Re: Biden's Plan To Link Federal Transportation Spending to Zoning Reform Could Make the Housing Shortage Worse

[Songbird Johnny]

In article <XnsAC96C0C...@95.216.243.224>
governo...@gmail.com wrote:
>
> ...I spent all night taking it up the ass.

The administration is encouraging counterproductive
"inclusionary zoning" policies that often raise housing prices
and reduce supply.

President Joe Biden has a new idea for reducing regulatory
barriers to new housing construction. Contained within the White
House's expansive new Housing Supply Action Plan is a proposal
to tie federal transportation grants to state and local
governments reforming their zoning codes.

Proponents of this approach argue that the massive amounts of
money that the feds spend on transportation give them a lot of
helpful leverage over the most overregulated jurisdictions.
Conditioning that money on the elimination of barriers to new
housing could get exclusive communities, or their respective
state governments, to start slashing red tape if they want
funding for new roads, bridges, or bike lanes.

But critics argue that even in its best form, getting
transportation bureaucrats into the weeds of local land use
policy is federal overreach.

The details released from the White House so far suggest that
they are not adopting the best form of this idea. In fact, Biden
could end up incentivizing counterproductive housing reform that
will probably raise costs and reduce supply.

The Biden administration's Housing Supply Action Plan, which was
released Monday, certainly sounds the right notes on zoning
reform when it says that "exclusionary land use and zoning
policies constrain land use, artificially inflate prices,
perpetuate historical patterns of segregation, keep workers in
lower productivity regions, and limit economic growth."

To fix the problem, it proposes a grab bag of policies; from
easing federal regulations on manufactured homes to streamlining
the applications for federal affordable housing funds.

Included is a plan to use discretionary transportation grant
programs funded by 2021's Infrastructure Investment and Jobs Act
(IIJA)幼osting $1.2 trillion葉o encourage "locally driven land-
use reform, density, rural main street revitalization, and
transit-oriented development."

The IIJA provides $150 billion in funding for discretionary
grant programs. Beginning this year, the White House says that
the Department of Transportation (DOT) has released three
notices of available funding, totaling $6 billion in grants,
that have policies promoting "density and rural main street
revitalization."

Salim Furth, an economist at George Mason University's Mercatus
Center, says more closely tying local land use policy and
federal transportation spending is "broadly logical."

"You shouldn't build infrastructure where people ain't or where
[housing] densification can't follow the [transit] investment if
you're adding a lot of capacity," Furth tells Reason.

But he cautions that trying to incentivize land use reform
through discretionary grant programs謡hich give the
administration a lot of freedom to set grant conditions and pick
who ultimately gets the money熔pens the door to a lot of
counterproductive political manipulation.

"When it's a Democratic administration, they are going to look
for Democratic-friendly policies, even when they don't have a
big impact on housing production," he says. "You might get
points for having a strong inclusionary zoning ordinance even if
that ends up backfiring and creating less housing than a Texas
suburb that is really generous about zoning for multifamily"
housing.

Inclusionary zoning refers to policies that require or
incentivize developers to offer some of the new units they build
at below-market rates to lower-income renters or buyers. Close
to a thousand jurisdictions in the country have some form of
inclusionary zoning.

The policy has a poor track record of creating new affordable
housing. Research is increasingly finding that requiring
developers to build below-market-rate units acts as a tax on new
housing, which has the effect of either raising prices or
reducing new supply. There's one active lawsuit out of
Pittsburgh, Pennsylvania, arguing the whole scheme is
unconstitutional.

And inclusionary zoning appears to be precisely the kind of
thing that the Biden administration's changes to discretionary
transportation grant programs are encouraging.

Per a DOT spokesperson, the administration has thus far used
three "notices of funding opportunity" that include language
promoting density and land use reform.

That includes a January-issued grant solicitation for $2.2
billion in Rebuilding American Infrastructure with
Sustainability and Equity (RAISE) grant money. These grants can
pay for projects ranging from bus lanes and port improvements to
recreational trails.

In March, DOT released another "multimodal project" notice of
funding opportunity covering three grant programs totaling $2.9
billion that also asks applicants to talk about how their
project relates to land use and housing development. Those grant
programs fund major infrastructure projects and infrastructure
projects in rural areas.

On Monday, a notice of funding opportunity for $1 billion in
Safe Streets for All grants預 new program that pays for safety
improvement projects預lso looks at applicants' land use policies.

The first two notices of funding opportunity make frequent
mention of rewarding grant applicants that have policies
encouraging "mixed-income residential development near public
transportation." And the primary way an applicant would create
those mixed-income residential developments would be through
having an inclusionary zoning policy.

Elsewhere, these notices of funding opportunity express
preferences for rewarding projects in areas with "fiscally
responsible land use" or "location-efficient housing." Those
terms could plausibly be read as references to more deregulatory
zoning policies that allow market-rate multifamily housing.
They're nevertheless pretty vague.

Those references also come sandwiched between a lot of other
factors that DOT staff will consider when scoring grant
applications. For instance, the notice of funding for the RAISE
grant program asks applicants to detail how their project will
improve economic growth. In particular, applicants are asked to:

describe the extent to which the project and local and regional
policies related to the project will contribute to the
functioning and growth of the economy, including the extent to
which the project addresses congestion or freight connectivity,
bridges service gaps in rural areas, or promotes greater public
and private investments in land-use productivity, including
rural main street revitalization or locally-driven density
decisions that support equitable commercial and mixed-income
residential development.

If the goal is to use transportation dollars to incentivize
productive housing reforms, making land use just one of many
factors to consider weakens that incentive.

Other Biden White House-endorsed plans to spend money
incentivizing local zoning reform have received similar
criticism: they focus on too many different policy priorities
all at once. They, therefore, become less a means of increasing
housing supply through deregulation and more of a general
subsidy to local governments.

Indeed, legislative efforts to use federal transportation
dollars on spurring local land use reform have been more
explicit about the land use policies they are trying to
encourage.

Rep. Scott Peters (D砲alif.)'s More Housing Near Transit Act,
for instance, rewards jurisdictions that don't give local
bureaucrats discretion to shoot down housing projects near
transit stops. The 2019 HOME Act, sponsored by Sen. Cory Booker
(D鋒.J.) and Rep. Jim Clyburn (D亡.C.), explicitly details the
"transformative activities" jurisdictions receiving federal road
and rail funding could adopt.

On the campaign trail, then-candidate Joe Biden explicitly
endorsed Booker's bill.

Marc Scribner, a transportation researcher at the Reason
Foundation (which publishes this website), says that competitive
grant programs that give the executive branch a lot of
discretion in picking awardees have a storied history of sending
pork to political allies.

A report from earlier this year from the Reason Foundation found
that 41 of the 90 RAISE grants awarded in 2021 went to districts
or states represented by lawmakers on Congress' various
transportation and finance committees. The Trump administration
used the same program to shower money on rural Republican areas.

Scribner says that the Biden administration's consideration of
land use policies when steering this money is just another way
for Democrats to funnel money to areas where their supporters
live.

"I expect dense urban cores are going to receive a
disproportionate share" of transportation funds, he says. "These
are earmarks by another name."

Scribner is skeptical of explicitly tying federal transportation
dollars to local land use policies. Prioritizing transportation
projects with higher ridership projections will already send
money to roads and rail being built in areas that are favorable
to development, he says.

The Biden administration has been remarkably consistent in
criticizing local and state barriers to housing construction. On
that point, they're in agreement with libertarian policy wonks.

Whether the federal government can be a force for good in trying
to fix that problem all hinges on the details of its policy
problems.

And the details released thus far on the White House's plans to
link federal transportation spending and local land use aren't
particularly encouraging.

https://reason.com/2022/05/18/bidens-plan-to-link-federal-
transportation-spending-to-zoning-reform-could-make-the-housing-
shortage-worse/