What’s ahead for housing in 2023
Plus: Lessons learned from Seattle and San Antonio on housing and education; and towards a smart, bipartisan approach to criminal justice reform
A 2023 housing forecast: single-family slowdown and stop: After several years of high buyer demand and staggering price growth, the housing market cooled dramatically late last year. FREOPP Research Fellow Roger Valdez’s prediction for 2023? A market that fails to produce much housing, setting the stage for huge prices increases when demand returns. The most likely government responses—doing nothing or punishing those buying properties with cash—will only make things worse by paving the way for panic and inviting more foreclosures and bankruptcies, further harming Americans who can least afford it. In The American Conservative, Roger proposes five specific priorities for policymakers who want a brighter future on land use and housing: He recommends reforming the low-income housing tax credit; allowing the immediate use of housing choice vouchers; looking critically at the case for home ownership; rethinking the conventional wisdom on the causes of homelessness; and working harder to save cities, which are engines of innovation and economic potential.
Seattle could do housing right in 2023: When tech jobs and population growth were booming, Seattle was a case study in regulatory missteps that quashed housing production. As Roger notes in Forbes, Seattle’s “Mandatory Housing Affordability” scheme alone severely limited the construction of important lower-cost options like new townhomes, producing only 104 housing units at a cost of $57 million in fees. Now, facing the loss of nearly 6,000 of those tech jobs and a looming industry-wide correction, Seattle has a chance to set a good example. The City Council should pull back the fees and review processes it piled on, removing barriers to housing growth. Even better? It could increase tax incentives like the Multifamily Housing Tax Exemption for builders of new rental housing who set aside affordable units.
→ For more unconventional—but desperately needed—solutions to the high cost of housing, check out the conversation at FREOPP’s Freedom & Progress conference featuring Roger, FREOPP Research Fellow Jon Hartley, Chief Production Officer at Walker and Dunlop Dana Wade, and the U.S. Senate Committee on Aging’s Ben Hobbs. The panel takes on influential and flawed government policies from zoning laws to Fannie and Freddie to the Federal Reserve.
San Antonio and the limits of school district innovation: In 2017, Texas formalized “Innovation Zones,” a policy response to charters and other school choice options. In these Zones, districts can imbue a subset of their schools with charter-school qualities like managerial autonomy and small-scale experimentation while retaining ultimate control over the school and its leadership. FREOPP Research Fellow Gavin Schiffres digs into a 2022 Stanford University study of educational outcomes in San Antonio and argues that even limited free-market qualities in a school or school sector produce better academic outcomes for students, including at-risk subgroups. While San Antonio’s Innovation Schools taught literacy 24 percent better than their standard district counterparts, charter schools did even better, outperforming standard district schools by 56 percent.
What about district-sponsored charter schools? Last fall, Gavin examined research on Camden’s “Renaissance” charter schools, which dramatically outperformed traditional district schools. But he cautioned families not to rely on districts to expand competition on their own. Instead, Camden’s experiment, which was compelled by a state takeover of the district, should be an argument for expanding educational options for families by any means available.
A smarter, bipartisan approach to criminal justice reform: In his new book, Criminal Injustice, the Manhattan Institute’s Rafael Mangual makes the case that, in practice, criminal justice reform trends like decarceration and depolicing are hurting those they are supposed to help—especially low-income and minority communities. FREOPP Research Fellow Jonathan Blanks counters that Rafael’s take oversimplifies the position of reformers across the spectrum and risks widening a partisan chasm that “pits pro-police Republicans against anti-police Democrats.” Advocates on both sides of the aisle should focus on constructive collaboration, which is possible in areas from over-policing to SWAT raids and use of force.
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