Progressives, libertarians blame government for affordable-housing crisis

[Geee]

Washington Examiner:

In this age of political and ideological polarization, it's rather extraordinary when progressives and libertarians find themselves on common ground. But that's what happened last week at the Cato Institute's policy forum on affordable housing.

Progressives on the panel wanted higher urban densities to allow more people to live in central cities, while their libertarian counterparts pushed for less market restrictions on the supply side. But both were in general agreement that too much government regulation is the real reason that affordable shelter is still too hard to find for many Americans.

Left-leaning economist Ryan Avent, author of "The Gated City," pointed out that housing costs in the United States no longer closely track construction costs like they did over the previous three decades. An advocate of high-density urbanization, Avent noted that "layer upon layer of barriers" -- including overly restrictive zoning, historic preservation and environmental regulations, and pressure from local elected officials -- have added a "shadow tax" of 30 to 50 percent to the cost of a home in some markets.

That shadow tax makes homes in areas like the Washington region, with plentiful jobs and a well-educated populace, up to twice as expensive -- and therefore twice less affordable -- than they would otherwise be.

Government restrictions also explain why "the highest-value places are not allowed to grow and prosper as they should," added Slate business and economics reporter Matthew Yglesias, who blamed zoning regulations for blocking the higher levels of urban density that the market, responding to consumer demand, would otherwise provide.