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  • Writer's pictureJack Metz

Housing Crisis Aversion

Have you noticed how many places claim to be going through a housing crisis right now? Regardless of where you live, be it a coastal metropolis or a midwestern commuter town, the story is roughly the same: some combination of politicians, NGOs and real estate developers has painted a bleak picture of home availability in your area. According to these pundits, the solution is simple: construct new residential complexes as fast as possible; then get people from wherever to move into them.


Consider the glaring disconnect in such a scheme. Namely, if the number of new transplants from other ZIP Codes matches or exceeds the increase in dwelling stock, won't the supposed housing shortages persist indefinitely? This seems like fairly basic algebra. It beggars belief that those in power not only refuse to admit it but also keep wooing new residents in such an environment. How did this miscalculation become so commonplace and why do we allow bureaucrats to routinely bake it into their presentations?


Image credit: @ochre.jelly (free use)

Come One, Come All

Resident recruitment campaigns have been a popular civic tool for decades. The general theory goes that bringing new bodies to town helps grow the tax base which, in turn, allows for more of everything. All of that sounds lovely until you factor in the added strain on resources caused by each additional resident; an inconvenient truth that government officials either downplay or treat as a completely separate issue. Things like utilities, city services, the transportation grid, and, yes, housing continue to be stretched thinner and thinner due to a misguided quest for perennial growth.


Many programs to lure newcomers don't bother to address addresses at all. They are designed to get people to move anywhere within the boundaries of that municipality, period. The assumption is that existing real estate inventory will absorb the increase in population. [To be fair, this logic isn't unfounded, given that rental vacancy rates in urban settings usually hover in the 5-10% range.]


For instance, the mayor of Jacksonville chose to spend part of his discretionary budget erecting billboards in other cities. Louisville's former mayor chose the more personal touch by scheduling at least seven trips to try and convince individuals who had moved away to come back to his city. In 2019, Spokane utilized a similar strategy by pursuing alumni of Inland Northwest universities capable of moving employment to the Lilac City.


Campaigns like these, focused on PR and networking, are the least egregious. With price tags usually under six figures, politicians can almost justify why they are spending money contributed by current citizens to pursue out-of-towners. Almost -- as long as they ignore the infrastructural downsides.

Pay-To-Stay Politics

Things really become problematic once governments start offering relocation stipends. In principle, the premise of dangling financial rewards as bait seems as American as apple pie. One could argue that nothing better harmonizes the concepts of freedom and capitalism than having cities pay cash to productive individuals who are willing to join their census roll.


In reality, the results of these campaigns are anything but storybook. Hundreds of thousands of budget dollars are dedicated to recruiting what amounts to a few handfuls of adults. When governments require assistance to administer the program, as has been the case in cities across Indiana, matters get even uglier. It's not unheard of for consultants to make more on a per transaction basis than the workers they coax.


Often times, new 'residents' need only call that place home for one year in order to collect windfalls approaching $10,000 per applicant. With such loose requirements, it's not crazy to think that cities like Tulsa will barely see a penny of the expected 13x multiplier on "new income, tax revenue, and jobs" from some of these participants. Well, technically, that's not entirely true. Landlords and realtors there will still get paid; just not as much as their developer counterparts do in areas experiencing the most extreme urban growth scenario: an affordable housing apocalypse.


Build, Baby, Build

Citywide expansion centered around housing goals should scare everyone who pays taxes in the localities proposing it. This may sound callous; yet it's true. If it was only about adding an apartment building to accommodate some gap between the number of existing residents and places to lay their heads, that would be palatable. But it never is about just one or two.


Washington DC demonstrates how these things are packaged, promoted, and will predictively play out. Mayor Muriel Bowser is presently dealing with the double whammy of a shrinking citizenry and a cratering business tax base. To combat it, she kicked off 2023 by pledging to add 15,000 new downtown residents in the next five years. This would amount to a neighborhood population increase of 60%, driven mainly by converting vacant office space into domiciles. [Hitting a benchmark of this magnitude in such a short time raises a lot of questions; but all that pales in comparison to the unfathomable 340% bump she floated as her stretch goal.]


Therein lies the rub. By following such a plan, at least one crisis is guaranteed to remain unresolved: either not enough people will move to DC to make up for the tax revenue shortfall or too many will come, thus requiring even more residential construction and strain. Doesn't someone in her political machine have the courage to stand up and say as much? Is there not one bureaucrat willing to suggest spending those millions of dollars on solving the problems faced by today's residents, instead of giving developers incentives, loans, tax breaks, et cetera to build stuff for folks currently living in places outside of the nation's capital?


Listen To The Experts

The above questions echo sentiments expressed by specialists in fields related to urban growth. Michael Hicks, Director of the Center for Business and Economic Research at Ball State University, when discussing "pay(ing) rich people to move to town," gave the following advice: "A more effective policy might be to spend scarce tax dollars to fix problems for taxpayers who live here rather than trying to lure new residents to the region."


In a 2011 article discussing Baltimore's attempt to grow the city by 22,000 people, Lester Spence expressed a similar viewpoint. The Johns Hopkins professor wondered aloud why his mayor was bypassing the opportunity to help poorer locals in order to cater to upwardly mobile outsiders. [In the interim, Charm City's population has actually decreased by twice the goal amount. Yet, true to form, the push to end the Housing Crisis in Maryland's hub hasn't ceased. On the contrary, the latest ploy being discussed there is linked to a desired price tag of 7.5 billion dollars!]


Some politicians in office right now have made remarks that back up these professors' claims. Bremerton's mayor was quick to pull the plug on his predecessor's Seattle-specific recruitment campaign because of the pressure it put on the local housing market. A few years later, in 2021, Mayor Hillary Schieve of job boomtown Reno blamed those very same jobs for her city's affordable housing emergency.


Perhaps the most damning confirmation of all, albeit unintentional, comes from the last place you'd expect it. Circling back to academia, Rice University's Kinder Insititute for Urban Research considers housing one of its core issues. In a recent article, their staff writer went into great detail explaining how Houston has been unable to improve its home affordability, despite building more apartments than anywhere else in the United States. In fact, the prices there are 25% higher than they were a few years ago. [Do you think this prompted the author of that piece to call for a rethinking of the build-no-matter-what philosophy? Of course not. Instead, he found a likeminded soul to go on the record with blame for Houstonians who pushed back against a fuzzy number of additional construction permits.]


Secure The Backdoors

Clearly, the evidence exists to make a compelling case against resident recruitment campaigns, particularly the most intensive ones. Unfortunately, even when communities succeed at thwarting housing boondoggles, it doesn't necessarily mean the fight is over.


Developers accustomed to getting their way might just go around governing bodies that deny them by appealing to different power brokers. Kansas City is tangling with this storyline as we speak. In a nutshell, the regional transportation authority stepped in to subsidize a large real estate endeavor after the city council said no. Allegedly, this action drains the public school bucket as a result.


Make no mistake -- this is part of a pattern. Quasi-governmental agencies like KCATA (which was originally formed solely to manage bus transit) have begun to expand their reach of late. These unelected bodies are able to flex their muscles knowing full well how virtually powerless the public is to stop them.


That sounds dystopian, no doubt. But at least concerned citizens have the faint hope, given that the major players likely live nearby, of petitioning representatives of these metropolitan area entities face-to-face. Such an option is far more onerous (and, thus, even less likely) when state government is the one stepping in to overrule local authority. Look no further than the aptly named Empire State to see why.


Earlier this year, Governor Kathy Hochul announced something called the New York Housing Compact which aims to build 800,000 new homes between now and 2032. On top of the sheer madness associated with a state that has the largest population decline rate of the 2020s doing this, there are some real red flags related to territorial autonomy. Permit denial overrides and mass transit rezoning requirements, not to mention environmental review "relief," are all on the table. Do any of those sound like the kinds of things that benefit current residents?


Conclusion

Sadly, it doesn't matter how often housing crisis plans fail or how undemocratic these failures are. There will always be another developer ready to promise a gimmicky solution based upon the same old broken methodology. There will always be another advocacy group screaming about the urgent need to hit some big round number target. There will always be another politician whose eyes wander toward nonnative bodies. We cannot change any of that -- it's who they are.


What we can do is point out how inherently paradoxical the idea of building our way out of a reputed housing shortage really is if we're just going to fill those places with outsiders. We can demand that any new domiciles created to solve this 'pressing' need limit occupancy to people already linked to that city. We can grill the people pushing these projects about the benefits they will derive from them -- spotlighting the indirect gains (votes, campaign donations, future arrangements, etc) that are harder for average citizens to track. We can make them admit, once and for all, that the word "affordable" is a misleading euphemism in the real estate world, a buzzword concoted to smooth the path to ultimate approval. We can remind the idealists who will call us NIMBYs that while there's no "thou shall provide housing to a never-ending influx of settlers until the end of time" commandment, the idea of living within one's means has been considered sage advice for millennia.


Better yet, we can insist on spending our tax dollars exclusively on real problems that have nothing to do with home construction. The trend of bureaucrats prioritizing future residents over the needs of current constituents can end today. But only if we reject the fearmongering false narratives they've been force-feeding us forever.


Stop letting the people who profit from housing crises tell you how to avert them.


Develop an aversion to the very notion of housing crises instead.



Note: the post above may contain commentary reflecting the author's opinion.




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