This commentary originally appeared in the Austin American-Statesman on May 9, 2016.
Austin’s renewed emphasis on affordable housing will read like a Shakespearean tragedy unless city officials are willing to embrace a new paradigm of government that disfavors finicky restrictions on land use and development.
William Shakespeare, in his great tragedy “Othello,” walks us through mankind’s penchant to sabotage the very the thing we hold most dear. During that play’s final scene, Othello laments the events that led him to doubt and then murder his wife. He curses himself because he recognizes that while his actions may have been provoked by the treacherous Iago, the final decision was due to his own possessive nature. Othello was a man who, in his own words, “loved not wisely, but too well.”
During its March 3 meeting, the Austin City Council ordered an affordability audit with the purpose to assess the city’s policies and determine whether they exert a positive or negative effect on residents’ ability to secure decent housing. Council members hope that the audit will give them guidance on how to combat escalating prices, but it may merely expose an Othello-like flaw in the city’s fixation with central planning.
Austin is in the midst of what many residents and commentators have termed an “affordability crisis,” particularly with respect to its housing market. The median home sales price climbed 40 percent during the last five years, from $215,000 to $301,500. Meanwhile, BBC Research and Consulting reckons that up to 40,000 low-income households lacked access to rental options within their price range.
The crisis has affected Austinites of all backgrounds and income levels, driving many into the surrounding suburbs. As the mayor observed quite astutely,Austin is at risk of pricing out the artists, musicians and historical communities that make up the city’s cultural soul.
Up until this point, the Austin City Council has approached the gap between income and housing as a hurdle that can be scaled with subsidies andwell-intended directives. A project known as Easton Park, for example, will likely receive a waiver on select city fees in exchange for dedicating units to low-income housing. The city has also at times conditioned participation in its density bonus program on the inclusion of affordable units.
The problem with this strategy is that, at best, it soothes the symptoms of an overvalued market. At worst, it perpetuates the same policies that drove up prices in the first place.
In April 2011, the National Association of Homebuilders (NAHB) sent a survey to hundreds of single-family home builders nationwide, asking about the hard costs associated with the development process. It found that 25 percent of a unit’s final sales price originated from government regulations. Two academic studies scrutinizing the California and New York markets corroborated NAHB’s conclusions. They discovered that localities with the harshest restrictions on land use saw their housing prices inflate by as much as 50 percent.
This is to say that while Austin’s housing market may have initially tightened due to its growing population, it’s the city’s zoning code, permitting process and prohibitions on short-term rentals that have sustained the shortage and ratchetted the tension up to its current, unsustainable level.
The citywide audit would give officials the chance to eliminate the worst offenders, assuming both the city auditor and council were willing to accept a new paradigm of land development that favored liberty over centralized control. This would mean:
- Simplifying Austin’s zoning code.
- Eliminating unnecessary delay in the permitting process.
- Repealing requirements that add little to public health but add much to the final cost, such as Austin’s visitability ordinance.
- Overall recognizing the impact that land use restrictions have on the city’s affordability.
Here’s where Othello re-enters the picture. Austin officials commonly view zoning and land-use regulations as the means of preserving the city’s peculiar character. Heavy regulations control size, shape and personality the city will take. However, evidence shows that it’s exactly that desire that is exorcising the people and qualities that gave Austin pizazz.
The question then becomes: What will the city council favor most? Will the council move toward liberty-centered land development or will it hold fast to the status quo? In short, will the council succumb to the temptation that defeated Othello? Will its possessive love of dictating Austin’s future prevent it from wisely bringing that future into fruition?
Hunker is a senior policy analyst with the Center for Economic Freedom at the Texas Public Policy Foundation. Follow her on Twitter @KathleenHunker.