The lack of affordable housing in our nation’s most generative cities is an ongoing tragedy. The cause is hardly mysterious: incumbent residents—homeowners, sometimes joined by renters—artificially suppress housing supply by blocking development. The result reflects neither the verdict of free markets nor the outcome of democratic processes, but rather political and regulatory dynamics that are powerfully and systematically skewed against change.
In their new article, Professors Roderick Hills and David Schleicher dust off what might seem like just another wonky policy tool, the transferable development right (TDR), and repurpose it as a coalition-building device that can help unstack the political deck to facilitate development.
The backstory is familiar to those who have been following the land use literature. Incumbent homeowners are a dominant political force, as William Fischel’s work has emphasized. The home looms large in their personal portfolios, and risk aversion drives them to oppose anything that might be perceived as a potential threat to home values—including virtually any and all residential development.
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