Happy Tuesday and welcome to another edition of Rent Free. This week's stories include:

• A federal appeals court slaps down the federal government's odd argument that it doesn't have to compensate landlords for its eviction moratorium because the moratorium was illegal.
• Vice President Kamala Harris sets a first-term goal of building 3 million middle-class homes.
• A Michigan judge sides with property owners trying to build a "green cemetery."

But first, a look at an under-the-radar federal regulation change that might make it easier for builders to create more small multifamily "missing middle" homes.

Code Games

In his 1942 book Capitalism, Socialism, and Democracy Joseph Schumpeter praised capitalist mass production for bringing almost every basic commodity, from food to clothing, within the affordable reach of the working man. The one exception he highlighted was housing, which he confidently predicted would soon see a similar collapse in prices due to mass-produced manufactured housing.

As it happens, manufactured housing production—which is built in factories and then shipped and installed on-site—peaked in the mid-1970s and has been limping along as a small share of overall home construction ever since.

Nevertheless, the dream that cheap, factory-built homes can deliver lower-cost housing has never died.

It's certainly alive and well in the current White House.

This past week, the Biden-Harris administration released a "fact sheet" of actions it was taking to lower housing costs. It included an in-progress regulatory change that would allow two-, three-, and four-unit homes to be built under the federal manufactured housing code set by the U.S. Department of Housing and Urban Development (HUD).

"The HUD Code creates economies of scale for manufacturers, resulting in significantly lower costs for buyers," says the White House in that fact sheet. Letting small multifamily housing be built under the HUD code will extend "the cost-saving benefits of manufactured housing to denser urban and suburban infill contexts," it says.

IRC, IBC, IDK

The proposed change comes at an interesting time for small multifamily housing construction.

Across the country, more and more states and localities are allowing more two-, three-, and four-unit homes to be built in formerly single-family-only areas.

That liberalization of the zoning code (which regulates what types of buildings can be built where) has set off a follow-on debate about which building code (which regulates construction standards) newly legal multiplexes should be regulated under.

Currently, the options are either the International Building Code (IBC) or the International Residential Code (IRC).

The IBC and IRC are model codes created by the non-profit International Code Council, which are then adopted (often with tweaks and changes) by states and localities.

The IBC typically covers apartment buildings of three or more units, while the IRC covers single-family homes. Neither is particularly well-suited for the regulation of smaller multi-family buildings that cities are now legalizing.

The IBC, for instance, requires expensive sprinkler systems that don't do much to improve fire safety in smaller buildings but can make their construction cost-prohibitive.

Zoning reformers have responded by trying to shift the regulation of smaller apartments into the IRC. But that raises its own problems, says Stephen Smith of the Center for Building in North America.

"It's a complicated thing to do because the IRC is not written for small multi-family. It's written for detached single-family," he says. "For traditional apartment buildings with a single entrance and stairs and halls and stuff, it's not really clear how the IRC would work with that."

The White House's proposed changes open the possibility of sidestepping this IRC-IBC dilemma entirely by letting builders of manufactured, multifamily housing opt into a single, national set of regulations.

A Floor or a Ceiling?

The question then is whether this will actually make life easier for builders.

The effect of HUD regulation on the production of single-family manufactured housing is a topic of intense debate.

Prior to the 1970s, manufactured housing was governed by a patchwork of state and local building codes. In 1974 Congress passed legislation that gives HUD the power to regulate manufactured housing.

Critics of HUD regulation argue that its initial implementation caused the steep decline in manufactured housing production in the 1970s.

In particular, they point to the HUD requirement that manufactured housing must sit on a steel chassis as a regulation that increases costs and decreases production.

Brian Potter, a senior fellow at the Institute for Progress and writer of the Construction Physics Substack, contrastingly argues that HUD regulation has actually helped keep the cost of building manufactured housing down.

The production of all housing, not just manufactured housing, plummeted in the 1970s, he notes. Since the 1970s, the costs of non-manufactured, site-built housing have skyrocketed while the costs of building manufactured housing have risen much less, he points out. Potter argues that the effect of the steel chassis requirement is also overstated.

To this day, manufactured housing is the cheapest type of housing to produce when comparing smaller manufactured housing units to smaller site-built single-family housing units. The HUD code has less expensive requirements and allows builders more flexibility in the construction of units.

"The most interesting and attractive thing about the HUD code is that HUD code homes tend to be much, much less expensive than single-family homes," says Potter.

The hope is that allowing newly legal duplexes, triplexes, and fourplexes to be built under HUD standards would reduce costs compared to building them under IBC or IRC regulations.

Degrees of Change

While the HUD code has been in existence since the 1970s, its explicit exclusion of manufactured, multifamily housing is a relatively recent development. In 2014, HUD issued a memorandum saying that only single-family housing can be built under the department's manufactured housing standards.

In a 2022 public comment on the proposed updates, the Manufactured Housing Association for Regulatory Reform argues that the 2014 memorandum was in error and that HUD actually has no regulatory authority to cap the number of units that can be built under the code.

According to the White House fact sheet, the Biden administration's proposed updates to the HUD code would once again allow up to four units of housing to be built under the code once again.

If the HUD code critics are correct, then this will make a minimal difference. Under this theory, builders would just have another cost-increasing building code to choose from. If folks like Potter are correct, however, this should allow builders to opt into less demanding regulations. We might therefore see an increase in the number of two-, three-, and four-unit homes built.

Building code liberalization will still only be effective in places where zoning code liberalization has already happened. Cities and states still have every power to zone out multifamily housing and ban the placement of manufactured housing.

Where cities have made those "missing middle" reforms, however, it's possible the White House's proposed regulatory changes will increase the production of manufactured, multifamily housing while policymakers figure out whether how to change the IBC or IRC to allow more site-built multiplexes.

If the CDC's Eviction Moratorium Was Illegal, Do the Feds Have To Pay for It?

When the Centers for Disease Control and Prevention (CDC) banned residential evictions for non-payment of rent in 2020, property owners responded with a flurry of lawsuits, arguing that the federal government owed them compensation for what amounted to a physical taking of their property.

While those lawsuits were ongoing, the U.S. Supreme Court ruled in August 2021 that the CDC moratorium was an illegal overstepping of the agency's authority.

This armed the federal government with an audacious response to all those property owners' claims for compensation: Because the CDC's eviction moratorium was illegal and lacked federal authorization, the federal government wasn't required to pay any compensation.

Incredibly, the Court of Federal Claims agreed with this argument—citing past cases that immunized the government from having to pay compensation for clearly illegal, unsanctioned acts of its agents—and dismissed a property owners' lawsuit in the case of Darby Development Co. v. United States.

But this past week, the United States Court of Appeals for the Federal Circuit sided with property owners and reversed that dismal.

The appeals court ruled that the CDC eviction moratorium, while illegal, clearly did have the endorsement of both Congress and the executive branch.

"Taken to its logical conclusion, [the government's] position is that government agents can physically occupy private property for public use, resist for months the owner's legal attempts to make them leave, and then, when finally made to leave, say they need not pay for their stay because they had no business being there in the first place," wrote Judge Armando O. Bonilla in an opinion issued earlier this month.

The case is now remanded back to the federal claims court.

"The government should not be able to hide behind its own illegality to avoid paying damages for that very illegality," Greg Dolin, a senior litigation counsel at the New Civil Liberties Alliance (which filed an amicus brief in the Darby case) told Reason.

Kamala Harris, Supply Sider?

In a speech this past Friday laying out her economic agenda, Vice President and Democratic presidential candidate Kamala Harris criticized state and local restrictions on homebuilding for driving up prices.

"There's a serious housing shortage in many places.  It's too difficult to build, and it's driving prices up. As president, I will work in partnership with industry to build the housing we need, both to rent and to buy. We will take down barriers and cut red tape, including at the state and local levels," said Harris, promising to deliver 3 million units of housing that's affordable to middle-class families by the end of her first term.

It's always refreshing to hear a politician accurately diagnose the cause of America's high housing costs as a matter of restricted supply. It's even better when politicians promise to do something about those supply restrictions. Harris' remarks are rhetorically a lot better than the explicit NIMBYism coming from Republican presidential contender Donald Trump.

Nevertheless, Harris' actual housing policies, including downpayment subsidies and rent control, will only make the problem worse. Downpayment subsidies will drive up demand and prices while leaving supply restrictions in place. Rent control has a long, long record of reducing the quality and quantity of housing.

Harris' speech was also peppered with lines attacking institutional housing investors who are providing much-needed capital for housing production.

Town's Ban on 'Green Cemetery' Is Dead

If the government doesn't like your cemetery, can it just ban all cemeteries? The answer, at least in Michigan, is no, no it can't.

In the case of Quakenbush et al v. Brooks Township et al, a state circuit court judge sided with a married couple who'd sued their local government when it passed a ban on new cemeteries with an eye toward stopping their development of the state's first "conservation burial forest."

"We're excited and feel vindicated by this ruling. We are delighted that the judge understood that Brooks Township's ordinance violated our right to use our property," said Peter and Annica Quakenbush, the plaintiffs in the case. They were represented by the Institute for Justice.

Quick Links

• Jim Burling, the Pacific Legal Foundation's vice president of legal affairs, has a new book Nowhere to Live covering the legal history of zoning in America, the courts' acquiescence to this restriction on property rights, and all the attendant consequences of high housing costs and homelessness that have flowed from it.
• A new paper published on SSRN estimates that a 25 percent reduction in permitting times in Los Angeles leads to a 33 percent increase in housing production.
• Calmatters covers the killing, or severe injuring, of various bills introduced in the California Legislature this year that aimed to pair back the California Coastal Commission's powers to shoot down new housing production. Read Reason's past coverage of the Coastal Commission here and here.
• Hawaii has legalized accessory dwelling units statewide, but they haven't made building them easy.
• If you build it, prices drop.

*UPDATED* (and still true)

When you build "luxury" new apartments in big numbers, the influx of supply puts downward pressure on rents at all price points -- even in the lowest-priced Class C rentals. Here's evidence of that happening right now:

There are 21 U.S. markets where… pic.twitter.com/BF9GY0YiFY

— Jay Parsons (@jayparsons) August 13, 2024

The post Code Games appeared first on Reason.com.

An Indiana court recently touched off a firestorm of media attention and online debate by ruling that burritos and tacos are sandwiches. The decision exemplifies a longstanding issue in legal interpretation: how to figure out the "ordinary meaning" of words in a statute or regulation. It also highlights the absurdity of zoning rules restricting the development and use of property.

The case arose because developer Martin Quintana wanted to use a property he owned in Fort Wayne, Indiana for commercial purposes. In order to be able to do that, he had to get the Fort Wayne Plan Commission (a local government agency) to "upzone" the area from allowing single-family residential housing only, to allowing some types of commercial uses. The Commission was only wlling to do that in exchange for Quintana signing a "Written Commitment" (required at the behest of a local NIMBY group) under which only certain types of restaurants would be allowed in the area.  The restrictions imposed by the Commitment became new zoning rules for these tracts. Specifically, the Commitment bars "restaurants, including fast food-style restaurants," except for the following:

A sandwich bar-style restaurant whose primary business is to sell "made-to-order" or "subway-style" sandwiches (which by way of example includes, but is not limited to, "Subway" or "Jimmy John's", but expressly excludes traditional fast food restaurants such as "McDonalds", "Arbys" and "Wendys"), provided that any such restaurant shall not have outdoor seating or drive—through service….

One of the businesses Quintana recruited as a tenant for the new development is a Famous Taco establishment—a Mexican restaurant that (as the name implies) serves tacos and burritos. The Plan Commission contended the Famous Taco should be barred because these food options are not "sandwiches." Indiana Superior Court Judge Craig Bobay rejected that argument, concluding that burritos and tacos are, in fact sandwiches:

The proposed Famous Taco restaurant falls within the scope of the general use approved in the original Written Commitment. The proposed Famous Taco restaurant would serve made-to-—order tacos, burritos, and other Mexican-style food, and would not have outdoor seating, drive-through service, or serve alcohol. The Court agrees with Quintana that tacos and burritos are Mexican—-style sandwiches, and the original Written Commitment does not restrict potential restaurants to only American cuisine-style sandwiches. The original Written Commitment would also permit a restaurant that serves made-to-order Greek gyros, Indian naan wraps, or Vietnamese banh mi if these restaurants complied with the other enumerated conditions.

In Indiana, as in most jurisdictions, courts are generally required to interpret laws  (or, in this case, an agreement that has the force of law, by virtue of being embodied in a zoning restriction) in accordance with their "ordinary meaning." The Supreme Court of Indiana recently reiterated that rule in its February decision in Spells v. State.

Do tacos and burritos fall within the ordinary meaning of "sandwich"? It's hard to say. I think most Americans would not usually refer to these items as sandwiches. On the other hand, it's not hard to see why a taco or a burrito would fall under what most ordinary people would understand to be the general concept of a sandwich: meat and/or vegetables encased in bread or some other similar wrap. Thus, it may be that Judge Bobay was right to conclude that tacos and burritos are "Mexican-style sandwiches," even if few people would actually refer to them in that way. It all depends on whether ordinary meaning depends on usage or on people's intuitive theoretical understanding of the concept in question.

This ruling diverges from a controversial 2006 Massachusetts state court decision, which held that tacos, burritos, and quesadillas do not fall within the ordinary meaning of "sandwich," because that term normally refers to a food item encased in two pieces of bread, while these Mexican foods usually only feature one. Judge Bobay does not cite the Massachusetts precedent, which—in fairness—isn't binding in Indiana. He also doesn't consider the issue of whether a sandwich must have two pieces of bread, as opposed to just one.

To my mind, food encased in a single continuous piece of bread (or tortilla roll) still counts as a "sandwich." The top and bottom of a hamburger bun or hot dog roll are sometimes connected to each other. But that doesn't mean hamburgers and hot dogs can't qualify as sandwiches. My wife (who is both a lawyer and much more knowledgeable about food than I am) points out there are "open-face sandwiches" that use only one piece of bread.

Perhaps these kinds of issues reveal the limits of "ordinary meaning" interpretive rules. Ordinary people (at least those who aren't lawyers) usually just don't think about these kinds of conundrums. Thus, when an issue like whether burritos qualify as sandwiches comes up, there may not be any unequivocal "ordinary meaning" answer to the question at hand.

Whichever way you come down on the definition of "sandwich," this case also highlights the absurdity of zoning restrictions on development. Barring some kind of significant danger to public health or safety (of which there is no evidence here), Quintana should not have had to get special permission to use his property for commercial purposes in the first place. It makes even less sense to allow restaurants that serve "'made-to-order' or 'subway-style' sandwiches," but not those that serve other kinds of food. This distinction appears to be based on little more than the esthetic preferences of the Covington Creek Association, the NIMBY group that pressured the Plan Commission into imposing this restriction on the development.

Such NIMBYism causes real harm to both property owners (who are deprived of the right to use their own land as they see fit) and consumers who wish to patronize their services. I don't especially like tacos and burritos, myself. But many people do, which is why there is a substantial demand for restaurants like Famous Taco.

In a forthcoming Texas Law Review article, Josh Braver and I argue that exclusionary zoning rules restricting housing construction violate the Takings Clause of the Fifth Amendment. Restrictions on commercial development are a more complicated case. But under the originalist theories discussed in Part II of the Article, such restrictions also violate the right to use property protected by the Takings Clause, unless they protect against a serious threat to public health or safety, and thereby fall within the "police power" exception (see Section II.C). Things may be different under the living constitution approaches covered in Part III of the article.

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Bryan Caplan's guest-blogging stint has come to an end. We thank Bryan for his excellent contributions to the blog!

Here is a listing of his posts about his book Build, Baby, Build: The Science and Ethics of Housing Regulation. I myself also wrote a post introducing Bryan and the book.

1."Trillions"

2. "*Build, Baby, Build*: My Most Inexcusable Omission"

3. "The YIMBY Napkin"

4. "*Build, Baby, Build*: Responses to the Best Objections"

I think my forthcoming Texas Law Review article, "The Constitutional Case Against Exclusionary Zoning" (coauthored with Josh Braver), in some ways serves as a complement to Bryan's book. In the book, Bryan suggests that judicial review is "probably the best shot [at] radical housing deregulation," but doesn't elaborate further. Braver and I explain how such judicial intervention can happen, and why it should be done.

The post Compendium of Bryan Caplan's Guest-blogging Posts on His New Book "Build, Baby, Build: The Science and Ethics of Housing Regulation" appeared first on Reason.com.

The Los Angeles Press Club on Thursday announced the finalists for the 66th Annual Southern California Journalism Awards, recognizing the best work in print, online, and broadcast media published in 2023.

Reason, which is headquartered in L.A., is a finalist for 14 awards.

A sincere thanks to the judges who read and watched our submissions, as well as to the Reason readers, subscribers, and supporters, without whom we would not be able to produce impactful journalism.

Senior Editor Elizabeth Nolan Brown is a finalist for best technology reporting across all media platforms—print, radio, podcast, TV, and online—for her November 2023 print piece, "Do Social Media Algorithms Polarize Us? Maybe Not," in which she challenged what has become the traditional wisdom around the root of online toxicity:

For years, politicians have been proposing new regulations based on simple technological "solutions" to issues that stem from much more complex phenomena. But making Meta change its algorithms or shifting what people see in their Twitter feeds can't overcome deeper issues in American politics—including parties animated more by hate and fear of the other side than ideas of their own. This new set of studies should serve as a reminder that expecting tech companies to somehow fix our dysfunctional political culture won't work.

Science Reporter Ronald Bailey is a finalist for best medical/health reporting in print or online for "Take Nutrition Studies With a Grain of Salt," also from the November 2023 issue, where he meticulously dissected why the epidemiology of food and drink is, well, "a mess":

This doesn't mean you can eat an entire pizza, a quart of ice cream, and six beers tonight without some negative health effects. (Sorry.) It means nutritional epidemiology is a very uncertain guide for how to live your life and it certainly isn't fit for setting public policy.

In short, take nutrition research with a grain of salt. And don't worry: Even though the World Health Organization (WHO) says "too much salt can kill you," the Daily Mail noted in 2021 that "it's not as bad for health as you think."

Managing Editor Jason Russell is a finalist in print/online sports commentary for his August/September 2023 cover story, "Get Your Politics Out of My Pickleball," which explored the emerging fault lines as the government gets involved in America's weirdest, fastest-growing sport:

Pickleball will always have haters—and if its growth continues, local governments will still face public pressure to build more courts. Some critics think the sport is a fad, but strong growth continues for the time being, even as the COVID-19 pandemic ends and other activities compete for time and attention. There's no need to force nonplayers to support it with their tax dollars, especially when entrepreneurs seem eager to provide courts. If pickleball does end up as an odd footnote in sporting history, ideally it won't be taxpayers who are on the hook for converting courts to new uses.

Reporter C.J. Ciaramella is a finalist in magazine investigative reporting for his October 2023 cover story, "'I Knew They Were Scumbags,'" a nauseating piece on federal prison guards who confessed to rape—and got away with it:

Berman's daughter, Carleane, was one of at least a dozen women who were abused by corrupt correctional officers at FCC Coleman, a federal prison complex in Florida. In December, a Senate investigation revealed that those correctional officers had admitted in sworn interviews with internal affairs investigators that they had repeatedly raped women under their control.

Yet thanks to a little known Supreme Court precedent and a culture of corrupt self-protection inside the prison system, none of those guards were ever prosecuted—precisely because of the manner in which they confessed.

Senior Editor Jacob Sullum is a finalist in magazine commentary for "Biden's 'Marijuana Reform' Leaves Prohibition Untouched," from the January 2023 issue, in which he disputed the notion that President Joe Biden has fundamentally changed America's response to cannabis:

By himself, Biden does not have the authority to resolve the untenable conflict between state and federal marijuana laws. But despite his avowed transformation from an anti-drug zealot into a criminal justice reformer, he has stubbornly opposed efforts to repeal federal pot prohibition.

That position is contrary to the preferences expressed by more than two-thirds of Americans, including four-fifths of Democrats and half of Republicans. The most Biden is willing to offer them is his rhetorical support for decriminalizing cannabis consumption—a policy that was on the cutting edge of marijuana reform in the 1970s.

Editor in Chief Katherine Mangu-Ward is a finalist for best magazine columnist for "Is Chaos the Natural State of Congress?" from the December 2023 issue, "Don't Just Hire 'Better Cops.' Punish the Bad Ones," from the April 2023 issue, and (a personal favorite) "Bodies Against the State," from the February 2023 issue:

Governments do unconscionable things every day; it is in their nature. But not all transgressions are equal. In the wake of the Iran team's silent anthem protest, an Iranian journalist asked U.S. men's soccer captain Tyler Adams how he could play for a country that discriminates against black people like him. What makes the U.S. different, he replied, is that "we're continuing to make progress every day."

The most perfect and enduring image of a person weaponizing his body against the state was taken after the brutal suppression of protests in Tiananmen Square in 1989. The unknown Chinese man standing in front of a tank didn't have to hold a sign for the entire world to know exactly what the problem was.

Reporter Christian Britschgi is a finalist for best long-form magazine feature on business/government for "The Town Without Zoning," from the August/September 2023 issue, in which he reported on the fight over whether Caroline, New York, should impose its first-ever zoning code:

Whatever the outcome, the zoning debate raging in Caroline is revealing. It shows how even in a small community without major enterprises or serious growth pressures, planners can't adequately capture and account for everything people might want to do with their land.

There's a gap between what zoners can do and what they imagine they can design. That knowledge problem hasn't stopped cities far larger and more complex than Caroline from trying to scientifically sort themselves with zoning. They've developed quite large and complex problems as a result.

Associate Editor Billy Binion (hi, it's me) is a finalist for best activism journalism online for the web feature "They Fell Behind on Their Property Taxes. So the Government Sold Their Homes—and Kept the Profits," which explored an underreported form of legalized larceny: governments across the U.S. seizing people's homes over modest tax debts, selling the properties, and keeping the surplus equity.

Geraldine Tyler is a 94-year-old woman spending the twilight of her life in retirement, as 94-year-olds typically do. But there isn't much that's typical about it.

Tyler has spent the last several years fighting the government from an assisted living facility after falling $2,300 behind on her property taxes. No one disputes that she owed a debt. What is in dispute is if the government acted constitutionally when, to collect that debt, it seized her home, sold it, and kept the profit.

If that sounds like robbery, it's because, in some sense, it is. But it's currently legal in at least 12 states across the country, so long as the government is doing the robbing.

Senior Producer Austin Bragg, Director of Special Projects Meredith Bragg, Producer John Carter, and freelancer extraordinaire Andrew Heaton are finalists for best humor/satire writing across all broadcast mediums—TV, film, radio, or podcast—for the hilarious "Everything is political: board games," which "exposes" how Republicans and Democrats interpret everyone's favorite games from their partisan perspectives. (Spoiler: Everyone's going to lose.)

The Bragg brothers are nominated again in that same category—best humor/satire writing—along with Remy for "Look What You Made Me Do (Taylor Swift Parody)," in which lawmakers find culprits for the recent uptick in thefts—the victims.

Deputy Managing Editor of Video and Podcasts Natalie Dowzicky and Video Editor Regan Taylor are finalists in best commentary/analysis of TV across all media platforms for "What really happened at Waco," which explored a Netflix documentary on how the seeds of political polarization that roil our culture today were planted at Waco.

Editor at Large Matt Welch, Producer Justin Zuckerman, Motion Graphic Designer Adani Samat, and freelancer Paul Detrick are finalists in best activism journalism across any broadcast media for "The monumental free speech case the media ignored," which made the case that the legal odyssey and criminal prosecutions associated with Backpage were a direct assault on the First Amendment—despite receiving scant national attention from journalists and free speech advocates.

Associate Editor Liz Wolfe, Senior Producer Zach Weissmueller, Video Editor Danielle Thompson, Video Art Director Isaac Reese, and Producer Justin Zuckerman are finalists in best solutions journalism in any broadcast media for "Why homelessness is worse in California than Texas," which investigated why homelessness is almost five times as bad in the Golden State—and what can be done about it.

Finally, Senior Producer Zach Weissmueller, Video Editor Danielle Thompson, Video Art Director Isaac Reese, and Audio Engineer Ian Keyser are finalists in best documentary short for "The Supreme Court case that could upend the Clean Water Act," which did a deep dive into a Supreme Court case concerning a small-town Idaho couple that challenged how the Environmental Protection Agency defines a "wetland"—and what that means for property rights.

Winners will be announced on Sunday, June 23 at the Millennium Biltmore Hotel in downtown Los Angeles. Subscribe to Reason here, watch our video journalism here, and find our podcasts here.

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UPDATE: This event has been postponed till September, for scheduling reasons. I will post the new date and time when it is set.

Note: I am reposting this in order to include the registration link.

On April 23, the Schar School of Policy and Government at George Mason University will hold an event on "Solving the Nation's Housing Shortage." I will be speaking along with economist Bryan Caplan (George Mason University), author of Build, Baby, Build: The Science and Ethics of Housing, and Jerry Howard, former Director of the National Association of Home Builders. Bryan will discuss his book,  which addresses the causes of the housing crisis, and potential solutions. I will speak about how exclusionary zoning—the most significant cause of our housing shortage—violates the Takings Clause of the Fifth Amendment, and how judicial review can help address the problem. These issues are covered in greater detail in my forthcoming Texas Law Review article on exclusionary zoning (coauthored with Josh Braver).

The event is free and open to the public. Here is the time and address:

12-1 PM, Schar School of Policy and Government, George Mason University, Van Metre Hall, Rm. 111, 3351 Fairfax Dr., Arlington, VA

You can register at this link.

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Axon, most famous for producing Tasers, is again making the sort of headlines it really shouldn’t make.

Everyone knows Taser. The company produces the most-used “less lethal” weapons cops deploy. “Less” is the key word here. It’s basically a cattle prod for humans but one that’s routinely deployed with less care than a cattle prod, even if its manufacturer instructs cops to limit the number of uses per minute or cautions against over-use of drive stun mode. People with heart conditions shouldn’t be tased, but no one’s consulting medical files before affecting arrests. People who’ve just doused themselves with gasoline definitely shouldn’t be tased, but you go to war with the army you have.

Axon is now more interested in selling body cams to cops. It will still sell you all the Tasers you want, but the real money is in the data storage and access market. It’s the inkjet printer plan, but for cops. The body cams are the loss leaders. Record all you want, but storing and accessing recordings will cost you, much in the same way your $29.99 printer won’t function until you buy a $70 3-color ink refill.

This shift in focus has allowed Axon to make more money while distancing itself from Tasers and the damage done — something it definitely needed to do as medical association after medical association refused to recognize “excited delirium” as an actual health condition.

For some reason, Axon seems to have a problem with accepting rejection, despite being the most-recognized name in the lucrative body cam field. A little more than four years ago, Axon generated negative headlines for refusing to gracefully accept the termination of a contract. The Fontana, California police department discontinued its use of Axon body cameras, making its $4,000/year contract with Axon’s Evidence.com completely useless.

Axon refused to take the L. It responded to the Fontana PD’s suggestion it would not continue to pay the bill for services it wasn’t using with this:

The only cancellation term is Termination for Non-Appropriations or lack of funding. There is a negative effect, however, as it can affect the credit rating of the City. Since we are looking at about nine months it would probably make more sense to ride out the rest of the contract…

In other words, Axon suggested it would report each month of non-payment to credit agencies, dragging down the city’s credit rating simply because it didn’t want to pay for something it wasn’t using.

While some might defend Axon by saying “the city signed a contract!,” that argument doesn’t hold up. The contract (contractually!) gave the city this option: “termination for convenience.” That clause meant the city could cancel the contract for exactly the reasons stated: it no longer required Axon’s storage and access services because it was no longer using the company’s body cameras.

Axon is doing this shit again, albeit for much different reasons. As Sam Kmack reports for AZCentral, Axon is again behaving in an extremely petty fashion because it didn’t get what it wanted.

Scottsdale’s city attorney confirmed in a sharply worded letter that an Axon employee had contacted a city planning commissioner’s boss about the official’s opposition to a controversial project.

“This type of action tends to raise public concern about the integrity of the city’s public hearing process,” City Attorney Sherry Scott wrote in a letter dated Friday. “It can also have a chilling effect on … public officials’ willingness to serve in their volunteer capacity.”

Here’s the thing about city and town commissioners. Being a commissioner isn’t their only job. Most commissioner positions don’t pay enough to be anyone’s only job. On top of that, their work for the locales they represent doesn’t consume 40 hours a week, 52 weeks a year.

So, when Axon pitched the city of Scottsdale a plan to build 2,000 apartment units near its proposed headquarters, it assumed the city would choose to ignore the fact that the location it had chosen wasn’t actually zoned for apartment construction.

Axon reps attended a city meeting in January, hoping to convince commissioners that rezoning the area to give Axon what it wanted would be a win for all Scottsdale residents. The commissioners disagreed, with Planning Commissioner Christian Serena being the most vocal in his objections.

Last month, Serena informed the city attorney a member of “Axon’s leadership” had contacted his day job, allegedly telling his employer (Merrill Lynch), presumably insinuating that his day job presented some form of conflict of interest since Merrill Lynch has also made overtures to Axon in an attempt to secure its (still-undefined) business.

Scott confirmed in the letter, addressed to Axon’s lawyer, an Axon employee did contact Serena’s employer, Merrill Lynch.

“It is apparent to me that an Axon employee did contact Commissioner Serena’s employer to discuss dissatisfaction with Commissioner Serena’s public hearing comments,” Scott wrote.

This “dissatisfaction” was explained more explicitly in Axon CEO Rick Smith’s response to the city attorney’s letter.

“Your March 1st letter was in the hands of multiple media outlets within hours of receipt. Up to this time, we limited our correspondence with media out of respect for the integrity of the process,” Smith’s letter read. “Unfortunately, it appears some within the City are more focused on prioritizing political theater.”

Smith’s letter contends Serena may have had a conflict of interest in deciding on Axon’s project because “Merrill Lynch (and its parent company) Bank of America have been unsuccessful in winning Axon’s business” despite approaching the company on “several occasions.”

Whew. That’s not even a denial. That’s pretty much an admission someone pretty far up the org chart tried to convince the commissioner’s employer that Serena was supposedly rejecting Axon’s request for re-zoning solely because Merrill Lynch’s courtship of Axon had been unsuccessful.

Even if this were true (and there’s not a whole lot of reason to believe it is), the proper way to handle this would be to take it up with the city’s commissioners, rather than approach a commissioner’s day job and try to get them reprimanded, if not fired, simply because Axon failed to convince a city government to alter the regulatory landscape to indulge one company’s wishes.

It’s not a good look, especially for a company that relies almost solely on contracts with government agencies to make ends meet. And it’s definitely not a good look for a company that’s done this sort of thing before. Sure, this may seem like two unrelated instances, but if it’s been caught doing this twice, there’s a good chance it’s gone a bit thuggish in the past, but has managed to escape being called out publicly.

America's high housing costs got a brief shout-out in President Joe Biden's State of the Union address tonight, with the president mostly proposing policies that would subsidize demand of this heavily supply-constrained good.

"I know the cost of housing is so important to you. If inflation keeps coming down mortgage rates will come down as well. But I'm not waiting," said Biden, proposing temporary tax credits of $400 a month to compensate for high mortgage rates and the end of title insurance fees for federally backed mortgages.

In addition, Biden proposed cracking down on the price fixing of big landlords and urged Congress to pass his plan to build or renovate 2 million affordable homes.

That housing policy got a shout-out at all in a State of the Union address is somewhat rare, despite housing being the largest line item in most Americans' budgets. Regrettably, most of the policies Biden proposed would do little to address the cause of high housing costs and could make the problem worse.

Higher rents and home prices are a natural consequence of local and state zoning laws, labyrinthine approval processes, federal restrictions on mortgage financing, and environmental reporting laws, to name a few.

All these laws limit the supply of new housing, which drives up the price for any given level of demand. That's a diagnosis the Biden administration itself has endorsed in various housing briefs and "action plans."

Despite that insight, the president's proposals to subsidize home buying will, all else equal, increase demand while leaving supply constraints in place. That will only raise prices further. People who claim new federal subsidies will be no better off. Anyone who misses out on the subsidies will be worse off.

Biden's proposal to crack down on price-fixing landlords is likely a reference to the hot new idea that landlords are illegally colluding on rents by paying for third-party algorithms that propose market-clearing maximum rents.

The Federal Trade Commission and the Department of Justice released a memo earlier this month saying that this could be illegal, without offering any clear guidance on when it would actually be illegal.

Even property owners who set their rents below whatever a third-party algorithm recommends could still be guilty of price fixing.

"Even if some of the conspirators cheat by starting with lower prices than those the algorithm recommended, that doesn't necessarily change things. Being bad at breaking the law isn't a defense," read the memo. One shouldn't expect this garbled threat to do much to move the needle on rents.

In his remarks tonight, Biden didn't elaborate much on the policy he proposed to increase actual housing supply, his plan to build or renovate 2 million affordable homes.

A White House fact sheet circulated earlier today provides a little more detail. The plan, such as it is, would involve increasing the number of tax credits available for low-income housing developers—something the tax bill approved by the House and being considered by the Senate would do.

The White House fact sheet also calls for creating a $20 billion competitive grant program that would directly fund affordable apartments, "pilot innovative models" for affordable housing production, and, more interestingly, "incentivize local actions to remove unnecessary barriers to housing development."

When it comes to housing funding, $20 billion is a lot of money. It's nearly a third of the current budget for the U.S. Department of Housing and Urban Development.

As part of its existing "housing supply action plan," the Biden administration has allegedly retooled a number of federal transportation grant programs to incentivize local zoning changes. As I've written, that doesn't seem to have made much of an impact on where those grants go. San Francisco, the nation's beating heart of anti-development regulations, got one of the largest grant awards from one of these supposedly retooled programs.

Congress has also passed a smaller, $85 million "baby YIMBY" grant program more focused on paying local governments to change their zoning rules. Here too, the language of the grant program (and the applications it's received thus far from localities) suggests it will end up being more of a subsidy for routine planning work than a powerful incentive for liberalizing zoning laws.

Given the difficulty state governments have had trying to prod local governments into being more pro-housing with explicit zoning preemptions, I'm skeptical of how much federal carrots can do here.

Perhaps the best thing the president can do for zoning reform is to use his bully pulpit to argue for it. Biden had an opportunity to do that tonight, and he didn't take it. It was a missed opportunity.

The post Biden's Plan To Subsidize Homebuyers Won't Work appeared first on Reason.com.

Is a painting of a giant burger a sign or a mural? The answer to that question could determine whether Steve Howard can keep some half-finished burger art on the side of his restaurant or be forced to take it down.

Howard is the owner of The Cozy Inn in Salina, Kansas—a restaurant known for the sliders it serves with a generous helping of aromatic onions.

Back in November, Howard commissioned a local artist to decorate the side of The Cozy Inn with a large burger mural, some smaller slider-shaped UFOs, and a caption reading, "Don't fear the smell! The fun is inside!!"

Within a few days, a Salina official was telling Howard to halt the paint job. The city reasoned that because Howard's wall art would depict a product his restaurant also sold, it was not a mural (which the city doesn't regulate), but rather a sign (for which it has extensive rules).

Under Salina's sign code, Howard's business could only post signs totaling 62 square feet in size and he'd already used up 52 of those feet with existing signage. His planned burger wall art would take up 528 square feet. Downtown businesses' signs also need approval from the city's Design Review Board.

Since being told to stop work on his burger painting, Howard has been going back and forth with the city over whether he'll be able to complete the work. Earlier this month, the city sent him a letter telling him to hold off on the painting while it "reviewed" its signage regulations.

Rather than wait, Howard filed a federal lawsuit arguing that because the legality of his mural turns on the particular images it depicts, his free speech rights are being violated. If he had commissioned wall art of car parts or some other product his business didn't sell, he'd be well within his rights to proceed with the mural.

"In our view, this is a clear content-based restriction on speech," says Sam MacRoberts of the Kansas Justice Institute, which is representing Howard.

The U.S. Supreme Court theoretically put limits on this kind of sign regulation with its decision in the 2015 case Reed v. Gilbert, which struck down an Arizona town's regulations on temporary signs that applied stricter rules to nonpolitical signage.

"The town definitely was drawing lines based on what messages the signs conveyed," says Betsy Sanz, an attorney with the Institute for Justice (which is not affiliated with the Kansas Justice Institute). "The court said that was not allowed."

Nevertheless, cities post-Reed continue to enforce restrictions on business murals that include images of what the business sells.

The Institute for Justice has litigated multiple mural cases, pre- and post-Reed. It is currently representing business owner Sean Young in a First Amendment lawsuit against Conway, New Hampshire, which has told him a donut mural painted by local art students on his bakery violates the town's sign code.

Despite the likely unconstitutionality of many towns' sign restrictions, business owners are often reluctant to challenge them.

That means businesses will often just paint over their murals or change them so that they're no longer showing products the business sells.

In 2012, The Washington Post reported on a smoke shop in Arlington, Virginia (a hotspot of mural censorship), that changed its mural of a man smoking a cigar to a man holding a whale to comply with county regulations.

Sanz urges the Supreme Court to take up the issue of towns' regulation of business murals, saying, "There are still government bodies that wish to control speech. The Supreme Court is going to need to take signs up again to help clarify things for individuals."

The post Town Says Burger Joint's Mural Can't Show Any Burgers appeared first on Reason.com.

In recent months, many politicians and media outlets have focused on the "migrant crisis" in various cities, supposedly caused by the arrival of large numbers of asylum seekers. Many of these migrants cannot support themselves, and end up taking up shelter space or living on the streets. In a recent Atlantic article (unfortunately, paywalled), Jerusalem Demsas explains why the supposed crisis is in reality a product of flawed government policies, rather than migration, as such:

When the mayor of New York, of all places, warned that a recent influx of asylum seekers would destroy his city, something didn't add up.

"I said it last year when we had 15,000, and I'm telling you now at 110,000. The city we knew, we're about to lose," Eric Adams urged in September. By the end of the year, more than 150,000 migrants had arrived. Still, the mayor's apocalyptic prediction didn't square with New York's past experience. How could a city with more than 8 million residents, more than 3 million of whom are foreign-born, find itself overwhelmed by a much smaller number of newcomers?

In another legendary haven for immigrants, similar dynamics were playing out. Chicago has more than 500,000 foreign-born residents, about 20 percent of its population, but it has been straining to handle the arrival of just 35,000 asylum seekers in the past year and a half. Some people have even ended up on the floors of police stations or in public parks. Mayor Brandon Johnson joined Adams and a handful of other big-city mayors in signing a letter seeking help with the "large numbers of additional asylum seekers being brought to our cities."

Sometimes the best way to understand why something is going wrong is to look at what's going right. The asylum seekers from the border aren't the only outsiders in town. Russia's 2022 invasion of Ukraine brought a separate influx of displaced people into U.S. cities that quietly assimilated most of them. "We have at least 30,000 Ukrainian refugees in the city of Chicago, and no one has even noticed," Johnson told me in a recent interview.

According to New York officials, of about 30,000 Ukrainians who resettled there, very few ended up in shelters. By contrast, the city has scrambled to open nearly 200 emergency shelters to house asylees from the Southwest border.

What ensured the quiet assimilation of displaced Ukrainians? Why has the arrival of asylum seekers from Latin America been so different? And why have some cities managed to weather the so-called crisis without any outcry or political backlash? In interviews with mayors, other municipal officials, nonprofit leaders, and immigration lawyers in several states, I pieced together an answer stemming from two major differences in federal policy. First, the Biden administration admitted the Ukrainians under terms that allowed them to work right away. Second, the feds had a plan for where to place these newcomers. It included coordination with local governments, individual sponsors, and civil-society groups. The Biden administration did not leave Ukrainian newcomers vulnerable to the whims of Texas Governor Greg Abbott, who since April 2022 has transported 37,800 migrants to New York City, 31,400 to Chicago, and thousands more to other blue cities—in a successful bid to push the immigration debate rightward and advance the idea that immigrants are a burden on native-born people.

Demsas is largely right here. Ukrainians admitted under the Uniting for Ukraine (U4U)  program have not caused any controversy in cities largely because they are allowed to immediately start working, and thereby can support themselves and contribute to our economy. By contrast, asylum seekers aren't eligible to apply for work permits for six months, and even then it often takes the federal immigration bureaucracy a long time to actually issue them.

What is true for Ukrainians is also true of Cubans, Nicaraguans, Venezuelans, and Haitians admitted under the "CNVH" program—an extension of the U4U model to a combine total 30,000 migrants per month fleeing oppression and violence in those four countries. Several hundred thousand people have entered the US under the CNVH program. But, like the Ukrainians, they have immediate work authorization, and therefore turn out to be a asset to cities, not a burden.

As Demsas explains, the federal government should abolish the six-month rule and let asylum-seekers work legally from day one. The Biden Administration has taken this step for many Venezuelans already in the US. But it needs to expand work authorization to other asylum seekers.

I do think Demsas gets one point wrong here. For the most part, it is not true that "the feds had a plan for where to place" U4U participants.  The program requires each migrant to have a US sponsor. But, beyond that, the federal government makes little or no effort to control where and how they live.

I myself am a sponsor in the U4U program, and have advised other sponsors and migrants.  Generally speaking, the migrants decide for themselves where they are going to settle in the US. Sponsors advise, but do not dictate. I now have eight Ukrainian sponsorees. To my knowledge, never once has a federal official attempted to plan where they live and work, or even offered advice on that subject.

Instead of planning and controlling, U4U mostly lets the market and civil society work. That, I think, is the real key to its success. While I don't myself have CNVH sponsorees, I know people who do; that program seems much the same.

Demsas also notes that, even when it comes to asylum seekers, the  dfficulties encountered in New York and Chicago have largely been avoided in cities like Houston and Miami, even though the latter also have experienced recent influxes. What's the difference between these cases? I don't know for sure. But a major factor is likely that the cities with serious problems also tend to have highly restrictive zoning rules, which make it difficult or impossible to build housing in response to demand. I have previously noted this issue in the case of New York.

By contrast, Houston is famous for not having zoning at all (thereby making housing construction easy, and housing itself very affordable). And Miami is at least less restrictive than cities like New York and Chicago.

In New York, housing issues have been exacerbated by the city's ill-advised free shelter guarantee, which incentivizes both migrants and poor natives to seek out free housing at public expense. New York would be well-advised to end the guarantee, while simultaneously ending exclusionary zoning rules that block new housing construction.

It is also true, as Demsas notes, that Texas Gov. Greg Abbott's migrant busing program—which has heavily targeted New York and Chicago—has caused disruption in those cities:

When immigrants make their way to a city in an organic fashion, they usually are drawn to a place where they have family ties, job leads, or other connections and resources available….

That's very different from the haphazard Texas busing program. When Abbott's buses arrive at their destinations, many of them are filled with people who had specific plans to go somewhere else. Cities then re-ticket many of the passengers. The mayor of Denver told me that roughly 40 percent of asylees who are bused into his city have no intention of staying there.

Abbott should stop the busing program, and instead let migrants choose their own destinations and pay their own way. In addition to increasing the migrants' economic productivity (thereby boosting the US economy) and reducing disruption in New York and Chicago, it would also save Texas taxpayers money. The state has spent some $148 million busing migrants to other parts of the country.

In sum, the "migrant crisis" is largely caused by a combination of perverse federal, state, and local policies that bar asylum seekers from working legally, artificially restrict housing construction, and bus migrants to places other than where they actually want to go. Migrants who enter by programs that avoid these obstacles don't cause any crises. Indeed, they are actually assets to the economy. If governments want to end the "crisis," for the most part they need only get out of the way.

The post The "Migrant Crisis" is Caused by Flawed Work and Housing Policies, not Migrants appeared first on Reason.com.