Gongol.com Archives: September 2022

Brian Gongol

September 3, 2022

Business and Finance Building more places to live

People in very serious roles sometimes propose most unserious responses to problems. San Francisco, for example, has a notorious housing shortage. Rents are among the highest in the world, with single-family homes selling in some neighborhoods for well over $1,000 per square foot -- five times the median rate in an affluent community like West Des Moines, Iowa or Naperville, Illinois. ■ Yet one of San Francisco's city/county supervisors wears his advocacy for rent controls as a badge of honor and declares (without evident self-awareness) that "The unregulated [housing] market is the problem, not the solution." ■ Reasonable observers would note that San Francisco's problem is largely one of supply. It's one of America's largest metropolitan areas, blessed with beautiful views, a fantastically mild climate, and an enviable economy, so people naturally gravitate there. But the city simply doesn't permit housing construction at nearly the rate it should, with a population-adjusted rate of new housing permits half that in Washington, DC, and barely a quarter that in Austin, Texas. ■ Language is no small part of the problem. It may feel satisfyingly self-righteous for a local politician to declare that "Housing is a human right", but it's neither helpful nor true. Housing is a universal human need, and knowing the difference between a universal need and a human right is no small matter. ■ A human right (like freedom of speech) is not subject to material constraints. It belongs to a person by right of birth, takes on no material form, and can only be taken away, usually by the interference of oppressive powers. ■ When China's government denies the right to freedom of conscience, it violates a human right by taking it away from the individual. When, for far too much of our past, the United States tolerated chattel slavery, it violated a human right to freedom and personal autonomy. Abraham Lincoln implicitly acknowledged this in the words of the Emancipation Proclamation: "I invoke the considerate judgment of mankind, and the gracious favor of Almighty God." ■ By contrast, someone has to answer a vital question about every universal need: "How can we encourage an abundant supply?". In the case of housing, there is no magic wand to wave that will conjure housing out of thin (perhaps foggy) air. Someone has to build it. And in the mayor's own words, "For years, San Francisco has made it too hard to approve and build new homes. That must change." The government there has, if anything, obstructed the function of a market-based housing industry. ■ People seeking to make money within a market will rarely leave any good opportunities on the table, and in the case of housing, it should be plainly evident that with developers are perpetually eager to seek their fortunes -- ones they can only make by building things. If enough developers aren't building, the most likely reasons for housing shortages just about anywhere come down to insurmountable constraints: Either there isn't enough available land or there are too many regulatory prohibitions. ■ Where land is in short supply, the choice can often be made to effectively create more by building vertically. But where regulatory constraints are the ones limiting supply, it's not "the market" that is the problem. ■ We should take care to call things by their appropriate names, and a thing that takes on a material form needed by everyone isn't a "human right", no matter how good it may feel to say. The material form makes it a human need. Knowing that distinction -- and taking it seriously -- is the only way to engage in the right mindset for solving the problem when there isn't enough of a good thing to go around.

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