Analysis

Biden’s Housing Plan Emulates Europe

In a good way.

Seattle Washington
Homes in Seattle, Washington, April 21, 2011 (Harold Hollingsworth)

One of the areas in which I think America should emulate Northwestern Europe is housing.

Stagnant wages, restrictive building codes and underinvestment in construction have caused home prices to rise faster than wages in eight out of ten metro areas in the United States.

Young Americans are one-third less likely to own a home at this point in their lives than their parents and grandparents, delaying their wealth accumulation and possibly family formation. Among young black Americans, homeownership has fallen to its lowest in more than sixty years. Americans of all ages are less likely to move, which has contributed to a decline in social mobility and an increase in regional inequality.

I like the Dutch system, which is a combination of government-built social housing rented out at below-market prices and rental subsidies, which can reach up to a third of the average private rent, and for which about one in five households qualify.

Turns out that’s close to Joe Biden’s plan.

Vouchers for everyone

Matthew Yglesias reports for Vox that the centerpiece of Biden’s proposal is simple: extend so-called Section 8 housing vouchers to everyone who qualifies.

The vouchers, which were created by Republican administrations in the 1970s under Section 8 of the US Housing Act — hence the name — hover around $500 per month in most places, but can reach up to $1,500 in expensive cities such as San Francisco and Seattle.

The problem is that not everyone who qualifies can get a voucher, because funding for the program is capped annually by Congress.

(This is a peculiarly American thing. Funding for European entitlements is seldom capped.)

The Center on Budget and Policy Priorities estimates that more than 5 million Americans receive vouchers. Another 11 million qualify but don’t.

The research is unambiguous:

housing vouchers leads to a decline in children experiencing separation from their parents, a decline in domestic violence, a decline in food insecurity and, most of all, a steep decline in housing instability.

Giving vouchers to everyone who qualifies would make a huge difference in millions of lives.

Build more

The other half of Biden’s plan is building more housing.

The problem there are zoning restrictions, which bar multistory construction in desirable neighborhoods.

Biden borrows a proposal from Senators Cory Booker of New Jersey and James Clyburn of South Carolina to require localities that benefit from federal grants to change such rules.

How likely is it to get done?

Because vouchers are a financial instrument, they could pass through so-called reconciliation. Originally a way to smooth over differences between budgets passed by the House of Representatives and the Senate, Republican overuse of the filibuster — which allows a one-thirds minority to block legislation — has made reconciliation, which requires a simple majority, the main way to make policy.

Changing zoning laws is more complicated. That would be up to local authorities, in many cases, like the San Francisco Bay Area, run by members of Biden’s own Democratic Party.

“The potential good news,” writes Yglesias, “is that, conceptually at least, liberalizing regulation is something Republicans might support.”

I wouldn’t hold my breath. The same was true for the individual insurance mandate in Obamacare. Originally a conservative idea, Republicans turned against it as soon as Democrats made it their own.

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