In Dallas and other tight rental markets, Section 8 voucher holders can’t find the homes they need, while developers face resistance from wealthier neighborhoods when trying to build new housing.
Question paraphrased from comments:
What would be the libertarian answer to people in neighborhoods that actively attempt to block development of lower cost housing within their neighborhoods? When resident groups and local officials actively participate in efforts to keep low income housing out, and when developers are uninterested in building low-profit units (as is frequent in other cases), how should markets address the issue of affordable housing? How does the free market get past these barriers, given the barriers are not just economic, but sociological as well?
There are 3 roadblocks:
1) Economic: The developer needs to still turn a profit and has a strong financial incentive to not earn less by spending capital to build lower-profit units if they don’t have to.
2) Social: NIMBYism.
3) Meta: The necessity of external effort and resources.
Looking at history, the first thing I think of is desegregation in the U.S. by the federal government. When local government (which I remind the reader is just people; so local people) is problematic from the perspective of a wider society, larger/higher government has been used effectively in the past (… eventually (TM) …).
But the question specifically asks about potential libertarian / free market solutions (i.e., not “more government”).
Libertarianism is a collection of political philosophies and movements that uphold liberty as a core principle. Libertarians seek to maximize political freedom and autonomy, emphasizing freedom of choice, voluntary association, individual judgment, and self-ownership.
libertarianism: an extreme laissez-faire political philosophy advocating only minimal state intervention in the lives of citizens.
I agree with an earlier commenter that just about the only possible solution that involves no interaction with government is to flood the market with housing to drop prices — although that itself would likely run into legal/zoning/development permit issues and is otherwise entirely impractical.
As for a potential Libertarian solution:
- How about advocating for the removal of development restrictions (using the argument that it’s the developer’s property and they should be able to build whatever they want and sell it or rent to to whomever they want) and offering a tax credit for mixed-income developments? This would probably convince very few existing developers to start building low-profit units, but you might manage to lower the financial barriers enough to let someone new do it for social reasons instead of for purely financial reasons.
- How about forming a new labor union to unionize a geographical area instead of an industry or company, and strike (refuse to work in) areas which provide insufficient housing (i.e. demand excessive commutes) for the working class. It’s still organizing people for a political purpose, but it isn’t literally *government*. (See: Thoughts on unions, by Jacob T. Levy)
- How about instituting a minimum wage benchmarked to local cost-of-living (which is largely driven by housing costs)? It’s some government, but it’s light-touch compared to using eminent domain to build affordable apartment complexes or otherwise overruling local development law.
The real challenge with all of these is that they are still action/effort which must come from outside the affected area (because if the poor cannot afford existing used housing in an area then they certainly cannot afford to flood that market with expensive new housing; because a union must be large enough to keep its membership financially afloat while cutting off labor supply to and wage revenue from something; because NIMBYs already control the design and enforcement of development restrictions; etc.).
RE: “Libertarianism is not necessarily about solutions.” — some other commenter
If Libertarianism is not necessarily about solutions, then it doesn’t necessarily have a place in government, because good government is about solutions — solutions for how we will live with our collective ethics and values, how disputes will be resolved, how we can cooperate for a greater good that is more than the sum of its parts, etc. If Libertarians want to effectively bring Libertarianism to government (which does have costs and is not always the right tool for the job), then they *must* do so by bringing solutions. Why should something not be “solved” directly by the government? What should government do to support non-government actors solve something in a better way, and why and how will that solution be as good or better than the by-government solution? Not just in theory, but in practice, in reality. It’s the reverse of demanding that anyone proposing a by-the-government solution explain why government action is necessary.
Do residents anywhere really have the “right” to demand/impose 2-acre-minimum properties and single-family homes (or other methods of ensuring multi-million dollar property values) for all residential development within a geographic area? If so, then for how large of a geographic area?
On the one hand, it seems like residents should have the freedom to use their government how they see fit for their own local community.
On the other hand, it is clear that such lines are being used to effectively exclude [denying housing to] part of the community, because the maids and nannies and gardeners and other staff *are* part of the community they work in as well as the one they live in no matter how much residents of the former deny it.
To some extent, that should be okay. For example, nurses and aides at a facility for disabled seniors shouldn’t necessarily be living there. And it doesn’t seem too wrong to permit a 50-200 unit high-end housing development (1 square km ?). But it seems clearly wrong to permit an entire county to price out everyone without an upper class income.
I’d argue that appealing to a higher government could still be a libertarian answer because it would be using government to ensure freedom — the freedom of the working class to live in the community which they serve in.
– Should Building Taller Be Much, Much Easier? | CityLab, by Emily Badger (2012/02)
– Should Cities Limit Building Heights? | CityLab, by Amanda Erickson (2012/02)
– Blame Geography for High Housing Prices? | CityLab, by Richard Florida (2016/04)
– Urban myth busting: Why building more high income housing helps affordability | City Observatory, by Daniel Hertz (2015/10/11)
– (also here)