Question
Are you aware of any jurisdictions that have utilized free market affordable rent (rather than government-mandated rent control) to stabilize prices? Interested in your impression of this approach as described in https://newenglandlegal.org/free-market-affordable-rent-a-model-zoning-bylaw-alternative-to-rent-control-for-massachusetts-towns/
Many thanks for your response.
XXXXXXX
Answer
Hi XXXXXXX,
It's not a topic I've heard about before, but looking at the summary page I get the impression that this is more like a reframing of zoning reform than a novel approach/alternative to rent control or stabilization, policy-wise. I suspect it would run into exactly the same challenges as zoning reform, and I'm not sure what it adds to make overcoming those challenges easier. In some ways, I'd guess it actually makes the work more difficult by using the phrase "free market," which is as triggering to many people on the left as "rent control" is to many on the right. (Generalizing here, but that's been my observation over the years.)
Another challenge, in my view, is that rent control is usually targeted at older buildings, and rightly so. Those are the homes that tend to be lower cost, and where lower-income people tend to live. I suppose that may not be relevant, except insofar as this policy is being discussed as an alternative to rent control. In practice, I would describe the proposal you linked to as a means of producing deed-restricted affordable housing. That's an important goal, but qualitatively different from rent control and a much longer term project. Impacts can take a decade or more to make a real impact because housing is such a long-lived product and produced in relatively small quantities year-to-year. Rent control, for better and for worse, makes itself felt much more rapidly.
In some ways this proposal reminds me of what we saw over the past couple years after the mayor of Los Angeles issued Executive Directive 1, which when combined with state density bonus policies led to proposals for thousands of unsubsidized deed-restricted affordable homes. Developers received relief from many building restrictions, including density limits, height, and floor area, as well as permit streamlining — similar to what's contemplated by the overlay zones discussed in the model you linked to — and it turned out that was sufficient to make these projects financially feasible in many locations. Unfortunately, because the policy was so effective, it is now being weakened by the city's leadership.
This, in my view, is the fundamental challenge in most jurisdictions: Not that we lack ideas or knowledge about how to build housing more affordably, but that the people opposed to more homebuilding still hold most of the power, and they don't want us to build more, or more affordably. That's slowly changing, and perhaps in some jurisdictions framing it as a "free market affordable rent" or something along those lines could be effective — but probably only as a framing device, in my view, and not as a genuinely novel policy instrument.
The Live Local Act is another policy that comes to mind in a much more conservative state, Florida. There, in almost all commercial, industrial, and mixed-use zones, cities must allow housing at roughly the densities of their highest-density residential zone, with 40% of units reserved for moderate income households. There doesn't seem to be a central repository of data on projects proposed under the Live Local Act, but a scan I did a few months ago indicated there have probably been tens of thousands of units proposed since its passage in 2023.
I hope that addresses some of your questions.
Cheers,
Shane