Senator Harris’ Housing Bill Misses The Mark, But Could Be Improved

US-POLITICS-KAMALA HARRIS
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Presidential candidate and United States Senator Kamala Harris has teamed up with United States Representative Maxine Waters on legislation they have called, “The Ending Homelessness Act of 2019.” Unfortunately, the legislation can’t live up to its name because it does nothing to address the fundamental problem that contributes to housing issues – overregulation of all housing productions by local governments. Simply dousing those local governments with more cash won’t end housing inflation or address the many contributing issues that lead people to improvised housing solutions. If money is to be spent, it ought to be heavily conditioned on lowering regulatory burdens. 

The author of the Huffpost article on the proposalpoints out that, 

California has one of the highestrates of homelessness. On any given day in January 2018, more than 500,000 peoplewere homeless in the U.S., according to a federal report. 

Nearly a quarter of the nation’s homeless residents live in California. In the past two years, homelessness has spiked in Los Angeles, parts of which Waters represents, and the San Francisco Bay Area, where Harris is from and had served as district attorney.“

But neither the author nor the legislators connect these numbers with the fact that regulation has made building housing almost impossible. I’ve highlighted the problems in California before. This isn’t about luxury housing or even market rate housing being slowed down and made more scarce, thus boosting its price. Even non-profit subsidized housing is now as much as $700,000 per unit. The price has gotten so high, the former Governor Jerry Brown shut off the funding. 

According to the press releasethe legislation will create 410,000 new units of housing. At the California price they wouldn’t need the $10 billion allocated by the legislation but more like $287 billion. Even at the Seattle price, where the average cost of a non-profit unit has risen to almost $350,000 per unit, the cost would be $143 billion for that many units. How much, at those costs, would the $10 billion produce? The real production would be somewhere between 30,000 and 60,000 units in 5 to 10 years. Maybe. Since housing now takes as long as 5 years to build in places like Seattle

Keep in mind that the $10 billion to build these units is to solve a stated problem of 550,000 people being homeless in the United State today. How did we get that number? From the classic Point In Time (PIT) count. That’s right, people walking around in some areas, one night, making their best guess at who is homeless. I’ve pointed out that is doesn’t help us understand the problem of people who are facing housing challenges. 

I wrote two posts about the problems with the approach used in the legislation to arrive at who gets the money, Homelessness Part 1: The Problems Of Definitionand Homelessness Part 2: The Problem of Reductionism. The formula allocates the $5 billion in emergency funds is largely based on income levels and homeless counts. As I said in those posts, we don’t really have a good quantitative definition of homelessness or measure of how many people would fit that definition. And the assumption people who are living outside of traditional housing are doing so only because of economic factors is inaccurate. 

What will happen (the other $5 billion in funding goes to the National Housing Trust Fund), is that local jurisdiction will do their best to prove, using the formula, that their community has the worst problems ever. This incentivizes over counting and pushing bad narrativesabout the “crisis” and “epidemic” going on. It also supports the perverse view that we ought to only believe homeless counts when they go up.   

What Harris and Waters should do is create a formula that allocates the $10 billion to jurisdictions that did the following five things: 

  • Suspend zoning laws 
  • Abolish design standards 
  • Tax inefficient land use 
  • Use that tax revenue to stoke building  
  • Abolish all sales and excise taxes on the production of new housing 

You might remember these from a post I made called, The Five Things Growing Cities Should Do If There Is A Recession. I would add another thing to criteria: strict requirements on costs and time of production of new units. This would likely encourage more turnkey production, that’s when private producers build the housing then sell it or lease it to non-profits. Modular could be a part of this solution. 

Finally, the Harris legislation includes more money for vouchers. Those should just be cash for rent to buy down cost burden as I’ve already described

This bill can be salvaged if it avoids pouring cash on a problem that lacks definition but instead supports fewer limits on the production of housing of all kinds, in all neighborhoods, for people of all levels of income plus cash assistance and case management where it is needed most.

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Presidential candidate and United States Senator Kamala Harris has teamed up with United States Representative Maxine Waters on legislation they have called, “The Ending Homelessness Act of 2019.” Unfortunately, the legislation can’t live up to its name because it does nothing to address the fundamental problem that contributes to housing issues – overregulation of all housing productions by local governments. Simply dousing those local governments with more cash won’t end housing inflation or address the many contributing issues that lead people to improvised housing solutions. If money is to be spent, it ought to be heavily conditioned on lowering regulatory burdens. 

The author of the Huffpost article on the proposalpoints out that, 

California has one of the highestrates of homelessness. On any given day in January 2018, more than 500,000 peoplewere homeless in the U.S., according to a federal report. 

Nearly a quarter of the nation’s homeless residents live in California. In the past two years, homelessness has spiked in Los Angeles, parts of which Waters represents, and the San Francisco Bay Area, where Harris is from and had served as district attorney.“

But neither the author nor the legislators connect these numbers with the fact that regulation has made building housing almost impossible. I’ve highlighted the problems in California before. This isn’t about luxury housing or even market rate housing being slowed down and made more scarce, thus boosting its price. Even non-profit subsidized housing is now as much as $700,000 per unit. The price has gotten so high, the former Governor Jerry Brown shut off the funding. 

According to the press releasethe legislation will create 410,000 new units of housing. At the California price they wouldn’t need the $10 billion allocated by the legislation but more like $287 billion. Even at the Seattle price, where the average cost of a non-profit unit has risen to almost $350,000 per unit, the cost would be $143 billion for that many units. How much, at those costs, would the $10 billion produce? The real production would be somewhere between 30,000 and 60,000 units in 5 to 10 years. Maybe. Since housing now takes as long as 5 years to build in places like Seattle

Keep in mind that the $10 billion to build these units is to solve a stated problem of 550,000 people being homeless in the United State today. How did we get that number? From the classic Point In Time (PIT) count. That’s right, people walking around in some areas, one night, making their best guess at who is homeless. I’ve pointed out that is doesn’t help us understand the problem of people who are facing housing challenges. 

I wrote two posts about the problems with the approach used in the legislation to arrive at who gets the money, Homelessness Part 1: The Problems Of Definitionand Homelessness Part 2: The Problem of Reductionism. The formula allocates the $5 billion in emergency funds is largely based on income levels and homeless counts. As I said in those posts, we don’t really have a good quantitative definition of homelessness or measure of how many people would fit that definition. And the assumption people who are living outside of traditional housing are doing so only because of economic factors is inaccurate. 

What will happen (the other $5 billion in funding goes to the National Housing Trust Fund), is that local jurisdiction will do their best to prove, using the formula, that their community has the worst problems ever. This incentivizes over counting and pushing bad narrativesabout the “crisis” and “epidemic” going on. It also supports the perverse view that we ought to only believe homeless counts when they go up.   

What Harris and Waters should do is create a formula that allocates the $10 billion to jurisdictions that did the following five things: 

  • Suspend zoning laws 
  • Abolish design standards 
  • Tax inefficient land use 
  • Use that tax revenue to stoke building  
  • Abolish all sales and excise taxes on the production of new housing 

You might remember these from a post I made called, The Five Things Growing Cities Should Do If There Is A Recession. I would add another thing to criteria: strict requirements on costs and time of production of new units. This would likely encourage more turnkey production, that’s when private producers build the housing then sell it or lease it to non-profits. Modular could be a part of this solution. 

Finally, the Harris legislation includes more money for vouchers. Those should just be cash for rent to buy down cost burden as I’ve already described

This bill can be salvaged if it avoids pouring cash on a problem that lacks definition but instead supports fewer limits on the production of housing of all kinds, in all neighborhoods, for people of all levels of income plus cash assistance and case management where it is needed most.

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For the past twenty-five years, I have been involved in public policy in the areas of education, health, and housing. Most recently I was housing director at a large re

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