Washington Can Encourage Pro-Growth Zoning

Large institutional investors have noticed that legal constraints on new housing supply shield their investments

Letter to The WSJ. 

"In “If You Like Your Town, Can You Keep It?” (op-ed, Aug. 29), Robert Showah suggests that advocates of development exaggerate the magnitude of the housing-supply shortage, but he underestimates the costs of land-use laws that prohibit denser development and limit outward growth. Tight zoning amplifies the other factors influencing housing costs that Mr. Showah rightly points out, but policy makers can change zoning far more easily than, say, boosting real wages or construction productivity. Austin, Texas, recently reduced the minimum lot size for single-family homes, recognizing that forcing home buyers to own more land than they might prefer unnecessarily raises housing costs.

The effects of restrictive land-use policies extend well beyond low-supply metros. Pricing out talented workers from high-opportunity areas dims career prospects and slows economic growth nationwide. Americans are also delaying marriage and childbirth, and having fewer children in general, because they feel they can’t support larger households in places with ever-increasing housing costs.

Like “not-in-my-backyard” homeowners, large institutional investors have noticed that legal constraints on new housing supply shield their investments from downside. Looser zoning would facilitate more single-family homes and thus more competition, dampening these investors’ appetites. Besides, some households prefer the flexibility and convenience of renting over the commitment and hassle of homeownership. Why not let the market meet these preferences?

There are good reasons to resist the federalization of land use and Vice President Kamala Harris’s broader housing agenda. But it’s reasonable and lawful for Washington to reward state and local governments that protect property rights and promote growth.

John Ketcham

Director of cities, Manhattan Institute"