Bryan Caplan  

"Free to Build": The Best Hope for Libertarian Populism

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The last big populist movement that libertarians could and did embrace was the tax revolt of the late 70's and early 80's. Since then, there's been a long dry spell, at least in the U.S. And if you know much about public opinion, that's no surprise: The man in the street has little sympathy for libertarian policies. All of which gets me thinking: What is the best hope these days for libertarian populism?

To be more precise, is there any policy change out there that is Big, Libertarian, Potentially Popular, and will Actually Deliver?

How about this: A populist movement to drastically reduce the price of housing by slashing the regulatory barriers to new construction? Uh oh, it still sounds like an egghead is talking. Real populism means sound bytes. My best shot so far: Free to Build.

Everyone from Paul Krugman to Ed Glaeser now highlights the fact that an array of regulations make housing needlessly expensive. A simple populist response: Gut the regulations so we can build more houses that are affordable for the average family. If a private party owns some land, let him develop it. If the government owns some land, let them sell it to the highest bidder, then use the proceeds to cut property taxes.

Simplistic? Sure. If it weren't simplistic, it wouldn't be populism, and wouldn't have a chance of becoming popular. But of course that's only a necessary condition, not a sufficient one. The big question is: Could a majority embrace the cause of Free to Build?

Economists are likely to say No. Why? Because the median voter already owns a home, so he doesn't want housing to get any more affordable. But this objection rests on the discredited Self-Interested Voter Hypothesis. Empirically, objective self-interest is an almost useless predictor of political preferences. The value of my home has doubled since I bought it five years ago, and I'm the founding member of the Free to Build movement!

In reality, people generally favor policies because they think they are right, not because they help their bottom line. And there are lots of ways to convince people that Free to Build has right on its side. Here are some preliminary slogans:

"You shouldn't have to be rich to buy a nice home."

"Think of our children! They deserve homes of their own too." (And if you remain convinced that voters are selfish, try "Do you want your kids to live with your until they're 40?!")

(For privately-owned land) "They own it, why can't they do something useful with it?"

(For publicly-owned land) "We own it, why can't we do something useful with it?"

Do I think Free to Build is going to happen? Probably not. But I still think it's the best hope for libertarian populism. And you shouldn't dismiss it just because my slogans aren't inspiring enough. That's not my forte. I bet my readers could do a lot better. Can you help me out?

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Brad Hutchings writes:

I think you missed the whole trade liberalization trend that began in the 90s with NAFTA. It's funny sitting around the table with a bunch of hand wringers wringing their well wrought hands over how everything is made in China. Within five minutes, they say how they got something really neat at WalMart for cheap. Hello? China anyone? Free trade? It's totally huge, and the opponents are sour note twits like Pat Buchanan and Lou Dobbs.

Lord writes:

It is more than self interest that promotes these. Everyone wants to maximize the value of their property and that of their neighbors as well. We live in communities after all, and the maximum value is created through common zoning standards. People want to live in areas with those of similar socio-economic status. This is expensive but price is truly a measure of value in housing as it is in few other things.

Patri Friedman writes:

It would have to be done at a large scale, ie a state-wide level. There is a prisoner's dilemma type problem, right, where every city would prefer the movement be implemented elsewhere.

Mainly, I'm skeptical that the SIVH doesn't apply here. In areas where self-interest is the clearest, it seems like people do vote self-interestedly. Do many steel workers really vote against protectionist candidates? Do exporters really vote for a candidate who is clearly going to make the dollar stronger?

Also, this is a classic case of dispersed vs. concentrated interests. You're gonna have a lot of construction unions to fight.

R.J. Lehmann writes:

Why would construction unions be against lifting land use restrictions that prevent more contruction?

alcibiades writes:

Free to Build, huh? Of course, you can reframe anything: going to war is called "self-defense," extinguishing a fetus is merely a "choice" like deciding between a Pepsi and a Coke, and so forth. That said, "Free to Build" and the accompanying slogans have a nice populist ring to them. I could see Average Joe American ticking his ballot box for "Free to Build" or the candidate that supported the policy. Now if we could just get The Man to sign on, something like this might have a chance...

Bill Newman writes:

"People want to live in areas with those of similar socio-economic status." Bingo, in my anecdotal experience of attending a convention in Houston (no zoning) where essentially all the visitors with an opinion thought it was weird and didn't like it. It was hard to get a specific complaint, but I did (without leading questions or anything) twice: they didn't like the way that the poor areas and the prosperous areas were all intermingled right next to each other, it was jarring. I think zoning is not a libertarian populist opportunity but a research opportunity for cynics with expertise in constructing surveys revealing opinions people don't like to talk about indirectly.

Some small somewhat-libertarian movements have succeeded somewhat since the tax thing. Notice how many states have shall-issue concealed carry now -- not libertarians' first choice, but a lot closer than what existed in 1975. And local drug legalization has been carried far enough to hit the Raich v. Ashcroft wall.

For a new movement, I nominate an end to mandatory professional certification. It has been carried to the level of self-parody in newer fields (florists...) and in the older fields the incumbents have created sufficient shortages (and gotten sufficiently excessive incomes --- good for populism, right?) that it seems there should be some way to get the general public to push back.

spencer writes:

We have the basis for a naural economic experiment. How do home prices in Houston with no zoning compare to home prices in a like city with zoning -- Tampa, for example?

Jeff writes:

How about:

Freedom to Build
"Why should you have to pay off the government to build a home"

spencer writes:

A recent survey found a 2,200 sq. ft., 4 bed room, 2 &1/2 bath, home with a family room and a two car garage in a typical neighborhood for a
middle management transfer costs $209,000 in Lexington, KY, $625,000 in Mclean, VA and $730,000
in Lexington, MA.

I am going to have to see a lot more evidence before I can accept that a home in VA or MA costs 3 to 4 times as much as a house in KY only because of zoning and or regulations.

I would suspect that the availablilty of open farm land a few miles away would account for much more of the difference.

James writes:

A recent survey found a 2,200 sq. ft., 4 bed room, 2 &1/2 bath, home with a family room and a two car garage in a typical neighborhood for a
middle management transfer costs $209,000 in Lexington, KY, $625,000 in Mclean, VA and $730,000 in Lexington, MA.

I am going to have to see a lot more evidence before I can accept that a home in VA or MA costs 3 to 4 times as much as a house in KY only because of the lack of open farm land a few miles away.

I would suspect that the availablilty of zoning and or regulations would account for much more of the difference

See, this is the trouble with trying to be "reality based." It means that you can list some numbers and claim that they seem to support what you already believed, or if not you can just whip out your "I suspect" card. It's as though the whole notion that builders must either ensure that the revenue from selling one more home exceeds the cost of building that home, or face monetary losses, is just a myth.

Bill Woolsey writes:

Greenspace and opposition to sprawl provide two rationales to oppose "freedom to build." I think traffic concerns are the real motivator for opposing new development, rather than worry that additional competition will reduce the resale value of one's home. (Or abstract concerns about sprawl and greenspace.) Go through a tax reassessment, and you will discover how many people have a paradoxically negative attitude about increases in the value of their home.

I served in public office (on a planning board
and then a town council) and was on the losing side of many political battles to impose more restrictive land use policies. Traffic is the key concern. Worry about living near poor people is limited to the immediate neighbors.

One peculiar situation developed when a poor community successfully opposed a neighboring upscale community out of fear that it would result in an increase in their property values and tax burden! While there were other, complicating factors, I believe that this would have been sufficient to defeat the project 3-2.

perry writes:

Its not so much the zoning (i.e. the difference between Houston and Tampa) that creates this effect. Moreso its the time spent on the ancillary processes that add costs and delays to the timeline of building. You couldn't just walk up to an empty lot and plop down a house on it even in houston - there are still layers of building review, permits, wetlands, environmental impacts, concurrency, etc. etc. etc.

For better or worse, we have the govt control for all of these issues and they have the power to slow down or speed up the process at will. In New Jersey, just getting the municipality to confirm sewer availability might take a few years. You try holding onto a piece of already scarcely zoned land for a few years while you spend a few hundred thousand dollars to comply with requirements and you quickly see why prices are so expensive!

Bill Newman writes:

Spencer: Evidence?

Anecdotally: If it is physical scarcity of land, why don't you see builders building in styles which economize on land?

Statistically: See Glaeser's papers, pointed to in the article upon which you are commenting. (analyzing the difference in value between a larger lot with legal permission to build and a smaller lot with legal permission to build)

My brother lives in Washington DC, in a row house constructed long ago in what seems like an obvious response to scarcity of land (and/or to poorer transport, probably). Such houses are worth a lot now, enough that it would be well worth it to convert large-lot buildings to multiple row houses. Has the technology of building on small lots like that been lost?

a widely-applicable answer from the libertarian point of view: "We no longer have the political technology to solve this problem." (from a guy whose name I have now forgotten, dammit)

a widely-applicable answer from the leftist p.o.v., esp. with regard to "zoning effects? I don't see any zoning effects" when people facing housing scarcity have spontaneously forgotten how to take roommates, take in boarders, build high density housing on the site of expensive trailer parks, etc. (as feelingly reported in the concluding chapter of _Nickel and Dimed_): "It's the market, stupid."

triticale writes:

People want to live in areas with those of similar socio-economic status.

True as a generality, but if it were an absolute gentrification would never happen. I for one have acquired most of my wealth by buying and living in homes that were priced in accordance with the socio-economic status of the neighborhood's past before the area became trendy.

John S Bolton writes:

Imagine a professor in the pay of the government, saying 'stop the oppression of builders'. How about 'end the ugly discrimination against developers'? Anyone would assume it was a joke. Actually, I remember a schoolteacher who said that blacks were in some ways, better off when they were allowed to build houses themselves (she meant shanties). One problem though, is that in the wastrel welfare society of today, communities need some means of protecting their own from those who could use freedom to build, to attach themselves to the net taxpayer. Each responsible official must consider whether his action will increase the level of aggression in the jurisdiction for which he makes the decision. Freedom to build could become freedom to camp, and sign up to vote oneself some extra welfare in a momentarily attractive place.

Dave H writes:

I can calculate the amount of my payoff (or at least part of it).

I live in MA. I bought a house for $390k. It was new construction, permitted under a state law provision (40B), that allows builders to bypass the town permitting rules if 25% of the lots are 'affordable', which means sold at a 50% discount to qualifying individuals. I calcuated my portion of this subisdy was about $55k.

I live in a town with over 3,000 buildable lots. The town fathers recently bragged they limited permits (other than 40b permits) last year to 10.

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