In a move that epitomizes the descriptor “mixed bag,” Florida Governor Ron DeSantis has signed the “Live Local Act,” a “pro-affordable housing” bill that mixes the negative of state subsidies and redistribution of tax money with the salutary action of banning local governments from imposing the euphemistically-titled “rent control” and highly restrictive zoning codes.
“The main provisions of the Live Local Act include funding increases and tax credits worth $711 million for a variety of the state's affordable housing programs. This includes sales tax relief on purchases of building materials; downpayment assistance for cops, teachers, military personnel, and other ‘hometown heroes’ buying their first home; and more funding for affordable housing construction.”
The act mixes the beneficial with the destructive, all in an effort to increase “affordable housing.”
“In addition to new funding, the new law also includes some deregulatory policies.
It would require local governments to approve multifamily developments on commercial and mixed-use zoned properties without forcing builders to go through discretionary rezoning amendments.”
Which addresses some of what economists and political philosophers often label “Little Leviathan” – the oppression of local political forces, as opposed to large-scale political controls. People tend to hew toward freedom and respect for Natural Rights when favoring smaller political units and decentralization. But such faith in what, since antiquity, philosophers and theologians have called “the Lesser Magistrate” as a bulwark against the large political tyrant does not provide complete protection against political forces attacking individual rights, especially rights to private property and free association.
Indeed, the practice of “zoning” – i.e., the practice of politicians creating preemptive barriers against how people peacefully can use their own property – is a towering, often overlooked infringement on the right to ownership and control. So, in this case, the move by the larger political body to allow property owners a slightly easier time if they want to create residential space on commercial property is not a tyrannical imposition from the top down, but is an act to fight local political tyranny.
Likewise, the Florida legislature and governor’s action to stop local governments from imposing so-called “rent control” also is a block of local political thuggery.
Britschgi offers details about the previous Florida government position on local “rent control” powers, and on this new change:
“Florida law already makes it really difficult for localities to regulate rents. They can only do so upon a finding that there's a "housing emergency which is so grave as to constitute a serious menace to the general public." That's a pretty high standard. The emergency caps can't last longer than a year. They also have to be passed by both the local county or city commission and voters via referendum.”
“Rent control” is a soft label that politicians apply to cover the reality of what they do when they prohibit landlords from raising their charges. In other words, it’s a euphemism for political threats aimed at property owners who might want to ask for more from people who want to live on their property. And “rent control” not only is an immoral breach of the right to peacefully control one’s own property – essentially negating the very idea of personal property ownership – and it is not “just” an immoral breach of the freedom of association, it also inspires numerous unintended consequences that degrade the ability of the market to start and cultivate new housing.
By imposing a price cap on anything, politicians kill the signals that alert potential suppliers to join a field, they artificially block the information that entrepreneurs need to help them navigate closer to what consumers want. In the case of housing, this means fewer people will offer new construction or conversion into residential units, which would, if they were to be created, help reduce the price -- by increasing the supply.
As it is with any product or service, housing becomes more plentiful and more affordable as competitors enter the market, and they will not enter a market if the initial price and profit information is smothered and kept artificially low by government.
Additionally, the practical cancer of “rent control” also disincentivizes property owners who might, under normal market circumstances, want to invest more resources into repairs and improvements of already extant rental properties. Why spend more to make a place cleaner, prettier, or safer if those investments don’t help profitability, if they become a net negative, even as property taxes rise?
Britschgi offers more about the “Live Local Act” and its orientation towards greater property freedom:
“In addition to these expedited approvals, these projects would also get relief from local height and density restrictions. They can be either three stories high or as tall as the tallest allowable commercial or residential development within one mile of the project site.
This regulatory relief would be available to projects where 40 percent of the units are offered at below-market rates to people making 120 percent of the area median income (AMI). Those affordable units could be offered at market rates after 30 years.”
So, while it doesn’t completely open the market to greater freedom, the new statute offers more room for potential local participants.
By taking these moral and practical factors into consideration, one can see that DeSantis and the backers of the “Live Local Act” are oriented toward freedom and toward potential renters being able to get more affordable housing. But by also offering subsidies, they actually work against their goal, because the morality-breaching, tax-redistributing subsidy also has the practical effect of artificially increasing demand.
And Britschgi notes one other negative when it comes to the “permits” and zoning restrictions.
“One provision of the bill DeSantis signed does make it more difficult to build affordable housing. The new law partially undoes a 2019 reform that allowed localities to expedite approvals of projects including affordable units on residential, commercial, or industrial land, even if the project isn't consistent with a local comprehensive plan or other state or local laws. Now, those expedited approvals are only available to projects on commercial or industrial land.”
Which seems kind of strange, coming from politicians who purportedly want to allow people to capitalize on opportunity and to create more affordable housing.
The Florida changes are truly a mixed bag, but they offer students of economics and ethics the chance to remember the immoral and impractical nature of government zoning and “rent control” impositions. The closer the housing market gets to purely market-driven inputs, the more those market participants can determine what is “affordable” to them