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As the cost of living crisis continues in the United States, new legislation in Congress aims to address Americans' biggest living expense: housing. A bipartisan team of representatives and senators have proposed the Yes in My Backyard (YIMBY) Act, which would tie federal block grants to cities' housing affordability policies. This legislation is a necessary step to address America's growing affordability crisis and ensure access to housing for renters and first-time homebuyers.
The issue of low housing supply and high housing costs may seem like problems for big cities, but it's one that should raise concern across the country. High housing costs in America's most economically productive cities have nation-wide ripple effects. High costs of living keep people out of some of the most productive and innovative local economies, reducing overall economic growth. Economic research indicates that America's housing shortage was responsible for up to a 36 percent reduction in aggregate economic growth between 1964 and 2009. Additionally, housing underproduction isn't restricted to just a few cities or states. Housing costs are rising across the country. Between 2000 and 2015, America underproduced at least 7.3 million homes relative to population growth, contributing to the rise in housing costs. Those costs now account for 42 percent of families' monthly income in the U.S.
Housing underproduction is largely driven by local laws—zoning laws, permitting requirements, community input processes, and other building restrictions—that make it more expensive and difficult to build in the U.S. Around 75 percent of land zoned for housing in the U.S. is zoned exclusively for single-family homes. Other laws ban certain types of housing, like accessory dwelling units, sometimes called "granny suites," as well as trailer parks, townhomes, and duplexes. This combination of restrictions makes building anything, especially dense housing, nearly impossible throughout much of the U.S., only adding to the housing supply problem.
Many localities also require extensive permits and community input sessions before developers can break ground, especially for multi-family housing construction. These are typically discretionary permitting processes, so projects depend on ad hoc approval from their city council. Over recent years, the time to build even smaller apartment complexes has risen to an average of 17.5 months. Time is money, and meeting all of these local government requirements can seriously raise the cost of building new housing, reducing local housing supply.
The federal government has been reluctant to intervene. A long history of low-quality public housing projects and "slum clearances" have, for good reason, made many Americans skeptical of any federal hand in housing policy. Past policies had devastating impacts on local communities, especially low-income and minority communities, where neighborhoods were destroyed in the name of "urban renewal" and poverty was concentrated into poorly maintained cinder-block projects. In response to these effects, federal lawmakers have taken a hands-off approach to housing policy. Beyond doling out tax credits to developers and adjusting interest rates, housing policy has remained solidly in the hands of state and local policymakers for decades.
That could all change if legislators pass the YIMBY Act. The bill would require Community Development Block Grant recipients to provide evidence that their localities are working to eliminate discriminatory land-use restrictions and other policies that reduce new housing production. Both versions of the bill—the one in the Senate and the one in the House—have bipartisan backing and would create the incentives needed to finally address America's severe housing shortage.
The YIMBY Act will avoid repeating the past harms of federal action on housing issues by promoting development through free-market principles. Rather than commandeering the future of land-use and housing policy in the U.S., Congress would tie approval for block grants to a city's progress on improving housing affordability. This would successfully prevent the law from imposing top-down requirements on cities and allow localities to establish their own legislation, incentivizing them to rely on the free market to work towards the shared goal of housing affordability.
The bounds of the housing affordability issue now far exceed city limits. America's inability to build new housing is stifling economic growth and creating hardship for American families. To meaningfully address the housing affordability issue, federal "carrots" and "sticks" are needed to encourage cities across the U.S. to update their laws and let Americans build again.
Elijah Gullett is a writer and commentator for Young Voices. His work focuses on energy, the environment, housing, and building an economy of abundance. Follow him on Twitter @marketurbanists.
The views expressed in this article are the writer's own.
