Dont California my Arizonathese words can be found on everything from T-shirts to tire covers. The slogan speaks to the fear that the Californians fleeing to Arizona will bring with them the very policies that propelled their exodus.
Californias housing shortage tops the list of troubles that Arizonans wish to avoid. The cost of a home in Phoenix is still modest compared to, say, San Francisco or Los Angeles, but the lack of affordable housing is nonetheless a growing crisis in Arizonas capital. If legislators are hoping to save Arizona from Californias failures, why are they trying to replicate its policies?
The Arizona House of Representatives recently passed House Bill 2815, affectionately nicknamed the Yes In Gods Backyard (YIGBY) bill. It replicates Californias SB 4, which seeks to make it easier to build affordable housing on lands owned by religious institutions.
Dont get me wrongboth YIGBY bills would loosen zoning and eliminate discretionary permits for qualifying projects. Onerous zoning and permitting policies are the primary culprits behind Californias high housing costs, and they ought to be liberalized, if not eliminated.
When I wrote about Californias SB 4 for The Orange County Register, I argued that these provisions constitute a tacit admission that zoning and permitting reform are vital to solving the housing crisis. So why does the legislature limit these reforms to certain landholdings?
Put differently, we might ask why Arizona is following Californias practice of granting rights discriminately to privileged groups instead of extending equal rights to all citizens?
Even worse, Arizonas YIGBY bill also seeks to impose some of Californias most counterproductive housing regulations by requiring every qualifying development to reserve at least 40% of units for low-income housing. This policy, known as inclusionary zoning, allows developers to build higher-density residential structures if they cap the rent on some of the units.
California cities began enthusiastically adopting inclusionary-zoning policies in the 1970s, and it has continued to double down on these requirements for the past half-century. Yet housing costs in California are higher than ever, and affordable units remain so scarce that college students sleep in their cars.
Economic research repeatedly finds that inclusionary zoning is not merely ineffective, but actually exacerbates the shortage of affordable housing. The studies show that the cost of affordability mandates outweighs the benefits of upzoning, leading to the construction of fewer affordable units than in areas that were upzoned without strings. The studies also reveal that even high-income housing developments make all housing more affordable by creating vacancies in the existing stock.
Arizonas YIGBY bill, in short, reflects the irrational habit among lawmakers of addressing problems by duplicating the policies of states where those problems are most acute.
Arizona must instead start learning from those areas of the country where housing is more affordable, not less. Rather than modeling solutions on the recent reforms of failed states, we should follow the blueprint provided by the longstanding policies of places that have kept housing prices below the national average.
Houston is the perfect example to look to when crafting reforms. It has long been among the most affordable major cities for housing, despite rapid population growth, because it never adopted zoning and it issues by-right permits within 10 days of receiving an application.
If Arizona truly wants to solve its housing crisis, the legislature should require cities to dramatically liberalize their zoning and building regulations and provide a simple, transparent, and expeditious system of by-right permittingfor everybody, not just churches. It must also resist the temptation to burden these reforms with impractical affordability requirements that have long proven to do more harm than good. California should be an example to avoid, not imitate.