How regulations make housing more expensive

Bryan Caplan is known for his unconventional approach to solving serious problems. With his latest book entitled Build, Baby, Build: The Science and Ethics of Housing Regulation, in collaboration with illustrator Ady Branzei, uses the graphic novel format to make the case for a more inclusive approach to housing policy. This is his second foray into the world of illustrated narratives, after the one in 2019 Open borders: the science and ethics of immigration. ReasonCaplan’s Christian Britschgi asked Caplan about his motivations and future prospects for the “yes in my backyard” (YIMBY) movement.

Q: Why present the case for more housing in the form of a graphic novel?

A: There is a lot of high-quality research on this topic, and yet almost no one would read it because most of it is really boring. Honestly, I’m just looking for a way to get other people interested. When someone gives me 20 seconds, the main idea I say about this book is: “I wrote the most fascinating book ever written on housing regulation.”

Question: You claim that ending most zoning and building regulations will impact many other issues we all worry about. What are some examples of this?

Answer: Let me start with the basics: housing regulations have significantly inflated housing prices, and deregulation will cause them to drop again. This is such a large part of the typical person’s budget that reducing the price of a home by 50 percent (makes) a big difference in the overall standard of living.

This means that there would be a lot of additional employment for people in the construction industry. A demographic that has done really poorly over the last few decades is non-college males. Well, that’s basically the main type of people working in the construction industry.

This one is subtle and fun. There is a traditional upward mobility path that Americans have followed: move from anywhere and go to the highest-wage part of the country. It doesn’t work anymore. Housing prices in the country, which we call gold rush, have reached such a high level that they consume over 100 percent of earnings. It’s still true that you can get a raise by moving to a high-wage part of the country. The problem is that now that wage increases are less than the cost of housing, this is no longer a viable route out of poverty.

Q: Your book portrays big cities as bright, fun and futuristic places. How many NIMBY (“not in my backyard”) arguments do you think are primarily aesthetic?

Answer: I really paid attention to the fact that many people are simply bothered by aesthetics. So in this book I wanted to fight aesthetics with aesthetics and say, “Look, you’re so convinced that this is going to look bad. Let my artist go and draw it to make it look good and maybe it will open up, think about it.”

Frédéric Bastiat said that much of the argument for government is based on looking at what is seen and ignoring what is not seen. I think this is really about housing regulation. If you’re looking at something really nice, it’s easy to believe that we wouldn’t want to tamper with that perfection. But is it perfect? Is it true that on this day we reached the peak of aesthetics in this particular area? Let’s imagine another way this could look.

Q: Would you describe yourself as optimistic about this? Do you think the YIMBY case will win significantly in terms of policy change?

Answer: I am a conditional optimist. Rules work wonders. I can’t say I’m optimistic about winning. Of course, I like the idea that my book will start a political avalanche and that everyone will read it and people will wave it in front of Congress and 50 state legislatures. There is a panel in the book where every Supreme Court justice reads it. Look, I can dream.

This interview has been condensed and edited for style and clarity.

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