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To make homes more affordable, we should build!

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Tuesday, 21 January 2025

Written by John Hood

In places where the regulatory climate makes it easier to build new homes, it’s easier for people to find housing at affordable prices.
No, really, please bear with me. I know my proposition sounds improbable. Could there truly be a direct link between the cost of building apartments and houses and the cost of renting or buying them? I submit the answer to this provocative question is yes.
My answer depends on two propositions for which, I argue, there is strong evidence. The first is that regulation increases the cost of building new residences. Many studies illustrate this effect, some from the industry itself and others from scholars who publish their work in peer-reviewed journals.
The following passage sums things up well. “Even where housing is allowed,” a group of economists stated, “local permitting requirements can drive up the cost of housing and contribute to the nation’s housing shortage.”
The economists pointed out that while “some permitting requirements serve an important purpose, such as ensuring structural, electrical, plumbing, and mechanical safety and environmental protection, the rise of unnecessary and onerous permitting has contributed to housing shortages and housing unaffordability across the country. Permitting requirements directly increase the cost of building new housing by increasing soft costs, administrative burdens, uncertainty, and delays.”
Some hack consultants on the take? Nah. I just quoted the Biden-Harris administration’s Council of Economic Advisors.
Now, in theory, homebuilders and developers might eat any higher costs imposed by housing and land-use regulations. That’s not what happens in practice, however. Consumers bear most of it —by paying higher prices, by renting or buying less quantity and quality of housing than they’d prefer, or by having to choose another location entirely where the housing is cheaper but other job or lifestyle amenities are less desirable.
A new study in the Journal of Political Economy-Macroeconomics quantified the relationship. For every 1% increase in the supply of housing, average rents fell by .19%. There was also an increase in second-hand units placed onto the market to rent.
This finding underlines a key mechanism to keep in mind: you don’t have to build “affordable housing” in order to make housing more affordable. That is, even a project aimed at middle- or upper-income consumers can end up serving the interest of lower-income consumers by freeing up preexisting houses or apartments.
The first house I ever purchased, in a starter-home neighborhood in Garner, was far from new. The couple from whom I purchased the home had lived in it for many years. When the husband got a raise at work, they jumped at the opportunity to buy another house closer to his office — and large enough to accommodate their growing family. Their decision, in turn, put an existing unit on the market for a young journalist living paycheck to paycheck.
Housing is an urgent and emotional issue. Policymakers have to talk about it, and at least promise to do something about it. On this matter, as on so many others, my advice is to focus on the supply side, not the demand side.
Except for poor people on public assistance, government ought not subsidize consumers of housing. Recent expansions of the standard deduction and caps on the mortgage-interest deduction have drastically reduced the number of Americans who take it. The deduction never played much of a role in boosting homeownership — countries such as Canada have comparable rates of homeowners without such a tax deduction — and mostly benefits high-income households.
And as Mark Calabria, former head of the Federal Housing Finance Agency, recently explained to Reason magazine, the government-sponsored enterprises Fannie Mae and Freddie Mac provide “not a homeownership subsidy but a home debt subsidy.” Their implicit federal subsidy can only boost the demand for mortgages, which “if you’re not doing anything about supply is only going to run up prices.”
Both the state legislature and local governments have been deregulating housing markets in North Carolina. Let’s do more of that, and soon.

Editor’s Note: John Hood is a John Locke Foundation board member. His books Mountain Folk, Forest Folk, and Water Folk combine epic fantasy with American history (FolkloreCycle.com).

Post-COVID test scores tumble in North Carolina

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Tuesday, 14 January 2025

Written by John Hood

In the wake of the COVID-19 pandemic, student performance fell across much of the United States. According to a new study of 2022 math and reading scores, however, North Carolina students suffered one of the country’s biggest tumbles.
For describing cross-state differences in educational outcomes, I’ve long relied on the Urban Institute’s analysis of data from the National Assessment of Educational Progress. Few yardsticks are as consistent as NAEP’s reading and math exams, administered every couple of years to a representative sample of students in each jurisdiction.
Urban Institute researchers then take these test scores and adjust them for demographics, making possible valid comparisons across states that differ markedly in the share of disadvantaged students.
Before COVID, our state fared well in the Urban Institute analysis. Averaging results from the four tests included in the model — reading and math exams in the fourth and eighth grades — North Carolina ranked 7th in the country in 2019, behind (in order) Massachusetts, Florida, New Jersey, Indiana, Mississippi, and Georgia. Rounding out the top 10 were Texas, Connecticut, and Maryland.
In 2022, the top 10 states in demographics-adjusted student performance were, again in order, Massachusetts, Mississippi, Florida, Louisiana, Texas, Georgia, Indiana, Illinois, Nevada, and South Carolina.
Alas, our state was no longer among them. North Carolina tumbled to 29th. Among previously high-performing states, only Maryland suffered a bigger drop than we did.
Now, I know readers may be tempted to slap this bad news on the back of their favorite hobbyhorses and ride them with reckless abandon. See, critics of the state legislature will insist, it was foolish to prioritize tax cuts and opportunity scholarships over more-dramatic increases in teacher pay and school funding!
See, critics of former Gov. Roy Cooper will say, it was foolish for North Carolina to keep its schools closed so long despite the lack of strong evidence schools were a major vector of deadly disease!
Might I suggest less rocking and more talking? You can’t answer complex policy questions with simple comparisons or correlations. Many factors shape academic achievement.
Only some of them can be found in the schoolhouse, and even then the effects on student performance are rarely as dramatic as the political rhetoric associated with them.
I happen to think Cooper did bungle the school-closure issue, and that this probably helps to explain why North Carolina’s test scores dropped so much. My opinion is based on research that holds other factors constant while comparing the length of closures to subsequent student performance.
But I acknowledge not all studies show large effects. I’d like to see more evidence before drawing a final conclusion on the magnitude of the harm.
Moreover, other states that kept schools closed even longer than North Carolina fared better on the 2022 NAEP tests, both in score averages and in changes from 2019. It’s possible that other policy choices by states help to explain variations in student performance. It’s also possible that NAEP tests administered in 2024 will show a different trajectory.
In the meantime, what the Urban Institute study can do is dispel certain myths that continue to pervade North Carolina’s debates on education policy.
First, no more making fun of the likes of South Carolina and Mississippi. Over the past decade, both have enacted major education reforms that changed how teachers were trained and students were taught. Their students haven’t just outperformed ours. They’ve outperformed their counterparts in such places as Connecticut, Minnesota, Rhode Island, and Wisconsin.
Second, no more asserting that low-tax states such as Florida and Texas must inevitably sacrifice the quality of public services on the altar of fiscal conservatism. Their schools ranked well not just in the latest study but in past evaluations of NAEP data.
Meanwhile, high-tax, high-regulation, low-growth states such as New York and California don’t have better schools. They have worse schools — and, usually, worse performance in other public services.
I used to point out that North Carolina’s schools ranked higher, as well. Not anymore.

Do parents today need a name consultant?

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Tuesday, 21 January 2025

Written by Margaret Dickson

What could be fresher in the New Year than a newborn baby?
Long anticipated, maybe even prayed for, a new baby is a sign of hope, of renewal, and of family. It is a rare opportunity to fall totally and permanently in love.
Babies change everyone around them but especially their parents, who now have responsibilities they are likely to carry for the rest of their days. First among them—what are we going to name this tiny little person?
We in the South are fond of giving our babies names of others in our families, living and dead—a so-called “family name.” I carry my maternal grandmother’s name, Margaret Dawson, and I am forever thankful that her name was not Scheherazade. Not all parents are traditional. My cousin once taught a student named Chandelier, for reasons no one ever explained.
The Social Security Administration is a resource for parents struggling with just the right name for their little bundle of joy. The SSA has kept records of what Americans name our most precious possessions since 1880. Turns out baby-naming is just about as trendy as designer handbags and blue jeans with holes in the knees. It also appears, at least to this writer, that boy babies are more likely to have solidly traditional names, and that parents are more likely to be creative with what to call their girls, especially in the 21st century.
Consider this:
In 1925 the 10 most popular girl names were Mary, Dorothy, Betty, Helen, Margaret, Ruth, Virginia, Doris, Mildred, and Elizabeth. Leading for boys were Robert, John, William, James, Charles, George, Joseph, Richard, Edward, and Donald. We still see a lot of those names now, but only 1 remains in the top 10.
Top billing for girls in 2023 (2024 is not yet available) were Olivia, Emma, Charlotte, Amelia, Sophia, Mia, Isabella, Ava, Evelyn, and Luna. Boys' names were also more varied than in 1925 with the top 10 being Liam, Noah, Oliver, James, Elijah, Mateo, Theodore, Henry, Lucas, and good old William.
So what names do we have to look forward to in 2025?
Lilia Corrigan, a name consultant with Heart Baby Names, told the HuffPost that nostalgic names “like Eloise, Maeve, and Otis” are on the horizon as are names that come from diverse influences, such as “Aria, Ayaan, and Leila.” She adds that names “tied to the natural world….like River, Sage, and Aurora reflect a desire for grounding and connection in a fast-paced world.” Another consultant, Heidi Prunkl, founder of Baby Name Sunday, is expecting to see daycare centers populated with “Cleo, Bear, Gia, Arlo, Jade, Ivy, or Kai.”
Biblical names are always in style, says Sherri Suzanne, founder of My Name for Life, another name consulting firm. She told HuffPost that some Biblical names have been used for generations, but that today’s parents are opting for lesser-known Biblical figures like “Erza and Micah and Ezekiel.” She will not be surprised to meet a few Enochs and Boazes.
Corrigan also expects “cool, unisex names like Blair, Rowan, and Ellis….These names feel fresh, modern and versatile….Sterling, Palmer, Finley, and Teagan are poised to rise in popularity in 2025.”
This is a lot to ponder for those of us who have or will have buns in the oven. As a mother of three, my advice is to remember that your precious jewel will carry the name you give him or her for life, and that what sounds fabulous in 2025 might not have such a positive ring in a decade or two.
You should also know that there really was a Scheherazade growing up with me on our little two-block street in Haymount.
As we say in the South, bless her heart.

Where have all the student athletes gone?

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Tuesday, 14 January 2025

Written by Pitt Dickey

Right now, you are probably asking yourself, “What’s the NIL all about, Alfie?” Mr. Science is going to explain how the NIL has improved college sports. Pull up a chair, put the dogs out, and light up a stogie. Enlightenment awaits.
The critical issue confronting America is what to make of college sports now that the NIL (Name, Image, & Likeness) has slithered out of the darkness of the toothpaste tube of secret alumni money into the full light of day. Colleges can now openly rent athletes by the season. I asked Mr. ChatGPT what was the total amount colleges are currently paying players, unfortunately, he did not know. Let us assume it is a lot. A whole lot. A mega lot, to get technical.
Like an overturned ant hill, college players skedaddle in the portal from one college to the next to get bigger paydays. It is quite charming. Where shall this money to fill NIL’s maw be found? Providing Sopranos-like No-Show jobs to our fine student-athletes just ain’t gonna cut it anymore.
What is a college to do? The academic part of most Universities is just a loss leader. Seems a pity to waste money on professors, labs, and libraries. The real money comes from packing football stadiums with fans. For example, take my beloved alma mater, UNC at Chapel Hill. Or as Henny Youngman used to say: “Take my wife, please.” UNC added beer and wine sales at Kenan in 2019 to beef up sports revenue. Prior to 2019, no one ever consumed alcohol during UNC football games. This statement may not be completely accurate. It is only a matter of time before In Stadium Betting is added to concession stands in Kenan. UNC’s inability to compete with Fan Duel sucking money from its fans will not last much longer. Players won’t play for dear old NCU just for the love of the game. Buying a BBQ sandwich while betting on the game is coming.
The Heels hired a fancy new $10 million-a-year football coach. UNC promised to increase its NIL money from $4 million in 2024 to $20 million in 2025. We are gonna need bigger bucks. Voila! Like Venus rising on the half shell from the sea, the CAROLINA NIL, like some rough beast slouching towards Bethlehem is born. The legal name of CAROLINA NIL is, in fact, in all capital letters. It shouts: “Give me MONEY or get lost.” The old timey Rams Club is now just a shining artifact from the past in the Brave New World of NIL money.
Consider a modest suggestion for fundraising for CAROLINA NIL based on the old Rams Club formula of donor classes. Not all fans are created equal. Rams club donors are classified in eleven levels of sedimentary bribes to be eligible to buy football tickets. Rams Club memberships range from $100 for Little Bitty Rams up to $50,000 a year for Legend Class Ram Members. Each.
Perhaps the CAROLINA NIL could use these levels of giving:
• Mini NIL club: $500. Member gets a UNC decal to adorn their TV
• Pituitary Deficient NIL club: $1000. Member gets decal, UNC hat, Beat Dook button from Shrunken Head
• Malodorous NIL club: $2000. All prior swag, plus a lawn chair to sit in the Bell Tower Parking lot to listen to the game outside Kenan Stadium
• Rabid Fan NIL club: $10,000. 2 seats on the visitors’ side in the broiling sun, one free stadium hot dog
• True Blue NIL club: $20,000 2 seats on visitors’ side beneath the overhang, two hot dogs and a bag of Houston peanuts.
• Mega Pint NIL club: $50,000. 2 seats under overhang on home side, 2 hot dogs, peanuts, 2 cold Chik Filet sandwiches, two Molson beers
• Super NIL Club: $100,000 All prior perks, ability to call 6 offensive plays in each half, 4 Molsons
• Super Duper NIL club: $250,000. Sit by Coach’s wife in Sky Box, Ability to call 6 offensive and 6 defensive plays each half.
• Most Holy Poobah NIL club: $500,000. Ability to fire the Athletic Director, the Chancellor, and the entire UNC Board of Governors. 6 Molsons
• Lion of Judah NIL Club: $1 million. All the above, plus the right to execute up to three referees per season who make bad calls against Carolina.
• Eternal Fan NIL Club: $2 million, all above plus right to have your body embalmed by the UNC Medical School and your coffin placed at the 50-yard line for all future Carolina football home games.
Get on board the NIL train. It’s leaving the station. Like Winston at the end of George Orwell’s novel “1984,” you must learn to love Big Brother.

(Illustration by Pitt Dickey)