OPINION & EDITORIAL
Inclusionary zoning rent control in disguise
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Also by Mark Murphy:
- Bush inconsistent at home, abroad (January 15, 2006)
- Foreign language requirement unnecessary in college (January 30, 2006)
- Americans underappreciate Darwin (February 13, 2006)
- Inclusionary zoning rent control in disguise (February 27, 2006)
- Blogs contribute to news cycle (March 20, 2006)
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by Mark Murphy
Monday, February 27, 2006
It's funny how activists from different sides of the political spectrum end up reverting to some of the same old tactics. After the courts struck down the teaching of creationism in public schools, the creationists decided to dress up an old idea and give it a new acronym. Similarly, because of the inconvenient agreement among nearly all economists that rent control "reduces the quantity and quality of housing available," the social-justice crusaders dreamt up IZ as a way of disguising their true actions.
The Madison Politburo passed an inclusionary zoning (IZ) ordinance in January 2004 that requires new housing and rental developments have 15 percent of their units set aside for residents who make less than 80 percent of the Dane County median income. Late last month, the Department of Planning and Development released a study analyzing the effects of the IZ. Ald. Jed Sanborn, District 1, who should be applauded for his staunch opposition to IZ, aptly characterized the study as "33 pages of nothing."
The IZ issue raises a number of concerns. First, the IZ ordinance is just one of many actions taken by the Common Council that violate the rights of property owners. From the minimum wage hike to the smoking ban to inclusionary zoning and now the possibility of mandated sick leave, it is clear the Common Council has a fetish for making Madison a horrible place to do business.
In the case of IZ, landlords and other housing developers are perfect targets for politicians, especially in the campus area. Students' relative silence on the IZ issue probably stems from the fact that, by the time freshmen begin their first off-campus housing hunt, they've already been taught to demonize anyone who collects rent checks for a living.
On top of this, Austin King and company do such a splendid job of wrapping these issues up in social-justice doublespeak that critics are left looking like cold-hearted fascists.
In addition to IZ's fundamental interference in property rights, the other glaring problem with IZ is that it is simply a clever way to pass costs on to other sectors of the economy. In a study examining the effects of IZ in the San Francisco Bay area, two economists from San Jose State University found that IZ "restricts the supply of new homes" and "makes market-price homes more expensive."
While some have attacked this study, other bipartisan analyses have reached similar conclusions. And this makes sense. When the prices of some housing units are artificially restricted, other market-priced units will have to make up the difference. Regardless of the demand for housing, developers and other Madison residents share in bearing this extra burden.
The end result is a disincentive for new development in Madison and higher costs for residents not qualifying for IZ housing.
However, Madison's social-justice crusaders aren't concerned with such reasoning. Instead, they simply dismiss their critics as simpletons wrapped up in the unsophisticated teachings of Economics 101. In their "progressive" fantasyland, they truly believe there is such thing as a free lunch.
But their "free lunch" comes on the backs of everyone else.
Last year, Steve Brown and the Apartment Association of South Central Wisconsin made a valiant effort to have the IZ ordinance struck down as a violation of Wisconsin's rent control statute, but the Dane County Circuit Court unfortunately ruled against them. Along with all of their similarities, it is hard to believe that IZ, an ordinance that controls rent, can be understood as anything other than rent control.
Then again, welcome to Madison.
Swedish economist Dr. Assar Lindbeck once made the famous remark: "In many cases, rent control appears to be the most efficient technique presently known to destroy a city — except for bombing." Perhaps Dr. Lindbeck should add IZ to the list.
Mark Murphy (mmurphy@badgerherald.com) is a junior majoring in economics and finance.
Anonymous (February 27, 2006 @ 2:17am):
LAME. What wretched conclusions you draw in this debate. Read the damn ordinance, understand how it works (density bonus in exchange for affordability), how there is a waiver process if IZ poses an undue burden on profit, and figure out why it is that Madison's skyline has more cranes than you do brain cells. IZ has a few flaws, the Mayor is working to fix them, and yes, your politics are indistinguishable from those of a "cold-hearted fascist".
Anonymous (February 27, 2006 @ 9:11am):
Nice work, glad to see that clarity can ring forth from Madison still.
Anonymous (February 27, 2006 @ 5:10pm):
Good work. Keep it up.
Anonymous (February 28, 2006 @ 2:31pm):
So cranes are only required to build housing and are never used in high rise office buildings. Most apartment style complexes don't need to use cranes ever.
In addition, a waiver process creates political lobbying where some are held to a different standard depending on how much they can contribute. It is not the job of cities to create housing and in fact that exact policy is what has turned once beautiful downtown locations into slums.
As for fascists, I only see that political leaning coming from the green Eco-fascists and the relegious Islamo-fascists. Who are all about their version of freedom.
