and the
Citizens Economic Research Foundation

Barbara's Column
August #1

Less government interference might fix housing crunch
by Barbara Anderson

The Salem News
Thursday, August 2, 2007

From caves to castles, I understand what "housing" is. I just don't see how the word "affordable" gets attached to it.

"Affordable" is an entirely subjective thing.

If I'm rich, I can afford all kinds of housing. The Queen of England, for instance, is able to afford several palaces.

If I'm poor, with no income or savings, I can't afford housing at all. I won't have a roof over my head unless I find an empty cave, a cardboard box under a bridge or a generous relative with a guest room.

Ideally, government encourages an economic system that gives more people more money they can apply to whatever they need, including housing. For most working people, for most of our nation's history, it was possible to afford a family-built log cabin or a tar-paper shack on a vacant lot, a city tenement, a studio or small apartment, a trailer or mobile home, or a "starter" home in the new suburbs. Mining companies provided company row houses; wealthy families provided "quarters" for their servants.

At some point, the government began to subsidize housing for the poor. We used the phrase "public housing" to describe this taxpayer-funded generosity. But then some politicians started arguing for affordable housing within the private sector, giving the impression that homes can be built, somehow, by someone, that just about anyone can afford.

This happened for a little while, as people of various means started building or investing in rental housing, responding to market need. Along with wealthy investors who built rental units, many an enterprising carpenter refurbished old homes to make apartment buildings. Widows made a living by running rooming houses. Trailer parks were opened in the suburbs. Government's role was to provide housing vouchers to the very poor, to apply to their rent.

But the government can't leave well enough alone. Boston and some other communities instituted rent control, arguing that landlords were somehow responsible for providing affordable housing. People whose politics reflected this belief were appointed to "rent control boards," whose primary joy in life came from beating up on landlords.

Those property owners who couldn't handle the aggravation found other ways to make a living. Wealthy absentee landlords with lawyers were still attracted to the artificial market, but inevitably there were fewer units available than there would have been without government interference.

Eventually, rent control was abolished with a statewide ballot question, except for so-called mobile home parks, whose owners are still forced to provide "affordable housing" in places like Peabody.

Many local communities, preferring to attract a more upscale citizenry, passed zoning laws that discouraged mobile home parks, rooming houses and even apartment buildings. If a town had caves, people were discouraged from settling in them. Tar-paper shacks, single trailers or tents on homesteaded vacant lots were out of the question.

Then came the inevitable government backlash. An "anti-snob zoning" law was passed requiring all communities to have "affordable housing" or else. The "or else" was Chapter 40B, which allowed developers to bypass local zoning laws if they included some affordable housing in their plans.

Inevitably once again, developers found ways to game the system. Open space was taken up by homes that were affordable by mostly high-income buyers but were artificially "affordable" by people who fit the state's definition of "qualified" to buy at below-market rates. Some of these homes were built by removing truly affordable cottages with bulldozers. Rental units owned by ordinary landlords who weren't developers didn't count toward a community's obligation. My affordable cottage doesn't count either, because I'm not a developer.

Oh what a tangled web we weave, when our government decides to provide for others. Now the inspector general is investigating 40B developers, and community activists are trying to get 40B repealed. I'm not sure which prospective homeowners will miss it.

As nearly as I can tell, wading through all the complexity: Since I earn less than 80 percent of the median income for this area, I could be eligible for "affordable housing," which would still be more costly than I could afford unless I got one of those sub-prime mortgages -- which Gov. Patrick might bail me out of if I couldn't make my payments.

Here are some better solutions:

* Allow communities to fulfill their 40B requirement by counting all existing apartments; then encouraging more. Towns like Boxford have moved to allow homeowners to create small apartments, not just for in-laws, in their large houses.

* Abolish the phrase "rent control' from our language, so that prospective landlords won't fear being trapped forever by control boards. Don't allow tenant activists to play games that cheat landlords. The courts should quickly enforce rental contracts for both parties.

* Bigger picture: Local non-environmental zoning should be replaced by that old-fashioned concept of "property rights," and the once-common "diversity." Education, starting with special ed, should be funded with existing broad-based state taxes, not the property tax -- so that communities won't want to discourage families with children.

* And finally, some people will have to face the fact that they can't afford the expensive East Coast lifestyle and will have to settle elsewhere -- unless of course, more of our citizens flee our political absurdities, leaving a surplus of homes that will have suddenly become ... more affordable.

Barbara Anderson is executive director of Citizens for Limited Taxation. Her column appears weekly in the Salem News and Eagle Tribune, and often in the Newburyport Times, Gloucester Times, and Lowell Sun; bi-weekly in the Tinytown Gazette; and occasionally in the Providence (RI) Journal and other newspapers.