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Dumb Arguments Against Changing The Height Act

October 29, 2013 2 comments

The D.C. Office of Planning recently sent a proposal to Rep. Darrell Issa (R-Calif.) to update the 1910 Height Act. The proposal called for a modification of the formula used to calculate maximum height restrictions in the L’Enfant area and also to release the city of all federal height restrictions in the rest of the District. The city would set its own limits based on its zoning process.

Iss has taken a keen stance on D.C. issues and asked for the proposal, along with one from the National Capital Planning Commission (NCPC), which presented a much more timid recommendation. While the fate of the 103-year-old law rests with Congress, D.C. residents have not been quiet about voicing their displeasure at the proposal. But the arguments against modifying the Height Act always seem to come up short.

The arguments in favor are pretty straightforward. The current housing restrictions severely limits the supply of residential and commercial space. That means higher rents for both residents and businesses, which are passed down to consumers through higher prices of goods. With more housing, rents would fall, prices would fall and more people would move into the city. This would not just provide a much larger customer base, but also a much larger tax base, giving the city more resources to spend on infrastructure and other programs. The arbitrary restrictions on the housing supply severely restrict economic growth. D.C.’s plan would start to change that.

Not everyone seems to get this though.

For instance, the President of the Capitol Hill Restoration Society, Janet Quigley, recently published a piece that argued it “could raise housing costs.” This is entirely wrong. Here’s a simple, Econ 101 demonstration of what happens when you increase the availability of housing:

supply shifts out

 

Notice how price falls? In the case of housing, that’s rents. The amount of housing demanded increases as well, but this is a shift along the demand curve. It’s a result of the lower housing costs as the market reaches a new equilibrium. In and of itself, relaxing housing restrictions will lead to lower, not higher, housing costs.

But the most ludicrous argument I’ve seen against modifying the Height Act comes from Chris Otten, the director of the District Dynamos, when he questioned whether the population growth forecasts laid out by Planning Director Harriet Tregoning were accurate. Much of the impetus for changing the law comes from the fact that D.C. estimates that its current housing stock cannot keep pace with the city’s expected population growth. Otten thinks he’s found a hole in that argument. Here’s Aaron Wiener at City Paper:

Chris Otten, director of the Ralph Nader-backed District Dynamos, questioned Tregoning’s population growth forecasts, saying they do not account for increased cancer rates from disasters like the Fukushima nuclear meltdown.

Wait. What?! Otten’s reason for doubting the growth forecasts is that more people may die of cancer thanks to potential nuclear meltdowns in the future. Of course, Otten could have come up with a hundred other potential future disasters that will restrict population growth. Why not the risk of a meteor shower? Or an alien attack? This line of argument is so absurd it goes to show how far opponents of changing the Height Act will go to stand in its way. Let’s hope Issa & Co. don’t give them a second thought.

An Easy Solution to D.C.’s Rapid Rehousing Program

September 26, 2013 Leave a comment

A story in the Washington City Paper caught my eye yesterday not, because of the complexities involved in it, but because of the obvious solution. As part of the 2009 stimulus, D.C. implemented a new program called rapid rehousing that puts people up in apartments for very short periods of time (around fourth months) so that they feel a sense of urgency to find work and become self-sufficient. If you tell someone they can have housing indefinitely, that incentivizes people to delay looking for a job or cheap housing. The rapid rehousing program tries to fix that problem. If a person cannot afford the apartment in those four months, the program generally extends the program up to a year. But the people in the program often don’t about that so the pressure is still on to find work.

In 2011, when the stimulus funds ran out, D.C. continued running the program itself, but it has run into a new problem: apartments in D.C. are too expensive. From the story:

But the problem, as Wright notes, is that housing has gotten very expensive in D.C. That’s meant a double whammy for the city: more homeless people who can’t afford to pay the skyrocketing rents, but also fewer affordable units for the city to place them in through rapid rehousing.

“We don’t have apartments,” Berns says, agreeing with the residents who have struggled to find housing. “They’re right. This has been my biggest frustration, that we can’t put them in an apartment that costs thousands of dollars per month, with the thought that at the end of four months or a year or even two years, after rapid rehousing ends, that they’d put up that rent.”

Placing the participants in more expensive apartments, says Berns, would be “setting them up for failure,” since they’d have trouble paying the rent once they’re on their own and could end up back in the shelters or hotels.

“D.C. has failed to adapt its rapid rehousing program to the realities of an expensive housing market and a highly competitive population of renters,” saysAmber Harding, an attorney with the Washington Legal Clinic for the Homeless. “Homeless families, many with poor credit and low incomes, are competing with renters with good rental and credit histories and much higher income.”

As a result, there’s a tremendous backlog. Berns says his agency has plenty of funds to place more families into rapid rehousing but simply can’t find enough affordable units.

The problem here isn’t D.C.’s rapid rehousing program, as Harding suggests. It’s that D.C. is too expensive!  You know what would be a great way to make D.C. less expensive? Reducing the height restrictions on buildings here. Right now, supply is constrained by the 1910 Height Act as buildings are capped at 90 feet on residential streets and 130 feet on commercial ones. It’s a draconian law that artificially limits the number of housing units available in the city and keeps prices high. The city is finally ready to revise the law, although it is in the hands of Congress in the end.

Last week, D.C. Mayor Vincent Gray submitted his recommendations to Representative Darrell Issa (R-CA) calling for new height regulations that would allow buildings to be 1.25 times the width of streets inside “L’Enfant City”. This would allow buildings to reach 200 feet in the air on streets 160 feet wide. It would be a big increase, but it still doesn’t go far enough. Abolishing the height act entirely and allowing skyscrapers into downtown D.C. would allow residents to take full advantage of D.C.’s infrastructure while providing a larger customer base for nearby stores and increasing economic activity (meaning more tax revenue as well). In addition, it would help programs like rapid rehousing by decreasing rents and allowing a sector of affordable housing to flourish. Sounds like a no brainer to me.

The Question We Should Ask About Wisconsin Teacher Unions

September 13, 2013 Leave a comment

Under Governor Scott Walker’s Act 10, passed in 2010, unions in Wisconsin must be recertified every year. They do this by conducting a vote of the workers and at least 50% must vote in the affirmative for the union to receive recertification. Before Walker, Wisconsin was one of many states that required union membership for employees to work. They didn’t have a choice. If they wanted to work in an industry with a union, they had to join the union. Walker eliminated that law with Act 10 (known as a right-to-work law).

Requiring workers to join a union may seem ridiculous at first, but it solves a very difficult problem: free riding. Without such a law, many workers would choose not to join a union, but would still benefit from its representation. The union would negotiate for everyone, but not everyone would pay dues. This incentives workers to forego membership and reap the benefits. But as more and more people rationally choose to free ride, the union becomes weaker and weaker. Eventually it has no power and the workers all lose. That’s why big business is such a big proponent of right-to-work laws. They destroy unions.

So it’s not surprising to find out that in the aftermath of Act 10, teachers unions are falling apart in Wisconsin:

Today, teachers in Kenosha, Wis., voted to decertify their union, the Kenosha Education Association, by a margin of nearly two to one. Only 37 percent of the teachers opted to retain the union in an election made possible by the labor reforms enacted under Gov. Scott Walker (R). The result goes to show that when workers have a choice on whether to join a union instead of being forced into one by law, they often choose to vote down the union.

That’s from the Competitive Enterprise Institute (CEI), a conservative organization focused on limited government, but it misses the most important question: did workers vote to decertify because they didn’t want a union or because they wanted to free ride off others? It’s not a surprise at all that unions are falling part. That was guaranteed to happen. The question is whether it’s because of free riding or not. Town Hall’s Mary Katherine Ham runs through a bunch of stories celebrating the fall of Wisconsin unions, but none poses this important question either.

I’m more sympathetic to the right-to-work argument than most liberals I know. I cringe at the idea that in order to be a teacher in many states, you must join the union. But I also understand that such rules solve the practical problem of free riding. The evidence is pretty solid that right-to-work laws weaken unions, but if workers would rather that be the case, then I certainly respect their freedom to choose that. But if most workers value unions and are not joining just so that they can free ride, then laws requiring union membership make a lot of sense. That’s what we need to figure out in Wisconsin, but no one is asking the right question.