Housing, Building Codes, and State-Level Reform

Cato Daily Podcast

Caleb Brown

Politics, News Commentary, 424708, Libertarian, Markets, Cato, News, Immigration, Peace, Policy, Government, Defense

4.6 • 949 Ratings

🗓️ 10 January 2025

⏱️ 22 minutes

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Summary

The housing market needs less government intervention, both in terms of zoning and building codes that add enormously to construction costs. Emily Hamilton of the Mercatus Center comments.

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Transcript

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0:00.0	This is the Cater Daily podcast for Friday, January 10th, 2025. I'm Caleb Brown. Many state governments have begun taking the housing crisis seriously, and that's led to serious positive steps to get government out of the way. But there is still a great deal more to do to expand housing affordability.
0:22.6	Emily Hamilton directs the urbanity project at the Mercatus Center. We spoke earlier this week.
0:29.6	Emily, if you don't mind, help listeners understand the degree to which the United States is facing a problem with respect to housing and its
0:44.5	affordability. Yeah, thanks a lot, Caleb. So what we're seeing in housing markets is very different
0:53.0	from other areas of the economy. In many areas,
0:57.2	we're seeing a clear standard of living increases where people's dollars are going farther to
1:06.7	buy what they're looking for. But in housing, if we look at, for example, the median renter,
1:14.8	the percentage of their income that the median renter is spending on rent
1:20.5	has gone steadily up since the 1960s.
1:25.2	And this is primarily because people just aren't seeing enough of a increase in new
1:32.7	housing to meet the needs of a growing population and also changing demographics that need a different
1:40.3	type and location of housing over time. But local and state rules that make it very
1:47.6	difficult to provide that new housing are making it so that rather than seeing an increase
1:53.6	in living standards over time, people's dollars just aren't going as far. And there has not been
2:00.1	a big change in the composition of renters versus
2:04.3	homeowners over time. So this isn't a composition effect. It's just that because not enough housing
2:11.5	is getting built, people are getting less for their money over time. And we're seeing people make painful tradeoffs,
2:18.9	like living in a location that might not be where their best opportunities are located or
2:24.9	sacrificing in other areas of their budget because they have to strain to spend on housing.
2:32.5	And so two thoughts on that. One, you talked about this as a cost of housing as a
2:37.9	fraction of income. So this is not, let's not lay this at the feet of something like inflation,
2:44.5	because that's only a recent phenomenon. And as you said, this has been going on a long time.
	...

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