NE2: Housing Deregulation Act (Failed)
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  NE2: Housing Deregulation Act (Failed)
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Author Topic: NE2: Housing Deregulation Act (Failed)  (Read 1230 times)
cinyc
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« on: April 18, 2014, 10:59:25 PM »
« edited: April 22, 2014, 03:17:21 PM by cinyc »

Housing Deregulation Act
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Sponsor: Rep. Deus naturae

Debate on this bill shall be open for 72 hours, or until around 11:59 PM on Monday, April 21, unless modified or extended.  The sponsor, Rep. Deus, is encouraged to speak on behalf of the bill within the next 36 hours.  If he does not, the bill will not be tabled as there is no other proposed legislation in the queue.

The floor is open for debate.
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sirnick
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« Reply #1 on: April 18, 2014, 11:45:21 PM »

I oppose this all the way to the bank. This is big government regulation at its finest. I'm tired of the regional government telling communities how to run themselves. Maybe height restrictions benefit their community? Who are we to decide on any of these issues.
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Deus Naturae
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« Reply #2 on: April 18, 2014, 11:50:53 PM »
« Edited: April 19, 2014, 12:00:07 AM by Rep. Deus »

Thank you, Mr. Speaker.

I proposed this bill in an attempt to deal with high housing costs. I normally don't like to interfere in the affairs of local governments but the high cost of housing in this country is a significant problem, especially in urban areas. Local/municipal regulations are a main contributor to this problem and need to be dealt with if we want to counter it.

Section 1, clause a would prohibit so-called "rent control" policies that have been implemented in many cities. These policies run entirely contrary to basic principles of economics and have been condemned by economists from Thomas Sowell to Paul Krugman. Under a free price system, prices (including rents) are determined by the amount needed to satisfy production costs. However, when governments impose artificial price ceilings, sellers are unable to satisfy production costs and are forced to reduce the supply of whatever good they are selling. At the same time, artificially lower prices result in greater consumer demand. In this way, price ceilings run entirely contrary to the basic laws of supply and demand. In the context of the housing market, this means that the supply of housing is artificially restricted, while the demand for new units is artificially increased. This situation results in a housing shortage, which will not be fixed until rent control laws are repealed.

Section 1, clause b would prevent zoning agencies from prohibiting homeowners from converting their single-family residence into a multi-family residence, or vice versa. During the Great Recession, many homeowners in need of an extra flow of income sought to rent out part their homes/apartments to other families in need of housing. This was/is a win-win situation, the original family is able to improve its finances while the new family is able to find affordable housing. However, many localities and municipalities have zoning ordinances that make this illegal. If these ordinances were repealed (which this bill would effectively do) many families would be able to find cheap housing, while others would be able to generate additional income.

Section 1, clause c would prohibit laws establishing minimum or maximum lot sizes for buildings ("lot size" refers to the area of the base of a building). Minimum lot size laws are by far the more harmful of the two forms of regulation. They force small builders out of the market and discriminate in favor of large developers. By forcing housing providers out of the market, these laws restrict competition, thus preventing prices ensuring that prices remain high. Maximum lot size laws have mostly been enacted in response to minimum lot size laws. It's arguable whether they are an effective tool in counteracting the harmful effects of minimum lot size laws, but with those gone, they would be obsolete barriers to competition. Clearly, both forms of housing regulation need to go.

Section 1, clause d would prohibit laws establishing height limits for buildings. Height limits serve to do nothing other than increase costs by preventing buildings from adding additional floors. They are yet another form of economically unsound regulation that increases costs and prices by restricting the supply of housing.

Section 1, clause e would prohibit limits or fees on new construction. As I have already said, it makes no sense whatsoever to limit the supply of housing or to increase the costs of new unit construction. Getting rid of regulations that do so will decrease prices.

Section 1, clause f prohibits the practice of "inclusionary zoning," a policy which some municipalities have considered with hopes of promoting affordable unit construction. This policy essentially requires new developers to construct a certain amount of units that are priced below a certain level. This seems like a good idea, but it really isn't for two main reasons. The first is that, because, like rent control laws, these regulations just impose artificial price ceilings on housing providers, they restrict the supply of housing and actually increase prices. The second is that these regulations effectively function as a tax on developers, thus discouraging new unit construction and increasing prices overall by increasing production costs.

In short, this bill is an attempt to fight high housing costs by getting rid of regulations that restrict the housing supply, increase production costs, and impose artificial price ceilings on housing providers.

For more in-depth arguments and analyses of housing regulations, see the following study:
http://repository.upenn.edu/cgi/viewcontent.cgi?article=1007&context=penniur_papers
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Deus Naturae
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« Reply #3 on: April 18, 2014, 11:56:26 PM »
« Edited: April 19, 2014, 12:00:26 AM by Rep. Deus »

I oppose this all the way to the bank. This is big government regulation at its finest. I'm tired of the regional government telling communities how to run themselves. Maybe height restrictions benefit their community? Who are we to decide on any of these issues.
I understand and sympathize with your concerns, but housing is an issue where the costs of regulation are incredibly high, and there is no incentive for local or municipal governments to do anything about them due to the power of special interests. This is unfortunately the only way in which we can seriously attempt to tackle the enormous costs of housing regulation.
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sirnick
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« Reply #4 on: April 19, 2014, 12:04:09 AM »

This bill hurts the rights of small businesses, landlords and local governments. I will not stand idly by as their rights are trampled on. I disagree with Rep Deus Natura that the only way to deal with housing prices is to subject them to further regulation by the regional government.
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Deus Naturae
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« Reply #5 on: April 19, 2014, 12:43:26 AM »

This bill hurts the rights of small businesses, landlords and local governments. I will not stand idly by as their rights are trampled on. I disagree with Rep Deus Natura that the only way to deal with housing prices is to subject them to further regulation by the regional government.
This bill will have no effect on small businesses and will allow landlords to charge rents high enough to satisfy production costs (something that many of them are unable to do under current regulations). It will also allow more homeowners to become landlords by allowing them rent out parts of their houses/apartments to other families. This bill does not increase regulations, it repeals them.
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sirnick
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« Reply #6 on: April 19, 2014, 08:56:00 AM »

This law takes power away from local government, as a libertarian its absurd that you support this. Local governments and communities should be able to determine their needs in their own community. Maybe a small suburban community doesn't want a skyscraper next door, and they should be able to pass ordinances and zoning laws doing that.


This bill would eliminate any attempt at community cohesion by municipalities, and it would even prevent affordable housing options. Under this law, local governments can't even define lot sizes to sell buildings on! This bill obliterates urban planning, suburban planning and rural planning one one fell swoop.

This bill eliminates all community input into how their community expands, develops, and grows.


Housing Deregulation Act

1. The Regional government of the Northeast, as well as all State, municipal, and local governments within the Northeast, are hereby prohibited from passing or approving any law or ordinance that does any of the following:

a. Limits the amount of money that may be demanded by a landlord in rent. Eliminates Affordable Housing Options

b. Prohibits or requires a special license for the conversion of single-family homes into multi-family homes, or vice versa. Allows for unsafe numbers of residents living in one place

c. Establishes a minimum or maximum lot size for buildings. Eliminates local zoning control, eliminates lots, like how more basic can you get?

d. Establishes height limits for buildings. Eliminates local regulation and community cohesion, you can now build a skyscraper in a suburban area and no one can stop it

e. Imposes limits or fees upon the construction of new buildings. Takes a tool use to promote or stifle growth away from communities.

f. Requires developers to build units priced above or below a certain level. I don't think this regulation even exists, it comes from fantasyland.

2. Any codified Regional, State, municipal, or local laws/ordinances that do any of the above are hereby rendered null and void. Voids local laws that may have other aspects that have nothing to do with Deus' intentions. This clause is a slash and burn tactic and it will hurt more than it helps.

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sirnick
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« Reply #7 on: April 19, 2014, 11:56:13 AM »

Just one example of many -- zoning laws in some communities could prevent a megastore like Wal-Mart from coming in. The presence of a huge store like Wal-Mart could put many small businesses out of business completely. Nothing against Wal-Mart but its a fact. Communities that are able to regulate zoning  know the interest of their citizens and can better fit their needs.

The opposite can also be true -- a community may not have many small businesses and has a high demand for a mega-store like Wal-Mart --then they can use zoning regulations to entice a mega-store to come to their community!
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Deus Naturae
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« Reply #8 on: April 19, 2014, 12:20:07 PM »

This law takes power away from local government, as a libertarian its absurd that you support this. Local governments and communities should be able to determine their needs in their own community. Maybe a small suburban community doesn't want a skyscraper next door, and they should be able to pass ordinances and zoning laws doing that.


This bill would eliminate any attempt at community cohesion by municipalities, and it would even prevent affordable housing options. Under this law, local governments can't even define lot sizes to sell buildings on! This bill obliterates urban planning, suburban planning and rural planning one one fell swoop.

This bill eliminates all community input into how their community expands, develops, and grows.
You have made this point of view clear. I must reiterate that although some municipal and local governments would like to keep these regulations in order to benefit special interests, restrict newcomers from entering neighborhoods, etc, the fact is that these government regulations are harmful to a great many people in our region, and we need to get government out of the way in order to ensure affordable housing.

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It's clear that rent control laws are not an effective way to reduce housing costs, and actually contribute to increasing them. See the following articles:
http://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent-affair.html
http://www.nationalreview.com/articles/220039/pricing-101/thomas-sowell
http://seattletransitblog.com/2013/10/24/rent-control-is-bad-for-affordability/
https://mises.org/daily/3483/
Now, I doubt that the respective authors of those articles agree on much, but if there's one thing they all get, it's that rent control is NOT good for affordability.

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I'm actually not sure what effect this would on occupancy limit ordinances. If you want to propose an amendment that would clear that up, I'd probably be fine with it. But, converting single-family homes into multi-family homes is a creative solution to tough financial circumstances and lack of affordable units and that has the potential to help countless people. In addition to helping people generate new income and find cheap housing, getting rid of these regulations would also help prevent senior citizen homeowners from abandoning homes which have grown too large or expensive for their needs. I'm open to compromise, but key purpose of this clause (getting rid of ordinances that hurt homeowners and home searchers) is a must.

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I'm open to keeping minimum lot sizes, as long as they're kept below a certain level. If you can come up with a reasonable figure that won't force small housing providers out of the market, I would be willing to consider it.

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I see your point. Height limits are mainly a problem in urban areas, so we can amend the bill to only apply to municipalities.

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How to construction limits or fees promote growth? And yeah, the whole purpose of this bill is to prevent government from stifling growth, and therefore keeping prices high.

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http://en.wikipedia.org/wiki/Inclusionary_zoning

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Another good point. I will amend it to only include the portions of statutes that perform any fo the listed regulatory functions.
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Deus Naturae
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« Reply #9 on: April 19, 2014, 12:37:49 PM »

The opposite can also be true -- a community may not have many small businesses and has a high demand for a mega-store like Wal-Mart --then they can use zoning regulations to entice a mega-store to come to their community!
I hope you realize that the "enticement" you describe constitutes making it illegal to start or own a small business...
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sirnick
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« Reply #10 on: April 19, 2014, 12:41:30 PM »

The opposite can also be true -- a community may not have many small businesses and has a high demand for a mega-store like Wal-Mart --then they can use zoning regulations to entice a mega-store to come to their community!
I hope you realize that the "enticement" you describe constitutes making it illegal to start or own a small business...

Pick a synonym, you get what I mean.

Also, going to your point on inclusionary zoning (which you propose eliminating) -- here's what the link says that you provided:
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So, you propose eliminating a tool that many municipalities use beneficially! Look at the rest of that article especially in the "in practice" section.

You're taking tools out of the toolbox of municipalities, and if this bill passes it will be harder for those communities to fix problems.

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Deus Naturae
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« Reply #11 on: April 19, 2014, 02:54:52 PM »
« Edited: April 19, 2014, 05:25:40 PM by Rep. Deus »

The opposite can also be true -- a community may not have many small businesses and has a high demand for a mega-store like Wal-Mart --then they can use zoning regulations to entice a mega-store to come to their community!
I hope you realize that the "enticement" you describe constitutes making it illegal to start or own a small business...

Pick a synonym, you get what I mean.
So, you realize that these laws violently force small businesses out of the market in favor of large developers, yet you still support them?

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So, you propose eliminating a tool that many municipalities use beneficially! Look at the rest of that article especially in the "in practice" section.

You're taking tools out of the toolbox of municipalities, and if this bill passes it will be harder for those communities to fix problems.
[/quote]
Read the introduction further. For one thing, you'll see that it says that while political activists favor inclusionary zoning ordinances, economists tend to be opposed. Furthermore, it also says that these ordinances have been  enacted to counter "exclusionary zoning" ordinances. Go to the examples section of the page on exclusionary zoning, and you'll see that these practices mainly consist of supply restrictions and cost inflators, such as prohibitions against multi-family conversions, lot size requirements, and construction fees. Inclusionary zoning ordinances have mainly been enacted in response to exclusionary zoning practices, which you have also defended. You can't have it both ways.
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windjammer
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« Reply #12 on: April 19, 2014, 04:26:35 PM »

Sirnick, you're definitely a voice of reason in the Northeast, and you will be missed.
(Sorry for the intrusion)
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Deus Naturae
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« Reply #13 on: April 19, 2014, 11:22:32 PM »
« Edited: April 21, 2014, 06:17:34 PM by Rep. Deus »

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sirnick
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« Reply #14 on: April 20, 2014, 01:42:35 PM »

No, that Amendment still takes immense power away from communities. I feel like you don't understand the implications of taking tools away from these municipalities.
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Napoleon
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« Reply #15 on: April 20, 2014, 03:23:16 PM »

The bill as written is marginally effective at best. See clause 1. It prohibits the Assembly from passing a certain type of law. That doesn't really work.
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sirnick
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« Reply #16 on: April 20, 2014, 03:58:16 PM »

The bill as written is marginally effective at best. See clause 1. It prohibits the Assembly from passing a certain type of law. That doesn't really work.

It prohibits "The Regional government of the Northeast, as well as all State, municipal, and local governments."
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Deus Naturae
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« Reply #17 on: April 21, 2014, 04:21:16 PM »

Do any other Representatives have anything to say about this bill?
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cinyc
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« Reply #18 on: April 21, 2014, 06:10:11 PM »

I don't support this.  Nullifying most zoning regulations in one fell swoop is unfair to those who bought houses and property with expectations that they would not be living next to a ten story apartment building.  It isn't even phased in over time to make the transition a bit more feasible. 
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SWE
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« Reply #19 on: April 21, 2014, 06:12:29 PM »

I'm going to have to side with Sirnick here
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Deus Naturae
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« Reply #20 on: April 21, 2014, 06:18:46 PM »

How about this?

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sirnick
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« Reply #21 on: April 21, 2014, 08:04:46 PM »

How about this?

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Your new clause is even more restrictive than the first! Instead of eliminating all regulations on heights you eliminated all limitations (or fees) on the construction of buildings in general! That even eliminates fire and safety standards in construction! It even eliminates the prohibition of asbestos in construction!

And I still have problems with the Section 1 and all its other subsections! You have essentially addressed nothing. These are powers that municipalities need to keep people safe. Do you want asbestos in your home?
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cinyc
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« Reply #22 on: April 21, 2014, 08:05:35 PM »

Sorry.  I still can't support gutting zoning laws all at once.  Under your proposal, a neighbor can build up to the property line, blocking out the sunlight from side windows.  Under your proposal, a neighborhood of large lot homes could be subdivided into more dense housing without recourse for the people who thought they bought a large lot house in a large lot neigborhood.  It's too radical a change to happen all at once.
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sirnick
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« Reply #23 on: April 21, 2014, 08:06:16 PM »

Deus, how old are you? Because if you've ever rented a house, apartment (or bought one), these kinds of regulations are extremely useful to consumers and to businesses (no one wants to get sued after all).
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Deus Naturae
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« Reply #24 on: April 21, 2014, 08:14:21 PM »

Sirnick, calm down. First of all, I didn't even add a new clause. That's been there all along. I will gladly get rid of the word "limits." You make valuable points and I'm willing to consider them, but I wish you'd just stick to doing that instead of throwing a fit and launching ad hominem attacks
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