• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Economy 2022: The Year the “Lodger Evil” Came to Kansas and Made Housing Less Affordable
Economy

2022: The Year the “Lodger Evil” Came to Kansas and Made Housing Less Affordable

by November 26, 2022
by November 26, 2022 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

Earlier this year, Shawnee, Kansas, banned “co-living,” meaning “renting to four or more people who are all unrelated.” It reminded me of David T. Beito and Linda Royster Beito’s 2016 study of “the lodger evil” and Progressive Era housing policy. They define the “lodger evil” as “the practice of many urban families, especially in the Northeast and Midwest, to double up through subletting” so they could “save on rent and earn extra income.” Naturally, this meant cramped living conditions that most people today would find intolerable. Nevertheless, the lodgers (mostly unmarried males, many of whom were immigrants) were willing to give up creature comforts to save as much money as possible. The Beitos explain that just over a third of households in cities with populations greater than 50,000 had lodgers in 1850. While this fell gradually, it was still around a fifth in the late nineteenth and early twentieth centuries.

During my second year of graduate school, some friends from church bought a house and rented it out to a group that included two medical students, a law student, a social work grad student, and me. We got kicked out of the neighborhood; I forget exactly how it went down, but we were “co-living,” and a few neighbors were upset about it. The article linked above points to a restriction on “co-living” in Lawrence, Kansas (home of the University of Kansas), and I’m familiar with similar rules in other college towns.

As the Beitos explain, “Although the restrictions [tenement reform] imposed may have increased the quality of housing, the side effects were to reduce affordability and availability.” There’s a trade-off between price and quality. Holding everything else constant, better housing is going to be more expensive. Restricting “co-living” is a surefire way to keep housing more expensive, albeit in a way that solidifies the coalitions of NIMBY activists looking to protect their property values.

Some activists have accused the politicians involved of racism, classism, and perhaps a few other -isms. Shawnee City Council members object to the claim that the move is racially or socioeconomically motivated. I don’t doubt it. As the Shawnee Mission Post reports, one council member said that racial or socioeconomic exclusion “is not what we would intend or want to see happen within our community.” As we know, however, good intentions and $2.50 $4 will buy you a cup of coffee. Rules like co-living restrictions reduce the housing supply and make housing harder to find.

Furthermore, they (and others) object to investors who, they say, can outbid families and then rent out houses to various unrelated people. In one person’s words, “This is not housing, this is a commercial enterprise.” HL Mencken allegedly defined “Puritanism” as “the haunting fear that someone, somewhere, may be happy.” Mencken’s definition has an anti-commercial corollary: the haunting fear that someone, somewhere may make money. Investors and developers, of course, are the bad guys. Few things are as rhetorically effective as the image of a faceless outsider just looking to make money. If investors can outbid families, though, that’s a crucial signal that the highest-value use of a house is as a co-living space, not as a single-family home.

We can have at least a little bit of sympathy here. One member of the Shawnee Council noted that people bought in areas zoned for single-family housing and reasonably expected not to be surrounded by apartments and multifamily dwellings. Zoning presents a knotty problem because it’s unclear whether people have a right to what they’ve done, which in this case, is to form a housing cartel to restrict supply and increase prices. These are contracts in restraint of trade that are unenforceable at common law (Russ Roberts and Mike Munger discussed this on a recent episode of EconTalk). And, of course, politicians trade policies and privileges in exchange for votes and campaign contributions, and non-residents don’t vote in municipal elections. It’s predictable, but an explanation is not a justification. It is an example of a transitional gains trap: getting people to agree to better public policies is hard because some people have already invested in projects contingent on the existing rules. The mortgage interest tax deduction is a perfect example. Just about every economist hates it because it screws up the housing market and, if anything, redistributes wealth upward. It’s probably here to stay, though, because eliminating it would mean a sudden and substantial drop in property values. The sale price already reflects anticipated tax savings when someone buys a house. I doubt I will get elected to Congress on a platform that says, “if you elect me, you’ll take a big hit to your property value, but at least economic growth will be a bit higher, and the housing market will be less screwed up.”

But what about externalities? As Russell Sobel and Randall Holcombe argue, pecuniary externalities don’t reduce efficiency. There might be some public health issues, however, it is easy to turn rules, intended to protect valid concerns, into weapons. In one example, activists used parking requirement regulations to thwart a crisis pregnancy center.

Housing restrictions might be politically inevitable, but they are almost always economically silly. To top it off, they reinforce the privilege and power of the already privileged and powerful who, I’m sure, advocate “affordable housing” as long as it’s somewhere else. If we’re serious about more affordable housing, we will cut the red tape by doing away with building restrictions and parking requirements. Until then, chatter about “affordable housing” is just a lot of words.

I thank Paul Wiget for bringing the Shawnee “co-living” case to my attention.

You Might Also Like
  • AOC suggests cutting off aid to Israel after U.S. vetoes ceasefire resolution
  • Missouri Legislature latest to join tax relief bandwagon
  • Ohio legislators introduce bill abolishing death penalty
  • Biden admin making moves at border amid looming migrant traffic shifts, increases
Share
0
FacebookTwitterPinterestWhatsapp

previous post
Five Below breaks out. Here is the next target for the stock
next post
Hypocrisy Abounds at Climate Summit

You may also like

White House interns mocked for issuing anonymous anti-Israel ‘demand’ letter...

December 7, 2023

Biden makes major gains with crucial voting group ahead of...

June 18, 2024

WATCH: Press secretary loses it when asked if WH cocaine...

July 8, 2023

Intercepted phone calls reveal Russian frontline troops complaining of heavy...

September 5, 2023

Pennsylvania Democrat Josh Shapiro takes oath of office to become...

January 18, 2023

CCP flagship newspaper touts Biden campaign’s TikTok, criticizes ‘hypocritical’ politicians...

March 1, 2024

Cotton probes DOD on security risks of Chinese-owned tutoring company...

February 16, 2024

Nominee who called Biden a ‘senile gaffe machine’ withdrawn by...

February 15, 2023

NYC Mayor Adams announces new taxpayer-funded migrant tent city

August 8, 2023

Who is Nicole Shanahan? Meet the wealthy entrepreneur RFK Jr...

March 27, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • The NASDAQ 100, On The Brink Of A Breakout, Needs Help From This Group

      June 21, 2025
    • Tesla agrees to first deal to build China’s largest grid-scale battery power plant

      June 21, 2025
    • Oil prices rise more than 1% as Israel vows to intensify attacks on Iran

      June 20, 2025
    • RRG Alert Tech Vaults to ‘Leading’—Is XLK Signaling a New Rally?

      June 20, 2025
    • Apple looking to make ‘premium’-priced folding iPhones starting next year, analyst says

      June 20, 2025

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 3,599 views
    • 2

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,876 views
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,578 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,542 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,418 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,143)
    • Investing (538)
    • Stock (2,622)

    Popular Posts

    • 1

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 2

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 3

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • The NASDAQ 100, On The Brink Of A Breakout, Needs...

      June 21, 2025
    • Tesla agrees to first deal to build China’s largest grid-scale...

      June 21, 2025
    • Oil prices rise more than 1% as Israel vows to...

      June 20, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,143)
    • Investing (538)
    • Stock (2,622)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Turkey launched airstrikes in Iraq and...

    January 13, 2024

    Israeli war cabinet divided over plans...

    January 18, 2024

    John Kirby defends Biden’s decision to...

    July 10, 2023
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here