To Fix US Housing, Let Democracy and the Market Work

When New York Governor Kathy Hochul introduced a plan to build 800,000 housing units over the next decade, opponents immediately conjured up worst-case scenarios. Such an ambitious goal would require her to destroy America’s long tradition of local self-rule, shattering the uncrowded idyll of New York City’s suburbs and forcing them into a densely populated future.

In the case of Cedarhurst, a village of about 7,000 people on Long Island less than an hour’s commute east of midtown Manhattan, it’s really just a matter of 0.004 square miles.

That’s about the size of the largely industrial site, on Pearsall Avenue just a couple blocks from the train station, where a developer wants to build a three-story apartment complex. The modest project wouldn’t alter the community’s character or come close to solving the problem of exorbitant housing costs. But it would satisfy Cedarhurst’s initial housing-growth target under Hochul’s proposal, while also giving New York City a bit more room to grow, putting $4 million in the municipal coffers, and boosting the local economy.

The fact that such an obviously useful project is mired in litigation reflects a deep dysfunction in the way communities like Cedarhurst decide what can go where. Local land-use rules and state environmental laws empower longtime residents to block precisely the kind of multifamily developments that would most effectively address housing shortages, even as ever-larger mansions encroach unimpeded on their humble bungalows. The process also excludes crucial constituencies, such as the people who would live there if they could, and the millions of Americans who would benefit from a more dynamic housing market.

This broken model has proved mostly impervious to positive incentive. State and federal efforts to reward local land-use reform have fallen flat. When Massachusetts offered direct payments in return for “smart growth” plans allowing more multi-family housing, it gained just 3,500 new units over 13 years, largely outside the Boston commuting area. The relatively well-off neighborhoods capable of making the biggest difference simply weren’t interested, preferring to stick with the same zoning rules that produced today’s sprawling, car-congested suburbs.