Reviews | How NIMBYISM is stifling affordable housing even in Big Sky Country

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Kendall Cotton is president and CEO of the Frontier Institute in Helena, Montana, and a member of the State Policy Network.

Fifty years ago, my grandfather raised $15,000 to buy a tiny shotgun-style house on a tiny lot in the middle of Missoula, Montana. Adjusted for inflation, that would mean around $105,000 today. Yet the median price of a single-family home in Missoula is now over $550,000.

We often hear about the disappearance of the dream of home ownership for millions of Americans – especially young people hoping to start a family – in New York, Los Angeles and other major cities. But the problem stretches coast to coast, with Missoula being a telling example of why there simply aren’t enough homes to keep up with demand. The shortage is pushing the cost of existing homes to prohibitive levels for countless low- and middle-income Americans.

The shorthand explanation for the housing crisis is not my NIMBYISM, but the political instrument that makes such hostility effective has a more prosaic description: strict local zoning regulations.

President Biden’s recently announced housing supply action plan reflects a growing political consensus on the need for action. People of all political stripes can unite around pro-housing reforms to give landowners more freedom to build new homes where they are needed most.

The Biden administration’s housing plan calls for the lack of available and affordable land through exclusionary zoning regulations, such as minimum lot area requirements, parking mandates and bans on multi-family housing, as “one of the most important problems limiting the supply of housing”.

Biden echoes points made by President Donald Trump in a 2019 executive order that called strict local and state zoning regulations a “primary driver of housing price growth.” And before Trump, President Barack Obama developed a toolkit in 2016 that said “local policies acting as barriers to housing supply include land use restrictions that make developable land much more expensive than ‘they aren’t inherently so’.

Exclusionary zoning practices reserve large portions of cities for single-family homes and prohibit the construction of denser multi-family homes, such as duplexes and triplexes, which are more affordable in design. Other regulatory layers increase construction costs and can effectively prohibit multi-family homes when requirements (see minimum lot areas and parking mandates above) cannot be met in existing space.

In emerging real estate markets such as Montana’s, we see firsthand the pain caused by exclusionary zoning. A pandemic real estate gold rush coupled with low housing inventory has pushed median home prices in some of the state’s fast-growing cities to more than $800,000. The organization I lead, the Free-market Frontier Institute, recently released a Montana Zoning Atlas report on how exclusionary zoning is exacerbating housing shortages: More than 70 percent of prime residential areas in the most demanded of Montana prohibit or penalize affordable multi-family housing. housing development.

While there is no silver bullet to solving the housing crisis, housing-friendly regulatory reforms would go a long way to expanding housing supply. The small town of Helena, Montana adopted this approach in 2020, abolishing minimum lot size requirements and restoring the right of landowners to build townhouses and full duplexes in all townhouses. residential areas. These changes may be a factor that keeps the median home price in Helena relatively affordable, at $470,000, compared to high-growth towns in Montana that have strict exclusionary zoning, such as Bozeman, where the median home price is $849,000.

Unfortunately, local governments have always resisted such changes. Landlord movements led by NIMBY can generate formidable political opposition to proposals allowing denser development. Multi-family housing projects are being shot down after outcry from existing landlords in a neighborhood. Perhaps because of this political influence, many local government officials still do not seem to believe that regulatory reform is part of the solution, preferring instead to focus on measures such as controlling rents or increasing funding for housing assistance programs.

Biden’s housing supply action plan will leverage federal grants to incentivize skeptical local governments to reform exclusionary zoning codes. Cities that give property owners the freedom to build denser, more affordable homes to meet the needs of low- and middle-income residents will be rewarded with higher scores in existing federal grant processes.

It will be fascinating to see if federal incentives will be enough to spur stubborn local governments to act on zoning reforms. If city leaders see grants flowing to neighboring towns and villages undertaking reforms, it could have a galvanizing effect.

Let’s hope so. Any sign of movement toward solving the housing shortage in the United States would be welcome. But these daunting regulatory hurdles have taken decades to build and will require years of significant rollbacks if the American dream of homeownership and individual prosperity is to be restored.

This goal is where people on the left and right can find common cause. They just need to put aside the NIMBY temptation and pressure local politicians for responsible reform that will get their fellow citizens into home ownership.

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