Gary Winslett on Cost of Living

Howdy, I’m Nolan Gray, your friendly neighborhood city planner, senior director of legislation and research at California YIMBY, and one of the new co-leads of the Metropolitan Abundance Project. Welcome back to The Abundance Podcast. In this episode, I chat with Gary Winslett. He’s an associate professor of political science at Middlebury College. He’s also a senior advisor for the Chamber of Progress and author of their New Cost of Living Agenda. We talk about that agenda. The report is actually called A Democratic Cost of Living Agenda: A Low-Cost Framework for Helping Families Build Abundant Homes, Care, and Energy. We talk about all that and more in this episode. Of course, if you’re enjoying The Abundance Podcast, please like, subscribe, and leave a review. And with that onto the show. Gary Winslett, thanks for joining The Abundance Podcast.

Glad to be here. Thank you for inviting me.

So, let’s dive right into it. Abundance is kind of having a moment. It’s in the name of our organization, Metropolitan Abundance Project. Let’s start at a really high level: What is the unifying theme of this abundance moment, and how has it reflected in some of the work you’ve done?

So to me, the core theme of abundance is that we’re not going to redistribute our way out of shortages. And actually, the best way to help everybody prosper is just to have more. In housing politics, there’s this musical chairs analogy that everybody loves. The reason that the slowest kid doesn’t get a chair in musical chairs is not because there’s anything fundamentally wrong with that child. It’s that there’s not enough chairs for the kids there. And so, one, it’s a third-grade game, but in terms of actual American society, we don’t want there to be people for whom there are no chairs. And so the answer is just, well, let’s build more chairs. And so it has this very deep pragmatism to it, but that pragmatism actually puts it– and this is where I think we get to a more interesting part of the answer– it puts it in opposition to a couple of different groups, both to its left and its right. And this is why abundance politics often has centrist vibes to it, even if it’s not always going for kumbaya moderation. And then it’s very pro-growth and it’s going to be very much oriented towards trying to find not just private sector solutions, but also solutions that are not fundamentally about distribution and status. So one group to the right of abundance politics are people like JD Vance and Donald Trump who want to blame immigrants and foreigners for basically every economic problem. Further right than them, you’ve got the post-liberals, the Adrian Vermeule, the people who– they want a Franco society or something. It’s odd, but that’s not an abundance thing. And then to the left of abundance, you’ve got people who really want to blame corporations for every problem.

They really, really want the housing problem to be about RealPage, even though it isn’t. And to their left, you’ve got de-growthers, who are the opposite of the abundance crowd. They actually think that there are these hard ecological limits we’ve got to stay within. And so they’re fundamentally opposed to abundance politics. And so that’s where I locate it intellectually. And then where really– the reason it works with how I think so much is I come from the trade policy world and my first book, Competitiveness and Death, Trade in Politics and Cars, Beef, and Drugs came out with the University of Michigan Press in 2021. And a lot of what is motivated by is trying to get the things we want economically from trade while also promoting progressive social goals. And if you think about the trade world, international trade is something that has lifted billions of people out of poverty.

It’s a thing that helps working-class Americans stretch their paychecks. It’s a thing that unites the world post World War Two. It holds the Western Alliance together. It’s a part of our global order. There are these really good things outside of just the economic benefits that we get from trade. Housing is a lot like that. Yes, there’s a growth to it. Yes, there’s an abundance to it, but it also means that seniors can downsize easily once they want to live in a one-level home. It means young people without a lot of money, they have the ability to start a family and have that starter home. There’s something to that that’s important outside of just money. It’s not just a money thing. And so it’s part of how abundance speaks to me is that yes, it’s about growth, but it’s about growth for the purpose of human flourishing.

Yeah, no, there were moments in that vice presidential debate that just recently happened that were a little bleak of, right, what’s your housing conspiracy theory? Is it immigrants or is it Wall Street? Governor Walz, to his credit, did have a moment where he said, “Look, we built this many homes and prices fell.” So I think of course to a lot of folks who listen to this podcast, and certainly you and I, it’s obvious we have housing prices that are high, we have the shortage, build more homes. Your work is fascinating to me because it seems like across so many different domains, a lot of people do have this default of scarcity, zero-sum mindset about these issues. So trade, right? Trump is the ultimate extreme form of this, if we are winning, someone else has to be losing. There’s only a scarce amount of wealth that can be created. What do you think explains that sort of almost the default salience? Is the scarcity mindset like the common sense that you have to intellect your way out of?

Well, it’s one of these things where the first step of the answer is just humans evolved in an extremely scarce environment. When we were hunter-gatherers, we were all always on the verge of starvation. And so that’s just how humans are programmed, is to think about the scarcity around them, and in very distributional settings. If there’s one berry bush and there’s six people around, it says tough man. So I think part of it’s that, but I don’t think it’s all that. I think there’s a way in which, when people are scared and anxious, they think in much more zero-sum ways. And the Great Recession put people in a mood to be scared and anxious. And there was a large period of the 2010s where people were really struggling economically. And when they’re struggling economically, the easiest thing for some demagogue to do is come tell them that their problems are because of those people over there.

And so I think that’s part of it. And the other thing too is people will forget, the Great Recession was the worst recession since the Great Depression. It’s unusually bad, really, really deep and long-lasting. And what it did, it took on for so long that if you tried to say anything positive about the economy, that was heard as invalidating people’s struggles. And so you couldn’t say anything positive. And so it created a ratchet effect where people got darker and darker and darker in their rhetoric, but that only feeds more into fear and anxiety, which itself then feeds into zero-sum. So I actually think that there was something unavoidable about zero-sum instincts taking hold in 2013, 2014, 2015, but I don’t think it’s automatic now. I think you’re hearing a sunniness in Harris’s campaign that’s not been present in a major party campaign since Obama ’08.

Yeah, no, I think that’s really, really important context too. I mean also just in the case of trade, I mean the sheer disruption of trade shifts on individual lives. I think that’s in part what’s motivating a little bit of the Trump moment of, yes, in the aggregate, of course, the world is significantly better off from these transitions, but they’re individual people who have to deal with the transitions costs, right?

Sure. Well, and the other thing too, and this is something, it’s just a fact of life when you study trade, is that when trade opens up new opportunities, but it also creates import competition. The people who win from the new opportunities don’t thank trade, they thank their own prowess in the market, which is totally understandable. That’s how we all do it. Everybody’s going to do that. But then the people who lose from trade are like, “Well, it’s not my fault. It’s because of the trade.” And again, that’s not to say that those people are wrong. People work hard and they have every right to feel proud of their own accomplishments, but it is a political imbalance that could happen when trade both creates new opportunities and new risks.

All of my successes are due to individual efforts and talent and skill, and all of my failures are larger structural problems.

Absolutely. Exactly.

Well, I’m curious, so definitely we’re operating out of this great recession because we get the scarcity mindset and on top of the fact that it’s just baked into us, now it really does seem like abundance is having a moment. What do you think is driving that shift?

Well, I think there’s a realization among a lot of Democrats that it is actually democratic areas in housing that have caused the problem. And it is because they didn’t take enough of an abundance mindset. The housing crisis is a national crisis, but it is at its worst in blue cities and blue states. And so people just look around and they get frustrated, and once enough people get frustrated, particularly further up the economic ladder, politicians take notice. But then it’s like, okay, well what do we do about it? Well, in some areas of the economy, you probably do have antitrust problems.

I don’t want to say antitrust is never the issue, but in housing, it’s so clearly not the case that that’s an antitrust problem. That’s a shortage problem. We don’t have enough homes. And so then you start looking into, well, why don’t we have enough homes? Well, it’s all of these things that create artificial scarcity, whether it’s zoning, whether it is height limits, whether it is tariffs on imported lumber, on and on and on. There are all these reasons why we have all these constraints. And so then the natural response pragmatically is like, all right, how do we address those root constraints and so that we get more building?

Right. Yeah. I mean, I think that seems to be what a lot of folks in the abundance space… I’m always hearing, “Oh, how do we have a YIMBY agenda, but for XYZ?” There’s this feeling of like, okay, yeah, this recognition that we can just have more stuff come out of housing because it’s so obvious.

Well, I mean you say, why can’t we just have a YIMBY agenda for XYZ? But that’s what I did with this cost of living agenda with the Chamber of Progress, is we were thinking, okay, how do we do abundance politics, not just in housing but in energy and infrastructure, in healthcare, and in childcare because all of these things cost too much. This is one of the few areas where I would critique abundance just a little bit, is that it sounds really cool to people like you and I who are on Twitter and listen to podcasts and very politically engaged, but if you just go to regular people, it’s the cost of living that annoys them. You say abundance agenda to them and they don’t care. But if you’re like, “Oh yeah, housing is too expensive and so is energy, so is healthcare, so it’s child care,” they’re like, “Yes, thank you. You’re at least recognizing the problem.” And so that’s actually, even though what we wrote was very much an abundance agenda thing, we framed it around the cost of living because that’s what voters care about.

There are actual humans on the cover, which is generally a positive thing for a policy document. So that’s a perfect segue. This report that you wrote for the Chamber of Commerce– Chamber of Progress– an important distinction– A Democratic Cost of Living Agenda: A Low-cost Framework for Helping Families Build Abundant Homes, Care and Energy. And we’ll have the link to it in the show notes here. But let’s dive right into it here. I think you’re exactly right. This is something that I was seeing some crazy data on this, the frequency with which housing affordability has come up in presidential debates. It’s almost unimaginable as a national political issue two decades ago. And now it’s like there’s just a large and growing body of survey data that’s like, yeah, who would’ve thought people’s number one budget item is actually one of the things they care most about? What is a democratic agenda for getting housing affordability under control?

It’s only got three prongs. So the first thing is you’ve got a reform zoning, and here I would say we’ve got to stop saying in single-family zoning. I think it’s off-putting, and it’s telling people what they lose. I think it would be much better to talk about what we can add. Not just missing middle, but also mixed-use zoning. We can also– when we reform something like minimum lot sizes, what that does is it adds starter homes. Minimum lot size, let’s say that you have a minimum lot size of a half acre. I mean a lot of places in New England have a full acre, even two acres in some places, but if you’ve got this large lot you have to build on, you’re not going to build a small home on that, ’cause you’ve already paid so much for the land. So you’ve got to build a big home that’s expensive.

Well, when enough people do that because they had to do it because of the minimum lot sizes, you don’t have those small starter homes that are great for people who are starting a family or great for seniors trying to downsize. And so one of the things that we’re arguing for is local zoning needs to be reformed such that we get smaller and minimum lot sizes. You could also add housing to commercial areas. If you look at public opinion polling on housing, this is the most positive one. The Pew Charitable Trust is polling on this and it is 81 to 18, do you want to see more housing in commercial areas? So anywhere where you’ve got a commercial area, if you want to just add to it, add housing to that, that’s pretty popular, and people like that. So part of it is zoning. A second part of it that I think a lot of people haven’t thought of as much is innovation in new housing types.

So the first mass timber building in the United States wasn’t until 2011, but this new kind of technology which allows you to cross-laminate timber, it’s got strength-to-weight ratios comparable to steel and concrete. It’s extra fire-resistant. It looks great. It sequesters carbon. The 2021 IBC, the International Building Code, allows mass timber to go up to much taller buildings. So now the tallest mass timber building in the world is in Milwaukee. The new Walmart headquarters in Bentonville, Arkansas are mass timber. We’re going to see this real flourishing of this new kind of technology for building. We’ve just got to make sure we get some of the policies in place to help facilitate that. So when you do mass timber, what you do a lot of the time is you’ll do a lot of the construction prefabricated off-site and then you put it together almost like a Lego set on site.

What that means is unlike a lot of other housing, you actually get a lot of interstate commerce in that. And so what that means is you actually have a role for Congress, just to make sure that standards are the same across those state lines to help facilitate that interstate trade. One of the other things we talked about was the chassis rule. So this one’s near and dear to my heart, ’cause I grew up in a mobile home. This kind of affordability, it matters to people in ex-urban and rural areas. Well, there’s a rule dating back from the 1970s that says that any small manufactured home, mobile home, has to be on a chassis as if it were going to be moved. Nobody moves those anymore. That’s pointless. It adds to cost, it adds to the stigma. There’s no reason to have that. And getting rid of that is actually a really easy change. You basically change one definition in a federal code to stop requiring that in the definition.

And do we know where this requirement came from in the seventies?

Yeah, so there was concern, by concern, I mean lobbying from builders of matchstick homes, basically, the builders of the simplest in-place homes that did not want competition from small manufactured housing. Those have basically gone away as mostly business entities. So the primary constituency that lobbied for it, which they hadn’t been given that little special favor, but they’re not even there anymore. And so there’s a real, in my view, political opening across the political spectrum to get that reform done. And so this is one of the things that I was really proud of in our report is we didn’t just do a lot of 30,000-foot discussions. We went into all these different very specific, very pragmatic policy reforms that could actually help.

Let’s talk a little bit more about mass timber too, because I’ve seen the building in Milwaukee and you mentioned this, it’s beautiful, in addition to having all these other benefits. The IBC has changed the provisions around this. What’s the actual policy that needs to change whether at the federal or state level here?

So only about half of states have adopted that new IBC. So it would be helpful if the other half of the states did that. Congress could always do some carrots on that if they want to. But the other big thing that the government can do is through HUD, potentially through NIST, maybe some other agencies, just ensure that regulations are facilitative of mass timber and that they are aligned state to state. And this is another thing that if you– We did not go a ton into tax policy in our report just because there will be a whole Taxmageddon set of negotiations next year around the end of parts of the TCGA and all kinds of other stuff. You could do a mass timber tax credit. There are all kinds of things around that that you could do. We’ve got tax credits for all kinds of other stuff. This is one that could be helpful. You could do workforce training in it. You could do full or faster expensing, R&D. You could do some tax credit stuff around here if you wanted to.

So while we’re wading through the weeds, a couple of other weedy issues that have taken on a mainstream salience, single stair reform and elevators. As I understand, these are both issues too that are mostly dictated as a matter of what code states have and have not adopted, similar to the issue we were discussing.

So let’s take them each at a time, point access blocks and then elevators. In most of the world, if you’ve got a smaller building, you only need a single staircase because there are many routes to fire safety. You can have concrete walls, you can have sprinklers, all kinds of ways to make a place fire-safe. You don’t have to have two staircases. In the United States and Canada, any building basically taller than about three stories, you need two staircases to make sure that it’s fire safe. Well, that comes with fire safety, which is good, but it also has all these drawbacks. Every apartment building feels like a hotel. It’s got that one central corridor where everything’s loaded off of. It means all the apartments are pretty much the same size. It’s not great for cross ventilation, it’s not great for sunlight, it’s not great for noise, it’s not great for family-style apartments.

And so there’s just all these problems and you end up taking a lot of floor space up that you can’t rent out because of that, between the two staircases and the central hallway. And so the argument runs that you could reform this by allowing those alternate routes to fire safety. So instead of having the two staircases, you have the one staircase, like in Germany, you have regulations about how far it is from the door to the one staircase. You have regulations about how many units can be on a floor. These are not going to be enormous buildings with only one staircase. It’s going to be a five-story building with three or four units of floor. These are about creating more family-sized apartments and doing it in smaller and more irregular lots. And it could be really good for smaller builders. So there’s all these pros to it, but you always come back to the fire safety point.

And so this is where, at a political level, I think the first thing you’ve got to do in any state and locality that wants to actually do point access block reform, you got to have the firefighters on board from day one. If they oppose you, you are dead. It is game over. But if you can get the firefighters on board with it, persuade them, have them write your model code. If they’re on board with it, then all of a sudden it’s got legs, right? Because if the firefighters are saying, “Hey look, this building that’s going to be four stories, four units per story, we see how these one-hour firewalls plus the sprinklers plus the size mean that you only need one stairway.” If the firefighters are saying that, you’ve got the potential for that political win. If you try to bring in the firefighters at step nine and they feel like that was their jurisdiction from the beginning and they’re annoyed with you or they just don’t like your designs, you’re dead in the water. That’s not going to work.

I mean I think a challenge here is something I’ve been surprised about as this policy space has gotten legs is the extent to which this fire establishment does not really seem to be motivated by the actual fire science issue with some of these cases. So I’ve heard from multiple local and state elected officials who have done work on this where they were like, we went to the fire marshal and the fire marshal said, “Sure, I’ll sign off on it if you buy me an extra truck and hire two more firefighters.” No interest there. A lot of fire marshals– I didn’t realize this until recently, a lot of fire marshals have no training. They’re just former firefighters. They have no formal training in fire science or fire engineering, which was kind of shocking.

Yeah. I mean look, I’m not saying to violate any sort of corruption laws or anything like that, but if there is some sort of trade-off that can easily be given in exchange for– Okay, that’s not the worst thing. If they want an extra fire truck in exchange for signing off on point access block reform and that’s going to get you a lot of new housing and family-style apartment units, all right, sausage got to get made somehow.

Sure, sure. Yeah, no, I understand. And I think, on this area in particular, reformers really need to do a better job of doing a little bit more proactive outreach first. And I think we’re getting there. I mean, I think with building codes, it’s another thing that’s been fascinating to me about that reform space is it’s so much more opaque than zoning and subdivision regulations. And for all the problems with zoning, you can go find your municipal zoning code online. It’s broadly intelligible. Building code, this is a proprietary document. It’s almost by design, only meant to work for professionals. You do not have access to it unless you pay a lot of money. And then the reform procedures happen at a far away place where you need to be a dues-paying member or something to even be a part of the conversation, right?

It’s wild how long the chain of logic is on the building code side to getting any reform done. So there’s all kinds of new refrigerants that are starting to come online in other parts of the world and the United States voted as part of the international standard-setting body to allow that. So it’s not even like the US is opposed. We are just so slow in uptaking those regulations that we haven’t even done that yet. And it’s not even about stiff opposition, it’s just inertia.

It’s true of many areas. Of course, we all love point access blocks and single-state reform. Your report also embraces five-over-ones. There’s some like single-star advocacy where people have almost gaslit themselves into thinking five-over-ones are bad.

No, I love five-over-ones.

Right, they’re the workforce of housing affordability. Do you want to take a moment on that?

I literally peg the meter in terms of enthusiasm for five-over-ones. You will not find somebody who is more enthusiastic about these. So if you don’t know what a five-over-one is, a lot of the new apartment buildings you see going up these days are five-over-ones. Now what a lot of people think those mean is five floors of housing over one floor of retail. And that’s intuitive, fine. But what it actually comes from is you’ve got type five building, which is basically light lumber over one floor of type one construction, which is concrete basically. And so what that allows you to do, it allows developers to hit this sweet spot because if you don’t build high, then you can’t get a whole lot of units on a given plot of land. You’re only going to get so much there at two floors.

But if you go really tall, things get really, really expensive because you’ve got to do all kinds of engineering safety. It’s really expensive to build a tall building. Well, the five-over-one is this perfect sweet spot that allows you to maximize units for minimum cost and you can actually get, depending on exactly how you do it, between 80 and 110 housing units an acre with five-over-ones. This is why I say they’re the workhorse for housing affordability. So one of the things Tim Walz could have pointed out in the VP debate is that the combination of housing reforms that Minneapolis did, getting rid of parking minimums, allowing mixed-use zoning, increasing some of their height restrictions, what that allowed to happen is an explosion of five-over-one apartment buildings. And that is why Minneapolis housing unit numbers went up and their rents went down and their homelessness went down compared to other places in Minnesota.

If you look, and there was a study done on this, the vast majority of the units that came online were not actually from duplex, triplex reform. Much as we love that, as much as that would be cool in the suburbs, it’s not where most of the units came from. Most of the units came from five-over-ones. You can get a lot of new housing there. People talk all the time about how they want these dense, walkable spaces. They go to Europe and have a great time and they’re like, why can’t we have this? The reason we can’t have this is because we don’t have enough five-over-ones. Literally anywhere in the country, up to and including New York City, if you just made it legal to build lots of five-over-ones without doing anything else, literally without doing anything else, just get rid of the parking minimums and the stuff that make those impractical height limits, whatever. You would immediately have the kind of dense, walkable urbanism everybody under 40 says they want. So just do that.
I hear these aesthetic complaints, and I’m sorry, the world is not your canvas if you’re an architect. If you want to be an artist and go draw or paint, that’s fine, but housing is 20% of the economy. It’s how people live. The housing market is not your canvas. Knock it off with the aesthetic concerns. People’s aesthetics change all the time. People thought the Eiffel Tower was ugly when they were building it. People thought the brownstones in New York City and Philadelphia were ugly when they were building them. Do we get it wrong sometimes? Sure. You know what we’re allowed to do when we get it wrong? Fix it. What used to be ugly as all hell is the Government Center in Boston, and it looks a lot better now ’cause they fixed it up. They planted trees, they made little walkways, like it’s better. If something goes wrong, you fix it. This fear of like, “Oh, I don’t like the way the five-over-one…” It’s like, look, stop it. People need a place to live.

Yeah. Well, I mean a couple of things on this. I think one in the long term, yeah, let’s fix some of these building code rules that make it impossible to build anything other than a five-over-one so people can have a choice in courtyard buildings, more point access blocks. That’d be great.

Sure, sure.

I think even in that scenario, you’re still going to get a lot of five-over-ones. And I lived in one, and frankly, it was probably the nicest unit that I’ve lived in as an adult when I lived in one in DC. But I think another really important point with five-over-ones, and you get at this, this is a form of housing that the market can build a lot of and at an inherently very affordable rate tomorrow. I think this is– of course in the longer term, we want an economy that we have point access blocks and a range of different multifamily style buildings. We want missing middle, we want cottage courts, we want duplexes, but a lot of those are typologies that have been illegal for a hundred-plus years, and that it’s just going to take time for our market to rebuild around those. Whereas exactly to your point, five-over-ones, and this is true in almost every major American city that had a major supply surge that’s keeping its rents and housing affordability under control, including, for example, Austin, they just built a ton of five-over-ones.
They weren’t building skyscrapers or tons of missing middle. They were building tons of five-over-ones. Right? Yeah. I think another sell too for people is, in many cases, these are being redeveloped on the sites of tired old strip malls or empty office parks that there’s none of the discourse around displacement or losing historic assets, right? Let’s talk about another one that you have here, re-legalizing SROs. I think some people listening to this might know what an SRO is, but do you want to talk a little bit more about that and what the actual policy prescription would be for that?

SRO is single-room occupancy, and this is basically where you have a room, it’s going to be pretty bare bones. It’s got a bed, maybe a sink, the door locks, it’s pretty small. You got a closet. You’re going to share kitchen and bathroom facilities with other people on the floor. It is the most basic form of housing we know of that we’ve ever seen built at scale. There were lots of these back in New York City a hundred years ago. No one thinks these are the ideal form of housing, but you know what they beat the hell out of? Homelessness. They’re the last– if you think about housing as a ladder with mansions at the very top and homelessness at the very bottom, SROs are that last rung before you’ve fallen into homelessness. And we made them illegal. Cities and states went to war against them out of all kinds of classist and racist motivations.

They didn’t want poor people, particularly poor people of color anywhere near them. And so New York City did every single thing it could to get every SRO it could to turn into a hotel. And cities across the country did this. And what it meant was you took that housing ladder and you broke to smithereens the bottom rung on it. And so it’s no surprise that that is one of the main ingredients to high homelessness that we see. And so we need to re-legalize SROs. And this is not a thing cities are going to do willingly. This is one of the few coercive things that we talked about in the report is we wanted to basically, under the Federal Fair Housing Act, where the federal government has jurisdiction to guarantee access to housing, we wanted to say that if you’re above a certain level of homelessness, your state has to re-legalize SROs.

So if you look at homelessness across the country, it varies massively from state to state. So the US average is about 11 per 10,000 people. So across the United States, for every 10,000 people, about 11 are homeless. Okay, well that varies a lot. There’s a lot of states. So where I grew up in Alabama, it’s only seven. I think Mississippi is the lowest at three. There’s a lot of states in the single digits, but the state I live in now in Vermont is 51. It’s just by in California, it’s 52. New York’s not far below them. There’s about five states that are over 40, and that’s a lot, like 50 out of 10,000 people. All right, you’re talking five out of a thousand, that’s one in every 200. One in every 200 people is homeless. You messed up somewhere along the line if one in every 200 people in your state is homeless and you’ve shown yourself at least currently not up to the task of housing people with little to no income.

And so SROs being re-legalized in those places, it’s not quite as caredy as some of our other policy responses, but it’s likely necessary and it would go a long way to alleviating suffering. Being homeless is horrible. Absolutely. Even if you’re not in the street, if you’re in a car, that’s still terrible. Like, oh my God. We have failed these people in awful ways and we have a moral responsibility not to continue doing that. So re-legalizing SROs is about that. It’s about not failing at this very, very easy moral test.

Yeah. Well, and I think a lot of people, one of the convenient excuses people lean on with the homelessness crisis is they say, “Well, it’s all just substance abuse and mental health disorders,” as if being homeless does not make you susceptible to developmental health and substance abuse problems.

Yeah, I think most people, if they were forced to be homeless for a week, would really like a stiff drink at the end of the week. It’s a really tough week to go through.

And on SROs, are we seeing a lot of progress here? I’ve heard Houston is building some SROs, but it does seem like one of the areas of reform. We’ve had a few states pass single-stayer reform bills. We’ve had a lot of states pass multifamily streamlining bills. What’s going on with SRO legalization?

Nothing, not to my knowledge. Maybe a few places, a few things here and there around the margins. This is one of these ones where I think you’re going to have to have more of a beefy federal response. And this is also one of those things where I think you got to be politically really savvy about it. Republicans do not like encroaching on the federalism of housing policy. So this is part of the reason why we wanted to focus this on states with high homelessness because, except for Alaska, there are no red states above 20 per 10,000, and most aren’t even above 10 or 15. And so if Republicans don’t think this is ever going to hit red states, maybe they’d be for it. It’s politically very challenging.

But also given what we’ve seen from the Supreme Court and their various decisions, it seems to us that it was the most direct way to actually fixing homelessness rather than just talk about it in scapegoat. ‘Cause there’s a lot of talking about it and a lot of scapegoating and a lot of wishing for a different world. And on one level I get all that because it really is detrimental to homeless individuals and society. But we felt that we had a responsibility to say something useful and practical, and to us that was SROs.

Well, and so I’m curious, again, dipping into, I think some of your political science expertise, one of the fears I think I and some others have about this housing affordability issue becoming more salient at the national level is this issue of the issue becoming partisan. So I mean, one of the unusual features of this zoning reform moment is that it’s bipartisan. It’s happening in red and blue states. And I look at the presidential race for example, and I see, okay, the Democratic Harris ticket is actually leaning into the YIMBY moment, Trump is leading into the more NIMBY moment. Is this going to have down-ticket implications that mess with the issue?

So one of the things I will often go back to in terms of housing politics, I’m a big believer in private property rights. If you own a plot of land and you would like to build a duplex on it, subject to some basic fire and safety stuff, you should just get to. That’s a private property rights argument that I could totally understand many conservatives and more libertarian types being a big fan of. There are some political topics that are inescapably partisan. I don’t think housing has to be it. I don’t see why it’s ineluctably going to be partisan.

Yeah, yeah. No, I think you’re right. And I think you have to be mindful to make different arguments in terms of different values. But I want to get to I think two of the big risks frankly for housing affordability. Even if states and cities do everything right, if we have very, very high tariffs on all the inputs and then extremely strict labor rules, those were the big inputs for housing costs. You talk about that in the report. Do you want to say a little bit more about that?

Yeah, so that was the third problem that we were saying about housing. The first thing, zoning. The second thing, innovation and housing touch. The third one is embracing globalization. And I get that at an abstract level that’s not going to be everybody’s favorite meal, but actually in housing it could really help. So right now we tax imports of Canadian lumber at over 14%. Why are we doing that? That doesn’t make any sense in a housing shortage.

We can’t be vulnerable to the Canadians if they try to invade us, right?

I mean, so on something like semiconductors in China, I at least understand the national security argument, the argument for building it here. I get it, I really do. But come on, this is Canada. These are our neighbors and our greatest allies, and they’re softwood lumber Mecca, and we should just allow imports of that and build a lot of homes with it.

You’re not saying that because you’re so close to the border, you would be first affected by the invasion. You want to be in their good graces.

Right.

That’s why you’re saying all this stuff.

Of course, of course. Yeah. No, it’s funny. Living so close to the border, I’m one of those few Americans for whom a Canadian city is my nearest city. So if we want to go to Ikea, we go to the one in Montreal, or if we want to go have a nice city weekend, it’s not New York, which is six hours away, it’s Montreal, which is an hour and a half. So yeah, I love Canada anyway, but we’re not going to get into that in my trade stuff. Let’s just talk about timber. So one of the things people consistently understate and under-appreciate about international trade is that a huge proportion of our imports are actually inputs into other stuff we’re making. So something like 40 to 50% of all goods imports are actually inputs. We’re using them to make other things. And so when you make those more expensive, you actually make it more expensive to build things here in America.

So if you’re going to make timber or lumber more expensive, that makes it more expensive to build housing here in America. If you want to make raw glass or raw lumber or raw steel more expensive, you’re going to make it more expensive to do manufacturing here in the United States. And then the other thing that links up into is if we want to build a coalition that can contain the Chinese Communist Party, we actually have to work with our allies on that. We can either be Fortress America or we can be at the head of a China-containing coalition, but we cannot do both. And so working with our allies like Canada to allow more imports of Canadian softwood lumber makes a lot of sense in a bunch of different directions. So that’s part of it. It’s just making lumber cheaper.

And the other part of it is not deporting huge portions of our workforce that work in housing construction. Like it or not, significant percentages of the people who work in housing construction, particularly some of our most dangerous jobs like roofing, are undocumented immigrants.
And we have studies that show when you do mass deportations in certain areas but not others, the ones where you see those deportations have a significant slowdown in housing construction. And so deporting our construction workforce is also not going to help build out housing. Now I know JD Vance got on an interview the other day where he tried to rebut this and you talked about how, “Yeah, well, we used to build in the forties, fifties, and sixties, and we didn’t have a ton of immigrants then.” I get that as a conceptual point, but as a pragmatic here-and-now point, most of the people who work in housing instruction are immigrants– not most, but many are immigrants. Doesn’t make sense if we’re trying to get out of this housing slump and this housing production slump to be deporting the builders.

Huge tariffs on inputs and deporting huge portions of the labor force would be a big issue. I mean, I think there has to be a broader conversation about construction labor in particular of just how we’ve completely gutted our supply, especially with skilled construction labor. But from where we’re at right now, it’s like don’t deport the labor force you have.

Sure, sure. Exactly. I mean, if you were to ask me what are the two great failures of the American political economy, one is just like how threadbare our social safety net is for poor children. But the other is that we have very thin, hardly funded poor active labor market policies. And what I mean by that is we don’t help people get jobs, we don’t have people transition between jobs. As a percentage of GDP, Denmark spends 20 times as much on this as we do. We’re not helping people in the way that we should be. And what it means is that there are fewer on-ramps to the American dream than there should be. And so this gets at young men who are dissatisfied, but it also gets at educational polarization and it also gets at housing construction. If you’ve got fewer of those on-ramps to the skilled trades, well then that means you’ve got a shortage of people who can do those. This is one of the areas in which I think our public policies have capital F failed and we need to rethink why and fix it.

I want to touch on a few other things. Obviously, housing is our bread and butter, but we’re broadly interested in making cities work. And I think a major barrier to the scale of infill that we know we need is you also have to scale up mobility infrastructure. And of course, we’re very bad at this in the US. Do you want to talk a little bit more about an abundance agenda for urban mobility?

So this is actually something we talked about in the infrastructure section of our report is the problem of procurement. So the way we do procurement in the United States, we treat it like– Ezra Klein called it everything bagel liberalism. I actually preferred nine birds, one-stone liberalism. So you’ve got these nine different birds you’re trying to hit and you’re trying to hit it with one stone. What’s going to happen in practice? You’re going to hit none of them. And so what we do with our procurement in the United States is we’ve got all these different things we wanted to do. You’ve got to not just build, you’ve got to make no noise above the street. You’ve got to not change anybody’s view. It’s got to hit all these other separate metrics. Some of it’s going to get outsourced to NGOs and nonprofits. This particular problem, hate to say it in places like California, instead of having real estate capacity, and so you just end up getting garbage that’s expensive.

I mean on Twitter it went wild. There was this thing called La Sombrita, which was this bus stop and it was just like this little, basically a sign with a curved top and it cost over a hundred thousand dollars. San Francisco had the million-dollar toilet. Our construction costs are multiple times what they are in other countries, and this has a couple of problems. One, it means we just get less infrastructure because we’re paying a ton of money for it, but it also undermines public support for paying the taxes for the infrastructure. And it’s very rational if you think about it. If you’re a taxpayer and just looking around and you’re like, “Well, I pay taxes and I didn’t get anything for my money.” The next day, unless you’re wired in a certain kind of way, you don’t come around to being like, “Oh, I want to pay more taxes.”

You’re like, “No, just cut the taxes. If you’re not going to give me a good deal on it, just let’s not pay those.” And so then you got lower tax morale. And so part of it is we’ve got to stop letting every group that says it’s an interest group get their little cut of the action. And that’s where you got to have a little bit of spine. So you got to have a little bit of courage. You’re going to build things as quickly as you can and as cheaply as you can. And there are all kinds of micro recommendations we had in our report about how to fix procurement. That’s one of those areas though that as much as there’s these micro changes you can make, it’s about a culture. And that’s one of these areas where I think you actually could bring in more bipartisanship is taking taxpayers’ interest seriously.
That’s bread and butter Republican thinking. And so if you can combine Republicans’ insistence on taking taxpayers’ interests seriously with Democrats’ insistence on making sure that there’s good infrastructure, that’s a winning formula culturally, but we’ve got to just get that right instead of what we currently do. So that’s what I would say on procurement. In general, on transit, this is where I would go with another potentially Republican talking point. You got to make it safe. If people are not going to take the subway, if there’s someone doing hard drugs near them on the subway, they just won’t. And that’s perfectly reasonable. So if you want people to be in public spaces and use public transit, you’re going to need to not fight fire with marshmallows when it comes to public safety. And sometimes that’s going to be a tougher response than I think some people on the left want there to be.

Or even just presence. I mean, I think there’s a presence and 100% risk of apprehension in the case of a violation with relatively light consequences can do most of the heavy lifting. Yeah, I think that’s absolutely right. I know that you also talk about e-bikes and bike lanes, which I think are often left out of these conversations. Do you want to say more about that?

Yeah, so I’m really excited about e-bikes. They make biking obviously a lot easier. They make it not just for spandex kind of people. And I think it could be really great for getting people around urban spaces. The thing is though, you got to make sure it’s safe. I own a bicycle. I literally only go on recreational paths with it ’cause I’m not sharing the road with a car. Just won’t do it. There’s lots of people out there like me in all kinds of urban spaces who would gladly take an e-bike for any trip under two miles in nice weather. But that means they got to have somewhere safe to do that.

Now the thing about it is, here’s great about bike lanes. As long as you have the political will to take space away from cars, you’ve already got your bike lanes, you need some paint and you need some barriers that are not high-tech. It’s just not that expensive or that hard to do if you’ve got the will to take space from cars. And so we were also really excited about that. E-bikes are another area where there’s a new technology here that can make things really great for a lot of people.

Or even just the broader ecosystem of electric micromobility, right? I mean, neighborhood electric vehicles essentially. We have to call them something new ’cause we can’t just call them golf carts, but I mean for the vast majority of urban trips, which like you say are only two or three miles, that’s a perfect vehicle and you can have it be climate controlled as well for the pickier sort of commuter.

Yeah, I mean as far as I’m aware in the villages in Florida, that’s like 90% of trips are these golf carts.

Yeah, right, right. Yeah, no, it’s cheaper. And I mean, I think another issue too that’s happening concurrently to just our inability to scale up is our streets are becoming a lot more dangerous. You just have a lot more traffic violence, and I think part of this is because of the increasing size and weights of vehicles. Part of it’s because I think you have more people in urban environments biking and walking, and we just haven’t redesigned our infrastructure to reflect that.

Yeah, I think that’s right. So the New York Times did a really interesting investigation on this, on what was leading to increased pedestrian deaths in the United States, and they actually pointed to the biggest factors being a combination of a couple of things. One is a lot of our population growth has been, like you say, in places that have warmer weather, like Florida, Texas, Arizona, that don’t have good pedestrian infrastructure combined with more and more people on their phones when they should be driving. And then they pointed out some of these really interesting, part of the reason you don’t see this in the EU is because they have so much more manual transmission, ’cause if you’ve got manual transmission, you don’t have the free hand, whereas 99% of cars in the US are automatic transmission, and so you got the free hand to be on your phone.

And so actually there’s this really interesting investigation that they did that it was actually like that being the combination. And that the bigger trucks don’t help in terms of sight lines, and they’re definitely making some crashes more deadly because they’re so big. But a lot of the pedestrian deaths are also involving little cars because it’s just like, you get hit by a little car going 50, you still get hit by a car going 50 because they weren’t paying attention because they were on their phone in a place where it’s not safe to walk.

Yeah, I missed that chapter in the copy that you sent me of your report of mandating manual transmission, but sure, it’s-

I did not. That’s not part of the abundance agenda, mandating manual transition. No, no, we’re not going to do that. There are other ways to reduce pedestrian fatalities from that.

I hope so. Third prong here that I think would be just interesting to cover, and there’s a lot of great stuff in here on energy infrastructure healthcare, which of course are minor issues the folks might’ve heard of. But the third prong of the California YIMBY agenda is we say we want to make California an affordable place to live, work, and raise a family. And I mean, this is another crisis to me where I’m continually baffled that we don’t talk about it more, which is the cost of childcare. You have a lot of material in here. Where do we start on bringing those costs under control?

So childcare is somewhat unlike those first three areas in that it’s not a thing you can just easily do more output on. The reason childcare is expensive is because it’s labor-intensive. In that report, I open up talking about this thing Agatha Christie said, which is that right after World War I, she was living in London and she was looking back on that time and she said she couldn’t have imagined being so rich to own a car, nor so poor not to have servants, which is remarkable to modern ears. You’re like, “Wait, what?” And it’s because back then, labor was really cheap and capital was really expensive. And today we have just the opposite. It’s actually that capital that’s really cheap. We’ve all got these nice computers and phones in our pockets, capital goods aplenty. And so it’s people’s labor that’s really expensive. Early childcare is very labor-intensive.
It’s really not safe for babies to have more than about four, maybe in an extreme case like five. And even then that’s tough. For babies you need not more than four per adult taking care of them. It’s just really labor-intensive and there’s no way around that. So then you got to think about, okay, well what can you do to understand that? And we really wanted to include this in our report because the thing that really hurts people in terms of cost of living, we knew this was our challenge and that there aren’t a ton of great answers, but when we just talk to people, there’s pretty good data that people are having fewer children than they want to have. And the number one reason for that is because it’s expensive. And I have a five-year-old, I am a father. So I find that heartbreaking in a certain kind of way ’cause I know what fatherhood means to me.

And so it is really sad that that would be the case. And so I take it as a real responsibility as somebody who was working on this to have something productive to say about it. And so what we ended up saying is that there are a couple of things you can do on child care provision. So you can slightly relax some of these child-to-teacher ratios as they get a little older. In some states, it’s 10 to one. Once they hit three, you could maybe go to 12 to one. In some states, it’s six to one when they hit two and a half. Maybe you could have that sort of 22 months. You can do some small relaxations around things that don’t go to Kinsey or whatever. Local zoning in some places makes it very hard to build new daycare centers.

Utah is particularly bad about this. In some places, you’re always going to have some occupational licensing on childcare providers, but some places go too far with this. In DC you have to have a college degree. That’s insulting to look at people and say, “Oh, well you didn’t go to college. You’re not smart enough to take care of children.” And that just also creates a constrained supply in childcare. I mean de facto, we require a degree in Vermont. It’s not literally written into it, but the number of credit hours you have to have, you basically have a degree at that point. Californians are in that direction as well. So we’re basically saying don’t go overboard with your occupational licensing. We also talked about an expanded child tax credit because this is something that would be relatively neutral in the culture wars. If you’re just giving people money, well that can help the two-earner household who wants to send a child to formal daycare to center, but that also helps the household that has one full-time earner and one part-time, or it helps the household that has one full-time earner, one stay-at-home parent.

It’s neutral between all of those. So we like that a lot. And the other section of that report that we talked about, this is why we called the section raising children ’cause it’s more than just about daycare. We talked about the need for universal free school lunch. It’s a great bang for the taxpayer’s buck. It’s not that expensive. You’re saving money because you’re not having one of those workers standing there collecting the money. It reduces stigma if everybody’s getting the free lunch. It’s not associated with poverty. It’s one of those things for parents and staff to do. The kids focus better. It’s good for learning outcomes. There’s just a lot of really good things that come out of free school. It’s not that expensive. It really isn’t. And then we also talk about Medicare for kids, which is also cheaper than a lot of people think it would be because kids’ healthcare needs are usually pretty cheap.

I mean, you do get a rare kid that gets quite sick, but for the most part, children have very routine checkups, vaccinations, that kind of stuff. So providing Medicare for kids is another way of making raising children more affordable. And that was another thing that we wanted to say because it’s funny, you’re always supposed to be a little bit cynical, but this project actually came from an extremely earnest place of just trying to help people live better lives. This is a podcast, so obviously you listeners can’t see anything, but I’m in my office and there’s all these books behind me.

We’re recording video.

Oh, we’re recording video too. Okay. So they’ll see that. All right. All right.

Sorry, I should have mentioned that.

That’s all right. So those books behind me, it’s cool. I like being a nerd. But when I had the opportunity to write something that might actually help real people live better lives because they’re not having all these things eat their income alive, that seemed like a thing I wanted to do. And like child care is part of that.

Yeah, absolutely. Well, so we’ve got a plan to help more kids come along and then find them a place to live and then move around. As we wrap up here, there’s a whole bunch of other sorts of things that come up in this report. Maybe something we’ve not discussed so far. What do you think is the most underrated policy intervention in this report?

That we didn’t discuss so far? Removing the residency cap on doctors. Back in the late nineties, Congress basically put a cap on the number of residency spots. So now there are people who have the determination and the smarts to make it through medical school, and there’s just not a residency spot for them. And so they just get shunted out of the system altogether, which is crazy. It’s contributing to a doctor shortage and doctors have, for understandable reasons, by the time they’ve gotten through residency, they’ve often put down roots in that location. They’ve gotten married or they like it there or whatever. And so de facto, this freeze on the residency number of spots and its locations has meant that we have an extra acute shortage of doctors in the places growing the fastest. And so that’s a huge problem.

And so that’s one of the things that, if you ask me for just one out of our healthcare section, since we didn’t talk much about healthcare as a thing we should do, that would be removing that cap. And the original organization that argued for it, the American Medical Association doesn’t even like it anymore. So there’s actually an open door to get this done. In this report, we really try to focus on things that are politically doable, and removing that cap is doable. There’s even a bill in Congress written by Terri Sewell, Democrat of Alabama that would relax this cap. We’d like to see it not just be relaxed, but super relaxed, but at least that’s a step in the right direction. So that may have legs in the next Congress.

Fantastic. Well, if you want to learn more about the healthcare proposals, you’ll have to go read the full report. Again, it’s A Democratic Cost of Living Agenda: A Low-Cost Framework for Helping Families Build Abundant Homes, Care, and Energy. This was with the Chamber of Progress. Gary, thanks so much for joining to chat about it. And I look forward to having you on in the future to chat about how all of these policies have been implemented. And it’s all because of this report, right?

Thanks, Nolan. I love your book and it was such an honor to be here with you today.