The US has a lot of layers of government. Some would say too many. I would say too many. Here in Washington, DC, we mercifully only have a city government and a federal government, but you state-dwellers often have to juggle a state government, a county government, a municipal government, and sometimes school districts and other political entities that sit somewhere between these levels.
This diffusion of responsibility has been a disaster for housing in the US. When an apartment building goes up, that creates substantial benefits to those moving in (they have a home!); significant but more modest benefits to the broader metro area in the form of lower rents than absent construction, and long-run economic growth from geographic clustering of top industries. It also brings some concentrated local costs to neighbors in the form of increased foot and vehicle traffic and more noise.
In aggregate, the benefits almost certainly swamp the costs, but decisions are often made at the exact level where those bearing most of the costs have disproportionate sway. In cities with “aldermanic privilege,” for instance, members of the city council get effective vetoes over what housing gets built in their district. Their voters care more about the nuisance of traffic and limited parking from new construction than about the long-run economic health of the region, or the interests of newcomers, and they respond rationally by strangling housing development. New York Mayor Eric Adams put some very worthwhile measures on this November’s city ballot that would weaken this privilege in New York, and unsurprisingly, the council is screaming bloody murder.
This helps explain why some of the most positive changes in housing policy in recent years have happened at the state rather than the local level. States are often able to capture more of the benefits from housing growth than individual cities, and certainly than individual city council districts, which has led some to overrule local zoning rules to mandate municipalities to allow more construction.
Tina Kotek, then speaker of the Oregon House and now the state’s governor, was a real innovator here, shepherding through in 2019 a measure requiring large cities in the state to allow at least two units of housing on all land parcels, effectively ending single-family-only zoning. San Francisco’s state Sen. Scott Wiener, with the occasional but inconsistent support of Gov. Gavin Newsom, has notched a lot of wins with this strategy too, most recently the passage of SB79 to legalize up to six-floor apartment buildings near transit. (The bill is still awaiting Newsom’s signature.) But Massachusetts, Washington, Florida, Texas, and Montana, among others, have gotten in on the action too.
Let’s get federal
But it’s worth noting that most of those state preemptions are quite modest, and efforts for more ambitious state action have often fallen short.
The classic case is New York state: In 2023, Gov. Kathy Hochul pushed an ambitious plan to upzone aggressively enough to allow construction of 800,000 new homes, only to abandon it late in the year in the face of overwhelming opposition in the suburbs. Most observers interpreted the capitulation as an effort to avoid an anti-Democratic party revolt in places like Westchester County or the Hudson Valley, which feature a number of swing House districts that Dems needed to get a majority.
Across the country in Arizona, Democratic Gov. Katie Hobbs last year vetoed a much less ambitious housing bill, citing vague “unintended consequences” it would cause.
All of which is to say: While state-level politics tend to be more pro-housing than local-level, they can still be pretty hostile.
Of course, there’s a whole other level of US government that could get involved: the federal government.
The feds have a decent amount of experience preempting local land use rules. The Natural Gas Act of 1938, for instance, preempts states and localities from regulating certain aspects of interstate gas pipeline construction and siting, instead having them participate in a process run by the Federal Energy Regulatory Commission (FERC). A town that doesn’t want a pipeline can raise a stink in the FERC consultations, but they generally can’t pass a zoning law that just bans the pipeline from the town. Lawyer Carlos Mucha, a specialist in zany schemes whose most famous is the trillion-dollar coin plan to beat the debt ceiling, likes to point out that the Federal Communications Commission has preempted basically all local zoning when it comes to cellphone tower construction.
But generally speaking, outright preemption seems far outside the realm of actions Congress would seriously consider on housing. Things on the menu are more in the genre of “give towns a little grant if they adopt this good policy,” or “hire more staff at the Department of Housing and Urban Development to help states make good policy.” The Federation of American Scientists put out a call for proposals for specifically federal actions that could boost housing supply, and while the list they came up with includes a lot of ideas I like a lot, none seem really at the scale needed to put a dent in the problem.
Many of the ideas in the FAS list are also in the ROAD to Housing Act, spearheaded by Senate Banking chair Tim Scott (R-SC) and ranking member Elizabeth Warren (D-MA). If that pair of backers isn’t surprising enough, consider that the bill passed their committee unanimously in July.
My initial reaction to the bill was that if it seems too good to be true, it probably is. The package seemed full of modest steps in the right direction, like getting rid of the “chassis requirement” that has slowed down efforts to build houses and apartment buildings en masse in factories.
But ultimately, this bill so far has unanimous Senate support. Usually, achieving that unanimity means that the bill isn’t too threatening to anybody — and truly transformational changes to zoning, to how people’s neighborhoods look and are built and change, are definitely going to threaten some people.
The case for optimism
The team at the Economic Innovation Group think tank makes a strong case, though, that I’m being too cynical. They don’t think the ROAD to Housing Act is epochal, earth-shaking legislation either — but they think it contains the rudiments of a federal approach that really could be a huge deal.
The researchers — Jess Remington, Adam Ozimek, and Carol Neuhardt — focus specifically on two things the bill does. The first is to encourage the federal government to develop model zoning codes for urban, suburban, and rural municipalities to adopt. These codes are, under the bill, supposed to allow denser building through features like eliminating mandatory parking allowance, lowering minimum lot sizes, and legalizing multi-unit buildings on land typically used for single-family houses.
The second component is that the act effectively pays municipalities that meaningfully boost their housing supply. One provision, the Innovation Fund, distributes about $200 million total per year to cities that adopt zoning reforms and have seen faster housing supply growth. The Build Now Act, another provision, would slash some Community Development Block Grant funds currently going to areas with high rents that aren’t building enough housing, and redirect the money to areas that are building enough.
On their own, these seem like the kind of provisions that I was just dismissing as nice but insufficient. But Remington, Ozimek, and Neuhardt argue that they combine to look like a much bolder idea that their team at EIG has been pushing for a while: “Right-to-Build Zones.”
Reaching for what he calls a “Dylan Matthews-friendly analogy,” Ozimek told me to think of them like the special economic zones that Deng Xiaoping set up in southern China in the 1980s. (He’s got me pegged — I do love this analogy.) After three decades of catastrophic Maoism, China had adopted too many different bad economic policies to repeal one at a time. So Deng instead carved out a few small areas and let them start from scratch: in these small spots, and only these spots, they could work under a totally different and freer regime than the rest of China. Those areas, like the now mega-city of Shenzhen, then grew like gangbusters, enabling Deng to spread the reforms across the whole nation.
Right-to-Build Zones would see the federal government create a model zoning code that is intentionally much, much less restrictive than that in most cities; cities and towns could choose to adopt these codes, but only for specific neighborhoods if they want; the municipalities would then receive payments for each new home built under the code. Developers could then exploit these much simpler legal regimes and concentrate their building in the designated special zones.
What’s powerful about this idea is that it cuts through the tangle of rules created by the fractured nature of American government, while also allowing cities and towns to sharply limit the scope of the reform to minimize backlash. If the federal government wanted, say, Washington, DC, to allow for no-parking, 10-story apartment buildings to be constructed, by right, anywhere in the city — well, at the very least, they’d have to give us a lot of money to get the Mayor and council to agree. But if DC could limit the new rules to a specific, small slice of area where housing is more popular and desired by neighbors, that minimizes NIMBY opposition while making construction meaningfully easier where it’s welcomed. DC could do this on its own, of course — but it’s easier to do when the feds are explicitly inviting it, and limiting the reform to one specific area is easier to justify in that context than as part of a city council bill.
The ROAD to Housing Act includes a lot of the rudiments of this approach, Remington and team note. It asks for the federal government to create model zoning policies, like the ones that Right-to-Build Zones would adopt. It creates financial incentives for more housing growth and better local policies. Even better, they told me, would be to explicitly tie some kind of financial incentive to cities that adopt, at least in certain neighborhoods, the model zoning policies. The bill has incentives for actual building outcomes, but the incentives aren’t tied to the model zoning rules that the EIG team thinks are so central (the bill’s incentives are also based on housing already built, running the risk of rewarding cities for housing they would’ve built anyway).
If the adoption of new zoning rules were incentivized, it would push cities to truly create clean regulatory slates for new buildings, rather than tinkering around the edges. There’s also less emphasis in the Senate bill on designating specific areas within cities as places to boost housing supply.
So it’s still unclear exactly how close to a special housing zone vision the Senate’s big bipartisan package will get. But that it gets close at all gives me hope. Maybe the unobjectionable bill that every Senator likes has some teeth after all.
This story was supported by a grant from Arnold Ventures. Vox had full discretion over the content of this reporting.
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