To make housing more affordable, remove government barriers

A recent op-ed in the Daily Inter Lake argued that reforming local zoning codes won’t fix the housing crisis. The essential argument is that there is no need to reform zoning because variables other than regulations factor into the cost of a house. I disagree, but it must be asked: what are the strategic alternatives to localities and the state government reforming land use regulations?

Like the homes themselves, there’s not enough supply of available land where people want to live. So, how do we expand land availability? As Sen. Mike Lee has suggested, we could privatize some public lands and develop them for housing. But this is far outside the window of what is politically and culturally possible in Montana.

The author says increases in labor costs are also driving housing prices, but what exactly does the author suggest we do to make construction labor cheaper? Well, he doesn’t have any suggestions, but I do. We could consider how government licensing barriers drive up skilled labor costs. Electricians, plumbers, and many other professions have high entry barriers, driving up their costs which are passed on to the consumer.

We could pass Right to Work, which would expand the competitiveness of many skilled labor jobs in Montana. We could pass reforms to labor licensure laws. We could reform workers’ compensation, making it easier to hire new employees. While all of these ideas are on the table at AFP-MT, the urgent crisis in housing places a higher priority on what will directly impact the supply of housing. In other words, labor reform is necessary but insufficient on its own to tackle the cost of housing.

A lot of ink has been spilled on supply chain issues, and I agree this is a significant problem. Given hindsight is 2020 —pun intended — we likely shouldn’t have shut down the global supply chain to handle COVID or our local economy, for that matter. Many an armchair Twitter epidemiologist told the world that the cost would be worth it. The bill is due, and it’s generally high inflation for everything. But in building specifically, the lockdowns jammed up supply chains, making building a house take a very long time and therefore cost more than ever. It will take time to unwind this problem. There are solutions, but they primarily lie in our western neighbors’ ability to get their act together and reform their regulations or for the federal government to finally repeal the Jones Act.

Undoubtedly, former President Trump’s trade wars exasperated problems with getting affordable building materials, furniture, and other items with no gain to the American consumer and all paying higher prices. To this day, President Biden has failed to act on his campaign promise to bring tariffs back down.

I am not sure what the author would recommend changing in financing a house. We have had 20 years of low-interest rates, decades of built-up rules around lending and borrowing, and tremendous debt staked on housing repayments in derivative markets. If we have not learned anything from the 2007 financial crisis, we should be careful not to make credit too easy, though there is room to reform money and banking so more people can get access to responsible loans. Once again, a federal problem.

In the end, the author admits that Frontier and the YIMBYs (Yes-In-My-Back-Yard movement) are right: what we need to do is expand the housing supply with pro-growth policies. Perhaps the author just does not like that the very thing he has made his career on has created the current housing crisis — that must be a difficult reckoning. Zoning is a problem, nobody is saying it is the only problem, but it may be the only problem that the state government can effectively solve on scale.

Unsatisfied with begging the question and then not providing any helpful alternatives, the author pivots to other issues, trying to build the case that something must be suspect about anyone who would question zoning.

There is nothing more starkly demonstrative of the arrogance of the planning elite than this gentleman telling the people of Montana that all they must do is get a variance from the government to build an ADU. You, Montana citizen, of course, have all the time in the world to fight the government to build that mother-in-law suite on your property.

“Just fight the law; I’m sure you’ll win.” Mr. Horne says. This flips the American conception of government on its head. The government exists to serve you, the taxpayer. Begging them for the right to build safely on your property flips the idea of We the People upside down.

Instead of relying on getting exceptions for government dictates, we should repeal the massive growth in building regulations that is driving up the cost of housing. Earlier I noted that regulatory reform here would have a much more significant impact on the cost of buying a house. Building a regulatory compliant house today adds $93,000 to the price. In 2011, it was $65,000.

Yes, you caught that: almost 23 percent of the cost of the average home is just in regulations.

Zoning reform is bipartisan, and some people don’t like that fact. Mr. Horne’s column ignores all the center-left support for zoning reform. Such as former President Obama, our own House Minority Leader Abbott, Senate Minority Leader Cohenour, or former representative Tenenbaum. Not to mention that deep blue Oregon passed a full repeal of single-family zoning or the many center-left social justice non-profits who support zoning reform.

Support for reforming our building regulations can start with seeing that exclusionary zoning is still used today to keep the “wrong sort” of people out of the “right” areas. Zoning is often a system of government-enforced privilege by the people with money and time vs. the people trying to get a start. On the other side of the ideological divide, land use reform expresses respect for property rights, a foundational human right foundational to the conservative case for prosperity and liberty going back to John Locke and Adam Smith.

A permissionless, bottom-up, and innovative Montana needs to evolve from the top-down one Mr. Horne has been creating these last 17 years. I am hopeful that this new coalition of people who see how this system of management has failed and that a better bottom-up way is possible. We are coming together to transform our government so everyone can afford to live in Big Sky Country. Join us.

David Herbst is the State Director with Americans for Prosperity-Montana.