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Why Rent Control and Housing Subsidies Backfire: James Burling

James Burling is vice president of legal affairs at the Pacific Legal Foundation and author of “Nowhere to Live: The Hidden Story of America’s Housing Crisis.”


“It used to be, if you could build on your property, you could farm on your property. You could cut trees on your property, as long as you didn’t hurt your neighbors. And now the federal government, the state government, local governments, are your partners in anything you do to your property. You can’t do anything. You can’t say ‘boo’ without getting permits from somebody. And with that kind of impediment, a lot of people who would otherwise build homes said, ‘I’m going to do something else with my money,” says Burling.


What are the root causes of the apparent shortage of housing in America today? And why does Burling believe many housing-related proposals, from subsidies, to certain zoning rules, to rent controls, are actually counterproductive?


Watch the video:



“The idea of having national rent control, as has been proposed by some people, is going to make a problem that is confined to the cities with rent control into a national problem. And it’s been a disaster wherever it’s been tried,” says Burling. “We start taking away property rights, and then it becomes easier for government to control us. If the government owns the printing presses, are you going to have a free press? If the government owns the churches, do you have freedom of religion? If the government owns interests in housing everywhere, and you have to get government permission to have a home or to build a home, are you going to be as willing to criticize the government that has the power over you of where you’re going to live?”


Views expressed in this video are opinions of the host and the guest, and do not necessarily reflect the views of The Epoch Times.




RUSH TRANSCRIPT


Jan Jekielek:

James Burling, such a pleasure to have you on American Thought Leaders.


James Burling:

It’s great to be here.


Mr. Jekielek:

The first presidential debate just happened, and Vice President Harris mentioned a $25,000 subsidy for housing for new home buyers. This tells us that there is some kind of issue in society. As you’ve been saying, there is a crisis. Please tell us what is happening.


Mr. Burling:

It’s a huge issue. People can no longer afford the way they used to to rent or to buy a new home. It used to be the rule of thumb that you spend a third of your income on housing. Many, many people today are spending over half of their income on housing, which leaves little left for medical costs, for transportation, food, and the other essentials of life. We’ve gotten ourselves into this problem gradually, slowly, but clearly we’re in a problem that’s a century in the making, a bad government policy after bad government policy, just making things worse and worse. Now, we’ve hit the boiling point.


Mr. Jekielek:

I want to dig into the whole picture that you develop in your book. Before we go there, let’s talk about some of these policies that are being put on the table recently like for example this subsidy to get for new home buyers.


Mr. Burling:

A subsidy is generally a terrible idea in the short term and especially in the long term. It’s a terrible idea in the short term because all it does is shovel more money into a sector of the economy without necessarily increasing supply. When you shovel more money into a sector of the economy that doesn’t increase supply, you have increasing costs. Costs are inevitably going to be going up if people are given $25,000 through their first down payment.


If that happens, people will start raising prices to take that into consideration, that, hey, there’s an extra $25,000 we can raise the cost of homes by a commensurate amount. In addition, a longer-term problem is once you start a subsidy like this, it’s virtually impossible to get rid of these subsidies later on, even if you find out that you can’t afford it. I mean, this $25,000 per person for a new home is estimated to cost in the next 10 years at least $100 billion.


That’s $10 billion a year. That’s a lot of money. Where’s the money going to come from? It’s going to come from you and I, the taxpayers. As a result, all other costs are going to go up as well. There’s no such thing as free money. I’m very concerned that proposals like this are also going to bankrupt part of the economy and cause prices to go up.


Mr. Jekielek:

These are typically described as a kind of stopgap measure at a time when people are having difficulty supporting them. From the perspective of the buyer, hey, if I have more money to buy a home, maybe I can actually do that.


Mr. Burling:

I have all kinds of sympathy for the homebuyer trying to buy their first home. It is very, very difficult. But stopgap measures are never stopgap, as I alluded to a moment ago. They last forever. Second of all, it’s not solving the problem of supply. It’s just having more money chasing the same number of homes that there was before. Supply and demand is an inexorable law, and you can’t overturn it. People have tried. North Korea tried to overturn it. Venezuela tried to overturn it. Even the California legislature tried to overturn the law of supply and demand. It just doesn’t happen.


Mr. Jekielek:

There is a model of this happening with the cost of education. Would you say that is analogous?


Mr. Burling:

It’s a very good analogy. Because higher education, what we saw, is the government, federal government, shoveling all kinds of money into higher education. As a result, universities and colleges started on spending sprees, where there used to be dormitories, there are now these castles, these luxury residences that people can’t afford before they go to college and can’t afford afterwards. But when they’re in college, they’re in the lap of luxury. After a while, the government funding starts to dry up a little bit.


So you have all kinds of student loans, but the price of tuition has gone up and up and up in universities and colleges, far faster than the rate of inflation. And this is because you have so much money washing around from the federal government in the process. As soon as there’s any kind of fiscal issue, the students have to pay back the student loans, which is increasingly difficult, so then the taxpayers are supposed to come in and subsidize this process even more directly than they were before.


This doesn’t solve the problem of the quality of education. It doesn’t solve the problem of availability of education. All this money just increases the cost of the education we have. And if nothing else, it makes it worse because now on our university campuses, we not only have professors and a few administrators, we have an army of bureaucrats overseeing the federalization of higher education.


The same thing is going to be in housing. If you start putting all kinds of money in it, whether it’s $25,000 for new home buyers or the other proposal to have $40 billion for subsidies for home builders, all this money washing around is going to create great distortions to the market, and it’s going to be increasingly difficult for the ordinary Joe to go out and find a home that he or Josephine can afford.


Mr. Jekielek:

Let’s shift gears and talk about some other policies that are in discussion right now. One of them is challenges to the single-family zoning policies. So what do you think about that?


Mr. Burling:

We need to rethink our zoning laws. This is one of the things I talk about in great length in my book, Nowhere to Live, because zoning started out in America on a very dark side. The first zoning law in America came in 1910 in Baltimore when George McMechen, a Yale-educated attorney and his schoolteacher wife, decided to buy a home commensurate with their success in life as an attorney and a schoolteacher. George McMechen bought a home in Baltimore in a very nice neighborhood called Eutaw Place.


Within several days of buying that home, local youths came to his property and essentially rioted, taking rocks and throwing them and destroying and cutting down every window in the house and the skylight. Why? They were incensed that George McMechen had bought this house because George McMechen was black and the neighborhood was all white.

Baltimore soon followed up with the nation’s first zoning law that made it a crime for a black person to move into a white neighborhood or subject him to a fine of $3,000 in current dollars or a year in jail. This was the first zoning law we had in America.


The Supreme Court struck down a very similar law that came out of Kentucky in 1917. That case was brought by a white real estate dealer and the head of the local NAACP, and they argued this is a violation of our property rights. This is a violation of our economic rights, and the court agreed. I think property rights are very important.


Now, zoning continued after that, though, in a different form. It was not racial zoning, but economic zoning, which had pretty much the same effect. By economic zoning, I mean you have areas of the city that are laid out for residential and others for businesses, and never the twain should meet. But also the residential areas often excluded multifamily housing. It excluded apartments. It excluded triplexes, duplexes, and even boarding homes. And that made it impossible for working class people to live in the nice suburban areas outside of cities.


Euclid, Ohio had an ordinance that was modeled on one out of New York City. The New York City ordinance was designed to keep Jews from having garment factories on Fifth Avenue. It sounds awful, but that’s what it was for. The one in Euclid, Ohio was designed to keep the immigrants out by banning all apartments. This went also to the Supreme Court.


Here, the Supreme Court had a change of heart. The Supreme Court said, look, apartment buildings in a residential neighborhood are nuisances. They’re kind of like a pig in the parlor instead of the barnyard. Now, I don’t know if the court was thinking that the term pig also meant a Polish-American at the time, but clearly the court was concerned about immigrants and working class people moving into nice suburban neighborhoods like the members of the court lived in, and it upheld that ordinance.


Ever since, zoning, single family zoning has taken over in America. It has made it virtually impossible today, especially for working class and new families starting out, to afford a home in many, many neighborhoods in this country. When we talk about single-family zoning, you have to think about the history. You have to think about what it does today.

Even if we no longer think about zoning in terms of keeping out working-class people or keeping out minorities, that is the effect that it has.


People are talking about the need to reform single-family housing in various ways. It could be allowing duplexes where there are single-family homes or triplexes or small apartments. There are lots of things that could be done to make housing more accessible through better zoning or elimination of bad zoning in many cases.


Mr. Jekielek:

You know an astonishing amount about this and of course you know it’s very much in your book. Please tell us about your background before we jump to some other policies, because this has been your life.


Mr. Burling:

It has been my life, but I had a life before this, if you will. I used to be, before I was a lawyer, a productive member of society, I like to say. I was an exploration geologist, and I climbed up and down hills all over the West looking for deposits of gold, silver, molybdenum, and copper. And I thoroughly enjoyed that. But in that experience, I ran into a lot of bureaucrats federal bureaucrats in particular and I was appalled by the power that they exercised which was extra legal that is they didn’t have legal authority to tell me what I should do it could and couldn’t do and I thought this is ridiculous we should sue these people.


My boss in the mining company didn’t want to sue anybody. I said, I’m going to go to law school so I can fight bureaucrats. I went to law school and I have been fighting bureaucrats for the last 40 years. It’s not only in mining or environmental laws, but all kinds of things dealing with people trying to build homes and being stymied by all levels of regulation at the state and local and federal levels.


Mr. Jekielek:

What would be the most significant case that you participated in? Let’s talk about one that you won, and one that you didn’t win.


Mr. Burling:

I‘ll talk about one that I won first, because then I hope we can forget about the one that I lost, or ones that I’ve lost. I’ve lost a number of cases, of course. In 40 years, it will happen. But the most significant case that I had was representing Anthony Palazzolo, who was a owner of a small wrecking yard and tow truck operator. He had a little bit of money that he set aside and he bought about 20 acres of property in Rhode Island along the coast, not right on the beach, but on a big pond in the area.


His hope was to develop that property and he bought it as part of his corporate ownership. He had a little corporation and he’s the only owner of the sole corporation. He tried to develop it year after year after year. Eventually, he said, I’m not going to try houses. I’ll do a beach club, just a parking lot, some shade structures, and some bathrooms that people can use, and then the families, when the water is too rough in the ocean, they can come to the pond and enjoy themselves.


Rhode Island turned down the permit because, in its words, this was going to advance a private interest rather than a public interest. When Anthony Palazzolo started having problems with the state of Rhode Island, he wrote to the legal publishing company called West and said, send me everything you have on property rights. They did and he read it. His son later would tell the story. When I was growing up, my friends’ parents would talk to their kids, their fathers about football and baseball. My father talked to me about the Magna Carta and about the Constitution.


When Anthony sued, saying that his property had been taken for public use without being paid, he thought he could win his case. And he had his own private attorney in Rhode Island, and he lost case after case. Eventually, the Rhode Island Supreme Court said, look, you’ve had this property so long, you knew that there were regulations in place, and you knew the regulations were getting harsher and harsher. You bought this property knowing that this regulatory scheme was in place. Next case, please.


Anthony got together with us, and I took on the case and went to the U.S. Supreme Court with it. It was Attorney General Sheldon Whitehouse at the time that argued the case for Rhode Island. I argued that Anthony Palazzolo had the same rights to sue for the regulatory taking of his property as anybody, regardless of when he bought the property, and regardless of when the regulations went into place. The property rights don’t disappear with the passage of time.


The Supreme Court, in a five to four decision, agreed with us. In an opinion, Justice Anthony Kennedy wrote that future generations have the same rights and property as the present ones, and they can sue. This is critically important for the idea that property rights really do not diminish in time simply because you have more and more regulations. These are the precedents created when I was with the Pacific Legal Foundation that really helped a lot of people.


Mr. Jekielek:

In your book, the erosion of property rights is the central theme. You argue that is the unifying principle behind all the problems with housing.


Mr. Burling:

Absolutely. Because time after time, people have had the right to use property taken away for various reasons. Another case that I have is kind of a heartbreaking case in some way was representing Ocie Mills and his son, Carey. They wanted to build a little fishing cabin for his son. And to do that on this little quarter acre or less lot, he started putting sand on the property.


The EPA came out and said, stop, you’re filling wetlands. And he thought that was absurd because these lands were dry. What do you mean wetland? Well, he got another letter from the EPA saying, stop right now. He stopped, he went to the state and said, because he thought, well, EPA, they’re sharing the same office building. If I talk to people in the state that I know, they'll come out and help me. And they did.


They came out and they actually drew a line in the sand and said, on this side, wetland, do not touch. This side, you can develop it. So he began to bring in some more sand and clear the land. The next thing that he knew, he was being arrested. And he thought this was so absurd, he could just go to court and tell his story. He didn’t have an attorney when he started out, and he ended up losing his case, and he spent 18 months in federal prison with his son because he filled a wetland.


But the irony of this case is after he got out of federal prison for filling this wetland, he had to clear it, so he took the sand off. Then the EPA said you haven’t taken enough off. It’s not wet enough. And he went back to court. This time he got a different one. He had an attorney and a different judge. This judge went out to look at the property and said, yeah, you’ve taken enough sand off, but really this is an Alice in Wonderland scenario. I don’t think this is a wetland to begin with. And you’re basically going to prison for putting dry sand on clean dry sand on a sandy area and the judge thought that was absurd.


I came into the case trying to get his conviction reversed because having the conviction he had limits on his ability to hunt with guns he had limits on his ability to vote and all the other things that felons federal felons have you know, their rights are forever limited. And we tried to get his conviction overturned on the basis of what the second judge had found.


Unfortunately, the 11th Circuit Court of Appeals said it was too late. He should have brought these arguments in a better way when he was in trial court the first time. It’s too late to overturn his conviction. That was a disappointment.


But the key to housing in this case is that you have such power of the federal government over individuals. Federal government can say, don’t touch your own property. Don’t put anything on it, not even clean sand, or you may go to prison. That’s a terrible impediment for people to build homes, and it’s a terrible incursion on their private property rights. It used to be, if you could build on your property, you could farm on your property, you could cut trees on your property, as long as you didn’t hurt your neighbors. Now, the federal government, the state government, local governments are your partners in anything you do to your property. You can’t do anything. You can’t say boo without getting permits from somebody.


Mr. Jekielek:

The big question is, what was the rationale and the development of all these regulations? Presumably, it’s because of population increasing and needing to protect vulnerable habitats?


Mr. Burling:

Certainly, we developed an environmental ethic in the 1970s, and it makes sense. We have to start paying attention to the environment we live in, and we have to protect it. But there has to be a balance in what we do. This is something I argue in my book, that when we simply blindly take vast areas of land off the table for development, whether it’s for wetland, endangered species habitat, viewshed corridors, agricultural preservation zones.


All these things take very large amounts of land off the table without considering what is the impact on housing, what is the impact on affordability, what is the impact on future generations who may need this land for some purpose or other if it’s taken off the table under threat of going to federal or state prison. This is a balance that has been lost.

This is the debate that we should be having about, well, how much environmental protection is enough and what are the costs of environmental regulation?


People used to think that it was free. You just regulate something and you don’t develop property and there’s no cost to society? There should be payments to the people whose land can’t be used, and that’s one thing we’ve argued for years at Pacific Legal Foundation. But there’s also the social cost of an increase in price of housing that has been a result of this and many other regulatory programs.


What I argue in my book, Nowhere to Live: The Hidden Story of America’s Housing Crisis, is that we really need to reconsider the regulatory oversight that we have on home building to make it easier for people. If they have land and the family farm isn’t working out anymore, because the commodity prices have changed, or the city’s growing up next to me, they ought to have the ability to build some homes on that property. But that right is diminished so much now that people are not doing that. It’s causing a huge distortion in the market and increase in prices.


Mr. Jekielek:

You have a list of the various eroders of property rights. We’ve touched on exclusionary zoning. We’ve touched on excessive environmental regulations. There’s this issue of eminent domain which is difficult to fathom. Please explain that for us.


Mr. Burling:

Eminent domain is the power of government to take private property and convert that into a public use. That is what the Constitution allows. It says the government shall not take property except for public use and upon the payment of just compensation. If the government has a highway, it has to build a school or a military fort, it has the ability of taking that property and converting it into a public use. It has to pay for that property, but that’s the way that the Constitution has laid out.


The parameters of the relationship have substantially changed over the years. It happened most significantly right here in Washington, D.C. It’s a story I go into in Nowhere to Live. And there’s a picture of this neighborhood in my book that is a nice, working class neighborhood, ethnically mixed. It was slated for redevelopment because some of the homes were run down, especially in the back alleyways. They looked kind of a mess. But it was a minority population, and the city fathers thought it was time to redevelop the area.


So they decided to take a large swath of Washington, D.C., and change it from the working-class neighborhood that it was into more of a commercial district that could perhaps bring in more taxes and have fewer minority residents in it. And an owner of a department store challenged this, saying, look, I have a perfectly fine department store. There’s nothing blighted about it. There’s nothing wrong with my department store. Why should I have my property taken and given to a private developer? Where is it public use?


The Supreme Court, in 1954, in an opinion by Justice William O. Douglas,

who’s a great progressive, said, look, if Washington, D.C. wants to make its city beautiful as well as sanitary, there’s nothing that the Supreme Court should do to stand in the way or any court. We should defer to the wisdom of the local government to be able to take this property. What about the public use clause? What’s the public use in taking private property from one person and giving it to another redeveloper.


The court’s answer was that public use was the same thing as the public interest. If the program follows a public interest, that’s good enough. Since that time, Katy barred the door, and city after city found a way to redevelop working class neighborhoods, minority neighborhoods, and turn them into something else, because it advanced a public interest. One wonders what the public interest is in getting rid of poor and working class neighborhoods.


To be cynical, it was to basically get rid of poor and middle class neighborhoods and replace it with anything else. And we’ve seen some horrific examples over time of this. Poletown in Detroit was a very vibrant working class neighborhood, ethnically mixed. It was destroyed to make way for a large General Motors plant. In New London, Connecticut, there was the Kelo case, where a large middle class neighborhood was destroyed to make way for Pfizer pharmaceuticals.


The problem with conflating public interest with public use is that government players are very bad at predicting what a good industry is going to be or what a good business is going to be. These are people that take other people’s money and spend it. They’re not people that go out and create wealth in the first place.


I will give you two examples. Back to Poletown, Detroit, within a couple decades, General Motors pulled up and left, and there’s nothing there but an abandoned wasteland. In New London, Connecticut, the Pfizer headquarters left after a decade-and-a-half. They said, enough of this. They never rebuilt these neighborhoods, and right now they’re nothing but weed-strewn lots.


The government does a terrible job in defining what public interest is. If you make it public interest instead of public use, basically public interest is whatever foolish idea that government bureaucrats may come up with to spend other people’s money to destroy neighborhoods.


Mr. Jekielek:

Rent control is another policy that’s on the table. In New York City there’s a number of people who have decided to stay living in their New York home forever because they have such a great deal.


Mr. Burling:

New York City is emblematic of what is wrong with rent control, but other cities as well. There is a famous economist named Assar Lindbeck, who said that the best way to destroy a city other than bombing in a war is through rent control. He was right. Why is that? Because when you have rent control, a number of things happen.


First of all, people don’t want to build any more housing, rental housing in a city, because they are afraid they won’t be able to get a decent return on their investment. Second, those places that are rented out under rent control, when landlords cannot get a return on their investment, they do not want to invest more money in those places, and they inevitably begin to deteriorate. People blame the landlords on the deterioration of housing stock, but it’s often because they can’t get a return on their investment.


New York City is a great example because of course we had the emergency after World War I and World War II. The justification for rent control was a wartime emergency where soldiers were moving into Washington, D.C., and industry into New York City, and rents were going up and up, so they had rent control as a temporary measure. It’s been temporary now for over a century since World War I was over.


I go through the history in New York City of rent control. It was a disincentive to build, and landlords began to abandon their buildings because it made no economic sense to keep a building open when you had rent control. It made more sense for them to simply abandon the building, mail the keys to the city and say, you deal with it, I’m sick of it.


But what happened after that is squatters moved in, people stole the plumbing and the pipes, and the buildings deteriorated all that faster than before. And then they began to burn down because they were great for arson. In the late 60s and 70s, the South Bronx was burning all the time. I have a picture in my book, Nowhere to Live, of what the Bronx looked like during the heyday of rent control.


It looked like a landscape devastated by bombing and a war. It was terrible. New York City got smart, and they altered their rent control to make it much more palatable and made it easier for landlords to get a return on investment and said that we’re not going to have rent control like we did before for newer buildings. So people started to build again. New York City started to come back for that and a number of other reasons as well.


Then fast forward to 2019, New York passes a new rent control law, which is as draconian as the old one. Now, the market value of apartments is going down. Landlords are no longer renting out apartments in some cases. We are going through the same old cycle as before.


The idea of having having national rent control as has been proposed by some people is going to make a problem that is confined to the cities with rent control into a national problem and it’s been a disaster wherever it’s been tried it also the cost of housing in the areas of rent control and around them go up because there’s such a disincentive for building new supply supply doesn’t meet demand and prices go up in everything except the rent-controlled units. It does nobody any favors.


Mr. Jekielek:

You said that the value of the property is going down, but the rents are going up?


Mr. Burling:

The rents in non-rent-controlled apartments go up.


Mr. Jekielek:

In New York, in some cases, there’s low occupancy but quite high rents, shockingly, given that there is not full occupancy, which is what you would expect when these rents should be here.


Mr. Burling:

In Manhattan, you do not have full occupancy of rent-controlled units and others because people are realizing they can jack up the prices because we have so much demand chasing limited supply. It reminds me of a study that Pacific Legal Foundation did a number of years ago, comparing rent-controlled jurisdictions in California cities with adjacent non-rent-controlled jurisdictions. We thought that the economic results would be exactly what they turned out to be.


Rent control is justified as helping working class people, poor people, and minorities. That makes sense. They’re the ones that at least can afford the higher rents. But in every case we found, people living in the rent-controlled cities compared to the adjacent non-rent-controlled cities. The people in the rent-controlled cities were whiter, they were richer, they had better jobs, they were in better health, and they were better educated.


Rent control was helping those people that had the stability in their lives to stay in one place, like your friends in New York City, and take advantage of rent control for decades. Poorer people and working class people often don’t have that stability in their life and they cannot take advantage of rent control in the long term. Moreover, rents in the non-rent controlled cities can often go up because that’s where the supply is and that’s where people are competing in an area that suddenly becomes static. Nobody’s building new stuff in rent controlled cities. They’re building it elsewhere and people have to move elsewhere, so it’s a huge distortion on the market. The bottom line is, it doesn’t help the people that it’s supposed to help the most.


Mr. Jekielek:

Basically, less regulation is better. Is that correct?


Mr. Burling:

That’s the bottom line. We don’t need to solve our housing crisis with more government programs, more government regulation, and more overarching rules and regulations on how we use our property.


Mr. Jekielek:

But we need some regulations.


Mr. Burling:

Yes, we need some.


Mr. Jekielek:

I’m trying to understand where that line is.


Mr. Burling:

The regulation should be to protect health and safety, bottom line. In my book, Know Where to Live, I talk about the history of housing in New York City and how in the 1800s, there were terrible tenements. These tenements didn’t have running water, they didn’t have sewage connections, and they didn’t have air. By air, I don’t mean air conditioning. They didn’t have air. They didn’t have windows that opened up. The only ventilation was through a central stairwell. Disease was rampant. You would take a bucket and fill your water up with a pump down in the courtyard below, and you take your waste and you put it into a pit near the pump. No wonder people were getting cholera and all kinds of diseases in New York.


There were regulations of housing that were necessary and that made sense. You had to have running water. You had to have toilets. You had to have ventilation and air. All these things to protect the public health, welfare, and safety. Yes, we do need regulations to some extent. But just because a little of something is good doesn’t mean a whole lot more is always better.


We’ve gotten beyond the whole lot more portion where it has become so difficult to build any kind of housing. The housing that you can build has all sorts of increased costs built in. In California, you have to have a solar roof on your property. That’s a wonderful idea, but it costs about $10,000 a house. You have to have charging stations for your EVs. You have to meet insulation standards that are appropriate for the North Pole.


But California has the most temperate climate in the world. Why do you need triple pane windows where you never need air conditioning in the first place or heating most of the year? So we’re just going overboard with regulations, and all they do is add to cost after cost after cost. Is it really a crisis?


When I first moved to California, there were no people living on the streets that I ever saw. There were no people camped out in the river areas. I used to like to hike in some river areas and outside of Sacramento. I wouldn’t do that now to save my life because it is nothing but homeless camps and it’s dangerous. It’s dirty and it’s filthy, because people have nowhere to live.


Mr. Jekielek:

There are a few different things happening. The things that you describe have to do more with addiction or drugs and things like this. It’s not like housing isn’t a specific issue, but that’s not the reason people are camping out there in the first place.


Mr. Burling:

The housing crisis contributes to that, because we used to have single-room occupancy hotels where your alcoholic or drug addict could at least have a place to live to some degree. We also used to treat mental illness on a much larger scale. I talk in my book, Nowhere to Live, about an experience I had when I was an undergraduate.


I was a volunteer at a state mental hospital in upstate New York. I would visit the patients and talk to them and have conversations and try to socialize them, somebody other than the guards in these institutions. In 1976, they all began telling me the same thing—Jim I’m going to a halfway house in Schenectady.Jim I’m going to a halfway house in Albany. Jim I’m going to a halfway house down in Rome, New York.


I said, great, wonderful, how long are you going to be there? Six months. What happens after that? They didn’t know. Nobody knew. There was no plan. We emptied out the institutions, and there are all sorts of legal reasons why that happened that I go into my book in lay terms.


We ended up with the homeless being treated by self-medication with drugs on the streets. They’re in the jails or the institution of choice now for many of them. And we have failed as a society to take care of the people that are most vulnerable, those people who have mental illnesses, mental illnesses that often morph into drug addiction. And we don’t have opportunities to treat people for their drug addiction either. The big institutional warehouses like the ones I volunteered in were hardly ideal.


There has to be a better answer than that. But the answer is not sending people out to the streets. When you are on the streets and there’s no place that you could possibly afford, there’s no rooming houses available, there’s no single-room occupancy hotels, there’s no little tiny starter homes that you could be with a number of people as a group home.


In many places in the states, it is illegal for too many unrelated people to live in the same home. These were ordinances designed to stop boarding houses and stop college fraternities and stop college roommates from getting together. But they have an impact on many people that it may be the only place that they could possibly afford. As housing has become more unaffordable, we’ve had more and more people on the streets, so there is a connection. Yes, there’s a lot of things going on, but the issue of home prices and being priced out is a contributing factor.


Mr. Jekielek:

You develop so many of these ideas in your book. How do property rights become the central theme that brings all of this together?


Mr. Burling:

All these cases that I talk about with the failure to allow people to build homes to meet the supply that demand requires is an incursion on property rights. It used to be, you know, 100 years ago, if you owned land, you could decide to build on that land as long as it wasn’t going to harm your neighbors. You could farm it. You do what you want to do. You couldn’t do things that were going to have a direct adverse impact on your neighbors. You couldn’t necessarily put stables next to a nice home or have a little factory, things could be dealt with in the courts through the nuisance law.


But as we’ve had zoning laws and environmental regulations put on, your right to use your property has been diminished seriously. That has had all sorts of adverse consequences. One of them is the cost of housing. Another one that I think people don’t think about enough is our property rights are so directly related to all of our other rights. When we start taking away property rights, then it becomes easier for government to control us.

If the government owns the printing presses, are you going to have a free press? If the government owns the churches, do you have freedom of religion? If the government owns interest in housing everywhere and you have to get government permission to have a home or to build a home, are you going to be as willing to criticize the government that has the power over you of where you’re going to live?


I think that property rights are incredibly important for the economics of housing, the supply and demand issue, but all the other issues that go together with owning a home. Ownership of a home is a place that we can keep government out, keep other people out. It’s my home. Or even a rental property. It’s my apartment. And I have the ability to keep the government out of this. But when government has such control, we have a potential loss of a lot of our freedom.


Mr. Jekielek:

Any final thoughts as we finish up, James?


Mr. Burling:

The crisis we’re in, and I do think it’s a crisis, is something that is not inevitably permanent. We can get out of it. In the past, we’ve had waves of immigrants in the 19th century. We built our way out of the housing crisis then. We can do it again. But we have to focus on the regulations that are important, but at the same time recognize that too much regulation just makes it impossible for people to build the homes where people want to live.


Mr. Jekielek:

James, if there were a single policy recommendation to challenge this crisis, what would that be?


Mr. Burling:

First of all, we have to look at ourselves and ask the question in our communities where we live, are we allowing enough housing to be built so that our children will have a place to live, so the people who work in our communities have a place to live? And in most cases, the answer is going to be no.


We’re not allowing enough housing and our children have to go elsewhere. People who work in our communities often have to have long commutes into where we live, and we need to reform it starting at the local level. We need to maybe allow duplexes where there’s a single family home now, or a triplex, or maybe a small apartment over here.


I’m not talking about 80-story apartment buildings in suburban neighborhoods, or subsidized housing in various places, but I’m talking about at the local level, asking ourselves the question, what can we do to allow more housing in our community so our children and the people that work here can live here.


I think we can do this. We can start at the local community and tell our city fathers, we want to fix the system that we have to allow more people to live here, to bring prices down. And if that sort of thing happens in different communities all across the country, we can begin to make a significant impact on the crisis that we have today.


Mr. Jekielek:

James Burling, it’s such a pleasure to have you on the show.


Mr. Burling:

It’s been my pleasure to be here.


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