The Pragmatic Approach to Housing

For more than 100 years, discussions of housing and related policies have been dominated by a flawed method. It is a method that disdains principles and long-term thinking. The result has been an ongoing attempt to address an issue in isolation with no consideration to how a policy will impact other areas of life. The method of Pragmatism has led to our current housing crisis.

According to Pragmatism, truth is what works—what gets the desired results. However, having disdained principles and long-term thinking, the Pragmatist can only enact a policy and then wait to see if it is “true,” i.e., if it works. Having eschewed principles, the Pragmatist discards the means for identifying the long-term consequences of a policy, i.e., if it will work. The debate over zoning in Houston in the early 1990s serves as an example.

When opponents of zoning pointed to the problems caused by zoning in other cities, such as increased housing costs and acrimonious public debates over land use, the proponents of zoning dismissed those points. To the zoning advocates, any attempt to address the principles underlying zoning was deemed unreasonable. Pro-zoners acknowledged that Detroit, Miami, Los Angeles, Boston, and every other city with zoning had problems resulting from land-use regulations. But, they quickly added, that is Detroit, Miami, Los Angeles, and Boston, not Houston. Houston will be different, and you can’t predict how zoning will play out in Houston, they argued. And without principles as a guide, that claim is true.

Having abandoned principles, zoning advocates were unable to identify the long-term consequences of the ideas they supported. Having abandoned principles, they angrily denounced anyone who advocated rational principles. Having abandoned principles, pro-zoners could only see and deal with the short-term.

Two contemporary examples further illustrate the short-term thinking that dominates policy discussions. As one example, lockdowns were instituted at the beginning of the pandemic to address a single issue—slowing the spread of COVID. This had predictable results. Tens of millions lost their job, and many were unable to pay their rent or mortgage. In response, governments enacted eviction moratoriums. And when this had the predictable result of imposing financial ruin upon landlords, government responded with a series of poorly designed aid packages for tenants and property owners.

Each of these policies was enacted to address a specific problem, and they were implemented without consideration of the impact on other issues. Each of these policies was enacted in the expediency of the moment, rather than a careful application of rational principles and long-term thinking.

The growing calls across the nation for rent control are another example. Economists are in nearly universal agreement that rent control is destructive to the rental housing market. When the profit potential is arbitrarily limited through government edict, individuals are discouraged from investing in rental housing and many remove their properties from the market. Advocates of rent control ignore these facts. They focus solely on their claim that the rent is too damn high, and they want government to intervene. They refuse to consider why housing costs are soaring, placing all of the blame on greedy landlords.

Rent control advocates look at rising housing costs in isolation with no consideration of the factors causing it. They then propose a “solution” that, when considered in isolation, will slow the increase in rents. Indeed, most housing policies do achieve short-term benefits for some individuals.

For example, eviction moratoriums do keep some tenants from losing their home. Rent control benefits some renters, i.e., those who live in a rent-controlled home. But the benefits that some enjoy are obtained at the expense of others, and the victims are often unseen. Rent control, for example, reduces the supply of housing, which is detrimental for renters looking for a new home.

If we truly want to solve the housing crisis, we must reject the flawed method of Pragmatism. In its place, we must embrace a principled, long-term method that integrates the myriad related issues.