Local government faces incentives just like everything else. If we want voters to encourage growth near them, we need to make it worth their while.
An ever-expanding body of work shows that increasing local regulations are the main driver of increasing housing prices. Yet there has been less interest in explaining why local regulations are increasing, or why they are rising so much faster in some areas rather than others. Given that the legal authority of local governments to impose zoning or other regulations on building has barely changed over the past few decades, and is fairly constant across the United States, there has to be some cause explaining what turned many pro-development places into anti-development places.
The best explanation for increasing regulation is that local governments and neighborhoods are less likely to see the gains from growth than they were in the past. Local governments used to get substantial fiscal benefits from a growing population, yet now they suffer fiscal costs. Local homeowners used to see the value of growth in terms of reduced taxes and increased land values, and now they see the increased taxes and worse services. States and local governments used to prepare infrastructure before growth happened, but now they let existing residents suffer crowding of roads and schools when new residents arrive.
Continue reading the entire piece here at Works in Progress
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Judge Glock is the director of research and a senior fellow at the Manhattan Institute and a contributing editor at City Journal.
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