What Does “The Builder’s Remedy” Mean for “Abundance?”

A few months back, Ezra Klein and Derek Thompson released a book in which they described the Abundance Agenda, which Klein summarizes as:

Abundance is the argument that a lot of what is wrong in our society is that we have manufactured scarcities. We have made it too hard to build and create the things people need more of. The places where we focus in the book are housing, clean energy, and state capacity…

But the solutions of one era become the problems of the next. Those procedures became overgrown. So now you have insane outcomes, like laws that are designed to make sure we have a cleaner environment being deployed against the development of solar panels and transmission lines and congestion pricing. Or the fact that in places like California and Washington, DC, it costs a lot more to build affordable housing than to build market-rate housing.

The housing crisis in California is essentially the textbook example of regulations being used to stymie housing (though many other places do it very well too). Which makes this NY Times story about “the buider’s remedy” very interesting (boldface mine):

The law is called the “builder’s remedy,” and it was designed to break the political logjams that have made California one of the most difficult places in the country to build. The law works by nullifying local zoning rules when cities fail to plan for enough housing as required by the state.

While the builder’s remedy has been on the books since 1990, it was effectively dormant until 2022. Since then, however, developers across the state have filed dozens of plans to build 10- and 20-story buildings in neighborhoods where they had never been allowed. Mr. Pustilnikov, who helped pioneer the tactic, has proposed 10 such projects across Los Angeles County….

The irony is that the builder’s remedy was rediscovered almost by accident. Even Ms. Wicks, one of California’s most staunchly pro-housing lawmakers, said the Legislature would never be able to pass the law now because of opposition from local governments. Thus, one of California’s most effective laws for building housing was not a product of its housing emergency or political will, but a legislative relic…

Over more than a dozen tweets, Mr. Elmendorf argued that since 1990, California had had a loophole that allowed developers to bypass the local zoning codes in cities whose housing element was deemed noncompliant by the state. In a follow-up paper, he called it the “builder’s remedy,” a nod to a similar mechanism that arose from New Jersey court rulings that have shaped housing policy in that state.

The clause had rarely been used. But, as it happened, the conditions for exploiting it were historically perfect. Cities across the state were about to be hit with increases in housing target numbers so steep that regulators were all but guaranteed to deem their plans noncompliant.

It’s probably not correct to argue that the builder’s remedy could have been used since 1990, as municipalities’ housing elements might have been deemed compliant back then, but it does seem correct to say that it could have been used since the last plan (roughly ten years, if I understand the timing correctly). What I’m really interested in is what this means for the entire abundance debate.

The example everyone uses for the abundance agenda is the California housing crisis, but the answer, the builder’s remedy, was sitting right there. For years. It suggests that maybe there’s more going on than just too much regulation.

In fact, it seems California is reacting to the builder’s remedy:

Last year, the Legislature passed a bill, introduced by Ms. Wicks, that explicitly codified the builder’s remedy in a modified form: Developers could more easily avail themselves of the tactic in exchange for set limits on density. They cannot build anything they want, but the allowable densities are still several times as large as what local zoning rules allow.

The ultimate impact of the builder’s remedy is likely to be measured not just in units that are built by using it, but in the ones built in fear of it. A few years ago, when Santa Monica was working on its housing element, Jesse Zwick, who was running to be a member of the City Council, sat in frustration while his future colleagues voted for a plan that the state ultimately rejected for failing to provide enough units, he said.

Then developers, including Mr. Pustilnikov, came along, and the wealthy beachfront city was blanketed with housing proposals. The city ended up settling with builders, and the effect is likely to be felt long after.

The fear of builder’s remedy brought along a lot of people whose inclination was to fight everything,” Mr. Zwick said. “They realized it was in our interest to grow and at least be able to have a say in how we do that.”

Anyway, it’s kind of interesting that a stereotypical example of the problem abundance is supposed to address seems to have resolved itself.

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2 Responses to What Does “The Builder’s Remedy” Mean for “Abundance?”

  1. Rodney S. says:

    For people like me, it was always clear that this book is another desperate tactic to get rid of the Democratic Party’s left wing. No-one should take seriously a plan that does not address power head-on.

    I sent you an email a while back to thank you for turning me on to Jacobin, which in turn led me back into political volunteering. Maybe it ended up in your spam queue, but regardless, I thank you again for steering me from doom scrolling to a healthier response.

  2. kaleberg says:

    According to the article:

    “About a decade ago, the California Legislature started revving up its housing efforts again by sharpening the existing laws’ teeth. Among those changes were two tweaks that would prove pivotal: Urban areas would now have to plan for much more housing than they had in the past, and it became easier for developers to sue cities that deny their projects.”

    Also:

    “Under the new allocation that would take effect in 2023, it [Beverly Hills] had to plan for more than 3,000.”

    In other words, the Remedy in a meaningful form hadn’t been just sitting out there for decades. It only became useful in 2023. Given the way developers work, it’s no surprise that the first court tests came a year or two later.

    Personally, I distrust the Abundance Agenda. It’s more of the old with a new label slapped on it. It’s like every proposal that starts with a tax cut and spins a complex justification.

    This one starts with gutting local control and moves from there. How many more slivers does Manhattan need? I ask because the way the Abundance Agenda is structured, that’s what we are going to get. It’s just a way to give the rich and powerful more money and more power It’s not like the Abundance Agenda explains why all those new houses aren’t going to soak up any wage increases as has been happening for decades.

    I agree that the Builder’s Remedy is a much better approach. Cities can still control their growth, but they also have to produce housing that people can afford. If that means making developments contingent on suitable pricing or even the city building housing on its own, so be it.

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