The Affordable City: Reclaiming a Pro-Market,Pro-Government Politics

The Affordable City was ambitious in scope but also short in length, and what I achieved in breadth came at the expense of depth. A lot was left unsaid and underexplored. I’m encouraged that its message resonated beyond US borders, but I’m most grateful for the constructive critiques of where it fell short and where deeper thinking is needed. Many of the respondents’ questions are the very concepts that have captured my attention since late 2019, when the book was largely complete. I appreciate the opportunity to explore them in greater detail here.

On local control and local action: Anacker notes that “municipal action appears unlikely in the short and mid run in most cities,” and Granath Hansson highlights my call for context-sensitive solutions. There is a tension here, because context-sensitive solutions are unlikely, or at least much more challenging, if municipalities do not act. Facing unprecedented housing affordability and homelessness crises, California has led the United States in statewide housing reform. At the local level, these efforts have mostly been met with muted acceptance at best, and naked obstruction at worst (Tobias, 2022). Ideally, local jurisdictions can serve as “laboratories of planning” (Millard-Ball, 2021), testing out innovative solutions that can be adapted and scaled up. Elements of Los Angeles’ Transit Oriented Communities density bonus program and San Diego's minimum parking requirement reform were incorporated into state law, for example. Unfortunately, these cases are rare, and most of California's nearly 500 cities have been dragged into the future rather than marching toward it lockstep.

Anacker is right that most cities will not solve these challenges on their own, and my views on this have evolved. With some exceptions, when push comes to shove, action trumps inaction; something, however imperfect, trumps nothing. We’ve learned from experience that opponents will tar state-level reforms as “one-size-fits-all” regardless of their content, but it is now common for state reforms to be restricted to areas near high-quality transit, to larger or more central cities, and toward more advantaged neighborhoods or away from vulnerable households and communities.

I’ve also been influenced by Hankinson and Magazinnik (2023), who find that shifting from at-large to district municipal elections is associated with reduced housing permitting, and by anecdotal observations suggesting that local officials are penalized more harshly than state representatives for pro-housing positions. NIMBYism is clearly salient at the local level, but it appears to have less influence outside that context. My support for state intervention is also about outcomes: The most ambitious and progressive jurisdictions cannot overcome the housing shortage on their own; there are too few of them and far too many laggards. Nor should residents of less progressive jurisdictions go without basic protections against egregious rent hikes, harassment, or no-cause eviction. States should learn from cities, but they should not wait for them.

Granath Hansson asks about the role of civil society, which I believe can be roughly translated to “nonprofit organizations” for an American audience. It's a question I may have taken for granted given the close ties in the United States between the public sector and nonprofits. A large share of subsidized below-market housing is already built by nonprofit developers, for example. I’ll admit to skepticism with this approach. State capacity has been hollowed out, and nonprofits now do much of the work once performed by the public sector. One reason I emphasize the role of the public sector is to re-energize a government that has outsourced too many responsibilities.

This brings me to a sharper critique of the book: that I reject direct government intervention into the housing market. Hodkinson calls for “direct state intervention to break up corporate monopolies, buy land, build homes and rent direct to tenants as public housing on a not-for-profit basis,” and claims that I “refuse to countenance” this approach. While I dispute that characterization, it is true that I don’t explore these tactics in meaningful detail, and that I treat questions about who owns and builds housing as secondary. I have a small aside, for instance, arguing that subsidization, not ownership, is the most important characteristic of below-market housing. I stand by that. I also believe that direct state intervention is a harder sell in the United States than in most other countries, especially when the polarized and gridlocked federal government gets involved.

With that said, I have come around to the value of public ownership and development for other reasons. One, noted above, is its potential to rebuild state capacity. Further, a successful countercyclical homebuilding program will likely depend on government-led development. I also hold out hope—perhaps naively—that building its own housing will direct more of the government's attention to the regulatory obstacles faced by all builders. And our interviews with international scholars on the UCLA Housing Voice Podcast have repeatedly highlighted the benefits of public land ownership, especially for preserving affordability.

In their critique of market-driven housing production, Hodkinson refers to England's “periodic liberalisation reforms that have generated no real improvement in housing output,” and implies that the regulatory reforms I propose would serve primarily to increase shareholder value among developers, not produce more homes or improve affordability. Here I disagree most forcefully. England, by many accounts, has among the most restrictive planning regimes in the developed world. In this context, periodic liberalization may be analogous to removing a few hurdles from a running track that ends in a brick wall—appreciated by the runners, to be sure, but hardly addressing the fundamental problem. Auckland, New Zealand is a worthy case study of zoning reforms commensurate with the scale of the Anglosphere's housing crises (Greenaway-McGrevy et al., 2021; Greenaway-McGrevy and Phillips, 2022).

It may also be that England has different problems: Developer monopolies are not a major issue in America's cities (greenfield suburbs may be another story), as they appear to be across the pond. In any case, I agree that a greater diversity of homebuilders would be hugely beneficial, and this seems unlikely without regulatory reform. Developers are not well-liked, and as I argue in the book, US policymakers have responded by devising a development process that is exceptionally slow, complex, expensive, and risky. The effect has been to render noncompetitive all but the most well-capitalized and politically connected developers—the ones we say we dislike most. Small builders will not succeed in an environment where 80% of residential land prohibits multifamily housing, where securing entitlements and building permits can take upward of 5 years, and where even code-compliant projects must navigate political approvals that may end in denial. Far from maximizing shareholder value, reforming these practices should increase competition and reduce the risk-adjusted returns required to build homes profitably.

Hodkinson and Wetzstein are skeptical that market-based reforms can improve affordability, with Wetzstein referencing Rodríguez-Pose and Storper (2020) as a critique of this view. I could not offer a better rejoinder than that by my colleagues Manville et al. (2022). But I would add two points. First is that my belief in the power of markets is at heart a belief in the power of government, and the strong desire for it to act more effectively for the public's benefit. Markets do not act independently. There is no “free market,” and the outcomes of 40-plus years of neoliberal restructuring cannot be separated from the governments which facilitated it. If markets have failed us, and they have, it's because governments have failed to regulate markets appropriately—not just to prevent bad outcomes, but to promote good ones. I look to places in the United States with more permissive housing regulations and I see lower prices and less homelessness. Frustratingly, these cities are often led by people who express little concern for the hardships of renters, the poor, or people of color. These are precisely the groups being priced out of restrictive cities in the greatest numbers, progressive language and values notwithstanding. I believe there's a lesson here: Liberal cities treat the market like an enemy, and as a result it becomes one.

Second, I’ve yet to see a credible alternative to market production for most of our housing needs, at least in the short and medium terms. I emphatically endorse a larger role for government-produced and funded housing, but even countries with generous public programs produce most housing through market mechanisms, and the United States, compared to these places, is famously stingy. That may or may not change in the future, but if it does, better market outcomes will only complement robust government programs.

Finally, Wetzstein asks whether “the power imbalance between those systemic victims and current winners … can be easily re-calibrated under current conditions.” They also note that this rebalancing of power must be continuously re-negotiated, reinforcing the need for durable coalitions. As neither an organizer nor a political economist, I’m ill-equipped to offer guidance. My ambition with The Affordable City was to facilitate new collaborations and draw connections between overlapping goals. What I’ve witnessed in recent years has been promising. The state of Oregon approved a package of laws to legalize missing middle housing and prohibit rent-gouging statewide. Minneapolis, Minnesota eliminated apartment bans on an explicit message of racial justice and reconciliation. Year after year, California is passing laws intended to increase supply, protect tenants, and invest more into affordable housing and homelessness reduction, and other states are following its lead. YIMBY groups are more pro-tenant, and tenant advocates are more YIMBY. I can take no credit for these developments, but they’re exactly the partnerships I hoped to see, and it doesn’t look like we’re done yet.