How To Solve a Housing Crisis

Nowhere To Live: The Hidden Story of America’s Housing Crisis, by James S. Burling, Skyhorse Publishing, 408 pages, $32.99

James Burling, with 40 years’ experience litigating property rights cases for the Pacific Legal Foundation, enriches the housing debate in three ways in his book Nowhere To Live. First, he reminds us of the crucial importance of private property ownership to a free and flourishing society. Second, he reviews a long history of efforts to interfere with the housing market. And third, he offers perspicacious recommendations for sensible and achievable improvements.

Burling’s first service forcefully restates the argument that any “solution” to a housing crisis cannot be allowed to extinguish historic property rights in land. He points out that John Locke’s prescription for a free society requires that we have rights to use, trade, exclude, and bequeath what we own. He recognizes the need for the common law of nuisance: “use your property so as not to injure that of another.” And if the government exercises its power to confiscate privately held land for public use, he reminds us, the government is constitutionally required to pay the owner just compensation.

Burling then moves to the “dystopian reality” caused by government’s efforts to meddle in land and housing markets: “Unless and until we free up the pent-up desires of Americans to build new homes, America’s housing crisis will grow worse, especially in large urban areas…even those who can afford a place to live are often forced to spend a disproportionate share of their income on housing….Nationally, just to replace aging or destroyed housing stock, one million homes must be built each year. Another million must be built to keep up with population growth.”

How have we reached this pass? Burling offers a highly readable account of the foolish—and racist—history of exclusionary residential zoning, in a chapter subtitled “America’s Obsession with Quiet Places Where Yards Are Wide and People (of Color) Are Few.” When the Supreme Court struck down explicitly racial zoning in Louisville in 1917, city planners and their lawyers designed “comprehensive zoning,” which refrained from overtly targeting blacks. In a 1926 case originating in Euclid, Ohio, the Supreme Court upheld a comprehensive local zoning ordinance, and the Euclid model has been widely emulated ever since.

From this beginning, Burling traces how zoning has protected the cultural and economic interests of the non-poor and non-black. One significant zoning ordinance was upheld in 1977 when the Court found no discriminatory motivation originated from the village of Arlington Heights, Illinois, where this reviewer graduated from an all-white thousand-pupil high school in 1954.

The Supreme Court’s approval of comprehensive zoning unleashed an enormous new planning industry in most American cities. Not surprisingly, when a municipal ordinance gives the government power over the location and use of every sort of development, that invites powerful interests to use that power for privileges and advantages. The poor are rarely among those interests.

Burling then turns to eminent domain. The courts have long agreed that governments can take private property to further the interests of the public, such as highways, water, sewer and electric plants, schools, hospitals, and the like, provided it pays just compensation for the taking. Burling focuses on instances where a government uses eminent domain power not for public use but for political usefulness. A notable example was the destruction (via “urban renewal”) of mostly black Southwest Washington near the U.S. Capitol, which the Supreme Court upheld in 1948. Another was the taking of Susette Kelo’s modest home in New London, Connecticut, to make way for a Pfizer pharmaceutical plant. That plant was abandoned, along with 1,400 jobs, a mere 10 years from the condemnation.

Burling also documents the perils of the Endangered Species Act, rent control, “affordable housing” mandates, and “the swamp monster that devours housing projects large and small, the Clean Water Act.” In each case, officials created a near-impenetrable jungle of bureaucratic and legal procedures that make it harder to build homes—and exhaust the resources of any citizen or organization willing to stand up and fight back.

Politicians sometimes recognize the problems. President Donald Trump issued an executive order stating that “Increasing the supply of housing by removing overly burdensome regulatory barriers will reduce housing costs, boost economic growth, and provide more Americans with opportunities for economic mobility.” President Joe Biden vowed to address the “exclusionary land use and zoning policies [that] perpetuate historical patterns of segregation, keep workers in lower productivity regions, and limit economic growth.” Other than the Trump administration’s retraction of the “Waters of the United States” rule, not much came of either pronouncement.

There is no magic bullet that will restore and protect property rights, but Burling makes a welcome pitch for the doctrine of regulatory takings.

Regulatory takings occur when a regulation reduces a piece of land’s value. A regulatory takings statute would require courts to recognize the amount of the reduction as a compensable taking, making the regulating body pay for it just as if the reduction in fair market value were actually taken for public use. Burling rightly credits Richard Epstein’s powerful 1985 book Takings: Private Property and the Power of Eminent Domain for stimulating officials’ interest in this concept.

Your reviewer might be forgiven for remarking that he advocated a similar approach in a 1974 law review article, and in fact, introduced a bill to that end in the Vermont Senate in 1991. It included this twist: Rather than suing to defeat a regulatory taking, the victim could, if the taking resulted in a reduction of 50 percent or more of the property’s fair market value, demand the right to file for “inverse condemnation” of the entire property. The government, if it still wanted the restrictions, would have to take all of the property, and a jury would determine the fair market value that the government would then have to pay. Thereafter the government could impose whatever regulations it desired on the property it had bought and paid for. (The Vermont Senate failed to pass this.)

One of the many virtues of Burling’s book is his ability to explain why and how the government should be made to bear the cost of its devices for defeating the creation of new housing. It does take a certain amount of  knowledge of constitutional requirements and legal issues, but any layman can understand the circumstances, the motives, and the economic and political interests involved, and how different policy choices would have housed more people. I’d like to think that most legislators could understand it too.

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Source: https://reason.com/2025/01/19/how-to-solve-a-housing-crisis/