Jenny Schuetz

Tourists visiting Boston love to stroll through Boston Common, enjoying the park’s landscaping and historic monuments, or skating on the Frog Pond. On the other side of the Charles River, Cambridge Common is less picturesque and more utilitarian, with softball fields and walking paths.  

Both spaces have been adapted from their original purpose in the seventeenth century: open grassy fields where nearby townspeople could bring their cattle to graze. At the time that Boston, Cambridge, and many of their New England neighbors were founded, the local common sat at the spatial center of a village economy.  

People’s daily activities occurred within a few miles of their home, because walking and riding on horseback were the only modes of transportation. How Boston decided to allocate its land between homes, farm plots, and a few small shops had little impact on towns located five or ten miles away.  

Today, the Boston metropolitan area has over 4 million people, who participate in one regional labor market – but whose land use decisions are made by more than a hundred independent cities and towns. Residents of Concord can travel the 18 miles from their historically preserved 19th-century village center to downtown Boston in less than half an hour by car, or slightly longer by commuter rail.  

 Local Decisions, Regional Problems 

The land use, housing, infrastructure and tax policy decisions made by each city and town have noticeable spillover effects on their neighbors and on the regional economy. Delegating authority over land use and housing production to local governments made sense when “downtown” meant the village common.  

Today, our continued deference to local control creates problems. 

In theory, local control over public services offers some advantages, especially in a country as large and diverse as the United States. Mayors and city councilors may have better information on what voters in their jurisdiction want than congressional representatives and, by virtue of closer geographic proximity, can be more easily held accountable.  

In practice, the virtues of localism are less clear. Allowing each city, town, or county to determine how much housing to build (or not build) leads to poor economic, social and environmental outcomes for metro areas, states and the country overall. Local political and fiscal incentives are often in direct conflict with regional well-being. Further, local governments vary widely in their resources and institutional capacity, which affects their ability to plan and implement effective policies. Therefore, the quality and quantity of services funded and provided by local government vary widely from place to place. 

 Sticks and Carrots 

Several governance changes could enhance the capacity of all local governments to deliver better housing market outcomes to their constituents, while also combating the parochialism that hampers regional and national housing markets.  

State and federal governments should set clear goals for local governments (standards for well-functioning housing markets), as well as provide financial support and technical assistance. Using federal or state funds to incentivize greater regional cooperation could also improve economic outcomes. Creating financial “sticks” to penalize localities that choose not to comply may be necessary for some determinedly exclusionary places.

Local political and fiscal incentives are often in direct conflict with regional well-being. 

Our highly decentralized system of local control over land use contributes to regional housing shortages and environmentally unsustainable development patterns, and it exacerbates racial and economic segregation. But localism is deeply entrenched in American democracy, which makes it difficult to change.  

Reform efforts have to contend with deeply entrenched financial and political interests. Support is likely to come from unusual coalitions that cross partisan lines – both a potential strength and a limitation of the burgeoning YIMBY (yes in my backyard) movement. And even if we could remove all regulatory barriers to well-functioning housing markets, the cost of market-rate housing would still be too high for some people and families to afford. 

 Change Is Hard, But Necessary 

Change is hard. People grow attached to their homes and neighborhoods as they are now – or as they were in the past. Elected officials are comfortable working within the existing policy framework. Even for people who struggle under the existing regime, the prospect of change can be frightening: Things can always get worse. 

To implement more economically, environmentally and socially beneficial housing policies, we need to open Americans’ hearts and minds to a broader vision of the American dream. The goal of owning a low-density, detached home isn’t financially feasible for many young workers, nor is it environmentally sustainable for a growing population.  

Elected officials, from mayors to governors to the president, are understandably reluctant to deliver unpleasant news to their constituents. But the only way we can move toward a better future is to present Americans with an honest, direct assessment of our current problems and concrete proposals for reform.  

Jenny Schuetz is a senior fellow at the Brookings Institution. This column is adapted from her new book, Fixer-Upper: How to Repair America’s Broken Housing Systems. 

Fixing Our Broken Housing System Means Rethinking Local Control

by Banker & Tradesman time to read: 3 min