Could Ezra Klein’s ‘Abundance Agenda’ Help Housing?

Writer Ezra Klein of the New York Times advocates for something called an “abundance agenda,” a progressive embrace of economic development and increased supply of housing by reducing regulatory barriers. Klein was one of the first progressives, or anyone of any persuasion I’ve seen, the way we’re addressing housing in the United States is “absolutely insane,” imposing the massive spending on housing with no effect on housing prices or homelessness. In a recent articulation of this, Klein points out the general tenets of the abundance agenda without specifics on how to overcome regulation. That’s fine. But I’d caution that to succeed, specific proposals must contain reforms that are both necessary and sufficient to improve housing for people with less money.

It’s simple from my perspective having spent decades in deep blue Washington state.

“Look at the places Democrats govern” Klein points out, “liberal strongholds like New York, Illinois and California. In 2023, California saw a net loss of 268,000 residents; in Illinois, the net loss was 93,000; in New York, 179,000. Why are they leaving? In surveys, the dominant reason is simply this: The cost of living is too high. It’s too expensive to buy a house. It’s too expensive to get child care. You have to live too far from where you work. And so, they’re going to places where all of that is cheaper — Texas, Florida, Arizona.”

Those are red, Republican states. Which, for progressives, Klein argues is “also a spiritual crisis.” There’s no doubt that across the country families at the lower end of the economic ladder voted in greater numbers for Trump. These families have become the battleground, maybe appropriately, for ambitious politicians. There’s nothing wrong with the political debate being about who can best help people struggling to make ends meet. You can’t make this case, Klein argues, or be “the party of working families when the places you govern are places working families can no longer afford to live.”

Again, I agree, “this is the policy failure haunting blue states”

What’s the answer? I often hear about the Yes In My Back Yard or YIMBY movement. I’m not convinced. First, I’ve pointed out that YIMBYs aren’t generally developers, builders, or housing providers but generally are planners, architects, or local government employees. That’s not a bad thing, but they tend to support public housing options. They talk about supply, but in practice the YIMBY argument leans not so much on regulatory relief but the equivalent of single-payer housing. A national YIMBY leader quoted in the linked post above said this: “We need publicly subsidized and/or public housing too. And we could transition to entirely public housing. I have no problem with that.” When YIMBYs embrace supply, they generally mean more money for subsidies not reducing regulation.

And when the YIMBY set does advocate for rolling back rules, they often neglect the myriad of contingencies and conditions that surround the changes they propose. In Austin, as I’ve mentioned before, a significant allowance for as many as three units on previously single-family lots was necessary for increasing housing opportunity but not sufficient. The regulatory changes there were real, but things like existing surface water management charges and an inability to subdivide lots made it likely that very few single-family lots would become multifamily homes. This happens largely because YIMBYs usually seek a big headline not a big economic opportunity; remember they’re mostly planners not people with their hands in the dirt as builders of housing. Those people get the millions of pinpricks of legislation that make it challenging in places like Seattle or Austin or San Francisco to build more housing.

Finally, almost every big change supported by YIMBYs ends up with extractions and mandates to squeeze the projects for money to pay for the big Low Income Housing Tax Credit (LIHTC) projects that Klein called “absolutely insane.” In Seattle, the Mayor and Council embraced Mandatory Inclusionary Zoning, what I’ve called, essentially, a bribery scheme that requires fees to build new housing, fees that wind up in LIHTC housing which has dramatically high per unit costs and takes years to build and usually houses people who earn more money to pay the rent.

Usually, even when trying to reform housing regulation, blue states and cities can’t resist creating more regulation. Consider former San Francisco Mayor’s effort to create a new department to try and reduce regulation; the irony of a bureaucracy to reduce bureaucracy is lost in may big blue cities. And remember, Klein’s abundance agenda diagnosis “The problem is the rules and the laws and political cultures that govern construction in many blue states.”

He is right, “if Democrats are to become the party of abundance, they have to confront their own role in creating scarcity.” Right at the heart of this is a genuine embrace of the price system, an economic view that sees prices as a quantitative indicator of supply and demand. That means when prices go up, it isn’t gouging or greed, it is lack of supply and too much money. This would make most progressive and populist heads explode; the heart of their views is that there are billionaires and millionaires programing the economy for their own benefit.

“To unmake this machine will be painful,” says Klein, and he says, “It’s also necessary.” So, before any lofty ideals of abundance can take hold among progressives, they will have to figure out an alchemy that allows an acceptance of both capitalism (or more accurately, human nature) without trying to transmogrify it into some perfect system of economic distribution. Instead, progressives must see abundance is expanding the pie, not handing out thinner and thinner slices. This is what, as Klein points out, what “they need to offer Americans a liberalism that builds.”