Before I continue with this series on Obama’s Housing Development Toolkit, I have to say how happy I was with the outcome of the election. The election of Hillary Clinton would have been far more disastrous than even that of Obama’s, and Trump’s election promises us a much better chance to return to a market-centered economy rather than one that is driven and ruled by fiat and unlawful regulations.
I would urge everyone to read Trump’s Contract with the American Voter. It is incumbent upon all of us not to let him forget the promises it contains and to insist that they all are carried out as expeditiously as possible.
Aside from the biggest promise the Contract contains – getting rid of Obamacare – I am especially interested in the third one on the list: “a requirement that for every new federal regulation, two existing regulations must be eliminated.” After all, even though the Housing Development Toolkit has not been codified yet (or at least if it has it has been kept quiet), it promises to create yet another overbearing set of regulations that will discourage new development that doesn’t meet the administration’s goals. The strategies to meet those goals are:
“Establishing by-right development.
“Taxing vacant land or donate it to non-profit developers.
“Streamlining or shortening permitting processes and timelines.
“Eliminate off-street parking requirements.
“Allowing accessory dwelling units.
“Establishing density bonuses.
“Enacting high-density and multifamily zoning.
“Employing inclusionary zoning.
“Establishing development tax or value capture incentives.
“Using property tax abatements.”
This week I will cover the second one on the list, “Tax vacant land or donate it to non-profit developers.”
This section opens with the statement, “Nationwide, the number of vacant residential units increased from 7 million in 2000 to 10 million in 2014… Strategies to address these properties can reduce blight and place them back into productive use … many jurisdictions have enacted vacant property registration ordinances that require individuals to register vacant land and often pay a fee… Once vacant property has been identified, jurisdictions are able to take action to combat the lost revenue and blight that come with vacant property by taxing vacant land or donating (those vacant properties) to non-profit developers.” This provides “a tool to enable cities to more effectively … pursue tax foreclosure on unproductive vacant properties in return for … placement into productive use in development of affordable housing”.
No one likes blight in their city, but “blight” has become a somewhat relative term in recent years. Even in one of our local Tulsa suburbs, 27 acres of homes and churches were taken for the purpose of developing retail and the taxes that it would generate. This was an old neighborhood, but the homes were not vacant.
There is no doubt that vacant homes, especially those that are dilapidated, are a detriment to a community. They do foster more crime than neighborhoods that are filled with occupied homes, even if those homes are in disrepair. However, these properties are still owned by someone, and to simply take those properties because a regulation has been created that allows it is still a violation of property rights.
Even if this kind of regulation were intended to address only vacant properties for the purpose of creating space for affordable housing, they would create incentives for the abuse of the property rights.
The Housing Development Toolkit makes it very clear that their definition of affordable housing is multi-family housing, which takes a great deal of space.
Yet many neighborhoods may only have a few vacant properties that the regulation addresses. In order to secure large parcels of land for apartment projects, it will be very tempting to do just as the city did in my earlier example – declare entire areas as blight, and take occupied homes along with vacant ones.
Am I against multifamily housing? Certainly not. Multifamily housing provides a valuable steppingstone to home ownership and allows a working population to be mobile from one community to another. There is a place for this type of housing in virtually all communities.
However, with a functional market economy, the appropriate number of apartment units would be created that would serve a community’s needs appropriately, as long as there are no cumbersome regulations. We need fewer regulations, not more.
Much of the incentive for affordable housing (which is really subsidized multifamily housing) becomes clearer as we explore the rest of the strategies in this document.