Who’s Responsible for the Housing Crisis?

Americans love local government. In a December 2023 Pew Research Center survey, 61 percent of respondents had a favorable view of their local government, whereas 77 percent had an unfavorable view of the federal government.

But behind this veneer of goodwill is a disturbing truth: Local government is driving a housing crisis that is raising rents, lowering economic mobility and productivity, and negatively impacting wages.

Today’s episode of Good on Paper is a little different from others. It features two guests, and it coincides with the release of On the Housing Crisis: Land, Development, Democracy, a collection of my reporting for The Atlantic chronicling the causes of the housing crisis and identifying the structural problems in local democracy at its root.

I’m joined by the Atlantic deputy executive editor Yoni Appelbaum and the Yale Law professor David Schleicher to discuss how American housing markets broke.

“The problem internal to local government is that we have very little capacity to control local government, particularly as local governments are bigger than the neighborhood or town size,” Schleicher explains. “And the basic reason is that we don’t know anything about it. If you ask yourself, dear listener, who serves on your county commission or who the local comptroller is, odds are, unless you’re a weirdo—possibly a weirdo who listens to this podcast—you have no idea.”

Listen to the conversation here:

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The following is a transcript of the episode:

[Music]

Jerusalem Demsas: The housing crisis is an economic, political, and democratic crisis that has spread from superstar cities like San Francisco and Boston to now impacting every state in the country.

Shelter is a fundamental need. But also, where you live determines so much—about whether or not you’ll go to a good school or go to college; about your health, since there’s so much local variation with things like air quality; even your wages. And on a larger scale, a broken housing market can undermine national GDP and labor productivity and has spawned a cost crisis in service industries like day care.

But on the most fundamental level, housing policy shapes the way your life works. If you can live near your family or friends, that changes whether you feel comfortable having a child or whether you’ll get support when you do. If you’re a senior and are no longer able to afford to stay in your community, you could have to prematurely move into an assisted-living home, cutting yourself off from younger generations.

Broken housing markets undermine communities. So why are housing markets broken?

[Music]

My name is Jerusalem Demsas. I’m a staff writer here at The Atlantic, and this is Good on Paper. Today, The Atlantic is publishing a series of my essays in a new collection called On the Housing Crisis: Land, Development, Democracy. And the core problem with American housing markets is that in highly productive cities with good jobs, we stopped building enough housing to accommodate new growth.

There’s a lot to unpack in that thesis, so before we dive into today’s conversation, I’m first joined by Atlantic deputy executive editor Yoni Appelbaum to talk a bit about my book. It’s incredibly timely because Yoni has just announced a book of his own called Stuck, which touches on a lot of the same themes.

After we talk, I’ll go deeper on the questions of local government’s culpability in creating the housing crisis, with Yale Law professor David Schleicher.

But first—Yoni, welcome to the show.

Yoni Appelbaum: Hey. It’s great to be with you.

Demsas: Yes. For listeners who aren’t aware, Yoni is the head of the Ideas, Politics, and Global section here at The Atlantic, so he is the head of my vertical. And even from the beginning of my work here at The Atlantic—which has culminated in me publishing this book of essays that’s coming out today—Yoni has been someone who’s cared a lot about this work. And we’ve talked all the time about housing, about mobility, about all these issues that have also been the center of his research and work.

You have a book that you just recently announced called Stuck. I would love to hear from you—how did you even start working on this sort of thing? How did you start thinking about housing and mobility? Why is that so central to your work?

Appelbaum: Yeah. I took it really personally. I was living in a wonderful city, Cambridge, Massachusetts, getting a doctorate in history, and started to realize that something had gone very badly wrong in that city, which for more than a hundred years had been an engine of mobility. Immigrants, migrants from elsewhere in the U.S. had arrived there, come to work in the factories, lifted themselves up, and their children had done better than they did.

And by the time I got to Cambridge, it was largely the preserve of professionals and others drawing very large salaries, and it was really hard to imagine that a new generation of immigrants—a new generation of working-class Americans—could use the wonderful resources of that city to lift themselves up. And, as a historian, when I find a problem, I go digging in the past to try to figure out where it came from.

Demsas: Yeah. I feel like there’s a couple of classic ways people get into housing. One is that they themselves are a yuppie, and they’re just like, Why is it so expensive to live in D.C. or San Francisco? And others are people who think a lot about economics and mobility. And, for me, I remember I lived in Williamsburg, Virginia, where I went to school at William and Mary, and there was this rule where you could not live with more than three unrelated people in the same house off campus.

And I vividly remember my friend who lived off campus—she was violating this rule in order to afford housing because the houses were too expensive for just three college students to afford. And they had this wire hanging from their bathroom ceiling, which was exposed and very clearly dangerous, but they were like, We can’t really complain about this to the landlord because, if we do, where are we going to live?

And of course, I’m not here to talk about the plight of just young, urban professionals and college students. But once you start seeing how so many of these local laws and exclusionary sorts of practices can really impact people on a day-to-day level in ways that, I think, are really hidden from view, it becomes something you just begin obsessing over. And I do think that the housing shortage has become really central. I wonder if you have thoughts on why that’s happening.

Appelbaum: It’s such an interesting question because the way you’ve split it, I think, is exactly right. Some people when they hear housing shortage, what they’re thinking is, Darn it. I can’t find the house I really want. I can’t afford to live in the neighborhood I want. And they’re worried about gentrification, or they’re worried about the affordability of their own home. But once you start digging at this a little bit, the other thing that becomes really, really clear is that the bigger problem is all the people who can’t live in that community to begin with.

And I think that one reason, maybe, that we’re all talking about this right now is a sense that people are not able to go to the places where the best economic opportunities lie, where they can have the kinds of communities they’re seeking out. They’re unseen. They’re the people who aren’t living next door. And the problem is that they’re not living next door. So that’s part of it.

But let me flip that around to you, Jerusalem, because you were out in Chicago recently at the DNC. And, at conventions, people often talk about polls. They talk about the various party functionaries. But at this DNC, everybody was talking about housing. Kamala Harris promises to end our housing shortage. Barack Obama, remarkably, came out as a YIMBY—

Demsas: (Laughs.)

Appelbaum: —in his speech and said that we need to clear away the outdated laws and regulations that are keeping housing from getting constructed. It’s like the Democrats decided to hold a book launch party in Chicago just for you. So what made everyone finally focus on this? Why is housing having its moment?

Demsas: Yes. I like to think they’ve just been studiously reading every article The Atlantic has published on this issue. But I actually think, really, what’s going on here is that the 2020–2021 home-price appreciation just forced the issue. Before then, this was something people have been talking about. Barack Obama—his Council of Economic Advisers had put out reports on the issue of low housing supply and exclusionary zoning and the impacts that that has on wages, on mobility, on economic opportunity, on GDP, on dynamism, a bunch of things.

It wasn’t that it wasn’t a known problem, but people still, at a political level, really conceived this as, Well, that’s New York’s problem. That’s Los Angeles’ problem. That’s Boston’s problem. That’s Seattle’s problem. They’re bad at governing. That’s their issue. And there’s a grain of truth to that. It is a worse crisis in these areas, but what you saw during the pandemic is that remote-work-induced demand really shifted the problem to secondary markets across the country.

Now it wasn’t just people in Los Angeles or superstar cities that I’ve mentioned who were feeling this pain. It was also people in Idaho, in Texas, in Florida, in Tennessee, in states where people were very used to—there’s expensive homes in parts of the state, but you can live near your job, and you can find a good house. You can find a home for $300,000 as someone who’s under 30 years old and has a decent wage. That really shifted in the pandemic, and it also happened super quickly. It happened so fast.

I remember stories of—there was a realtor in D.C. who had to hire a bouncer to stand outside a line of people who were looking at an open house in D.C. because it was just so chaotic. The shortage became undeniable to people because they were looking around and saying, Why is every single upper-middle-class person even incapable of finding a house where they want to live?

And I think for a lot of people who work in these places, they’re used to thinking of, There’s an affordable-housing crisis. There’s a crisis for people who are very poor, but there’s not a crisis for people like me, people like me with a good job. And I think that when that clicked for a lot of people, politicians also started to take notice. And, to me, that seems to be the central reason why we’re seeing housing become front and center. I don’t think it’s because there’s been some new research or some new breakthrough here. I think it’s largely just a question of how much the pain is being felt by working-class, middle-class, and now also upper-class Americans.

Appelbaum: Yeah. It’s remarkable. It’s become a national issue. But I want to read you something you wrote in your introduction because I think it gets at something really interesting here. You’re articulating a sense of crisis, that people can’t get in the places that they want, and usually that kind of thing prompts us to look for villains.

But you wrote that: “Americans are aware by now that the housing-affordability crisis is acute, but many don’t understand what’s causing it. All too often, explanations center around identifying a villain: Greedy developers, or private equity companies, or racist neighbors, or gentrifiers, or corrupt politicians. These stories are not always false, nor are these villains imaginary, but they don’t speak to root causes.”

So I want to ask you about that, actually. What’s wrong with blaming the villains?

Demsas: (Laughs.)

Appelbaum: Racist neighbors and price-fixing landlords—those sound like real problems. Let’s blame them.

Demsas: Yes. But I think that the fact of the matter is that a housing shortage means that someone’s going to miss out on housing in the place where they need it. What we see over the last—since, like, 1970—is the ratio of jobs being created in the most productive parts of the country not match up to the homes that are being created.

That means you come out of college, or you’re someone who wants to move to get better wages—as a service worker, whether you’re working in restaurants, or you’re working as a taxi driver, or you’re a lawyer, or you’re a nurse—and you want to move to get better wages in New York City or in the big city in your state. It used to be that that’s a great deal, right? You make a lot more money and, yeah, you pay a little bit more in cost of living—your rent’s a little higher—but the deal works out. And now what we’re seeing is that that’s no longer the case.

And I think that this focus on villains is something that people really gravitate towards because it’s an easier frame for thinking about the political problem—like, We just need to find the best housing cops, and we need the lawyers to get in charge and finally root out these bad people. And structural explanations are just so much less satisfying. Yes, there are bad people, but they’re not actually at the root of what’s causing you pain. And the solutions are not going to be as satisfying as finding these villains and getting them out. It’s going to be, Yeah. We need to make broadscale changes to how we do development in this country to make it easier to build more housing so that it becomes more affordable.

And that doesn’t mean that I know—when a new development goes up, I don’t know exactly who that’s helping. It’s not a situation where a politician can say, Because of me, you will have a house, Jerusalem Demsas, in Chevy Chase, Maryland, where you want to send your kids one day to school. What they’re going to say is, More people, on average, will be able to afford housing in the places where they need it. And, from a political level and also from a constituent level, that’s just a really unsatisfying way to do politics. And so I think that we see—on both the left and this right—just this obsession with the villain narrative, and I think it doesn’t really get us where we need to go.

Appelbaum: What I hear you describing is a game of musical chairs, where we all want to blame the jerk who just took the chair we were about to sit down in, and we’re not paying attention to the fact that people aren’t setting up enough chairs.

Demsas: Yes.

Appelbaum: So let’s talk about that. Why aren’t we setting up more chairs? It’s an economics question. Usually, when there’s a lot of people who have access to a lot of money, who want things, the market provides them. And that’s the really interesting question here, right? If so many people want to buy homes, why aren’t builders building them? Why aren’t those homes available?

Demsas: Yes. Funny thing about the musical-chairs example is that that analogy is literally what housing-policy researchers use all the time to explain the homelessness crisis: Yes. There’s a case that there are people who are—if you’re watching a game of musical chairs—maybe the kid who wins is faster and stronger.

And maybe they’re more gregarious or more willing to jokingly pull a chair away from someone else. But at the end of the day, the reason why not everyone has chairs is because we’ve removed a chair from the game. That’s exactly what’s going on here.

And the reason for this, I think, is often counterintuitive to people because people really love local government, and they feel like local government—which controls housing policy in this country—is often acting in their interests and is closer to the people. But what’s happening is that there’s actually a lot of interests that are arrayed against development.

In the aftermath of the post-World War II building boom, people became very uncomfortable with what happened when we allow for lots of development really quickly. Some of these were reasonable. Some of these were environmental harms that were occurring as a result of development. Some of these were people using the language of environmentalism to cover over their discomfort with change, in general. I like to say that the last house anyone wants built is the one that they bought. (Laughs.)

And so I think that change and that fear and that rapid amount of change that we witnessed in the post-World War II era led to a bunch of new regulations really being inculcated—and norms being inculcated—in our development process. Now instead of by-right development—which means, you know, there are rules to the road. There have to be safety standards. There are reasonable things you have to do as a developer to build houses. But as long as you’re checking all those boxes, you can go ahead and build—we created all of these veto points for people to be able to say, Well, did you make sure that you’re not violating any historical-preservation guidelines? Did you make sure that you are checking with every single person on the block to make sure that they’re happy with this new development?

And some of these people might hear and say that that’s a reasonable thing for a developer to do. But you have to balance that against: If you create a process that’s so onerous for people that they can’t actually get enough building done, the cost of that means there are higher housing costs. And we might want to pay some of them. Maybe people are willing to pay $5,000 more for a house if that means that they know that they’re not going to impede on the local watershed, or there’s going to be an endangered bird that they’re worried about. They want to make sure that they’re not building taller and impeding the migratory patterns of those birds.

But are you willing to pay $50,000 to make sure that everyone’s window facades are the same like they were in 1850? Are you willing to pay $100,000? And I think that for a lot of us, we’re not actually seeing how much this trade-off is being made without our consent. These trade-offs are being made in rooms that many of us are not in.

Appelbaum: Yeah. Let me ask you about that. Because going after local government is a little bit like renouncing Mom and apple pie. It’s the Rockwell painting of the town meeting. It’s the Tocqueville to direct democracy. This is something Americans care passionately about, that we govern our own communities. So what’s wrong with local government? Why wouldn’t you want communities to determine their own fates?

Demsas: Loaded questions. First, there are many liberal reformers in the 20th century who were critiquing local government for a long time. While we now have memory-holed a lot of the critiques of local government, if you just think back to the struggles of the civil-rights movement, it was requests at the local level for the federal government to come in and override exclusionary and racist and unjust practices happening at the behest of local governments. It was explicitly a federalist and centralizing project pushing back against the domination of local power. And so now that we are in this era of backlash against development, we developed a lot of ideas around local government always having been this bastion of good and goodwill. But it really depends what local government is doing.

And so, to me, there’s a structural problem that’s happened when people have become less and less interested in local government as political animals themselves. There was a time where people really cared about their local government. They saw their identities as political animals as being local, but that doesn’t exist anymore. People think of themselves as national political figures. They think of themselves as Americans much more than they identify with a specific county. And even if they have local and state community commitments, they don’t line up with jurisdictional boundaries, right?

If you think about your own life, when you take your kids to school or you go to the café or you go to work, you’re crossing dozens of invisible lines all the time that are actually really politically relevant. The reason why this matters is—our Democracy 101 understanding of how democracy should work is that you vote for things you like, and you vote for people you like, and then if they do well, you keep voting for them. And they understand that, and so they keep doing the things you like, and that leads you to better policies and better outcomes. This obviously is not perfect, because how do those signals actually work? Are people understanding why they’re being voted into office? Is everyone voting for the same reasons? It becomes very murky.

At the local level, first of all, most people aren’t voting. If they are voting, they often aren’t actually informed about what’s going on. Even if they are extremely informed, it’s impossible to get some of the information necessary because there either isn’t local media or the types of things you would need to know are so opaque. Like, who’s going to report on whether a zoning board or a historic-preservation board is responsible for antidevelopment. All of these layers of things make it impossible for anyone to hold local government accountable, and it becomes captured by other interests.

Appelbaum: This is one of the great counterintuitive things about the argument you’re making, and it runs through a lot of the essays in this collection, I think, too.

It’s that you might think that an argument against local government was an argument that was skeptical of democracy—that wanted more bureaucratic decision making—but you’re actually making an argument for democracy. You’re saying, Put the decision-making authority in the hands of governments at a level at which voters are actually engaged. Put them in the hands of the politicians who voters are likely to hold accountable. Get those decisions made by people who then have to face voters, face media scrutiny. And with that kind of democratic accountability, we’ll get more equitable decisions. We’ll get a different kind of public process.

Demsas: Yes, exactly. And it can be difficult because, I think, many people have really internalized the sense that democracy is this participatory type of democracy—it means you go to these meetings, and you go to these protests, and you engage in this way. And that stuff is part of democracy; it’s not irrelevant. The question is: Do people actually engage in that way? And also, fundamentally, the most important part of democracy is: Are people voting at that level?

And so I think the really core question here is: How can we align our democratic institutions with the way that people actually think of themselves and behave in politics today, instead of constantly scolding them for not engaging in local politics?

But I, obviously, could talk about this for an hour and do a full episode with you, but I want to thank you for coming on the show. This has been a really great conversation, and it’s a snippet of the thousands that we’ve already had. And I’m excited to have you back when your book comes out.

Appelbaum: Well, it’s been a pleasure talking to you. I don’t think we solved the housing crisis in 15 minutes, but we gave it a good shot.

Demsas: Yes, we did.

[Music]

Demsas: We’re going to take a quick break. When we get back, we’re going to be talking to David Schleicher, who is a Yale Law professor, about how local governments are at the root of the housing crisis.

[Break]

Demsas: David, welcome to the show.

David Schleicher: Thanks so much for having me. And congratulations on the book.

Demsas: Thank you. Yes, I feel like my journey with the work that I’m writing about now really began with an article I read of yours when I was in college. So it’s exciting to have you on the show.

Schleicher: It’s literally something that couldn’t warm an academic’s heart more. It’s the best, so I very much appreciate it.

Demsas: Yeah. Well, that’s where I want to start because I feel it really kicked off my journey on thinking about the issues of local government and housing. So in 2017, you published an article called, “Stuck! The Law and Economics of Residential Stagnation.” I’m hoping you can just tell us about it. What was that paper doing? What’s the argument it’s making?

Schleicher: The argument that paper is making is it’s discussing the decline in interstate mobility in the country. And the claim in the paper is that we—through a variety of policy tools—have limited our ability to move around the country. And this has had pretty pernicious economic and, perhaps, social effects. I focus on the economic effects.

The obvious one effect is that by failing to move to opportunity, we limit the size of our economy. We limit the benefits we get from what economists call agglomeration economies, which are the benefits of colocation. Our booms no longer create boom towns. If you look back at booms of the past, Chicago grew exponentially around the turn of the last century, but Silicon Valley barely grows during the period of its economic ascendancy.

There are other negative effects, as well. It has a negative effect on our macroeconomic management, which is something people don’t focus on. But it’s true that mobility is central to the degree to which the dollar is an optimal currency area. But the broad idea is, Well, what is it that we’ve done? It’s a whole variety of things, but a lot of them are the way in which local and state regulations make it harder to move to opportunity.

Demsas: People think of America, largely, as a very mobile country. People are moving a lot. Of course, we just think about our history in this way as people—the obviously violent history of settling the West, and people moving around a lot even in between that. And the size of the country really means that when there’s a boom, there’s a ton of diversification happening. A boom in Chicago means that you can go there and leave a bust that’s happening to you in California, or whatever it is.

And your paper really tries to drill down onto why we stopped moving so much. So the one I want to focus on is the policies that are happening at the local level when it comes to housing. What changed to make us less moving when it comes to housing regulation?

Schleicher: Basically, they got a lot stricter. It’s traditional ones, the ones that we’re going to talk about most—things like zoning and historic preservation, subdivision requirements, building codes. But it’s actually true across the entirety of property law, but it just got a lot stricter around the 1970s and ’80s.

And what’s interesting is that prior to that period, there were a lot of complaining about zoning. There’s a famous quote from a writer about zoning, Richard Babcock, who said of academic criticism of zoning, Zoning is unpopular with everyone but the people.

Demsas: (Laughs.)

Schleicher: And there was a lot of criticism, mostly about the way rich towns used zoning to keep others out and hoard local tax dollars. But there was a broadside belief that there was no way that local regulations would have an effect on regional housing markets. And the idea behind this was that there would always be, on one side, an exurban fringe to which you could just build further and further, more and more sprawl.

Demsas: So you can just sprawl, yeah.

Schleicher: And the second thing was that cities were going to be controlled by what they understood as growth-machine coalitions. And growth-machine coalitions were combinations of businesses and unions and a few other interests who would dominate big-city politics and produce an insatiable demand for growth.

The idea, though, was that while rich towns may exclude, there would never be any effect on regional housing markets. And starting in the ’70s and ’80s, this just stopped being true. We hit limits on exurban fringe. There were pro-growth suburbs, and they cease being pro-growth. There are violent political fights in some of the few pro-growth suburbs. And cities go from being places where building is easy to being places where building is, well, not easy. And the effect of all of this, together, is that it limits the rate of growth of housing.

Demsas: It’s funny because when I first started thinking about this problem, it was very narrowly focused on, Okay. These zoning regulations are really bad. There are specific things we should change. It feels like there are bad people who are attempting to block housing because they have views that I find objectionable. Over time, I realized how much this was really, actually, a critique of local government. Because local government is where all of this action is happening. It’s at the local level where these zoning decisions are made, where people are coming and demanding that their government block or delay new development.

And so I think it’s really counterintuitive because, for a lot of people, they have this sense that their local government is really good, that it’s very democratically responsive, that it is the place where you can set aside partisan politics. When you look at polling around how satisfied people are with their local, state, or federal government, you consistently see people are happier with their local government. But then when you ask them about specific policy areas that their local government has huge amounts of influence over—like housing, like policing—they’re very unhappy but don’t seem to be blaming the appropriate apparatuses for that.

And so I just want to get a sense from you, top level here, what is the problem with local government? What’s going wrong? What’s happening there?

Schleicher: It’s just like asking, What’s your life about?

Demsas: Exactly. What is your life about, David? (Laughs.)

Schleicher: It’s a great question. What is my life about? Liverpool Football Club, mostly. No.

There are two types of problems we might discuss when we discuss the problem of local government: One is internal to local government, and the other one is external or between local governments. The problem internal to local government is that we have very little capacity to control local government, particularly as local governments are bigger than the neighborhood or town size. And the basic reason is that we don’t know anything about it.

If you ask yourself, dear listener, who serves on your county commission or who the local comptroller is, odds are, unless you’re a weirdo—possibly a weirdo who listens to this podcast—you have no idea. That’s the normal thing to have, is to have no idea. And, of course, we don’t have great ideas about most politicians. There’s a lot of ignorance about politicians, but at the national level, we’re given tools to help us. That is to say, because if we can follow, give or take, what Democrats and Republicans believe or how they’ve performed over time, the actual differences between this or that candidate for House or Senate are pretty small as long as you can develop what political scientist Morris Fiorina called a running tally of beliefs about the parties.

But when you’re voting for city council, you just don’t have great tools. A lot of local elections are formally nonpartisan. It’s very hard to track who’s in what coalition. It’s very hard to assign responsibility, across officials, for things. It’s just very hard. The informational universe is difficult. And, as a result, the people who do know things about local politics dominate.

And so you can see this in local homeowner groups. Likelihood of voting is much higher among homeowners—older, white, or richer, but homeowner is actually the biggest factor. Likelihood of participation is much higher among homeowners, as well, but also traditional interest groups: your public-employee unions or your corporate-interest groups that are trying to influence politics. And so local politics has a large information problem, particularly in your big cities and counties and such.

Demsas: Local governments are places where we have very little information. But about who these people are—what they’re actually doing, what they’re responsible for—we don’t have even partisan information that helps us distinguish whether someone is likely to be more liberal or conservative on our issues, even if there is some partisan idea at the local level. Given that a lot of local areas are one-party rule, you end up not really even being able to distinguish, then, between candidates. And the result of that is that, because you have so little information, very few people are actually engaged or voting—not only because of that, but people are very unengaged in local government. And, as a result, you get a ton of interest-group capture.

So if you are a homeowner’s group, like you said, but also—Sarah Anzia is a political scientist at Berkeley. She has a book called Local Interest where she tries to document how involved different kinds of interest groups actually are in local government and the effect of that behavior. Because it’s possible that you have a bunch of local-interest groups happening—which you do in state government and national government and every single democratic government—and they’re not that influential.

What she finds is they actually are very influential. Cities with politically active police unions are less likely to have adopted body cameras. In cities with strong environmental groups, you’re less likely to favor policies conducive to economic growth. In school districts where teachers’ unions are dominant, jurisdictions that have off-cycle elections pay experienced teachers more.

And so what you have here is the story where voters have left a vacuum of who is holding government accountable, and into that vacuum has come all of these interest groups that, whether or not you agree with them—maybe you think the teachers’ unions are good, or maybe you think the police unions are good, whatever—they’re the ones, actually, really directing policy because they have entrenched, specific interests in what the government’s doing. And the rest of us—it’s just too much work. And even if you were to do all of that work, the benefit to you as an individual is pretty small, unless you are concerned about specific development in your area, and then you’ll get involved through that way.

Schleicher: So Rick Hills and I call this the lack of mass politics, that there’s no ability to have your ordinary, knee-jerk-type voter response: Taxes are too high. Crime is bad. I’d like the economy to grow. It’s really straightforward stuff. It’s very hard for that type of ordinary preference to reflect itself in local politics because you have to assign responsibility to someone, and the people with the ability to do that are just somewhat limited in the informational universe of local politics.

And, obviously, of course, this is getting worse with the decline of local media. So when a newspaper goes out of business, local borrowing costs go up because people just assume the local government’s going to be a little more corrupt. Split-ticket voting goes down. And it can be things like something that just happened—like The New York Times declaring that it’s no longer going to do candidate endorsements in New York City elections—that have the effect of making it hard for voters to identify anything about politicians.

Now, lots of voters, with respect to The New York Times, listen to them, and other voters went the other way and said, The New York Times likes them? I hate them. And both of those improve the voter information and give ordinary voters with ordinary opinions a capacity to be involved in politics, in a way that becomes harder in a less information-rich universe.

Demsas: We’ve hinted at a few problems here in local government: One is this lack of voter engagement, and the second is this prevalence, in response, of all of these interest groups coming in, and—outside of the normal democratic process, outside of the voter accountability—they themselves get their interests met.

There’s a third one, which you’ve referenced before, but I want to get into it, which is this representational problem about who ends up showing up. Because, in some way, theoretically, it wouldn’t really matter if very few people are voting if the people who do vote are representative of the broader community. If you get 10 people voting in a 100-person jurisdiction, but those 10 are perfectly representative of everyone else, then you end up getting reasonably democratic.

Schleicher: Like a jury.

Demsas: Yes, exactly. But that’s not what we find. Neighborhood Defenders is a book by some Boston University scholars, and they look at zoning and planning meetings across Massachusetts, and they find that—as you said—meeting participants are 25 percentage points more likely to be homeowners and were significantly older, more likely to be male and whiter than their communities.

As a result, you see policy really skewed in that direction. And I think that this is probably one of the biggest problems in local government, is that the people who do show up are vastly different than the average person, and it really skews what policies end up getting pushed.

Schleicher: Yeah. And it also turns big cities into collections of small neighborhoods. One of the classic political-science findings is that parties limit pork-barrel spending. And the way the argument goes is that if you are trying to make your party popular at the national level, you have to propose things that are popular everywhere, and you can’t just give projects to districts or whatever. You have to come up with policies that will be broadly popular.

In the absence of party competition, you end up in what Barry Weingast calls distributive-politics norms. Every legislature has an interest in getting things in their own district but not necessarily in jurisdiction-wide benefits, like lower taxes or the best project or whatever. In land use, this is a really prevalent problem. We call this aldermanic or councilmanic privilege—that often, zoning changes are, in practice, made by the council member or alderman who represents that district or ward.

Demsas: Basically, everyone wants to have a veto in their own neighborhood.

And in order to make sure that no one forces you to build something in yours, you’ll just let everyone be like, Okay. Well, if the alderman or the council member disagrees, then we just are all going to vote against it. So it’s not really a democratic decision; it’s just devolving down.

Schleicher: It’s just democratic at the neighborhood level—or that itself is democratic. But the effect of this is that, while Greenwich Village is part of New York City, and Greenwich, Connecticut, is its own town, in practice, the homeowners in Greenwich Village have as much of a veto over development as the homeowners in Greenwich, Connecticut.

Demsas: So there’s this question, then, about how individual people view themselves as political animals, right? Individual people used to have a very close connection with local politics and thought about themselves as animals of their town or even their county, in some cases. But, in general, not anymore. People just don’t actually think about local governments or local politics as a way that they construct their own political identity. They’re much more national political animals.

And that’s a problem that more information can’t solve. That’s a problem that five x’ing, 10 x’ing local media doesn’t solve. It doesn’t solve that, even if you get everyone to come out to vote, yes, you get relatively better outcomes if more people were to vote, but, in general, if you can’t actually get the relevant populations—if you live outside Greenwich, Connecticut, but it really matters what happens to you in Greenwich, Connecticut, for your life outcomes—that’s still a problem. And so I still think you can’t resolve most of these problems tinkering at the corners of what’s being done at the local level. You have to actually move things more centrally because you have people who care about you in every jurisdiction when you move to the state level.

Schleicher: I don’t want to push this too hard but, again, one of the things that you have seen across American history is we’ve had periods where local political participation was people’s dominant political identities. And you had periods when local governments played quite central roles, and they were quite pro-growth.

If you think about party machines, people were unhappy about them. They’re corrupt. But the political system they created—both between them and their opponents—forced people to make citywide promises. And so, again, this is what people in law school called resisting the hypo, but it is the case that we could improve local politics, and it would be good, but it would never address the intercity problem.

And it also might not address what I think you’re identifying, which is: The way people might approach problems differs based on who they’re talking to. That is to say, when you put yourself in the mind frame of local, you are trying to avoid harms to your property values, or you’re trying to keep your community or whatever, but, at the same time, the same person can hold the preference that we need to break down housing limits generally.

So the wonderful story in the book—an article you did on Marc Andreessen—captures this distinction quite clearly, which is that you can be really angry and protective about your neighborhood but also understand that local protection is bad.

Demsas: Yeah. So Marc—he’s the billionaire venture capitalist of Andreessen Horowitz, and he’s been someone who has very vocally been in favor of ending these sorts of protectionist regimes. He thinks that we should build more housing. He thinks it needs to be easier for us to build and be more dynamic, new companies, things like that. And then when it came to his very, very exclusive community in Atherton, California—at one point was called the most expensive zip code in America—he and his wife apparently signed a public comment, which opposed allowing a few more townhomes to exist in their area.

And so I think this is a really interesting part of this problem, and I want to talk to you about how NIMBYs—or Not-In-My-Backyard types—figure into this. Because when you think about Marc Andreessen’s story, I don’t think he’s lying. I mean, I don’t have any sense of what he fully believes inside of his own mind, but my view of him—

Schleicher: He blocked you. You would never know.

Demsas: Yeah. He blocked me after I wrote my story. But when he was writing about how we need to make it easier to build, I don’t think that was completely insincere. I just think that when you ask people questions about politics at different levels of government, they answer with different parts of themselves and with different sorts of concerns.

But I think, in general, because it’s very interesting—stories about NIMBYs—people like to hear about these hypocritical stories, whether it’s about Marc Andreessen or it’s about liberal homeowners in progressive areas who vote blue up and down the ticket but then say, No. I don’t want people of a different class or a different type of home to live near me, because it’ll ruin the vibe of my neighborhood. There’s a lot of focus on NIMBYs as a result of this. But I wonder, how much do you blame these individual people for the ensuing housing crisis that happens when we don’t build enough housing?

Schleicher: I think it’s perfectly fine to blame them some. That is to say, we can ask people to refer to the better angels of their nature, or whatever. But that’s not effective politics to say, Be more generous. Maybe you can imagine situations in which it would work and situations where social pressure would force people to kind of behave in different ways but, broadly speaking, to my mind, the bigger problem is not incorporating the other voices.

That is to say, one of the things about the growth machine was the growth machine brought together a series of interests that we have as a society—in employment, in public employment, in private employment, in growth. And if politics gets made at a level at which those interests can represent themselves or have an incentive to represent themselves, then the outcomes will be more pro-growth. And the great trick of the 1970s and ’80s was not only changing the engaging in downzoning or limiting growth, limiting housing at that moment, but was changing the process through which decisions were made in a way that disabled these pro-growth coalitions.

And so the great project of people interested in growth—we all say “abundance” nowadays—the problem that these groups face is that the venues in which politics takes place, whether it’s in courts, in individual zoning decisions, amendments, are not hospitable to abundance-like interests. And that can be true at the level of the interest groups arrayed, but also, as you say, at the level of abstraction at which you ask people questions.

Demsas: It’s interesting, too, because there’s a level at which, when we talk about this, people might say, Maybe there’s a growth cost happening, or, There’s some kind of economic cost happening. But if it’s democratic, it’s democratic, right? And so a lot of people, when they tell these stories about opposition to new housing, it’s very easy for someone to claim the mantle of the community. It’s very easy for someone to say, I’m opposing the developer. You read news stories about new housing being proposed and it says, Well, the community came out and said they didn’t like this, or, They didn’t like this project. They don’t want it to happen. There’s community opposition.

And so, I find it really bizarre how reporters will take these claims at face value often. I don’t think it’s even just reporters. I think we have a general sense that if a few people show up and say they’re upset about something, regardless of what their personal motives are or desires are, they get to say they represent this group of people, even if it is significantly more vast or they have no democratic control over it.

When you’re thinking about these processes, it’s also how people believe who gets to speak for a community. And if a local government official believes, Oh, the community doesn’t like this project, it matters what the process is but, in many ways, they will do whatever they can—they will pull whatever lever they can—to delay or block that from happening.

Schleicher: We have that problem at the national level on some levels, too, which is that we have something that people in D.C. call the groups. And what are the groups? Well, they’re interest groups or nonprofit groups that declare themselves representative of groups of people. Sometimes they’re membership organizations, but often they’re not. They’re a group interested in something, and the question of how to attribute responsibility or who is authentically speaking for a group of people is tricky.

The normal way we do it is through elections. But a system of participation or lobbying doesn’t happen through elections; it happens in between elections. And the result is that if you want community input, whatever that means in this context, you have to decide on who gets to represent the community and come up with a method for representing them. And so it is an endemic problem of non-electoral politics that seeks some kind of representation.

You could imagine tools for doing so. You could have polls. You could have juries. You could do all sorts of things in order to get community, but the one we’ve settled on is to allow self-appointed groups to declare their—or, ultimately, whoever shows up at the meeting. And if it turned out that they were, somehow, by magic, representative of the broader population that we cared about, well, that’d be fine. But there’s no reason to believe that it is.

Demsas: One problem that we haven’t talked about with local government is this problem of too much government. The U.S. is pretty unique—

Schleicher: Too many governments, I guess.

Demsas: Too many governments. Yes. Too many governments.

The U.S. is relatively unique in that we have 90,000 overlapping jurisdictions that range from school boards to towns to counties. And part of the problem here is that even if you are—

Schleicher: You didn’t even get into the weird ones—mosquito districts.

Demsas: Water zones. Exactly.

And I think that one of the big problems with local government is that even if you were someone who was very, very committed to learning a lot about your local government—you cared a lot, and you tried to figure it out—for some things, it’s nearly impossible to figure out who’s really responsible for a specific policy problem.

This is a big problem when we talk about transit. We talk about who is responsible for delays in getting a new station built. And there’s multiple different jurisdictions that are responsible for allowing for right of way in some places or that you need to get an okay from in order to do something. I wonder how much of that growth is attributable to this anti-growth coalition that built the 1970s or where it comes from.

Schleicher: Yeah. We’ve had—up through not the most recent period, but through a long period of time—a rise in special districts. And it’s driven by a number of forces, not all of which have something to do with the particular anti-growth coalitions. Often, one of the things that drives it is, oddly, debt limits. So we limit how much a government can borrow, but if we create a new government, it suddenly isn’t governed by those borrowing limits.

And so even though it represents the same people, it’s governed by different legal limits, and so that explains a good bit of the rise of public authorities—also, the somewhat reasonable desire to represent people in different capacities. That is to say, some people might want a mosquito-control district, and other people who are in the same county might not want one, and so creating a government that provides that service and taxes them for it provides some degree of sense.

A couple of things about this that might be helpful here: One is that the desire to create them and the idea that they continue producing benefits are not the same thing. So we can have a moment when we’re like, We all want to control mosquitoes in our area. We have low-lying water. The upland doesn’t, so they don’t need to be part of this government. But, as time goes by, preferences can change, and governments very, very rarely go out of business. And so we end up with these—lots and lots and lots. So if you are in Illinois, you’re frequently paying property taxes to 10, 13 governments. It’s a wild thing.

Secondly, this magnifies the information costs. If you have to vote, when you vote in America, you vote for a million things. And it’s really hard to know what to do. It’s just hard, right? It’s just informationally burdensome. And the odd idea of having more elections can reduce democratic responsiveness.

The final thing is that there were institutions that coordinated these things. So if you think about the Daley machine in Chicago: Chicago has lots of governments, but the old Daley was the mayor, and his brother was at the county, and the existent—

Demsas: Not great.

Schleicher: It’s got problems, but it does create a way to coordinate between all of these governments and allow for policy tradeoffs between them. And one of the really pernicious things about having so many local governments is that there are nice policy tradeoffs you could make, but you can’t if they’re separate entities that are rivals with one another.

So there’s a lot of evidence that crime by schoolkids happens mostly between 3 and 5 o’clock. School ends. Parents aren’t home. You’d think that a jurisdiction that was concerned about crime would think of this policy tool of pushing the school day back. But what interest does the school district have in that? None. Because no one doesn’t vote for someone for school district, if they even know the election is happening, because of crime happening somewhere else.

That would be a weird allocation of responsibility. And this can get really, really, really pernicious in fiscal crises. So we can have situations where we have the same voters represented by different governments fighting for scarce resources. When the city of Detroit went bankrupt, the school district ended up getting a bailout from the state. And this ended up with these really weird outcomes: So police officers’ pensions were cut, but teachers’ pensions weren’t. They were both promises made by the people of Detroit to public servants. But we end up with these differing outcomes based on the weirdness of multilevel government.

Demsas: And I think that the accountability problem you’re drawing out there is super important, right? Because if you are someone who’s concerned about crime or about education, it’s actually not clear how you would vote, even with perfect information, in order to incentivize your elected officials to do better. Normally, our very Democracy 101 sense of government is voters vote, and if things go well, they want to vote for that person again, or they vote against that person. It obviously gets more complicated than this—both because who you’re holding accountable for what becomes very difficult and, also, that signal is not super clear. Is it communicated perfectly? Does the mayor understand that they lost, and does everyone understand that the mayor lost for a reason that the democratic public was voting against them?

But it becomes even more complicated when you have all of these different levels of government where they’re all, maybe, a little bit responsible for different parts of the problem, and there’s no central person to blame or not. You reference this in the political-science literature before, but there’s some evidence that voters will vote against their governor or even their mayor sometimes if things are bad with the economy. It’s not the strongest of evidence, but we don’t have any evidence that people are voting against their zoning boards or voting against their school boards if things are really bad there, and so—

Schleicher: And power—not only is it divided between multiple governments, but it’s divided internal to those governments because the executive branch isn’t one thing, but it’s many elected officials. So if you’re concerned about crime in a county, even if you have a strong county executive who has some policing authority, like, Do I blame them or do I blame the district attorney? I don’t know, you know?

One of the ironies about the way we divide power in America is that we have a unitary executive at the federal level, where people might have reasons for wanting capacity to monitor difference, so you could understand a world in which there’s a voter who wants to vote for Donald Trump but for a Democratic attorney general as a check. But the idea that people are able to do that at all levels of government is just a wild, wild, crazy belief.

And there are historical reasons for it. Some of them date back to the Jacksonian era. Some of them date back to the Progressive era. But it just does not fit our modern informational roles and voter-capacity abilities.

Demsas: And the problems that we’re laying out here really are the core of why you and I have argued for greater centralization of political authority, whether it’s towards mayors or towards governors or away from local governments, towards state level, and simplifying the number of governments that actually exist so there can be clearer signals sent.

But I was thinking back to 2017, when people really thought, even as late as then, that the dynamics we’re describing here of NIMBY control at the local level—of all these overlapping government bodies; of this shift in ideology that preferences making sure that local harms aren’t happening; all these veto points that we see, whether it’s through environmental legislation or other things, that are preventing things from happening, whether it’s new housing from being built or transit from being built or wind projects from being built—these dynamics were so strong that we just were not going to make any real change here.

You weren’t going to be able to get the centralization, because the power of these local groups had become so entrenched, and it was very difficult to build a political coalition to respond to that. In recent years, there’s been some activity on these issues. Particularly on housing, you’ve seen—in places like California, in Washington, in Montana, in Texas—action by state governments to say, Okay. The housing crisis has gotten really bad. We’re frustrated by the fact that this is not actually being resolved by local governments, and we’re going to take away power, or we’re going to set limits on what they’re able to do to block new housing. Were you surprised by this development?

Schleicher: It surprised—you know, you’re in this business, so you’re a little involved—but I was encouraged by it, I guess is the way I’d put it.

Demsas: Were you expecting it?

Schleicher: No. When I first started out writing about land use, it was writing about the fall. And, of course, there’s variation in the country, and so you can point to the way different things happen in different places. But the rise of these groups is really notable. Particularly, there’s a couple of things that are really notable. One is that it must be the dorkiest activist group in history.

Demsas: Who? The YIMBYs?

Schleicher: The YIMBYs. Oh my God, yeah. One of the stories in Conor Dougherty’s book about the rise of the YIMBYs is this dramatic activist figure reading a paper by Enrico Moretti, the economist at Berkeley, and wanting to talk to him. This is, by the way—it’s an activist group that academics love. Like, Oh my God, they’re driven by an academic paper. This is the best.

But I guess what I’d say is that I am heartily encouraged by the development of these groups and that in California, one thing that you’ve seen is that individual policy change in this area rarely gets the job done. Before the rise of YIMBYs, there was a bill to force local governments to allow the building of accessory-dwelling units.

Demsas: These are mother-in-law suites or turning your garage into an apartment—like a small accessory dwelling on your property.

Schleicher: Yeah. A casita, as some people there say. The bill didn’t do anything. So they said, Local governments, you must allow these to be built. And local governments responded by saying, Yes. We’ll allow them to be built, but they have to each have 11 parking spaces, or they have to have sewer hookup fees that cost a gazillion-trillion dollars.

Demsas: Yeah.

Schleicher: And it took many, many, many laws being passed, playing Whac-a-Mole with local opposition, to overcome this problem, and now we see that there has been a huge growth in accessory-dwelling units. It’s one good housing story out of California.

And one of the things that’s encouraging about the rise of these groups is that they are institutionalizing themselves. They have lobbyists. They have officers. They have membership. And this gives them the ability to have multiple bites at the apple, rather than a freak occurrence happening and winning a particular election. That’s the positive story.

The negative story about them is that there hasn’t been that much housing growth. Now, it takes time. The development process takes time, so I think that many of the reforms they’ve gotten through the legislature will bear fruit. But one of the challenges is that, in order to get things through, they’ve had to make lots of compromises.

And one of the challenges that is out there is what Ezra Klein calls the everything-bagel problem—that in order to get these housing-supply increases through, they’ve had to make promises to a whole variety of groups. And it’s unclear whether that’s a requirement to build affordable housing, subsidized housing, in addition to market-rate housing; whether it’s labor requirements to use union labor or whatever else when building it; and a whole variety of other things. And one of the questions that is out there is whether these restrictions are just so high that no one will ever be able to build the everything bagel and now weigh down the actual benefits from building, and that, despite these policy gains, we won’t see a lot of housing.

Demsas: Well, we’ve covered a lot of ground here, but I wanted to always ask our final question, which is: What’s something you thought was a great idea at first but ended up only being good on paper?

Schleicher: There’s so many things. I’m a pretty liberal guy, and if you’d asked me a number of years ago whether it was a good idea to legalize sports gambling or to legalize marijuana, I would have said absolutely. I would have assumed, prior to that—because I’m a student of Mark Kleiman—that the result of this would have been that things get legalized, but there are high taxes on them. And the benefit of putting high taxes on these things is that it reduces the harms, the internalized harms to super users. That is, if you put heavy, heavy taxes on marijuana, it’s just very hard for people to smoke all day because they just literally run out of money.

But what we’ve seen in both sports gambling and in marijuana is that we liberalized, but we didn’t strongly regulate or didn’t strongly tax. And the result has been real social harms. There’s just a bunch of papers coming out about legalization of sports gambling, and it’s causing a lot of problems. I like sports gambling. I don’t think I have a problem. My wife may disagree about when I’m focused on it too much. But it’s creating real social problems because, among super users, it can really create financial problems for them.

And similarly with marijuana, we’ve seen a real rise in problem smokers. And so I guess what I’d say is that I misunderstood the political dynamics a little bit, and that changed what I expect about how good this would have been.

Demsas: Yeah. I feel like sports gambling is one that, really, I just did not pay a lot of attention to. I did not think of it as a serious concern when people were really talking about it. And now it feels like consensus is really shifting to what you’re saying right now, which is that everyone’s very worried about people spending their entire life savings on sports gambling. And it is interesting to see, even, people on the libertarian side of things become a little bit concerned about the lack of government paternalism here.

Schleicher: Especially because it’s now institutionalized itself. It’s in the ownership of leagues. It’s the endorser. And, as a result, it’s very hard to see any regulation of it coming down the pike.

Demsas: Okay. So no regulation of housing, but we need to regulate sports betting.

Schleicher: I mean, again, “no” is strong on all fronts, but the idea here is that I thought this would work better than it did.

Demsas: Yeah. Well, we actually do need a lot of housing super users, so if you’re there, please—not super users, super producers.

Schleicher: Super producers. Super users—we can ask Marc Andreessen.

Demsas: Yes, exactly.

Schleicher: As soon as he follows you, you can ask him to be a super user.

Demsas: Exactly. Well, thank you so much, David, for coming on the show.

Schleicher: Oh, thanks for having me. And congratulations on the book. Everyone should go buy it.

Demsas: Thank you.

[Music]

Demsas: Good on Paper is produced by Jinae West. It was edited by Claudine Ebeid, fact-checked by Ena Alvarado, and engineered by Erica Huang. Our theme music is composed by Rob Smierciak. Claudine Ebeid is the executive producer of Atlantic audio, and Andrea Valdez is our managing editor.

And hey, if you like what you’re hearing, please leave us a rating and review on Apple Podcasts.

I’m Jerusalem Demsas, and we’ll see you next week.