Thursday, November 29, 2007
It is always more palatable for government to give a “tax break” for behavior it wants to encourage, rather than to impose extra tax for behavior that it doesn’t. This is true even when the category of “good” citizens might be as large as that of “bad” ones. So, instead of trying to penalize residents for long, gas-guzzling commutes (such as through a higher gas tax, as relentlessly advocated by Thomas Friedman), the state of Maryland is rewarding citizens for having a short commute. A new program rewards homebuyers up to $5,000 to defray settlement and closing costs, if the new home is within 10 miles of their work, or within the same county.
Such a program undoubtedly will affect some residents’ buying choices, even in a fairly dense state such as Maryland (and let’s hope, for taxpayers sake, that the documentation that the state gets is better than that collected by subprime lenders over the past decade). But, like any subsidy, it may have some unwanted consequences. More than half of Maryland’s population lives in a handful of large suburban counties that spread more than 20 miles in either direction. Thus, a lot of buyers in sprawling subdivisions far from Baltimore, Annapolis, and Washington will be subsidized as “short commutes.” Next, because many inner suburbs tend to be wealthier than outer suburbs (as low-cost housing drifts further out), much of the subsidy may end up going to buyers of big old close-in houses instead of less affluent buyers on the low-cost fringe. And, finally, if some homeowner decisions are affected by the grant, might the subsidy also affect some decisions of employers as to where to locate –- such as away from an urban area and into the middle of a sprawling new suburban realm?
Wednesday, November 28, 2007
Here’s a kind of story that I probably could write about every day. A town rejects a plan for compact, lower-cost housing because it fails to meet the density “character” requirements of the community, with the loss of apparently socially friendly housing. In this case, the town is Harding Township, N.J., where, according to the New York Times, the government has rejected a plan to build 32 small, “eco-friendly” houses because they don’t meet the town’s five-acre minimum lot size requirement. Will this rejection preserve the “rural” character of the township? Perhaps. Will it push development pressures elsewhere and further out, causing greater environmental harms, and further exacerbating the low-cost housing crunch in the state as a whole? Probably. And this is in New Jersey, a state that has often been at the vanguard of encouraging land use law to consider more than just the parochial desires of the locality, and to consider greater social needs. Sigh …
Monday, November 26, 2007
Land use law is unusual in the American legal system, in that it often works to the detriment of what poorer people would get in the free market—often explicitly, in the case of exclusionary zoning. Thus it makes sense for governments to sometimes give a break to “affordable housing.” Massachusetts law did just that last week with a high court ruling that a state statute designed to grease the wheels for affordable housing can override local zoning laws, even when the project includes a commercial use. (The case is Jepson v. Zoning Board of Appeals of Ipswich, No. SJC-09914 (Mass. Nov. 20, 2007)).
The local YMCA in Ipswich, north of Boston, helped plan an apartment building, with 18 units, that would meet the state law requirements for affordable housing, which among things include a pledge that all the units will forever be reserved for low-income households. The first floor would be used for commerce, including a YMCA center, a bank, and a coffee shop “or similar establishment.” The Massachusetts Supreme Judicial Court held that it was permissible for the town government to grant a fast-track, comprehensive permit for this mixed-use building, regardless of the fact that a routine commercial development would have required more scrutiny. Nothing in the state affordable housing law prohibits “incidental” commercial uses in an affordable housing structure, the Court noted.
Such a benefit for mixed-use buildings might naturally provide an incentive for developers to re-characterize commercial-dominated developments as “mixed use.” In the Jepson case, the trial court concluded that the development was not a “subterfuge for commercial development.” This leaves open the questions of: What would be a subterfuge? Would it have to be an “intentional” effort to “abuse” the affordable housing law? And, considering the court’s citing of the purpose of the law to encourage more low-cost housing, would a finding of a “subterfuge” be a valid ground for a court’s setting aside a town’s approval? Lawyers, start your engines …