Wednesday, September 14, 2016

Micro-housing’s gradual demise in Seattle was death by a thousand cuts, with a mushroom cloud of incremental zoning regulation finally doing it in for good

See Micro-Housing, Meet Modern Zoning by Vanessa Brown Calder of Cato.
"Beginning in 2009, developers in Seattle became leaders in micro-housing. As the name suggests, micro-housing consists of tiny studio apartments or small rooms in dorm-like living quarters. These diminutive homes come in at around 150–220 sq. ft. each and usually aren’t accompanied by a lot of frills. Precisely because of their size and modesty, this option provides a cost-effective alternative to the conventional, expensive, downtown Seattle apartment model.

Unfortunately, in the years following its creation, micro-housing development has all but disappeared. It isn’t that Seattle prohibited micro-housing outright. Instead, micro-housing’s gradual demise was death by a thousand cuts, with a mushroom cloud of incremental zoning regulation finally doing it in for good. Design review requirements, floor space requirements, amenity requirements, and location prohibitions constitute just a few of the Seattle Planning Commission’s assorted weapons of choice.
As a result of the exacting new regulations placed on tiny homes, Seattle lost an estimated 800 units of low-cost housing per year. While this free market (and free to the taxpayer) solution faltered, Seattle poured millions into various housing initiatives that subsidize housing supply or housing demand, all on the taxpayer’s dole.

Sadly, Seattle’s story is anything but unusual. Over the past almost one hundred years, the unintended consequences of well-meaning zoning regulations have played out in counterproductive ways time and time again. Curiously, in government circles zoning’s myriad failures are met with calls for more regulations and more restrictions—no doubt with more unintended consequences—to patch over the failures of past regulations gone wrong.

In pursuit of the next great fix, cities try desperately to mend the damage that they’ve already done. Euphemistically-titled initiatives like “inclusionary zoning” (because who doesn’t want to be included?) force housing developers to produce low-cost apartments in luxury apartment buildings, thereby increasing the price of rent for everyone else. Meanwhile, “housing stabilization policies” (because who doesn’t want housing stabilized?) prohibit landlords from evicting tenants that don’t pay their rent, thereby increasing the difficulty low-income individuals face in getting approved for an apartment in the first place.

The thought seems to be that even though zoning regulations of the past have systematically jacked up housing prices, intentionally and unintentionally produced racial and class segregation, and simultaneously reduced economic opportunities and limited private property rights, what else could go wrong?

Perhaps government planners could also determine how to restrict children’s access to good schools or safe neighborhoods. Actually, zoning regulations already do that, too.

Given the recent failures of zoning policies, it seems prudent for government planners to begin exercising a bit of humility, rather than simply proposing the same old shtick with a contemporary twist.

After all, they say that the definition of insanity is doing the same thing over and over and expecting different results."

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