapers.

    1. Bob: Why don’t you tell us how you really feel? 🙂 Not all developers are rapacious capitalists and not all communities that pose barriers to housing are bastions of racism. Use a sledge hammer to approach your concern and you risk doing harm without solving the problem. Name-calling will not help. Good luck.

  3. Greater State control sounds good in theory, but not necessarily in practice. Gavin Newsom just signed SB 7 into state law, which should lead to more “infill” housing with “streamlined” CEQA review, but only 15% of such units must be “affordable.”

    This means that 85% of new infill units will not be affordable, and will do little to address the shortage of low-income units in urban areas and resulting traffic and other environmental conditions.

  4. Mr. Biber blithely passes over the public costs of additional housing. The infrastructure is not free. For example, Tacoma, WA has sewer lines that are at capacity, additional residences will require that the be enlarged. The City has been identified as having one-third the recommended amount of park space . The schools are at or over capacity. The transit system is inadequate and relief is a decade away. Adding to this is a city that does not only charge developers an impact fee they give developers tax abatement – no taxes on the building for 10-years. Yes, the new residents pay sales tax but the primary souce of revenue is property taxes. As these rise residents on fixed incomes and POC are displaced. Add the loss of tree cover and more stormwater – a major source of pollution and the environmental effects are significant. Stop accusing everyone concerned with these costs of nimbyism and racism and start providing solutions to the problems created by increased density.

  5. I don’t believe that there will be any reduction in housing prices as a result of this embrace of yimbyism. When this price reduction fails to materialize, will any of these advocates change their positions? Or will they just move onto the next fad?

    Further, I am not sure that it makes sense to have an opinion about what the price of housing is “supposed” to be. What matters is whether people can afford it – and none of these new bills will help ordinary Californians, of any ethnicity. This state is awash in foreign money and second-home money.

    Moreover, the positive view of constant population growth is a 20th century idea. We need to move beyond it now (at least until we fix the CC problem). I do not see evidence that TOD actually works. In theory, it may, but that’s not good enough.

    Prof. Bieber seems very nice though – an optimist, clearly. I imagine he gets plenty of grief from his students on these and other topics. It is nice to see a discussion here.

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About Eric

Eric Biber is a specialist in conservation biology, land-use planning and public lands law. Biber brings technical and legal scholarship to the field of environmental law…

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