Housing crisis: the need for smart regulation

This morning I read an interesting article in the New York Times. It describes how, “under pressure to control housing costs, […] lawmakers rejected standards meant to protect against disasters”.

The articles continues:

“Over the past 15 years, North Carolina lawmakers have rejected limits on construction on steep slopes, which might have reduced the number of homes lost to landslides; blocked a rule requiring homes to be elevated above the height of an expected flood; weakened protections for wetlands, increasing the risk of dangerous storm water runoff; and slowed the adoption of updated building codes, making it harder for the state to qualify for federal climate-resilience grants.”

This specific, and tragic, example, reflects a wider debate about the housing crisis, often presented as a choice between regulation and deregulation.

For example, a recent opinion piece in the same newspaper is titled: “The Best Plan for Housing Is to Plan Less“.

So, this morning’s article suggests the need for more regulation, whereas this opinion piece convincingly argues for less.

Why regulate?

It is not my intention to be exhaustive. Here are a few reasons to consider regulation:

• building and materials quality and safety (industries do not self-regulate: external rules and inspections are necessary to ensure basic construction quality)
• dangerous sites (e.g. flood plains, land-slides – the location of which is changing as climate changes)
• environmental protection (e.g. wetlands, which can protect against floods; parks, which are necessary in cities)
• stabilising expectations and reducing conflict (to some extent at least, planning regulations set the rules of the game, thereby reducing lawsuits, incompatible uses…)
• some degree of rental protection (to some extent at least incumbent residents and businesses require protection from massive rental increases, especially at times when there are few alternatives)

Why de-regulate?

Here are a few reasons to consider deregulation.

• zoning can inhibit housing development by protecting low-density and/or exclusive settlement patterns.
• zoning and codes can be inflexible, too restrictive or out-of-date (for instance in the face of a housing crisis).
• zoning can fetishize lines-of-sight, vague historic stories, elite views on heritage, etc…
• building rules can lose sight of construction quality and safety, veering towards subjective criteria, unreasonable minutiae, or out-of-date requirements.
• rules tend to multiply and overlap, and administrative processes can become excessively burdensome.
• regulations can be fuzzy, regulators are often slow, there can be lack of coordination between regulatory bodies…

A call for smart regulation

The regulation/deregulation debate fuels ideological clashes over neoliberalism and late capitalism. However, these clashes do little to address the housing crisis in practical ways.

Debates of principle or ideology get in the way of informed discussions about specific regulatory thickets and how they can be resolved.

To resolve regulatory thickets and improve housing-related regulation it can be useful to, periodically:

• articulate the underlying logic of regulations and of their administration.
• then, assess these logics, decide which are still valid, and update/retire regulations (and administrative processes) accordingly.
• and, finally, reduce the regulatory burden (notably on developers, who build houses) whilst maintaining streamlined regulation that achieves socially desirable purposes.

The regulatory framework that emerges should enable the rapid and safe construction of much-needed housing, and should leverage existing infrastructure and public services.

As the Urban Institute argues:

a blanket deregulatory approach is likely to undermine public health, widen inequalities, and exacerbate affordability challenges; instead, smart regulatory strategies should be the goal of reforms at all levels of government.

Greene, 2019, Urban Institute