Fixing our broken housing system means rethinking local control

ByShannon J. Cortes

May 1, 2022

Jenny Schutz

Tourists visiting Boston love to stroll Boston Common, enjoy the park’s landscaping and historic landmarks, or skate on Frog Pond. Across the Charles River, Cambridge Common is less scenic and more utilitarian, with softball fields and walking paths.

Both spaces were adapted from their original purpose in the 17th century: open grassy fields where neighboring townspeople could graze their livestock. At the time Boston, Cambridge, and many of their New England neighbors were founded, the local township was located at the spatial center of a village economy.

People’s daily activities took place within a few miles of their homes, as walking and horseback riding were the only modes of transportation. The way Boston decided to divide its land between homes, farm plots, and a few small stores had little impact on towns five or ten miles away.

Today, the Boston metro area is home to more than 4 million people, who participate in a regional labor market – but whose land use decisions are made by more than a hundred independent cities and towns. Residents of Concord can travel the 18 miles from their historically preserved 19th-century village center to downtown Boston in less than half an hour by car, or a little longer by commuter train.

Local decisions, regional issues

Earth the decisions about use, housing, infrastructure, and fiscal policy made by each city and town have a significant impact on their neighbors and on the regional economy. Delegating authority over land use and housing production to local governments made sense when “downtown” meant the village commune.

Today, our constant respect for local control creates problems.

In theory, local control of public services offers certain advantages, especially in a country as large and diverse as the United States. Mayors and councilors may have better information about what voters in their jurisdiction want than congressional representatives and, due to greater geographic proximity, can be more easily held accountable.

In practice, the virtues of localism are less clear. Allowing each city or county to determine how much housing to build (or not build) results in poor economic, social, and environmental outcomes for metropolitan areas, states, and the country as a whole. Local political and fiscal incentives are often in direct conflict with regional welfare. In addition, local governments vary considerably in their resources and institutional capacities, which affects their ability to plan and implement effective policies. As a result, the quality and quantity of services funded and provided by local government vary greatly from place to place.

Sticks and carrots

Several governance changes could strengthen the ability of all local governments to deliver better housing market outcomes to their constituents, while addressing the parochialism that hampers regional and national housing markets.

State and federal governments should set clear targets for local governments (standards for well-functioning housing markets), and provide financial support and technical assistance. Using federal or state funds to encourage greater regional cooperation could also improve economic outcomes. Creating financial “sticks” to penalize localities that choose not to comply may be necessary for some decidedly exclusionary places.

Local political and fiscal incentives are often in direct conflict with regional welfare.

Our highly decentralized system of local control over land use contributes to regional housing shortages and environmentally unsustainable patterns of development, and it exacerbates racial and economic segregation. But localism is deeply embedded in American democracy, making it difficult to change.

Reform efforts must confront deep-rooted financial and political interests. Support will likely come from unusual coalitions that cross partisan lines – both a potential strength and a limitation to the burgeoning YIMBY (yes in my backyard) movement. And even if we could remove all regulatory barriers to well-functioning housing markets, the cost of market housing would still be too high for some individuals and families.

Change is difficult, but necessary

Change is difficult. People attach themselves to their homes and neighborhoods as they are today – or as they were in the past. Elected officials are comfortable working within the existing political framework. Even for people struggling under the current regime, the prospect of change can be frightening: things can always get worse.

To achieve more economically, environmentally, and socially beneficial housing policies, we must open the hearts and minds of Americans to a broader vision of the American dream. The goal of owning a single, low-density home is not financially feasible for many young workers, nor environmentally sustainable for a growing population.

Elected officials, from mayors to governors to the president, are understandably reluctant to deliver unpleasant news to their constituents. But the only way to move toward a better future is to present Americans with an honest and direct assessment of our current problems and concrete proposals for reform.

Jenny Schuetz is a senior comrade at the Brookings Institution. This column is adapted from his new book, Fixer-Upper: How to Fix Broken Housing Systems in the United States.