By CHRIS POWELL
Connecticut is not likely to get any time soon the 120,000 additional housing units the state is said to need desperately to bring prices down, but the state’s political left has a terrible idea that may raise housing costs instead. It would have state government spend as much as $575 million each year to pay part of every residential tenant’s rent.
Fix Connecticut’s big problems before trying to seize utilities
Governor goes retrograde with Medicaid penalty tax
Many TV and radio ads make Connecticut look terrible
The idea, promoted by a left-wing public-policy organization called the Connecticut Project and supported by many Democratic state legislators, would give renters a tax credit of as much as $2,500 per year — probably more than many of them pay in state taxes. This proposal is rationalized as making the state’s tax system more progressive. But it’s more like another welfare subsidy.
A tax credit for renters won’t bring rents down. To the contrary, it will help landlords keep rents up. If the tax credit, a rent subsidy, makes tenants more able to pay, they will agree to pay more in rent and landlords will discover that they can charge more. Indeed, landlords will be the ultimate recipients of the subsidy, quite without anyone’s having to create more housing.
The only thing that will reduce housing prices is more supply — that is, a lot more housing construction. Connecticut lately has been trying to achieve more construction with a law that restricts municipalities from blocking inexpensive housing with exclusive zoning, but that law seems likely to require many years before it meets more than the ordinary annual increase in housing demand. In that case the state’s need for 120,000 new housing units will keep being pushed into the future and become perpetual.
The rent tax credit idea is popular with liberals because it lets them pretend to do something about the housing shortage without actually building any housing that might risk offending people who already have adequate housing, who don’t want their towns to get more crowded, and who fear, reasonably enough, that inexpensive housing will import poverty and cause higher welfare and school costs (particularly with “special education”), costs that won’t be covered by new taxable property or state financial aid.
There is a way to get a lot of middle-class housing built with relative speed but without frightening the neighbors too much, as well as without tearing up and covering more of the countryside with suburban sprawl.
For Connecticut is full of already developed land, especially in its cities and inner suburbs, that is unused or underused — industrial buildings, office buildings, and shopping centers — property already served by streets, electric lines, and water, sewer, and natural gas pipes. What is lacking is only a government that can take all these properties in hand by negotiated purchase or condemnation, control their zoning, publicize their availability to housing developers, and supervise the development plans and timetables to give the projects urgency.
In Singapore, the multi-ethnic city-state that is the pearl of Asia, the government is in charge of arranging for housing needs to be met and has succeeded spectacularly. The government does the planning and zoning and works with developers to get the housing built. Singapore’s housing developments — mostly condominiums — are beautiful and incorporate shopping centers, schools, transit connections, and civic spaces. In effect everyone’s housing in Singapore is subsidized by the government and nearly everyone who wants to own his housing can do so. An astounding 90% of Singapore’s residents own their own homes. Not surprisingly, there are no slums.
There is also little poverty, income inequality, crime, and racial tension in Singapore, healthy social conditions that may arise from government’s having solved both the housing problem and the education problem. (Most Singaporeans are highly educated, perhaps because, also unlike Connecticut, the city-state’s schools enforce academic standards and don’t operate by social promotion.)
Connecticut doesn’t have to socialize housing as much as Singapore does. But it needs to build it, and fast. Housing subsidies that don’t actually build housing will just worsen the shortage and let politicians get away with pretending that their timidity has solved the problem.
Chris Powell has written about Connecticut government and politics for many years. (CPowell@cox.net)