Have a nice Tuesday. Welcome to the next version. rent free. This week's stories include:
- White House imposes rent controls on federally subsidized affordable housing developments.
- San Francisco reversed reforms that had the unintended consequence of allowing too much housing.
- A new National Bureau of Economic Research study finds that eviction moratoriums have increased racial segregation in the rental housing market.
But first, our top story about a former public official in California who was criminally charged with bringing a housing project on time and on budget.
The birth of a national hero
A former California government employee has become something of a YIMBY folk hero for building apartments inside an existing train station.
Last week, the San Mateo County District Attorney's Office charged former Caltrain Deputy Director of Operations Joe Navarro and contractor Seth Worden with misappropriating $50,000 in government funds to convert two closed train station offices into small private apartments.
According to prosecutors, Navarro built himself an apartment with a shower, kitchenette and bedroom at a Caltrain station in Burlingame, California, for $42,000 in 2019. An anonymous tipster alerted authorities to the apartment in 2022.
Want to learn more about city issues like regulation, development, and zoning? join rent free from reason Christian Britschgi.
As a publicly funded apartment in California, the apartment's low sticker price could mean it cost nearly $1 million to build. X had an “Architecture, Architecture, Architecture” section praising Navarro’s economy and frugality.
sorry. You built a house for $42,000? It doesn't matter if the money was stolen. They should be responsible for developing affordable housing in California, not sent to prison. https://t.co/5Z9a6VRfJf
— Josh Barro (@jbarro) March 29, 2024
I literally know nothing about this… Become a King https://t.co/0fXsdXM3iC
— Jerusalem (@JerusalemDemsas) March 29, 2024
Because you'll have to spend the night in an illegal train station apartment, Caltrain will have to list it on Airbnb or VRBO or something. https://t.co/buEexQpzX6
— Max Doubler ????️???? (@maxdubler) March 29, 2024
Much of the unit's low cost likely comes from the fact that Navarro and Worden didn't have to buy land or build the actual structure that would house the illegal apartments.
Still, the two point out how affordable housing could be if they could avoid the costly bureaucratic processes developers typically undertake when trying to build homes, including impact fees, zoning approvals, environmental reviews, and building department inspections. showed that it was there. Location accessible by public transportation.
Certainly, stealing government funds is not praiseworthy. Meanwhile, all government funds have already been stolen from taxpayers. By expanding housing supply, black market apartments in Navarro have also slightly reduced overall housing costs.
White House's Rent Control Plan
President Joe Biden's administration plans to issue new rules limiting annual rent increases for federally subsidized affordable apartments to 10%.
According to a report by that much washington postThe rent cap applies to approximately one million apartments that benefit from the Low-Income Housing Tax Credit (LIHTC) program.
The new rules were met with a predictably poor reception from trade associations representing the real estate industry, who criticized the rules for their potential to restrict new home construction.
“Price controls prevent markets from allocating scarce resources efficiently and impede the investments needed to expand affordable housing,” wrote Jeffrey Miron and Pedro Aldighieri of Harvard University in a post published by the Cato Institute.
The administration and other housing experts dismissed the idea that the new rules would affect new supply. post An annual rent cap of less than 10% would not impede construction.
Controversial applause. To the extent that the new rent cap limits rent increases, it will almost certainly limit new supply as well.
Nonetheless, it is worth noting that properties affected by rent caps are already price controlled.
Under the affordability requirements of the LIHTC program, rent is limited to 30% of the tenant's income. To qualify for one of these apartments, renters generally cannot earn more than 80% of the area median income.
This rule does not limit annual rent increases per se, but sets a cap on the maximum allowable rent. LIHTC owners’ ability to raise rents is already limited.
In that respect, the government's rent cap plan appears to be largely performative and political.
Biden has been talking more about housing costs as part of his re-election campaign. The White House's new rent cap plan lets the president say he's doing something to address rising housing costs.
Affordable housing advocates have been pressuring the administration to go even further by imposing rent controls on all rental properties with federally backed mortgages. In this respect, the Biden administration appears to be taking the same approach to rent control as to zoning reform. That is, adopting modest policies while telling activists what they want to hear.
San Francisco reverses reforms that allowed too much housing
San Francisco has one of the highest housing costs in the country. Coincidentally, we have one of the most restrictive and unpredictable regulatory regimes in the country for new developments. Last week, the city's Board of Supervisors voted to make things a little worse.
On Tuesday, the board voted 8-3 to override Mayor London Breed's veto of an ordinance that would shrink zoning along the city's northern waterfront.
The downzoning ordinance, which supervisors first approved in late February, was written by Board of Supervisors Chairman (and potential mayoral candidate) Aaron Peskin.
Peskin reported that, ironically, he supported a zoning change in the Northern Waterfront area to allow for more office-to-residential conversions. that much San Francisco Standard.
But by allowing housing in the area, the city has made residential development eligible for density bonuses and streamlined approvals provided by state housing code. This has led to a flurry of developer proposals to build residential towers instead of old office buildings and garages.
“Once we realized the unintended consequences, we introduced legislation to reimpose density limits,” Peskin said. standard. “I don’t think we need to destroy the city to save it.”
Breed vetoed the ordinance when it was first passed. she It's called redefinition Her veto is “retreat.”
Today marks a setback in our efforts to get consent for housing. But I will not allow this to be the first step in a dangerous course correction back to the No. 1 city. We won't back down.
Here is my statement on the Board of Supervisors' vote reduction: pic.twitter.com/lYb5JD1dJe
— London Breed (@LondonBreed) March 26, 2024
The area affected by the ordinance is small. Nonetheless, this vote is a reminder that the process of zoning reform is long and not necessarily tilted toward greater architectural freedom.
A new study finds that eviction moratoriums have led to increased racial discrimination.
In a new paper published by the National Bureau of Economic Research, researchers found that pandemic-era eviction moratoriums led to more landlord discrimination. From the paper abstract:
Using data collected from an experiment involving more than 25,000 inquiries to landlords in the 50 largest U.S. cities in the spring and summer of 2020, our analysis shows that the implementation of eviction moratoriums has significantly disadvantaged African Americans in the housing search process. appears to have been received. . The housing search model explains this result, showing that discrimination gets worse when landlords are unable to evict tenants during the eviction moratorium.
This is consistent with past research showing that landlords and employers are more likely to engage in outright racial discrimination when they cannot use criminal background checks, eviction records, etc. to vet potential employees/tenants.
Pandemic-era eviction moratoriums have always been bad policy. The wave of mass evictions they were supposed to prevent was always unlikely to materialize. As far as preventing evictions goes, many landlords find themselves in a situation where they don't pay and often harass or harass tenants. Housing courts are now struggling to sort out routine eviction cases that have piled up over the months (or years) that evictions have been paused.
Increased discrimination is another unintended consequence that could plausibly be laid at their feet.
quick link
- Colorado became the latest state to pass justifiable eviction legislation.
- Utah Gov. Spencer Cox has signed numerous housing reforms aimed at increasing housing supply, primarily by making it easier for developers to finance infrastructure improvements.
- Is the U.S. Navy the latest NIMBY boss standing in the way of a new home?
- Or is it the fire department?
- A California appeals court has upheld its decision rejecting a challenge to a state law that makes it easier for local governments to zone apartments. make a case Building more expensive homes generally makes them less expensive.
New appeals court ruling: “Supply and demand are real.”
No, this is not an Onion headline.
A real-life example that rejects the left-wing NIMBY argument that state housing laws are unconstitutional unless they are narrowly tailored to promote BMR rather than market-rate housing. https://t.co/2CZTWcPOAi pic.twitter.com/pBuE7bd4k8
— Chris Elmendorf (@CSElmendorf) March 30, 2024
- A Washington state bill that would override local zoning regulations banning small neighborhood coffee shops passed the state House unanimously but failed in the state Senate due to lobbying from local governments, according to a report. national review.
- The California Supreme Court will hear oral arguments this week on whether California environmental law requires the University of California, Berkeley, to study the noise impacts of future student housing it plans to build in People's Park. I hope the lawyers don't talk too loudly.