Nowhere to Live

1. The American Housing Crisis is a Century-Old Government Creation.

The problems of housing affordability and homelessness didn’t crop up overnight.

Decades of policy failures. The current housing crisis, marked by unaffordable homes and widespread homelessness, is not a sudden phenomenon but the cumulative result of over a century of misguided government policies. Despite bipartisan recognition of the problem for over fifty years, conditions have worsened, with the median U.S. home price increasing by 30% since 2020 and a national shortage of over five million homes. This persistent shortfall is directly linked to government actions that prevent sufficient housing construction.

Supply and demand imbalance. The core issue is a severe imbalance between housing supply and demand. While the U.S. population has grown significantly, new home construction has lagged dramatically. For instance:

• The U.S. needs to build two million homes annually (one million for replacement, one million for growth).
• However, only about 1.2 million homes per year have been built since 2015.
• California alone needs 3.5 million homes by 2025 but builds only half its annual requirement.
  This deficit drives up prices, making housing increasingly out of reach for working and middle-class families.

Consequences of scarcity. The lack of affordable housing has devastating consequences, pushing many into severe financial strain or homelessness. Over half of California renters pay more than 30% of their income on rent, and nationally, 25% of renters are severely cost-burdened, spending over half their income on housing. This leaves little for other necessities and erodes financial stability, leading to a catastrophic loss of faith in the American Dream, especially among first-time buyers.

2. Zoning's Exclusionary Roots Perpetuate Segregation and Scarcity.

The shortage of affordable housing, especially for working class and minority populations, is no accident.

Racist origins of zoning. Modern zoning laws, while appearing neutral, have roots in explicit racial and economic segregation. Beginning in Baltimore in 1910, ordinances were designed to prevent Black families from moving into white neighborhoods, a practice later outlawed by Buchanan v. Warley (1917). However, this overt racism evolved into "comprehensive zoning," which achieved similar exclusionary goals by restricting apartment buildings and mandating large-lot single-family homes, effectively confining minority and lower-income populations to urban ghettos.

Euclidean zoning's impact. The Supreme Court's 1926 Euclid v. Ambler Realty decision legitimized comprehensive zoning, allowing towns to ban apartment houses and other "parasitic" structures from residential areas. This ruling, despite a trial judge's warning that it would "classify the population and segregate them according to their income or situation in life," paved the way for widespread exclusionary practices. The result is a landscape where:

• Apartments are often banned from affluent suburbs.
• Large-lot zoning makes housing economically inaccessible.
• Minority populations remain concentrated in older, less desirable areas.

Judicial complicity and modern NIMBYism. Despite early challenges like Nectow v. Cambridge (1928), which struck down arbitrary zoning, the Supreme Court largely remained silent on exclusionary zoning for decades. This judicial deference allowed NIMBY ("Not-in-My-Backyard") movements to flourish, using zoning to maintain property values and preserve perceived neighborhood character, often at the expense of housing affordability and diversity. Even today, efforts to reform single-family zoning face strong opposition, sometimes cloaked in environmental concerns, perpetuating the cycle of scarcity and exclusion.

3. Eminent Domain Abuses Destroy Communities for Private Profit.

The use of the sovereign power of eminent domain to condemn private property has been the most visible manifestation of government’s tendency to harness private property for the private good of government-favored special interests.

"Public use" transformed. The Fifth Amendment's "public use" clause, intended to limit government's power to take private property, has been stretched to mean "public purpose" or "politically useful." This reinterpretation, solidified by Berman v. Parker (1954) and Kelo v. City of New London (2005), allows governments to condemn private homes and businesses not for direct public use (like roads or schools), but for private economic development projects that promise increased tax revenue or jobs.

Destruction of working-class neighborhoods. This expanded eminent domain power disproportionately targets working-class and minority communities, often under the guise of "slum clearance" or "blight removal." Examples include:

• Chavez Ravine (Los Angeles): A vibrant Latino community razed for public housing, which ultimately became Dodger Stadium.
• Poletown (Detroit): A mixed-ethnicity neighborhood destroyed for a General Motors factory that later failed.
• New London (Connecticut): Suzette Kelo's "little pink house" and her neighborhood condemned for a Pfizer headquarters that eventually left the city, leaving vacant lots.
  These projects often displace thousands, intensifying racial segregation and poverty, and leading to the pejorative term "Negro removal."

Unjust compensation and perverse incentives. Even when property is taken, "just compensation" often falls short of making owners whole, ignoring intrinsic value, moving costs, and business goodwill. Furthermore, "tax increment financing" creates perverse incentives for redevelopment agencies to prioritize projects that generate higher tax revenues, leading them to favor luxury developments over affordable housing. This system effectively redistributes wealth from less powerful property owners to politically connected developers and corporations, undermining the social contract and individual liberty.

4. Environmental Laws Unintentionally Stifle Housing Development.

Government action clothed in moral imperative is a most dangerous force.

Environmentalism as a new moral imperative. The rise of environmental consciousness in the 1960s and 70s led to a wave of federal legislation, including the Endangered Species Act (ESA) and the Clean Water Act (CWA). While intended to protect nature, these laws have become powerful tools to halt or significantly delay housing and other economic development, often without fully considering the human cost or the impact on property rights. This shift reflects a "deep ecology" ethic that prioritizes nature for its own sake, sometimes at the expense of human needs.

ESA's broad reach and unintended consequences. The ESA, famously interpreted as protecting species "whatever the cost" in Tennessee Valley Authority v. Hill (1978), grants federal protection to virtually all species, regardless of size or public popularity. This has led to:

• The "snail darter" halting a dam project.
• The "northern spotted owl" devastating the timber industry.
• The "delta smelt" causing severe irrigation cutbacks for farmers.
  The Act's prohibition on "taking" a species, including habitat destruction, effectively imposes a de facto conservation easement on private lands without compensation, leading to practices like "shoot, shovel, and shut-up" to avoid land-use restrictions.

Clean Water Act's "swamp monster" jurisdiction. The CWA, particularly its wetlands regulations, has created immense uncertainty and risk for landowners. Identifying federally regulated wetlands is notoriously difficult, leading to:

• Criminal prosecution and imprisonment for landowners like Ocie and Carey Mills for filling what they believed was dry land.
• Decades-long legal battles, such as the Sacketts' fight to build a modest home, due to ambiguous federal jurisdiction over remote damp spots.
  The Supreme Court's recent Sackett v. EPA (2023) decision clarified federal wetlands jurisdiction, but the years of delay and exorbitant permitting costs (averaging $271,596 and 788 days for individual permits) continue to deter housing construction, making the housing crisis worse.

5. Rent Control Exacerbates Housing Shortages and Deterioration.

In many cases rent control appears to be the most efficient technique so far known for destroying cities—except for bombing.

Economic consensus against rent control. Despite its appeal as a quick fix for high rents, economists across the political spectrum overwhelmingly agree that rent control is detrimental to housing markets. A 1990 survey found 93% of economists agreed that "A ceiling on rents reduces the quantity and quality of housing available." This consensus highlights that rent control, outside of wartime emergencies, creates more problems than it solves.

Negative impacts on supply and quality. Rent control distorts market incentives, leading to:

• Reduced investment: Landlords cannot keep up with expenses or earn a reasonable return, discouraging maintenance and new construction.
• Conversion to non-rental use: Owners may convert apartments to condominiums or abandon properties, shrinking the rental stock.
• Deterioration: Deferred maintenance leads to declining housing quality, as seen in the "Bomb Damage or Rent Control?" comparisons of the South Bronx to war-torn cities.
  The result is a shrinking supply of quality rental units, pushing up prices in unregulated segments of the market and ultimately undermining affordability.

Perverse outcomes and social costs. Recent expansions of rent control in New York, Oregon, and California demonstrate these negative effects:

• New York's 2019 law led to drastic devaluations of rent-stabilized buildings, increased landlord bankruptcies, and thousands of units being taken off the market due to unrecoupable repair costs.
• Studies in San Francisco found rent control contributed to gentrification and increased income inequality by limiting displacement of some but attracting higher-income residents to controlled units, while driving up market rents.
• In St. Paul, Minnesota, a 3% annual cap caused property values to fall by $1.6 billion, with benefits disproportionately going to higher-income, white tenants, and burdens falling on lower-income, minority owners.
  Rent control, therefore, acts as a disincentive for new construction, exacerbating the very housing shortages it purports to solve and creating a less-free, less-equitable housing market.

6. Affordable Housing Mandates Extort New Homebuyers and Developers.

Government officials like to call these schemes “inclusionary zoning” as a way of pretending that they are a solution for their exclusionary zoning policies.

"Inclusionary zoning" as disguised taxation. Faced with housing shortages and public demand for amenities, local governments increasingly impose "affordable housing mandates" or "inclusionary zoning" on new developments. These schemes force market-rate homebuilders to either construct subsidized low-income units or pay substantial "in-lieu" fees. This practice, often imposed by legislative bodies, is a form of "extortion" that shifts the cost of public benefits from taxpayers to new homebuyers and developers.

Economic burden and constitutional challenges. These mandates significantly increase the cost of market-rate housing, adding 6% to 18% to new home prices through impact fees alone. This burden disproportionately affects younger, middle-income families who are already struggling to enter the housing market. Property owners have challenged these demands under the "doctrine of unconstitutional conditions," arguing that governments cannot compel the sacrifice of constitutional rights (like property ownership) in exchange for a permit without a clear justification.

Judicial pushback and the Sheetz decision. The Supreme Court has gradually reined in such governmental overreach:

• Nollan v. California Coastal Commission (1987) established that permit conditions must have an "essential nexus" to the project's impacts.
• Dolan v. City of Tigard (1994) added the "rough proportionality" test, requiring conditions to be proportional to the project's impacts.
• Koontz v. St. Johns River Water Management District (2013) extended these protections to monetary exactions and permit denials.
  Most recently, Sheetz v. County of El Dorado (2024) unanimously ruled that legislatively imposed fees, like traffic mitigation fees, are not exempt from these constitutional tests. This decision offers hope that courts will finally scrutinize inclusionary zoning mandates, which often lack a proportional connection between a new home's impact and the demand for affordable housing subsidies.

7. Deinstitutionalization Without Support Fueled Mentally Ill Homelessness.

The great emptying has not only emptied the psychiatric institutions of their patients, but apparently also our collective moral responsibility for their plight.

The "great emptying" of mental hospitals. Starting in the mid-22nd century, a movement to deinstitutionalize mentally ill patients gained momentum, driven by humanitarian concerns, legal rulings, and fiscal motivations. Landmark cases like Souder v. Brennan (1973), which mandated minimum wage for patient labor, and O'Connor v. Donaldson (1975), which limited involuntary confinement, effectively dismantled the economic and legal foundations of state psychiatric hospitals. This led to a dramatic reduction in patient populations, from over 558,000 in 1955 to 71,619 by 1994.

Unintended consequences: from hospitals to streets and prisons. The emptying of institutions, however, was not matched by adequate community-based treatment, housing, or support systems. Patients, many of whom had never lived independently, were discharged to "halfway houses" with no clear long-term plan, often ending up on the streets. This created a cruel hoax:

• Lack of consistent medication and therapy.
• Increased vulnerability to fear, hunger, abuse, and addiction (e.g., fentanyl crisis).
• Prisons became de facto mental institutions, housing a significant percentage of mentally ill inmates.
  The result is that over three-quarters of the street homeless today are estimated to be mentally ill, a stark testament to a societal failure to provide comprehensive care.

Reclaiming moral responsibility. The crisis of mentally ill homelessness demands a renewed commitment to comprehensive community treatment and affordable housing. Current legal standards make involuntary confinement difficult, pushing many onto the streets where their conditions worsen. Solving this requires:

• Much more pervasive and accessible community treatment programs.
• Increased availability of inexpensive individual housing options.
• Overcoming NIMBY resistance to housing for the mentally ill in neighborhoods.
  Ultimately, addressing mentally ill homelessness is inextricably linked to solving the broader housing crisis by building more homes across all income levels.

8. Property Rights are the Foundation of Liberty and Housing Solutions.

The right of property is the guardian of every other right. And to deprive a people of this, is to deprive them of their liberty.

Property as a bulwark against the state. The American founders, deeply influenced by John Locke, viewed private property not as a government creation but as a fundamental, pre-existing right that government was instituted to protect. This Lockean philosophy, articulated in the Declaration of Independence and the Federalist Papers, posits that property ownership creates a sphere of individual independence, a "castle" free from arbitrary state interference. Without secure property rights, other liberties—such as free speech, religion, or the pursuit of happiness—lose their meaning.

Historical erosion of property rights. This foundational understanding began to erode over a century ago with the rise of progressivism, which prioritized collective welfare over individual rights. Figures like Woodrow Wilson argued that "property as compared with humanity...must take second place." This shift led to:

• Expanded government regulation of land use (zoning).
• Redefinition of "public use" in eminent domain.
• Increased government control over economic activity.
  The consequence was a transformation of property owners from autonomous individuals to "mere managers and instrumentalities of a collective will," diminishing the barrier between the individual and the state.

The modern revival of property rights. Despite this historical decline, the Supreme Court began to restore vitality to property rights in the late 20th century. In Lynch v. Household Finance Corp. (1972), the Court declared the "dichotomy between personal liberties and property rights is a false one," affirming their fundamental interdependence. This paved the way for the revival of the "regulatory takings" doctrine, which holds that if a regulation "goes too far" in destroying property's use and value, the government must pay compensation. This doctrine, along with the "unconstitutional conditions" doctrine, offers a crucial legal pathway to challenge excessive government interference and restore the freedom to build and own homes.

9. Judicial Deference Undermined Constitutional Property Protections.

The role of the judiciary in determining whether that power is being exercised for a public purpose is an extremely narrow one.

Abdication of judicial oversight. A critical factor in the erosion of property rights and the exacerbation of the housing crisis has been the judiciary's increasing deference to legislative and administrative actions. This "judicial deference," particularly evident in the post-New Deal era, meant that courts would rarely second-guess government decisions regarding economic regulations, even when fundamental constitutional rights were at stake. This approach allowed governments to expand their power over private property largely unchecked.

The Berman precedent and its legacy. The Supreme Court's 1954 decision in Berman v. Parker epitomized this deference, stating that the judiciary's role in reviewing eminent domain for "public purpose" was "extremely narrow." This ruling effectively equated "public use" with "public purpose," giving legislatures near-conclusive authority to define what constitutes a legitimate taking. This broad deference:

• Enabled the widespread abuse of eminent domain for urban renewal, displacing thousands.
• Allowed the "public use" clause to become a "politically useful" clause, benefiting favored private interests.
• Contributed to the perception that property rights were secondary to government's perceived "common good."

The slow return to judicial scrutiny. For decades after Berman, courts largely avoided meaningful review of land-use regulations. However, a shift began in 1987 with cases like Nollan v. California Coastal Commission and First English Evangelical Lutheran Church, which reasserted judicial responsibility to scrutinize government demands on property. The Lucas v. South Carolina Coastal Council (1992) decision further clarified that regulations denying all economically beneficial use of property constitute a taking, requiring compensation. These cases, along with Koontz and Sheetz, signal a gradual, albeit incomplete, return to the judiciary's original role as a check on government power, emphasizing that constitutional limits on government authority, including property rights, should not be "manipulated out of existence" through unchecked deference.

10. A Radical Reset: Less Government Interference is the Solution.

Real solutions will not be found in more government programs, more government regulations, or more government mandates. Instead, real solutions will require less—not more—government!

Government as the problem, not the solution. The housing crisis is a direct consequence of over a century of government policies that have stifled housing supply, from exclusionary zoning and eminent domain abuses to burdensome environmental regulations and counterproductive rent control. Relying on more government intervention to solve these self-inflicted problems is akin to "hoping that giving more axes to an axe-murderer will solve the murder crisis." A radical reset is needed, prioritizing individual liberty and free-market principles.

Reforming regulations and empowering builders. To address the crisis, governments must:

• Streamline permitting: Eliminate redundant federal, state, and local regulations (e.g., CWA, ESA, CEQA) that cause years of delay and exorbitant costs. Permits should be granted if objective requirements are met, without arbitrary denials or endless studies.
• Reform zoning:
  • Eliminate large-lot zoning and prohibitions on multi-family housing.
  • Allow more accessory dwelling units (ADUs) and conversion of single-family homes.
  • Ensure localities meet regional housing demand.
  • Constrain NIMBY power by limiting frivolous lawsuits and requiring proof of actual harm.
• Eliminate rent control: Phase out rent control to restore market incentives for new construction and maintenance, as demonstrated by Massachusetts's positive experience after repeal.

Respecting property rights and limiting government demands. The core of the solution lies in restoring respect for private property rights:

• End exactions and fees: Stop treating homebuilders as ATMs for public amenities. Development fees and inclusionary zoning mandates should be subject to strict constitutional scrutiny (as affirmed by Sheetz), ensuring they are proportional to a project's actual impacts, not just a means to fund unrelated public programs.
• Curb eminent domain abuse: Limit eminent domain to genuine public uses, not private economic development. If property is taken, just compensation must be truly comprehensive, covering all losses.
• Enforce regulatory takings: Courts must vigorously apply the Takings Clause, compelling governments to pay for regulations that destroy property value, thereby incentivizing responsible governance.
  By dismantling the regulatory thicket and trusting the "invisible hand" of the market, we can unleash the power of builders to meet demand, making the American Dream of affordable housing accessible once again.