Building Out of a Housing Shortage: New at Reason

Californians talk a lot about affordable housing but don’t necessarily understand how supply and demand work.

Steven Greenhut writes:

City councils and county boards of supervisors love to control housing growth. But often, they merely succumb to public pressure. The Register reported this past week that a judge ordered Huntington Beach to “immediately comply” with a previous ruling requiring it to permit more low-income units as part of a high-density housing project.

The city, which has vowed to appeal, has been at odds with housing advocates “since last May, when the council, reacting to public outcry, eliminated more than 2,400 units of potential high-density housing from plans along portions of Beach and Edinger,” according to the report. Focus on the phrase, “reacting to public outcry.” Try to find any development project that doesn’t spark a backlash from neighbors, environmentalists and slow-growth activists.

Affordable-housing activists miss the big picture, of course. They believe the solution to the housing-affordability crisis is to subsidize (or mandate) the development of below-market-price “affordable” units. That’s a drop in the bucket; traditionally, “affordable” housing is best found in the “used” housing market. There’s no constitutional right to a subsidized new condo. They are right that localities need to permit more infill housing, but they need to green-light every type of new housing. If you feed supply into the system, it will help at every price point.

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