The very liberal city of Cambridge, Massachusetts, just accepted the reality that excessive government regulations prevent adequate housing production.
The city imposed what is being hailed as “one of the most ambitious changes to any city’s zoning in decades” by eliminating exclusionary zoning (permitting only single family homes) and allowing residential buildings of up to six stories throughout neighborhoods citywide.
It’s a step in the right direction.
Prior to the zoning change, the city’s housing plan was estimated to build 350 new units by 2040, which is objectively pathetic. Under the new plan, however, as many as 4,800 units could be created, according to official government projections.
As cities throughout the West struggle with building more housing to keep up with demand and alleviate a burdensome housing crisis, Cambridge offers a lesson that housing experts have been saying for years: get the government out of the way and let the free market do its job.
Complaints of regulations are often easily discarded because they sound anarchic and seem to dismiss the obvious need for safety and other neighborhood concerns. But even in places like Cambridge, there is still a need for city planning.
Cambridge is as positive an example of what works as the city of Los Angeles is a negative one. In the wake of tragic wildfires that caused unimaginable damage, a long, windy path to rebuild was laid bare.
To spur redevelopment, a well-intentioned Mayor Karen Bass announced a one-stop place for interacting with a dozen or so of the city’s relevant agencies, seemingly missing the obvious—that even with a one-stop-shop, that’s still far too many hurdles to jump through.
By contrast, Gov. Gavin Newsom waived some of the California Environmental Quality Act (CEQA), which is widely considered the number one impediment to housing production (which is why lawmakers grant exemptions on all must-pass development projects), and the California Coastal Act.
The state is in a housing crisis, and most crises must be met with urgency, not a multi-year, bureaucratic slog. But if bureaucracy must be waived in an emergency, it raises the question: “Why can’t we do this all the time?”
While different from permitting hurdles, zoning requirements are similar impediments to getting housing built. A report by the California Assembly Select Committee on permitting reform found about as much.
“(O)nly if governments consistently issue permits in a manner that is timely, transparent, consistent, and outcomes-oriented, will we be able to address our housing and climate crises,” wrote the committee. “Unfortunately, for most projects, the opposite is true.”
In Cambridge’s case, the city cut or amended restrictions on lot and unit size, parking minimums, number of units and allowed building up to four stories by right.
Unfortunately, Cambridge also imposed a new requirement that certain uses of the property require at least 20% of units built to be “affordable,” which means the rent or sale price are capped, based on a percentage of the median income. Price controls in general lead to increased demand, supply shortages and various other issues.
Berkeley took similar actions as Cambridge, with similar affordable housing requirements but with significantly slower pace of reform, and remains one of the more expensive cities for housing in the state, even narrowly outpacing San Francisco in median sale price.
By contrast, Houston, Texas, is the largest U.S. city to forgo zoning and while that comes with certain disadvantages, like a lack of neighborhood character, its median home prices have stayed low compared to other cities like Austin and Dallas, and the state as a whole.
Houston does not have mandatory affordable housing requirements, but instead it tries to incentivize affordable housing through various programs for developers and down-payment assistance for buyers.
While Houston’s level of government involvement is perhaps the gold standard of American cities looking to get out of the housing crisis, Cambridge and others are taking good steps in the right direction.
Matthew Fleming is the Pacific Research Institute’s communications director.
