High rents and the lack of politics
Forbes recently published a two part interview with law professor David Schleicher discussing his recent paper City Unplanning. Schleicher discusses the perversity of zoning restrictions and begins by noting that, in many cases, rents and rental units available have nothing to do with each other:
In a number of big cities, new housing starts seem uncorrelated or only weakly correlated with housing prices and the result of increasing demand while holding supply steady is that price went up fast. The average cost of a Manhattan apartment is now over $1.4 million and the average monthly rent is over $3,300.
The only explanation is that zoning rules stop supply from increasing in the face of rising demand.
Effectively, Schleicher argues that new developments in big cities are subject to a form of NIMBYism which is effective to the extent it is apolitical:
Local legislators may prefer more development than we have now to less, but have stronger preferences for stopping development in their districts because these projects would hurt homeowners in their neighborhoods—either directly through things like increased traffic or indirectly through increasing the supply of housing, harming the value of existing houses.
This is a prisoner’s dilemma and absent a political party to organize the vote in local legislatures, one-by-one votes on projects will result in “defect” results, or situations where every legislator builds coalitions to block projects in their own district and nothing gets built [emphasis added].
I couldn’t quite understand Schleicher’s point from the interview, but it is much better explained in the full paper:
Importantly, most cities do not have competitive party politics – they either have formally nonpartisan elections and/or are entirely dominated by one party that rarely takes local-issue specific stances. Absent partisan competition, there is little debate over citywide issues in local legislative races and there is no party leadership to organize the legislature, making the procedural rules governing the manner in which the legislature considers land use issues far more important. The content of the land use procedure generates what one might call “localist” policy-making: seriatim [i.e., one-off] decisions about individual developments or rezonings in which the preferences of the most affected local residents are privileged against more weakly-held citywide preferences about housing.
It’s an intriguing thesis positively, but I’m not sure what I think of Schleicher’s point normatively. Local voters generally do seem to prefer NIMBY outcomes in order to avoid threats (e.g., increased traffic, lowered property values) to their existing assets (i.e., homes and businesses). But if local voters achieve this result through the mechanics of “weak” local politics, isn’t that an example of the political system “working”?
Put another way, high rents may be undesirable, but they are largely an outsider problem. Current residents (insiders who can vote) first and foremost want to protect themselves from the problematic vicissitudes of new development (which will, if it is built, be populated with outsiders who obviously cannot vote unless it is built and they take up residence). If current residents/voters achieve this goal through voting for “apolitical” council members, (1) isn’t this actually a highly political choice, and (2) isn’t this precisely how voting and elections are designed to work?