Latest news with #RentFree
Yahoo
10-06-2025
- Business
- Yahoo
SpaceX's New Company Town Considers Adopting NIMBY Zoning Code
Happy Tuesday, and welcome to another edition of Rent Free. To start with a brief programming note, I'll be off the rest of this week and early next week for some YIMBY-adjacent travel. That means there will not be a Rent Free newsletter next Tuesday. Please accept my sincerest apologies for the coming lack of housing and urbanism content in your inbox. Perhaps readers could use the missed newsletter to reflect on all the homes, businesses, economic growth, and social opportunities we're all missing out on because of modern zoning codes. With that said, we still have this week's newsletter, which takes an in-depth look at cutting-edge SpaceX's efforts to impose a stodgy old zoning code onto its new company town. Early last month, residents of the unincorporated villages near SpaceX's launch facility in Southern Texas, right along the U.S.-Mexico border, voted to incorporate as the new city of Starbase, Texas. With most of the area's 218 voting residents being SpaceX employees, the vote was overwhelmingly in favor of incorporation, which the company says will make it easier to shut down nearby beaches during its rocket launches. Regrettably, one of the first priorities of the futuristically named town is to adopt a very old-fashioned zoning code. As news outlets have covered, the Starbase City Commission has begun notifying residents that they potentially stand to lose the property rights they've enjoyed on their heretofore unzoned land under a draft zoning code. As The Washington Post reported, Texas law does guarantee landowners' rights to continue with legal uses of their land after the imposition of a zoning code, even if the new code would otherwise prohibit those existing uses. Nevertheless, longtime residents have every reason to fear that the imposition of a zoning code will restrict future, potential uses of their property and reduce their property values in the process. A close look at Starbase's 52-page draft zoning code suggests that it's better than some zoning regimes. But it will still do a lot to weigh down development with layers of red tape, restrictions, and process. The zoning maps for most major American cities, and more than a few suburban communities, are a rich mosaic of multicolored districts. That's a bad thing. Each color on a zoning map corresponds to a zoning district, with its own set of rules about how big buildings can be and what they can be used for. In this respect, Starbase's proposed zoning code calls for a simpler regulatory regime. The draft code divides the small city into just three zoning districts: heavy industrial, open space, and mixed use. The heavy industrial district will allow, naturally, industrial uses as well as office space and retail businesses dedicated to servicing industrial uses. The open space zoning prohibits almost all development to preserve recreational space within the town. The mixed-use district will meanwhile allow for a range of residential, light commercial, and office uses. This is a major improvement on the standard zoning code's strict separation of residential and commercial uses. Allowing easier intermingling of homes and businesses goes a long way toward allowing much-prized "mixed-use walkable urbanism" where convenience stores can actually be allowed in convenient walkable locations. Starbase's proposed code does one better by not imposing single-family zoning, where only one residential unit per property is allowed. Instead, the city would permit single-family homes, duplexes, and townhomes anywhere in its mixed-use district by right—meaning these forms of "light-touch" density wouldn't need to obtain discretionary permits from the city government. As an added bonus, the code would not impose any minimum lot sizes on townhome developments. Barring any health or safety rules about minimum unit size, developers can use as much or as little land as they think is necessary when building rows of row houses. (Townhome blocks could only be 220 feet long.) Starbase's mixed-use district would also allow property owners to operate home-based businesses out of their residences. Unlike the most restrictive home-based business ordinances, it would allow on-site sales and permit up to four clients to visit a home-based business at one time. The draft code would still prohibit home-based businesses from having employees on-site or physically altering the exterior of the home. Starbase's mixed-use district would also allow a range of commercial uses. Property owners could set up a convenience store, grocery store, bar, restaurant, or even a dance hall by right anywhere in the mixed-use zone. Better yet, unlike most zoning ordinances, Starbase's draft code includes no explicit parking minimums requiring builders to include so many off-street parking spaces per bedroom, square foot of commercial floor space, or linear foot of church pew. For by-right uses, it would generally be up to the property owner to decide how much off-street parking their business needs, or even whether it needs parking at all. For all its relative simplicity and permissiveness, Starbase's draft code still includes many restrictions typical of modern zoning regimes. It would require a 4,000 square foot minimum lot size for single-family homes and duplexes. That's quite large. It's notably bigger than the 3,000 square foot minimum lot size cap that the Texas Legislature voted to impose on new subdivision developments in larger cities. Starbase's draft code would also create maximum lot coverage rules, which would limit duplexes and single-family homes from covering no more than 50 percent of an individual lot. Townhomes could cover no more than 75 percent of an individual lot. These requirements would potentially make residential development on smaller lots infeasible. Builders also couldn't make up for these lot coverage rules by building up. Single-family homes, duplexes, and townhomes could be no more than three stories tall. Where Starbase's zoning code is more permissive than the average code on smaller homes, it is arguably more restrictive than the average code when it comes to regulating multifamily housing. While multifamily housing developments, defined as projects of three or more units, are not expressly prohibited in the mixed-use zone, they're not allowed by right either. Building a triplex or a small apartment building would require obtaining a special-use permit from the City Commission. That would be no small order. Under the draft code, the Commission will only sign off on these permits after holding a public hearing and finding that the proposed project is "compatible with surrounding land uses," that anticipated impacts are adequately mitigated, and that the development promotes "the public interest, health, safety, and general welfare." Those requirements would give the City Commission ample opportunity to say no to a new development. The power to just say no in turn gives the City Commission a lot of leverage to force changes and alterations onto developers' projects. Per the draft code, the City Commission is explicitly given the power to condition a special-use permit on adherence to ad hoc density limits, parking regulations, landscaping requirements, and a development's "compatibility of appearance." This all opens the door to the city micromanaging the aesthetic appearances of multifamily housing. In the service of mitigating parking impacts, the city would seem to have the power to force developers to add parking on a project-by-project basis—undercutting the code's general forswearing of mandatory parking minimums. Starbase's mixed-use district would require some businesses, including hotels, liquor stores, and smoke shops, to get special-use permits, too. The code would also ban food trucks from parking on the street. While many people might not care for its founder or his politics, Elon Musk's SpaceX is undeniably one of the most dynamic, innovative companies in the world. It's done a miraculous job of revolutionizing the stodgy, state-dominated business of space launches. It's unfortunate, then, that a company known for disrupting old ways of doing things is proposing to regulate land use in its newly founded city via outmoded zoning regulations that have turned the rest of the country into a property rights–free museum. It's sadly ironic, too, that Starbase is considering adopting a zoning code, given that SpaceX is no stranger to burdensome land-use regulations. The company's launch operations at Vandenberg Space Force Base in California are under threat from the state's Coastal Commission, the state body that governs development along the California coast. Federal environmental review laws have hampered SpaceX's Texas launch operations as well. Despite SpaceX's tangles with red tape, Starbase can't resist zoning's gravitational pull, and all the awesome powers it creates to say "no" to land uses both benign and beneficial. In so much of the rest of the country, states and cities are slowly walking away from parking minimums, minimum lot sizes, and discretionary approval processes. Lawmakers in Starbase's home state of Texas just passed a slew of zoning reforms that peel back some local restrictions on property rights. The state's newest city is moving in the opposite direction. It'll end up costing the company town some of the dynamism its corporate patron is justly famous for. Connecticut Democratic Gov. Ned Lamont is considering whether to veto a housing bill that would require cities to upzone land in order to meet state-set affordable housing goals. The Washington Post reports on the out-of-control costs of subsidized affordable housing in Washington, D.C., which costs far more to build than nearby market-rate housing. Read my own investigation into the country's most expensive affordable housing project from 2019. The California Senate passes a major transit-oriented development bill. The post SpaceX's New Company Town Considers Adopting NIMBY Zoning Code appeared first on
Yahoo
03-06-2025
- Business
- Yahoo
Starter Homes Live in Texas, Die in Arizona
Happy Tuesday, and welcome to another edition of Rent Free. This week's stories include: A win for starter homes in Texas… …and a defeat for them in Arizona A new constitutional challenge to affordable housing fees in Denver A veto of a rent-recommendation algorithm ban in Colorado After suffering a near-death experience last week, Texas' Senate Bill 15, a.k.a. the Texas Starter Homes Act, has passed the Legislature and now goes to Gov. Greg Abbott's desk. The bill would prevent larger cities in larger counties from requiring that homes sit on lots larger than 3,000 square feet in new subdivisions of at least five acres. Proponents argue the bill will enable the construction of more inherently affordable owner-occupied housing in cities that currently require much larger minimum lot sizes. "Texas is the first state to take seriously the idea that a basic starter home, without any subsidy, is usually affordable to people making average or below average incomes, [and] should be available throughout the state," says Salim Furth, a researcher at George Mason University's Mercatus Center. Minimum lot size bills have been one of the more controversial and less successful YIMBY reforms in state legislatures. Texas' bill is one of the first to make it over the finish line. The initial version of S.B. 15 would have capped minimum lot sizes at 1,400 square feet, which mirrors unzoned Houston's minimum lot sizes. That version passed the Senate back in March but was watered down in negotiations between the House and Senate during last-minute considerations of the bill. The legislation survived an effort by Texas House Democrats to effectively gut the legislation. Rep. Ramon Romero Jr. (D–Fort Worth) briefly succeeded in amending the bill to only require that cities create a starter home zoning district with the smaller minimum lot sizes. The amendment would not have required cities to actually apply this new zoning district to existing land or to new subdivisions. This would have effectively made S.B. 15 a voluntary paperwork exercise. Romero, who also briefly managed to kill S.B. 15 via a procedural move in the House earlier in May, has criticized the idea that allowing smaller homes on smaller lots would yield more affordable homes. "It's already been proven that just because you have smaller (homes) does not immediately equate to more affordable (homes)," he said to The Texas Tribune last month. (One study of minimum lot size reductions in Houston, Texas, facilitated an "unprecedented" increase in the rates of infill housing construction in single-family neighborhoods.) That gutting amendment was stripped out of the bill in last-minute negotiations between the House and the Senate, meaning that S.B. 15 will have some teeth, provided that Abbott signs it into law. While the bill does not apply to existing residential areas, Furth says it will provide developers a lot more flexibility when constructing new subdivisions, where most new housing in Texas is being built. "Most single-family home production in Texas is done in non-residential or extremely large lots. A normal Texas subdivision is going to be five-plus acres, and maybe 100 acres," he tells Reason. "This will allow [builders] to include small homes in that mix and make sure there's a variety of price points and variety of styles." Meanwhile, in Arizona, a near-identical Starter Home Act is effectively dead in the Legislature. Similar to Texas' S.B. 15, Arizona's S.B. 1229 initially would have prevented cities from requiring homes in new five-acre-plus subdivisions to sit on lots of 1,500 square feet or more. It also would have prohibited cities from dictating home designs and aesthetic features. As in Texas, the bill was amended to raise its minimum lot size cap to 3,000 square feet. That helped get the legislation out of the Senate on a 16–13 vote, with Republicans and Democrats on each side of the vote. Two House committees also approved the bill in March and early April. But it then stalled over what proponents say was persistent opposition from the Arizona League of Cities and Towns and Gov. Katie Hobbs' office. Hobbs vetoed a very similar starter homes bill last year, citing concerns that that bill didn't explicitly carve out areas near military bases or explicitly include fire safety standards. The governor's concerns were incorporated into S.B. 1229. Yet the League, a taxpayer-funded association that lobbies on behalf of local governments, still opposed the measure's limits on local land use regulation. The League had pushed for amendments to S.B. 1229 that would have dramatically limited its scope by imposing price and income limits on new starter homes and requiring that buyers live in the homes for 15 years. These demands were a nonstarter with proponents of S.B. 1229, and negotiations on a compromise measure broke down earlier this spring. "Our last meeting was about an hour and a half in the governor's office. I could tell [the governor's staff] were not going to come over to our side at all. They were literally letting the League [of Cities and Towns] run the table," Sen. Shawna Bolick (R–Phoenix) tells Reason. With the threat of Hobbs' veto hanging over S.B. 1229, the bill was never brought up for a floor vote. Despite the failure of the starter homes bill, Arizona did pass a handful of other housing reforms. That includes House Bill 2928, which expands last year's statewide legalization of accessory dwelling units in cities to unincorporated county land as well. The state also passed a bill allowing for third-party plan reviews of single-family projects. A homebuilder in Denver is suing the city over what it says are unconstitutional affordable housing fees being slapped on two of its pending residential projects. Denver's Linkage Fee ordinance requires residential projects of 10 units or less to either set aside units to be rented or sold at below-market rates or pay per-square-foot "linkage" fees. When local builder redT Homes sought approval for two projects, a four-unit single-family home development and a two-duplex project, the city said it would need to pay linkage fees of $45,000 and $25,000 on each respective project. A string of U.S. Supreme Court decisions has established that the Fifth Amendment protects property owners from having to turn over money or property when applying for a development permit, unless there's some nexus between those exactions and the actual impact caused by the permitted project. Denver claimed when passing its linkage fee ordinance in 2016 that new development raises economic activity and, therefore, raises demand for work-force housing. redT counters that its planned homes are making housing more affordable, not less, by expanding overall housing supply. By charging it an affordable linkage fee anyway, Denver is charging it for an impact it's not having. That, it argues, violates the Fifth Amendment's protections against "unconstitutional conditions." redT Homes is suing Denver in the U.S. District Court for the District of Colorado. "These affordable housing fees almost by definition fail" the Supreme Court's test for unconstitutional conditions, says David Deerson, an attorney with the Pacific Legal Foundation, which is representing redT Homes. "A fundamental law of economics is that an increase in supply tends to lower prices. Denver can't force developers like redT Homes to pay fees to solve problems that not only are they not creating, they're already solving," he says. A favorable federal court ruling for redT Homes could have major implications for housing development nationwide. Like Denver, hundreds of jurisdictions have adopted similar "inclusionary zoning" policies that require housing developers to include below-market-rate units in their projects or pay in-lieu affordable housing fees. And like Denver's linkage fees, a similar constitutional argument can be made that inclusionary zoning's affordable housing mandates take developers' property to mitigate an impact they're not having. Developers and property rights advocates have periodically challenged inclusionary zoning laws in court, typically with little success. In 2019, the Supreme Court declined to hear a challenge to Marin County, California's inclusionary zoning policy that the California Supreme Court had upheld. (The Pacific Legal Foundation also litigated that case.) The Supreme Court's 2024 decision in Sheetz v. County of El Dorado established that fees and permit conditions imposed on whole classes of projects by legislatures must still have some connection to those projects' impacts. The Sheetz decision was a narrow one. It didn't directly deal with inclusionary zoning. But it did widen the universe of permit conditions that can be challenged as "unconstitutional conditions." Potentially, a new inclusionary zoning case with a new set of facts might pick up this Court's interest and result in a decision that puts some guardrails on affordable housing mandates and fees. On pure policy grounds, inclusionary zoning acts as a tax on development, reducing production and raising costs. Ending these policies could unlock a lot of potential new projects. Colorado Gov. Jared Polis has vetoed a bill that would have banned the use of rent-recommendation software. Proponents of the bill argue that this software facilitates price-fixing among landlords by sharing nonpublic data on prices and vacancies between competitors. Colorado, along with a number of other states and the U.S. Department of Justice, is currently suing rent-recommendation software provider RealPage for antitrust violations. Polis said in a veto letter, posted online by Colorado Public Radio, that while he shares concerns that this software could be used to drive up prices, the measure was overly broad. "We should not inadvertently take a tool off the table that could identify vacancies and provide consumers with meaningful data to help efficiently manage residential real estate to ensure people can access housing," said the governor in his veto letter. "This bill may have unintended consequences of creating a hostile environment for providers of rental housing and could result in further diminished supply of rental housing based on inadequate data," he wrote. The governor said he would prefer for state and federal lawsuits to play out. He said he'd be open to a future bill that made a distinction between collusive and noncollusive uses of nonpublic competitor data. Read Reason's past coverage of the RealPage controversy here. New York City's rent-stabilized housing stock is in increasing financial distress, thanks to rising operating costs and the city's suppression of rent increases. To remedy the situation, New York assembly member, and New York City mayoral candidate, Zohran Mamdani is proposing to remedy the situation by freezing rents. Los Angeles Times covers the California Legislature's efforts to exclude urban infill housing from the state's notoriously burdensome environmental review process. Organized labor is cool on the effort, altruistically asking, "What's in it for us?" The biggest opponents of a public housing redevelopment project in New York City? The [wrong link here] of multimillion-dollar homes nearby. The Connecticut Legislature has passed a major housing bill that requires localities to zone for more affordable housing, increases density near transit stops, and pares back minimum parking requirements. The post Starter Homes Live in Texas, Die in Arizona appeared first on
Yahoo
27-05-2025
- Business
- Yahoo
Texas Revs the Growth Machine
Happy Tuesday, and welcome to another edition of Rent Free. This week's stories include: The near death of Texas' Starter Home Act Colorado's pending ban on rent-recommendation algorithm software A very Catholic story of eminent domain abuse But first, our lead item on the success of pro-supply housing bills in Texas. On May 20, the Texas House passed Senate Bill 840, which allows developers in larger counties to build residential and mixed-use developments on commercially zoned land "by-right." That means local governments can't force builders to go through extensive, expensive, and discretionary processes of requesting rezonings and variances. The bill "would make converting empty office spaces into housing units much easier," reads an analysis from the Texas Public Policy Foundation. Similar to Florida's Live Local Act, the bill also limits localities' ability to impose height and density restrictions on new residential developments on commercially zoned land. Cities would have to allow these new developments to be built at least at a density of 36 units per acre and 45 feet tall. Housing wonks describe the bill as clean and "muscular." Today, the Texas Senate concurred with the House amendments to S.B. 840. It will now go to Gov. Greg Abbot's desk. Also headed to the governor's desk is House Bill 24, which places new limits on valid petition rights that property owners can use to halt zoning changes. H.B. 24, a reform to the so-called "tyrant's veto", raises the percentage of property owners required to challenge a rezoning from 20 percent to 60 percent. It also lowers a city council's vote threshold to override these challenges from a supermajority to a simple majority. Neighborhood activists in Austin famously used their valid petition rights to thwart upzonings in that city. With H.B. 24's reforms, that will be a harder thing to pull off. Still pending approval is Senate Bill 15, a.k.a. the Texas Starter Homes Act. Described as a "smaller homes on smaller lots bill," the legislation would prevent local governments from setting minimum lot sizes of over 1,400 square feet in new subdivisions of five acres or more. The bill only applies to cities of 150,000 people in counties of 300,000 people or more. S.B. 15 had already passed the Senate with a 29–2 vote back in March. It was scheduled for a vote in the House of Representatives this weekend, where it nearly died. As the Texas Tribune reports, House Democrats led by Rep. Ramon Romero Jr. (D–Fort Worth) attempted to kill the bill on a procedural move. Romero had requested a "point of order" about the bill's exclusion of land around a planned Dallas County police training facility. This, said Romero, violated legislative rules about singling out individual jurisdictions in legislation. That point of order was accepted, preventing further discussion of the bill. But, reports the Tribune, the bill's supporters in the House managed to "fast-track" the legislation by removing the offending provision so that it will be considered on the floor again today. Romero told Tribune reporter Joshua Fetcher that he'd seen no evidence that allowing smaller homes on smaller lots would reduce home prices. He might want to look a little harder. The Mercatus Center's Emily Hamilton found in a 2024 study that Houston's minimum lot size reforms, on which the Texas Starter Home bill is modeled, facilitated an "unprecedented" increase in the rates of infill housing construction in single-family neighborhoods. Houston's reforms "had no detectable effect on land values, and she finds some evidence that it reduced land values. This may be because it has facilitated a large amount of housing construction," according to Hamilton's study. In recent years, software sold by companies like RealPage that recommend to landlords profit-maximizing rent and occupancy levels has come under fire for making housing less affordable. Critics charge that these products allow landlords to collude on prices in order to raise rents to above-market rates. The federal government and several states have sued RealPage for antitrust violations. States and cities have also started to crack down with legislation of their own. Earlier this month, the Colorado Legislature passed H.B. 25-1004, which would "ban the use, sale and distribution of software that uses an algorithm to set rents." (Colorado is one of the states suing RealPage.) The bill is now on Gov. Jared Polis' desk, who has not said whether he'll sign or veto it. "We're all for math and algorithms. At the same time, there is the concept of antitrust, which has been abused, but also has a core role in preventing monopolistic pricing practices," Polis told Reason in a Friday interview. "It's a question of: Is this an algorithm that reduces market friction and leads to more efficient pricing or is it a backdoor effort to exert monopolistic control over pricing?" The limited academic research on rent-recommendation algorithms suggests that they do in fact facilitate more efficient pricing. One study found that landlords who use these products lower rents faster in down markets and raise them faster in hot markets. RealPage critics would seem to have a hard time explaining why rents in Austin, where lots of landlords use RealPage products, are slashing rents in response to a glut of new supply. Last week, news broke that the village of Dolton, Illinois, is threatening to seize via eminent domain the childhood home of newly elected Pope Leo XIV from its current owners, who recently bought and renovated the home and are now selling it at auction. As I wrote last week: At present, the owners are auctioning off the small, 1949-built home for a reserve price of $250,000. In a Tuesday letter to the auction house running the sale, Dolton attorney Burton Odelson cautioned buyers against purchasing the house. "Please inform any prospective buyers that their 'purchase' may only be temporary since the Village intends to begin the eminent domain process very shortly," reads Odelson's letter, per NBC Chicago. Odelson told Chicago's ABC7 that the village had initially tried to voluntarily purchase the home but had snagged on the sale price. "We've tried to negotiate with the owner. [He] wants too much money, so we will either negotiate with the auction house or, as the letter stated that I sent to the auction house, we will take it through eminent domain, which is our right as a village," Odelson said. It's a wonder why the village can't pursue a voluntary sale, given the relatively low reserve price of the home. The potential for the modest, 75-year-old home to serve as a historic site surely couldn't boost the sale price that much. Seizing the home via eminent domain would seem to contradict the last Pope Leo's defense of private property and, in particular, privately owned family estates, in his famous 1891 encyclical Rerum Novarum. Wrote Pope Leo XIII, "Every man has by nature the right to possess property as his own." The plans of contemporary socialists to seize private property, Leo XIII denounced as "emphatically unjust, for they would rob the lawful possessor, distort the functions of the State, and create utter confusion in the community." Los Angeles Mayor Karen Bass is very pleased that at least one home in Pacific Palisades is under construction following the deadly wildfires that struck the area earlier this year. Los Angeles–area builders are less impressed with the mayor's streamlining efforts. Politico reports on a brewing split between the California Assembly and Senate on this session's housing bills. The Assembly has been passing a litany of YIMBY ("yes in my backyard") bills to streamline development. They face an uncertain future in the Senate. Senate President Pro Tem Mike McGuire has been less than keen on such efforts. Senate Housing Chair Aisha Wahab (D–Hayward) is even more critical by arguing that lowering building costs doesn't necessarily reduce housing costs. At The Volokh Conspiracy, George Mason University law professor Ilya Somin lays out some of the legal problems Toms River, New Jersey, might face if it follows through on its plans to use eminent domain to prevent a church from building a homeless shelter. Bisnow reports on the dire financial state of New York's rent-stabilized housing stock. If you have a home in Minnesota, you soon might not be able to get inside it, thanks to the state's impending ban on lead content in keys that makes most keys illegal. The post Texas Revs the Growth Machine appeared first on
Yahoo
20-05-2025
- Politics
- Yahoo
A Major Property Rights Case Idles on Supreme Court Docket
Happy Tuesday, and welcome to another edition of Rent Free. This week's stories include: How a pending challenge to Los Angeles' COVID eviction moratorium at the Supreme Court could pave the way for broader challenges to rent control laws nationwide Colorado Gov. Jared Polis deploys some fiscal sticks to get localities into compliance with state housing law. Why rent controls are worse than other price controls Idling on the Supreme Court's docket is a challenge to Los Angeles' COVID-era eviction moratorium that, if heard, could have major implications for legal challenges against tenant protection and rent control laws across the country. In its upcoming Thursday conference, the Court is scheduled to discuss whether to take up the case of GHP Management Corp. v. City of Los Angeles, in which landlords are demanding $20 million in compensation for what they claim was free housing the city of Los Angeles forced them to provide through its eviction ban. The Court has been repeatedly "relisting" the case since March, when it first was scheduled to consider taking the case in conference. A continually relisted case can effectively mean anything. It definitely raises the possibility that either the justices are seriously considering taking the case or, alternatively, that one of the justices is writing a dissent from the Court's decision not to take the case. "Usually when that happens, it means somebody is interested, but that doesn't mean they're going to take the case," says Jeff Schwab, an attorney with the Liberty Justice Center, which wrote an amicus brief in support of the landlords' Supreme Court petition. The landlords' petition in the case argues that the city of Los Angeles effected a physical taking of their property by banning their ability to evict tenants for nonpayment of rent, causing nuisances, and/or having unauthorized occupants and pets in their unit. They also couldn't take the property off the market to live in it themselves. These restrictions were ended in January 2023, although delinquent tenants couldn't be evicted for accrued back rent through 2024. "The City in effect imposed and transferred to defaulting tenants an exclusive easement in the private property of others without paying for it," reads the petitioners' cert petition to the Court. To make their case, the petitioners cite the 2021 U.S. Supreme Court decision in Cedar Point Nursery v. Hassid, which held that a California law allowing union organizers access to farm properties was a physical taking. Twice now, federal appeals courts have accepted the argument that COVID-era eviction moratoriums are a physical taking. In 2022, the U.S. Court of Appeals for the 8th Circuit ruled that Minnesota Gov. Tim Walz's eviction moratorium was, per Cedar Point, a per se physical taking, and the plaintiff landlords in that cause could pursue a just compensation claim. (Last year, the same court ruled that Minnesota's sovereign immunity protected it from actually having to pay landlords that just compensation.) More recently, in August 2024, a three-judge panel of the U.S. Court of Appeals for the Federal Circuit ruled that the federal government needed to pay compensation to landlords for the national eviction moratorium. Plaintiffs in that case are demanding $23 billion in compensation. Disagreeing is the U.S. Court of Appeals for the 9th Circuit, which in May 2024 rejected landlords' physical takings claim in the GHP Management Corp. case. "A statute that merely adjusts the existing relationship between landlord and tenant, including adjusting rental amount, terms of eviction, and even the identity of the tenant, does not effect a taking," reads the 9th Circuit's unpublished opinion, citing a 1992 Supreme Court decision upholding a local California rent control law. The Cedar Point precedent, the 9th Circuit wrote, distinguishes between a commercial lessee protected by eviction moratoriums and "an interloper with a government license" like the union organizers in that case. Schwab says the 9th Circuit is interpreting the Cedar Point case much too narrowly. The GHP Management Corp. case would give the Supreme Court a "clean vehicle" to give clearer, more sweeping guidance about the property rights protections they laid down in Cedar Point, he says. "I think that the way that property rights have been enforced by [lower] courts has been more limited than [the Supreme Court justices] want, so that seems like a good reason why they'd take it," Schwab tells Reason. Last year, the Supreme Court rejected two cert petitions from New York landlords making Cedar Point physical takings claims in their challenge to New York's 2019 rent stabilization law. At the time, Justice Clarence Thomas wrote a short statement agreeing that the court was right not to take those cases on technical grounds, while adding that the "constitutionality of regimes like New York City's is an important and pressing question." Should the Supreme Court take up the GHP Management Corp. case and agree with landlords that they've been victims of a physical taking, other rent control laws (like New York's) that include extensive eviction restrictions could become more vulnerable to physical taking challenges. In 2024, the Colorado Legislature passed a suite of housing bills requiring localities to pare back parking requirements, allow accessory dwelling units (ADUs) in single-family neighborhoods, and upzone land near transit stops. Democratic Gov. Jared Polis is now proposing to cut some state funding to communities that are behind schedule on implementing the reforms. In a Friday executive order, Polis instructed the state's Department of Local Affairs (DOLA) to create a list of localities that are (and are not) in compliance with these new "state strategic growth laws." The order directs other state departments to prioritize grant awards to compliant communities. "Housing is a multi-jurisdictional concern and today's action prioritizes the building of new homes in communities that are working to successfully implement more housing now for all budgets," said Polis in a press release. Colorado Public Radio reports that some $100 million in energy and transportation grants would be affected by the order. DOLA is given until October to produce its list of compliant and noncompliant jurisdictions. Grant awards given before then won't be affected by Polis' order. Nor will federally funded pass-through grants and grants awarded via state formulas. Colorado's state-level zoning preemptions are predicated on the idea that local governments have powerful incentives to oppose additional housing construction, to the detriment of statewide housing affordability. Localities therefore need to be told by the state to lift some of their restrictions. The difficulty in implementing such laws is that the state, even with a mandate, is still practically relying on local elected officials to amend local laws they, and many of their voters, didn't want to change in the first place. Witness California's local governments constantly finding new and creative ways to flout or undermine state laws prodding them to permit more housing. The California state government, as well as YIMBY legal nonprofits, has spent a lot of time and effort suing the most obstinate localities to enforce state housing law, as well as sending lots of threatening regulatory compliance letters. Fiscal incentives, both positive and negative, are a slightly more direct way to motivate compliance on the part of localities. The power of fiscal incentives is limited by how much state money might be forfeited by noncompliance, the willingness of local governments to go without state funds in the service of preserving their land use powers, and the willingness of state politicians to pick fights with determined NIMBY jurisdictions. An even more direct method might be to pair state preemption with state entitlements. That is, let developers bypass scofflaw jurisdictions and apply directly to the state for permission to build state-permitted housing. In her abortive 2023 Housing Compact, New York Gov. Kathy Hochul proposed creating a state body to approve housing projects in jurisdictions that were undershooting state-set housing production targets. Another option would be giving private property owners more general rights to sue over zoning restrictions. A bill considered (and rejected) by the Montana Legislature this year would have enabled private property owners to challenge effectively any land use restriction in court. Local governments would have the burden of showing that their restriction was a necessary and narrowly tailored means of protecting health and safety or eliminating nuisances. Those are more radical proposals, to be sure. That both failed suggests there's little political appetite for them currently. To the degree most states are considering state-level zoning reforms, they all generally take the form of state-level zoning preemptions of local land use rules. Such laws will continue to require local implementation and, to some degree, local resistance. Economist David Henderson has a smart piece explaining the difference between rent control and other price controls, like controls on gas prices. Both obviously will produce shortages. But only rent control creates a class of privileged insiders committed to keeping price controls around, even as they wreck the rental market around them. Henderson writes: In the rent control case, current tenants are insiders. They don't have to line up for an apartment. So, as noted above, most of them will favor rent control. In the gasoline price control case, though, everyone (unless they had a special deal with the service station owner or manager, as sometimes happened) had to line up. The fact that you managed to get gasoline last week gave you no special place in line this week. So, there aren't many "insiders" to lobby for the gasoline price controls. It's a dynamic that helps explain why rent control laws have persisted (and even gotten stronger) in places like New York City, even as the consequences of financially failing buildings, falling maintenance spending, and a general housing shortage pile up. Any productive fix to New York's rent stabilization law will result in higher rents for incumbent tenants, who have every incentive to lobby against such a change. Thus, the law remains the same, and the problems get worse. A California business owner weaponizes the "Baby Shark" song to keep the homeless away. Over at City Journal, Eric Kober offers a grim assessment of the major New York City mayoral candidates. Opposition mounts to efforts to eminent domain an Episcopal church's land in Toms River, New Jersey, on which the church was planning to build a homeless shelter. In California, Assembly Bill 609, which would exempt urban infill housing from the state's onerous environmental review law, passed the Assembly with unanimous support. The New Hampshire Legislature has passed two bills that allow multifamily residential development in commercial zones and permit accessory dwelling units to be built in single-family zones. The post A Major Property Rights Case Idles on Supreme Court Docket appeared first on
Yahoo
13-05-2025
- Politics
- Yahoo
New Jersey Town Uses Flimsy Blight Allegations To Seize Tire Shop, Apartment Building
Happy Tuesday, and welcome to another edition of Rent Free. This week's stories include: Proposed funding cuts at the Department of Housing and Urban Development (HUD). Zoning reform in Baltimore. Encampment crackdowns in California. But first, our lead story on a case of apparent eminent domain abuse in New Jersey. There, the city of Perth Amboy is using incredibly flimsy blight allegations to seize an apartment building and a family-owned tire shop from owners whose families came to America to escape communism. Honey Meerzon's parents are Jews from the Soviet Union, who moved to the United States in the 1970s to escape religious discrimination. Luis Romero's parents fled Fidel Castro's Cuba when he was eight years old. The two ended up as neighboring business owners at the corner of Smith and Herbert Streets in Perth Amboy, New Jersey. It's there that Romero has been running his family's tire shop, Quick Tire, for the past 20 years. Meerzon has owned the four-unit rental property next door for the past 10. Now, these two children of refugees from communism are having their businesses taken from them by the all-too-American process of eminent domain. Last month, the City Council of Perth Amboy voted that Meerzon and Romero's properties were not, in fact, comfortable homes or a successful business, but are rather blighted hazards. Because their two buildings are too close together, too close to the street, and have some (since-collected) litter and stray cats in the backyard, the city says it is now entitled to take the properties. Meerzon and Romero strongly object to the idea that their properties are in any way blighted. They argue that the city's report claiming otherwise is riddled with erroneous complaints and fatal factual errors. Nevertheless, the city has moved forward with seizing their properties, which sit right on the edge of a massive city-facilitated warehouse project. Both property owners now face a looming deadline at the end of May to file a lawsuit challenging the seizure. "They refuse to answer our calls. They refuse to answer any of our lawyers," says Meerzon. "They're waiting for us to go to superior court to monetarily drain us until we have no choice but to take whatever they offer us." Neither Perth Amboy's mayor nor any members of the City Council responded to Reason's request for comment. Both Meerzon and Romero see a dark irony in their properties being seized by the city, given their family's backgrounds. "[My parents] said this is the only way you get on your feet. You have to take a risk, you have to make an investment, you have to leave a legacy for your children," Meerzon tells Reason. "This is what happens to the legacy they dreamt of having coming here." "The reason [my parents] left Cuba is the system how it was, they just come to your home, say 'we want this property. You have to get out,'" says Romero. "Here it's done legally." Read the entire story here. The Trump White House's budget proposal released earlier this month proposes steep cuts to federal housing programs. The administration is asking for a 44 percent cut to current funding levels for the next fiscal year, according to an analysis from the National Low Income Housing Coalition. The $26 billion in proposed cuts would significantly reduce funding for rental assistance programs administered by HUD. It would also zero out funding for the Community Development Block Grant program and the HOME Investment Partnerships Program. Also on the chopping block is the Pathways to Removing Obstacles (PRO) to Housing program (a.k.a. "baby YIMBY grants") that was intended to reward cities for reforming their zoning codes. Read some of Reason's criticism of that program, and its poorly targeted grant awards, here and here. On Monday, Baltimore City Council members introduced a package of bills to allow more homes on less land. The proposed reforms, which have the backing of Mayor Brandon Scott, would allow between two and four homes on land currently zoned for single-family units, permit taller single-stair buildings, and eliminate off-street parking requirements, reports The Baltimore Banner. "Nothing stands more clearly in our way than our own laws of prohibition and division," said Councilman Ryan Dorsey at a Monday news conference announcing the reforms, per the Banner. "The bills being introduced today are the first, modest step to correcting course." On Monday, California Democratic Gov. Gavin Newsom urged cities and counties to adopt a model ordinance targeting homeless encampments written by his office. The model ordinance would prohibit "persistent camping" in a single location and camping on sidewalks. It would require that local governments "provide notice and make every reasonable effort to identify and offer shelter prior to clearing an encampment." The Supreme Court's 2024 Grants Pass decision gave local governments more freedom to clear encampments and cite the homeless for sleeping in public, even when there are no local shelter beds available. The release of the model ordinance was accompanied by the governor's release of $3.3 billion in voter-approved funding for supportive housing and treatment programs. Local governments in California are complaining that the governor is blaming them for inaction on homelessness while not providing them with enough funding to address the problem, reports the Associated Press. Advocates for the homeless argue that encampment clearances are punitive and merely separate the homeless from social service providers. First Things reviews Yoni Appelbaum's Stuck and finds broad agreement on his criticisms of zoning regulations. A country club sues to block a townhome development enabled by recent "missing middle" reforms in Raleigh, North Carolina. Did someone say snob zoning? Could Hong Kong get even more dense? This Works in Progress essay by Benedict Springbett argues that yes, yes it can. Washington Democratic Gov. Bob Ferguson signed a recently passed rent stabilization bill into law. Critics argue the measure will reduce the supply of rental housing. Some YIMBY propaganda spotted in the wild in D.C. The rebellion is growing. The post New Jersey Town Uses Flimsy Blight Allegations To Seize Tire Shop, Apartment Building appeared first on
