Talks with Authors: Nowhere to Live: The Hidden Story of America's Housing Crisis

Edith Harold: Hello everyone and welcome to this Federalist Society virtual event. My name is Edith Harold and I'm an Assistant Director of Practice Groups with the Federalist Society. Today we're excited to host this Talks with Authors program on Jim Burling's new book, "Nowhere to Live, the Hidden Story of America's Housing Crisis". In addition to being an author, Jim Burling is the Vice President of Litigation at the Pacific Legal Foundation. He is joined by Professor Eric Claeys of the Antonin Scalia Law School at George Mason University. If you'd like to learn more about today's moderator or speaker, their full bios can be viewed on our website fedsoc.org. At the end of the program, we will turn to the audience for questions. If you have a question, please enter it into the Q&A function at the bottom of your Zoom window, and we'll do our best to answer as many as we can. Finally, I'll note that as always, all expressions of opinion today are those of our guest speakers, not the Federalist Society. With that Professor Claeys, thank you for joining us today and I'll hand things over to you.

Prof. Eric Claeys: Thank you for those introductions, Edith, and thank you for asking me to moderate and thank you, Jim, and congratulations for writing such an interesting book. Why don't we start, I just like to ask you to tell the audience what's the main argument, what's the main change you want to have the book convince people to follow?

James S. Burling: I think the main thing I would like people to understand is that we need less government, not more government, fewer government programs to interfere with the housing market, not more government or interference with the housing market. Bottom line is we have had one bad government policy after another for over a century, and all these bad policies combined with one another have led to the housing crisis that we're in today.

Prof. Eric Claeys: In the introduction, you say in one passage, we can get ourselves out of the housing mess by re-embracing the inspiration for the statute of liberty, and there's a quote from the poem that's associated with the statute. So why is housing shortage a liberty problem and why is the cure more liberty?

James S. Burling: Well, if we do not have enough housing, it's easy to be taken over by a demagogue. If we have a lack of housing, people do not feel the freedom that we can otherwise enjoy when we have the material basic material goods. And the way to get those is not to have a government program provide things, but to give us the ability to build the homes that people need to live in, to go out and earn a living and to be able to afford the homes that should be built. Liberty and property are tightly tied together. The founding fathers realize this. Political philosophers have understood this for a long time, that liberty and property are one of the same. They cannot exist without one another, and that's the basis thesis of the book in the beginning of the book, that we have to restore property rights, which is a concomitant restoration of our liberty. At the same time,

Prof. Eric Claeys: Also in the introduction, you talk a bit about the number of houses that need to be built to keep up with demand. How many houses do need to be built every year to keep up with demand for new housing?

James S. Burling: So depending on your estimate, roughly a million to 2 million houses a year, 1 million simply to take care of obsolescence, those homes that get too old have to be torn down. Homes that are destroyed by tornadoes, floods, hurricanes, that kind of thing, plus another billion homes a year across the nation to keep up with population growth, to keep up with increasing demand of new families being created. And we are building far less than that every year. In fact, I talk about my book that back in the late sixties, early seventies, we were building more homes than we are today or on an annual basis, and that was back at a time when our population was only 200 to 225 million versus the close to 350 million that we have today. So every year we're building fewer homes, demand continues to rise, the disparity between supply and demand increases, and therefore as Econ 101 will tell you, prices go up and up and up.

Prof. Eric Claeys: So the book has more than 20 chapters, it comes in eight parts. And what I'd like to do in the next few questions is just to ask you about each of the parts, just to give readers an overview of the book. So part one, the title is The Racist History of Residential Zoning. So that's a strong thing to say that zoning has a racist history. What do you mean by racist and what's the evidence?

James S. Burling: So I begin my book telling a story, and I should point out that my book has a lot of stories about individuals and how they deal with rules and regulations and government. And the first story starts in 1910 in Baltimore where George McBechen was a Yale educated attorney, and he and his school teacher wife decided to buy a new home because to reflect their status, reflect their success, and they bought a new home in what was called the Utah Place neighborhood in Baltimore. Within a few days of buying that home, local youth gathered in front of their home and threw rocks and broke every window in their home and the skylight as well. Why did they do that? Because George and his family were all black, and the neighborhood that they were moving into was all white. Within a short period of time, the city of Baltimore, the city council, basically acquiesced to the mob mentality and they passed the nation's first zoning ordinance that made it a crime for African-Americans to move into a white neighborhood under penalty of close to $3,000 in 2024 in the fines, and up to a year in prison for the offense of moving into the wrong neighborhood.

This ordinance proved wildly popular in the southern states and the border states between the north and the south. And eventually it was struck down, but as I talk in the book, it was replaced by economic zoning, which essentially did the same thing, but it was a kinder and gentler sort of racism. It wasn't based on the race, but based on class, based on the fact that you could not afford to live in communities if they were zoned to have large lots single family zoning, if you banned apartment buildings, if you bend duplexes and triplexes and things of that nature, then you were effectively excluding working class people. You were excluding minorities and you were excluding poor people as well. And so this is the zoning that we've had up till this present day that is designed to keep out multifamily housing, keep out working class people and people of color. So I point out that the history of zoning is very racist because it was designed explicitly at first to keep certain races out of neighborhoods and later designed to keep them out based on their economic class.

Prof. Eric Claeys: So what you're now calling economic zoning that was upheld by the Supreme Court in a watershed case called Euclid v. Ambler Realty Co. And you talk about that in detail in the book. I have a few questions about Euclid. So first you go on quite a bit about the opinion of the trial court opinion by Judge D.C. Westenhaver. So what's so interesting or important about Judge Westenhaver's trial court opinion?

James S. Burling: Well, Westenhaver recognized that the point of the zoning was to exclude people by class to basically segregate Euclid, Ohio by class. And then he continued saying, look, a few years before when the racial zoning of the sort we saw in Baltimore, and then it was later taken over to St. Louis to Louisville where it was overturned, that was just in the judge's opinion, a good ordinance. It did good things because it kept the races separate. And he says an extraordinary thing for a district court opinion. He says that it is well known judicial cognizance of the fact that everybody knows when a minority person moves into a largely white neighborhood, the neighborhood goes to hell. And he basically talked about this idea that if you have a mixing of races in the neighborhood, the neighborhood is destroyed. And he thought if the Supreme Court struck down such a good law as a racial zoning in Louisville, Kentucky based on the Baltimore ordinance, then how could this ordinance based on economic zoning be constitutional? Because if such a good ordinance was unconstitutional, this one, which is not quite as good because it doesn't explicitly exclude people by the basis of race, how can that be constitutional? So he struck down the ordinance at the trial court, not because he didn't like it, but he didn't think the Supreme Court would like it.

Prof. Eric Claeys: And then what happened in the Supreme Court?

James S. Burling: So the Supreme Court took the case up, and at first the oral argument was very much against the city of Euclid. And the attorneys for Euclid asked for another opportunity to answer some more of the questions and to have further argument, primarily because one of the judges was absent and they got a last minute stay. I mean, I tell the story in the book about after the first oral argument, the attorney taking a train ride home in the snow and realizing he had a pen on the train, and he threw out a brief to the Supreme Court with a dollar bill or $10 bill attached to it, hoping that the person at the train station would pick it up and see that it had instructions to send this to the Supreme Court by telegram if the word got through. He had a second oral argument and he won.

And what the Supreme Court by the conservative Justice Sutherland said was that building an apartment building in a residential neighborhood is kind of like a nuisance. It's a wrong place, it's the right thing in the wrong place. And he characterize it like a pig in a parlor that building apartment buildings in a residential suburban neighborhood is like putting a pig in a parlor of a home. And of course, pigs were also a term for Polish Americans at that time. I don't know if the Judge Sutherland meant to say that as a slite or not, but he basically talked about the thing that happens when you have this mixing of classes and how an apartment building is going to take away the light and air, and it's a parasite, his words parasite on the community. So he was very much against the idea of using the constitution to strike down zoning. And despite what had happened when the Louisville ordinance was struck down in a case called Buchanan v. Warley, despite that decision, he upheld the Euclid ordinance and he basically upheld economic or class-based zoning. And that has been with us till this day.

Prof. Eric Claeys: So in part one, you introduce some acronyms. I'm thinking in particular NIMBY and BANANA, what are each and how do they matter in debates over land use regulation?

James S. Burling: Well, everybody knows what a NIMBY is - not in my backyard. A banana are the people that say "build absolutely nothing near anybody." And you also have the NOPErs. Those are not on planet earthers. So there is a strong parial interest among people not to have more growth in their areas in their neighborhood. And that is why single family zoning, large lot single family zoning has proven to be so incredibly popular because the not in back my backyard type say, look, I think we should have more housing. We know we have a housing shortage. Just don't build it near me, don't build it in my backyard, build it somewhere else. And the problem is when everybody collectively says the exact same thing, build it somewhere else, there is no place to build. And that's part of my discussion in the book is that we have so few places where it's lawful to build the kind of housing near where people actually want to live. So NIMBYs, bananas, NOPErs, all these are acronyms for just keep the building somewhere else out of sight, out of mind.

Prof. Eric Claeys: So I'm going to move to part two. Part two is about eminent domain and its use. So I guess I want to start with some of the characters in part two. Who's Aurora Vargas?

James S. Burling: Aurora Vargas was a World War II widow. Her husband died in the war, the Battle of the Bulge, and she lived in Chavez Ravine, which was a long established Mexican-American community outside of inside Los Angeles. And it was working class. It wasn't a terrible place to live. People grew up there. It was a very coherent, cohesive neighborhood. But the city fathers decided to take the property through eminent domain and redevelop the neighborhood. Aurora Vargas and her family fought back. They did not like that. And you'll see a picture on my book about the last battle she fought when she was literally carried out by her arms and her legs down out of her house by Sheriff's deputies as she was being carried out of her house and the rest of the family escorted out of the house. Bulldozers were literally next door to her property, they were fired up and they immediately tore down her home a roar of Vargos and her family camped out in the ruins of their home for about a week, and eventually they had to give up. Now, initially, her home was to be destroyed for a public housing project. A new mayor came in, didn't really think too much of public housing, he thought it was a communist plot. And instead Aurora Vargas's home was turned into what is now Dodger Stadium. And as I point out in my book, you could take all of the homeless people in California, all the homeless children in California, and they could not fit into Dodger Stadium today.

Prof. Eric Claeys: Who is Susette Kelo?

James S. Burling: Susette Kelo is well known to everybody. She was a homeowner. She owned a little pink house and the Trumble Fort neighborhood of New London, Connecticut. The city fathers there had a brilliant idea of raising her neighborhood so Pfizer Pharmaceuticals could build a nationwide worldwide headquarters in New London, Connecticut. It was a dream that the city fathers had because frankly, New London was a town that had seen better days. A lot of the industries had left, and here is an opportunity to bring in Pfizer Pharmaceuticals. Problem was there wasn't enough land. So the city fathers have said, Hey, we have this working class neighborhood here, why don't we just condemn it and bulldoze it? And Susette Kelo fought back. It was the famous Kilo case where the Institute for Justice represented Susette Kelo and her neighbors and they put up a big fight. And many of us were optimistic because it seemed that the tide was turning where at one time that the courts had routinely upheld these kind of redevelopment projects.

Courts were the, and when the Kelo case came to the Supreme Court, about a dozen so years ago, people were then beginning to wake up and that redevelopment wasn't such a great thing. Redevelopment was really destroying minority neighborhoods right and left. And there was hope that the Supreme Court would rule that there really was no public use in a private pharmaceutical company building its headquarters on top of somebody's neighborhood. Unfortunately, as we all know, the Supreme Court ruled against Susette Kelo, but there was a very strong dissent from Justice O'Connor of all people because she had written an opinion a number of years before upholding the use of eminent domain for private purposes, but this time she thought it was too far. She said this could allow a Motel Six to be taken down to build a Ritz Carlton. And she thought it was just wrong that Susette Kelo and the citizens of New London, Connecticut were being forced out their homes. Eventually they were forced out of their homes. And today, if you go to the neighborhood, it's nothing but a weed-strewn lot or a lot of weed-strawn through in lots because nothing has been built there because only about a dozen and a half years after the condemnation, Pfizer Pharmaceuticals decided to pick up its stakes and go somewhere else. They were done with New London and New London was left with nothing.

Prof. Eric Claeys: So the main concern in the book is that government policy restricts access to housing. How does eminent domain contribute to that problem? I could see a supporter saying eminent domain could be used to make way for more development. So why does it restrict development?

James S. Burling: Well, it restricts housing development because so often the case is that a neighborhood will be destroyed to make way for all kinds of development that aren't necessarily housing. I talk in my book about people that talk about it's kind of a morbid humor that if you want to find a future, archeologists a century or two from now are looking for where there used to be minority neighborhoods in our urban areas, you just look underneath the freeway because so often the freeways went directly through minority neighborhoods and left the upper class and whiter neighborhoods alone. Same thing for redevelopment in urban neighborhoods. More often than not, it took property of minority populations, which was often run down, but they're often vibrant neighborhoods and they're turned into office complexes, hotels, convention centers, all kinds of things without enough housing being built. Look, the first major redevelopment case that got up to the Supreme Court was a case called Birmingham v. Parker.

That was a destruction of a working class mixed race neighborhood in Washington DC and it was raised to make way for a redevelopment project. Housing was promised to be part of that, but as it turned out, only a small fraction of the people who lived there actually had housing built that they could live in and that they could afford. Most of the redevelopment project went to hotels, conventions and that kind of thing at the Supreme Court. However, Justice Douglas writing for the majority said, look, if the city of Washington DC wants to ensure that a neighborhood is sanitary as well as aesthetically nice, there's nothing that a court could or should do to stand in the way. And that basically left open cities across the country to raise their poorer neighborhoods, their working class, mixed race neighborhoods to make way for urban redevelopment, which often left poor people out with no place to live. In fact, James Baldwin, a black intellectual of the 1960s famously said that urban redevelopment is nothing but moving Negroes out. He called it a negro exclusion policy. Those are his words, not mine, because he saw what was happening to urban neighborhoods where the poor people, often minorities would be moved out and no accommodation would really be made for them.

Prof. Eric Claeys: Part three of the book studies the impact of general environmental laws on development. First question, what's the Endangered Species Act and how does it affect residential development?

James S. Burling: Well, the Endangered Species Act was passed with a plethora of other environmental rules and regulations in the early 1970s under President Nixon. And the Endangered Species Act essentially says that if you have any kind of species of plant or animal that is subject to a potential future extinction, then the government must do whatever it to ensure that that species survives. I mean, the first big case challenging the Endangered Species Act involved a Teleco dam, which is something of a boondoggle project, but nobody was able to figure out a way to stop it because those popular with members of Congress and the powers that be, if you will, in the state of Tennessee. But it was found that there was a little fish called the snail darter, tiny fish, kind of a minow lake fish that lived where the Teleco dam was going to flood it out, and therefore the snail darter was in danger of extinction.

And the Supreme Court famously said that when it comes to protecting endangered species, the government must do whatever it takes at whatever the cost. And it was a very bold prescription. It was probably with beyond what the framers of the act intended be that as it may, that was a holding of the Supreme Court. And what that has meant across the country is that many, many areas of land are taken out of development or out of the sort of development that could be intensely used for housing. If you can develop in an area that affects a endangered species, you may have to do all kinds of very expensive mitigation, but more often than not, it's simply impossible to develop in areas where there are end. There's endangered species habitat, and this is just not the megafauna that we all know and love grizzly bears and bald eagles, but it involves little tiny plants, crustacean snails, certain insects, and it has made it extraordinarily difficult to build.

Now, I'm not saying that we should plow under endangered species habitat necessarily, but we have to have a balance. We have to look at are the costs of protecting a species worth it to us as a society if the cost means we cannot build enough homes for people if the cost means we're going to have people living on the sidewalks of the streets because of the housing shortage? I just simply point out in the book that it is extraordinarily expensive. These regulations, environmental regulations are not cost free. They not only cost the landowner whose land the species may be upon, but it costs the rest of society for the lack of infrastructure, housing, infrastructure, et cetera, that we can no longer build like we used to.

Prof. Eric Claeys: What's the Clean Water Act and how does it restrain development?

James S. Burling: The Clean Water Act again, a statue from the 1970s. So it was designed to protect our nation's waters. Very, very noble goal. It's a good thing. But there was some ambiguous language in the Clean Water Act that talked wetlands and the governors of state's ability to protect wetland. That was taken ultimately as a carte blanche by the Environmental Protection Agency and the Army Corps of Engineers, which regulates rivers and harbors and tributaries there too, to protect wetlands and essentially have a vastly expansive definition of what wet lands are. And it could be any place that gets a little damp for just a couple weeks, a year, 18 inches below the surface. And this is a vast expansion of federal authority over all kinds of land. I mean tens of millions of acres nationwide. And as a result, it became almost impossible to build housing in these areas that are designated as wetland.

And I talk about a couple cases where Pacific Legal Foundation, my law firm represented individuals who had huge fights with the EPA and Corps of Engineers over wetlands. I talk about Ocie Mills and his son Carrie, who were essentially sent to prison, federal prison for 18 months for filling a wetland outside of Pensacola, Florida. They wanted to build a little cabin for their son, for his son, Carrie, to basically go and be near the river and fish and that kind of thing. EPA came by and told him to stop because you're in wetlands. Ocie Mills was confused by this because he didn't see any wetland on his property, and he went to the local state government agency that is the same office building as the EPA at that time, and he asked him, do I have wetlands in my property? They came out and they looked at his property.

They said, well, there are wetlands here on this side of the line close to the river, but on the far side there are no wetlands. You can go ahead and develop those. Ocie did. He began to develop those. In the other side of the line, EPA sent him another letter saying, if you continue to work on this property, you're in violation of the Clean Water Act. He wrote them again and said, look, he wrote rather inartfully a line has been drawn in the sand. Now he meant that literally, I think EPA took that metaphorically and the next thing he knew he was arrested along with the sun and tried and convicted of filling wetlands and waters of the United States. After spending 18 months in federal prison, he was let out in order to restore the wetlands on his property. So he removed the clean sand that he put on his property.

EPA said, not enough, remove more. He objected. He said, there wouldn't be anything left if I did that. He went back to court this time he had another judge, and this judge went out and actually looked at the property, unlike the first one, and he had a ruling that had an astonishing statement. He said, this is like an Alice in Wonderland scenario where somebody is accused of filling a wetland by putting clean sand on dry land. The judge didn't think the property is wetland to begin with, but you take stories like Ocie Mills who is put up as an example to teach other people not to touch wetlands across the country. We've represented other people who wanted to build homes. The Sacketts near Priest Lake, Idaho, they spent 20 years, almost 20 years and two trips to the United States Supreme Court before they could finally have a ruling that the Corps of Engineers and EPA did not have jurisdiction over their property. But these rules and regulations combined have taken tens of millions of acres out of development potential, reducing the areas where people could build homes near people want to live.

Prof. Eric Claeys: You mentioned in the last part of that answer the Sacketts, and I wanted to talk a little bit bit more about them. Their case brings out something that a lot of the others don't. When a city makes a zoning ordinance, people know what they can do in different parts of the area that's zoned, the Sacketts had I think, more uncertainty. So I'm wondering if you can just tell the audience in wetlands policies, how does uncertainty arise by government regulation?

James S. Burling: Well, it's almost impossible for anybody but a wetland expert to determine what is and what is not a wetland. Under the federal definition I talked about you have to have certain types of vegetation growing. You have to have saturation 18 inches below the soil for a couple weeks, a year, so on and so forth. You have to have people coming out and do borings. And the Sackett case is emblematic of that. When they first started to develop their property by clearing some land, they were visited by an EPA, an official probably tipped off by a NIMBY neighbor. And the EPA official said, you're in wetlands, you have to stop. Well, Mrs. Sackett, Chantel Sackett said, well, how do you know that? And the EPA official said, it's on the map. Chantel Sackett got the map of the wetlands of the area. She looked at it and she immediately called the EPA and said, look, my property's not on the map.

Can I go ahead and develop now? And the officials said, no, no, those maps aren't accurate. Well, this went back and forth for a long time. She and her husband eventually received a compliance order saying that they had to stop doing any work of their property. They had to remove all the fill that they put on their property. They had to replant wetland vegetation as if it was there in the first place. They had to fence it off and they had to wait a few years. After a few years, they were allowed to ask for an after the fact permit, to legalize what they had done before, not a permit necessarily to go ahead and develop it just to make it legal so they wouldn't do it. Now, they were also told if they didn't do that, they would be subject to fines for violating the Clean Water Act of $37,500 a day and an additional $37,500 a day for violating the compliance order.

They objected. They said, we don't think the property is wetland and hired an expert. The expert came out, former Corps of Engineers biologist. He said, it's not a wetland. They eventually were told they could not even argue in court whether or not it was a wetland. That was their first trip to the Supreme Court where we received a unanimous decision saying that the Sacketts had a right to challenge the Corps's wetland determination. But after that, it wasn't simple. The court said, well, for us to really know if it's a wetland, we have to do all sorts of test drills all across your property. We have to bring our experts back out. And the Sacketts were saying, ‘But wait a minute, you told us we couldn't because you knew it was a wetland. Now you're saying you have to get more proof, and you were ready to send us to jail for that and fine us?”

Anyway, lower court allowed the EPA to do all these test findings. And the lower court, excuse me, EPA, found that there was an area of wetland on their property. It was a hundred square feet or so small patch, and it was subject to federal jurisdiction. This time we argued on behalf of the Sacketts that the federal government only has a powers granted to it under the Constitution, and in this case the Clean Water Act under the Commerce Clause, and that there was no connection to any navigable waterway which would give the federal government jurisdiction. We lost that case at the Ninth Circuit, went up to the Supreme Court and we won another unanimous decision where the court said that there has to be a surface water connection to a water of the United States, that is a navigable stream, a navigable river or a lake or that kind of thing.

And in the Sackett's case, they were so far away from any navigable waterway, that water had to go under a road, through a ditch, down a stream. Eventually, after a circuitous route, almost three quarters of a mile eventually would reach a navigable waterway that is a drop of water underground. And the court unanimously said, that's not enough. But the underlying point is for an average person, they shouldn't have to go out and hire experts and spend 16 years in the court system to figure out whether or not they can develop their property. So the average person not wanting to be fined $75,000 a day or go to prison for 18 months is simply going to say, if I'm going to build homes, I'm going to look for the driest place possible and just maybe put my money in somewhere else because I don't want to have to take these risks.

Prof. Eric Claeys: So part four of the book is about rent control. When a city institutes rent control, what does that mean? What policies is it instituting?

James S. Burling: Well, the city will essentially say that for apartments or homes, usually apartments subject to rent control, there's a cap on the rent, and there's a cap on how much the rent can be increased on a year to year basis. The problem is, more often than not, those caps are under what it takes to maintain the properties. Studies have shown that properties under rent control generally, generally deteriorate over time because landlords cannot recover capital expenses necessary for improvements such as new boilers, new roofs, new heating systems or whatever. Moreover, it's a terrible disincentive for building new homes. Many developers will avoid places with rent control. Some will try to build in those areas, but most will avoid areas of rent control. And so as a result of rent control, supply of housing generally is diminished in an area and prices overall will rise except for those few people lucky enough to live in rent control apartments.

And in time, this can cause severe deterioration of homes. It can cause landlords to abandon properties. It can cause severe devaluation of property. I talked in my book about St. Paul, Minnesota. It passed a rent control ordinance a few years ago, and it limited rent increases to 3% a year regardless of inflation. And when that happened, builders immediately stopped. Projects sticks and bricks were coming out of the ground and the workers were called off and the equipment was called off because the developer realized they could not make a pencil out in the long run if there was going to be rent control. And lastly, I also point out that there was an economist named Sr. Beck, who a few decades ago said a very pithy quote that other than bombing in a war, rent control is the most effective way to destroy a city. And I also quote the foreign minister of Vietnam who said, look, the Americans tried to destroy Hanoi through bombing. It couldn't do that, but we almost destroyed our own city by keeping rents too low. So rent control has very pernicious effects. Everywhere it is tried out, it causes deterioration. Overall prices go up. It is pretty much every economist that looks at rent control considers it a failure and it does not work. And yet cities continually try to impose rent control because they think it'll be a good thing, at least in the short term while they're running for reelection.

Prof. Eric Claeys: What happened in Massachusetts with rent control in 2004?

James S. Burling: When rent control was banned in Massachusetts, prices of properties went up, prices of housing, when I say prices property, the investment potential property went up, but the housing costs did not rise commensurate after that. And just the other day, there's a brand new example in Argentina, rent control was banned and rents are now going down and there's a massive influx of new buildings. So we know from history that when rent control is removed, basically things get better, not worse.

Prof. Eric Claeys: Part five of the book studies affordable housing policies. So what are the ways in which governments encourage affordable housing?

James S. Burling: All the wrong ways? One of the most common tactics today is something called inclusionary zoning to try to get around the old exclusionary zoning to keep poor people out. Now what's required is that if you're going to build, say a dozen homes, you have to set aside 10% of those. So they're affordable for somebody who is below the median income who could spend only 30% of his or her income on acquiring or renting a property in a new development. Now, the problem is if you're going to build a home or an apartment similarly to other neighboring homes or apartments and charge such a low rate, you're basically having the people buying new homes subsidizing the low income housing that government is mandating through these projects. The one economic study that I'm aware of on that put out by Mercatus Center shows that there's really no showing that it does anything to make housing more affordable.

It does more to raise housing prices than it does to lower them because of the subsidies that the new home buyers have to provide to the new people that get affordable subsidized housing. Some variations of inclusionary zoning is instead of building the new units, you have to pay a fee. And this often turns out to be a modest development, has to pay hundreds of thousands of dollars for low income fees. Now look, if a government in a community wants to subsidize low-income housing, they could do that by assessing taxes on everybody in the community rather than forcing the people that have not yet moved into the homes to bear the cost of subsidizing low-income housing, which creates another disincentive for building new homes and a disincentive for people be able to buy them because they can't afford the increased prices caused by their required subsidies.

Prof. Eric Claeys: Part six studies policy toward the mentally ill. So can you tell us about the relevant policies and how do those policies affect residential development?

James S. Burling: I talk in my book the first time I went to a mental hospital when I was a undergraduate in upstate New York and I was a volunteer and I visited and I spent four years undergraduate volunteering in a hospital, basically socializing and helping the patients in the hospital. In 1976, they all began to tell me the same story, Jim, I'm going to a halfway house in Schenectady, Jim, I'm going to a halfway house in Albany. Jim, I'm going to a halfway house in Buffalo. And I'd always ask, and how long are you going to be there? Six months, six months, six months. And where are you going to go after that? They had no clue because nobody did. And it was what I call the great emptying of the mental institutions. There are all kinds of reasons behind the emptying of the institutions. One was to save money.

Others was a series of lawsuits that had been filed that made it impossible to run the institutions. And the other was the idea that patients, if they were out of the institutions, they could live their lives on their own. And now there's medication to cure, mental illness, everybody would be happy and they would be cured and everything would be fine. It turned out to be a terribly cruel hoax. We know what happened to the mentally ill. Many of them are occupying our jails and our streets and estimates go between 25 to 75% of mentally ill. Of the people who are homeless living on the streets are mentally ill. Certainly if you add in addictions, those numbers closer to 75% are quite clear. When people are living on the streets, the stress is really, really high. Any chance of recovery from your illness is just going to go out the window.

There are all kinds of drugs you can try to self-medicate with, and the problem is a lot worse. We have really failed our societal duties to the mentally ill people who really cannot take care of themselves, and it's really exacerbated the homeless problem, plus the rise in cost. A lot of people living on the margins could live in single room occupancy, hotels which have been made illegal and city after city across the country. They could be in rooming homes, rooming houses, boarding homes, which are basically illegal in most parts of the country again. And so there's very little opportunities left. The halfway houses are fought wherever anybody tries to build one in a neighborhood under the not in my backyard types. And so we have really failed our duty to the mentally ill, and it has only caused our housing crisis to grow worse.

Prof. Eric Claeys: Part seven and eight of the book turn to solutions, and part seven in particular is on property rights. So what is a property, right and how does a property right factor into debates about what good development policy ought to be?

James S. Burling: I'm glad you asked about property rights because it is something that I have been litigating for 41 years now. And I think it's really important to understand where we used to be when we had a stronger regime of property rights. It used to be that if you had some land, you could do with it pretty much what you wanted. You could farm it, you could cut trees on it, you could build homes on it so long as you were creating a nuisance to your neighbors, which home building is generally not considered a nuisance like activity. You might have to put in streets and streetlights and water and that kind of thing, but you could generally build a home. But over time, the ability to make that decision of what to do with your land has been taken away. You can no longer do it without going multiple levels of government approval process.

You have to go through zoning approvals, you have to get all kinds of approvals from environmental regulations and rules and every step of the way, people can come in and object. Environmentalists can object, your neighbors could object. And California labor unions object if it's a housing project that doesn't have labor, labor workers a union agreement. And so it's become very difficult. Property rights have been, I think, substantially diminished through the zoning rules. Euclid versus Ambler that we talked to a few minutes ago was a severe deprivation of property rights because people no longer had the choice of what to do with their own land and their own property. And so when I talk about property rights being taken away and deprived, it is the right to use your land as you wish. It's the right to use your property in a way that is reasonable and doesn't harm your neighbors, but it's a decision that you have. You can buy it, you can sell it, you can develop it. All these things that you can do with your property are really limited in large degree in much of America today.

Prof. Eric Claeys: So the second chapter in part seven, chapter 24 is about regulatory takings. And I'd like you to explain the listeners what a regulatory taking is. I can imagine listeners saying taking happens when the government seizes land for a government building or a highway. What does that have to do with regulation?

James S. Burling: So what if you have a regulation that simply forbids you for making use of your property, as in economic use? And so I talk about examples in my case where people wanted to develop their land to build a house or something else, and they're not allowed to do so. And the idea is that if a regulation, it can have the same effect on property as if the government builds a highway across your property, you can't use it, you can look at it, but you can't use it for any economic purpose. It has essentially been taken by government for environmental amenities to keep open space, to keep an agricultural preserve area in agriculture, all kinds of things that destroy economically viable use. And since the 1920s, there's a famous Supreme Court case where the Supreme Court said, look, if a regulation goes too far, it is a taking.

And there's actually all kinds of history back in the 19th century as well where regulations that were so severe on the use of property government was founded, acted unconstitutionally. And so one of the things I talk about in the book is that if we are regulating property too severely for environmental open space, any kind of preservation or habitat conservation, essentially the landowner is being forced to pay for a public amenity and the public should pay for that. And so what a landowner will often do, a property owner will sue the government and say, look, you've imposed severe regulations in my property. You may have the right to do that, but you have to pay me for my property. If you want my property for an open space preserve, pay me for it rather than simply letting me bear all the burdens of this public amenity. So that in a nutshell is what regulatory takings is all about.

Prof. Eric Claeys: And the last part of the book is part eight. Looking toward the future, what thoughts do you have about the future?

James S. Burling: I think if I were not an optimist, I wouldn't have written this book. I wouldn't have been litigating property right cases for 41 years. I think the future is that government needs to get out of the way. We basically have to look at ourselves in the mirror and say, are we allowing enough development in our community to allow people who work in my community to live here? Are we allowing enough development in my community to allow my children when they grow up and move out of the house to have a place that they can afford to live here? More often than not today, the answer is no. We have such restrictive requirements that we are not able to build our way out of the housing crisis like we used to. I talk in my book about the 19th century housing crisis in New York or after World War I, where we were able to build our way out of that. We can't do that anymore. We have to allow people to turn single family homes into duplexes, triplexes. We have to allow small apartments in residential areas. We have to allow some greater density. We have to free up areas where building is not allowed, and we have to basically allow people to build homes near where people want to live. Then we can get out of the crisis we're in today.

Prof. Eric Claeys: Thanks, Jim. Edith, I have more questions, but we've been going about 45 minutes. And if members of the audience have questions, this is probably a good time to bring those questions to Jim.

Edith Harold: Looks like we have one. I have one that I can read. What is the best response to those who would both advocate for NIMBY and inclusion affordable housing policies or rent control, seems very contradictory, but how can we point this out to them?

James S. Burling: Well, I think first of all, you have to have people understand basic economics. That if we do not allow housing to be built in our neighborhoods because of the NIMBY sentiment, we're going to have prices rise and rise and rise. And then you're going to have rent control as one of the answers to rising prices. And what rent control is going to do is a further disincentive for building new homes. So people may be NIMBYs and support rent control. They're really acting across purposes. They're acting to really restrict the supply of housing and causing housing to become more expensive. So I would hope that people would understand that you cannot separate out NIMBYism from other bad solutions to the housing crisis. It's all part and parcel of the government trying to do too much and as a result, causing problems to get worse rather than better.

Prof. Eric Claeys: Edith, did I hear you say that's the only question you have?

Edith Harold: It looks like we just got another one. Okay. Someone asks, what do you think of the enabling ability to develop more rural town areas across the US instead of making denser living arrangements in urban areas? Is this helped by deregulation?

James S. Burling: All of the above. I think that we have to build both more dense areas or greater density in already developed areas, allowing those duplexes, triplexes, and quads, but also undeveloped areas need to have more development allowed as well. In my book, I talk about a project north of Los Angeles and something called the Teehon Ranch, or Tejon Ranch, depending how you pronounce it, a quarter million acres. The owners agreed to set aside close to $200,000, 200,000 acres for open space in conservation if they could build on the remainder. But they have been struck with lawsuit after lawsuit after lawsuit. So there should be both further development in urban areas and greenfield development, which means development in those areas that are not yet developed. We have to simply allow the free market to build homes near where people want to live and let the free market decide where the homes should be built rather than government edict.

Edith Harold: Great. Thank you. We have another one. Can you comment on the Nexus requirement in Nollan, and do you think that there is a chance that the courts will rule that inclusionary housing requirements are a taking?

Prof. Eric Claeys: Right. Let me interject. Why don't you explain for the audience what an exact action is and what Nolan is, and then after having done that, come to the question.

James S. Burling: Yeah. So Nollan v. California Coastal Commission was our first Supreme Court win. And in that case, the Coastal Commission had demanded that the Nollans who wanted to rebuild a home on the California coast from a one story to a two story home, give up a third of their property to the public for an easement across the property between their home in the ocean. The Coastal Commission justified that on the ground, that building a two story home where there was a one story home would create a psychological barrier to people driving down the highway to realizing the existence of the ocean. Now, taking that at face value, the court said, no, that's unconstitutional, because requiring the Nollans to give up property between the ocean and the house could not have anything to do with ameliorating the psychological barrier. People realized from driving down the house, so-called psychological barrier, there had to be a nexus or a connection between the thing demanded by government and the impact caused by the development, the impact of the lack of the view shed or the lack of the view of the ocean was not going to be ameliorated, therefore no nexus and it was unconstitutional.

Fast forward, there have been a number of cases at the Supreme Court on that same issue. How much of a nexus is enough? Can money be a subject to the same standard? Yes. What if a legislative body imposes it? Yes. So every time we've had a victory at the Supreme Court, local governments try to find a way around that. Each time we've gone back to the Supreme Court and struck that evasion way, struck that down. So inclusionary zoning, the argument is that if you build new homes, somehow you're creating a need for low-income housing. I think that is bogus. I think that, so-called studies are just make work studies that purport to show that if you build market rate housing, that because people are going to be your gardeners and work on the property and you, you're going to have working class people in the car  washes.

It creates a need for more low income housing. I don't think so because those people are here already. We're just paying them more to do more work in our communities perhaps. But the nexus or the connection between building new homes and a need for affordable housing is not that Building new homes creates a greater need for affordable housing, but building new homes creates more housing, which lowers costs, which makes it easier for working class people to afford housing. So we don't need to have subsidized housing in the first place. So the answer is build more. There is no connection. And so I think whether the next big battle is at the Supreme Court may be over inclusionary zoning and whether that passes the test established in Nollan and subsequent cases, I don't think it can, but I'd love to get that case to the Supreme Court and we're working on it.

Edith Harold: Great. Well, speaking of local governments, can you please elaborate on how to relax land use regulations? It seems it must happen at the local level. What do you recommend as the best approach to change the long established mindset of traditional urban planning and zoning?

Prof. Eric Claeys: Jim, I want to take moderator's privilege. That's a good question, but I think it assumes something in your book that should be gotten out. To what extent is your book a blueprint to reform local land use policy, land use commissions and electoral bodies, and to what extent is your book a blueprint for encouraging people to file lawsuits and impact litigation suits?

James S. Burling: I think it's a little of both. I mean, part of the purpose of the book is to educate people about how they can affect change. One of the things that I've seen is that, so-called YIMBY movement. Yes, in my backyard, where people are showing up at city council hearings and say, yes, approve this building. Don't say yes to the NIMBYs, but say yes to this development in my backyard. And if people, as I said, look in the mirror, ask yourselves if you're building enough in your local community, and I hope people will read my book and say, yeah, we need to do more and show up at the city council hearings when there is opposition to a little development project going on, show up and support that project saying, we need to have more building. My children are going to need to have a place to live in this community. And the only way to do that is by approving this development. So my book talks both about a prescription for educating people at the local level and helping to get government out of the way. And we can do that, but it's not going to be some big top down federal government program that's going to get housing built. It's going to have to be done by changing the mindset at the local level, such as the mindset that we've seen with the ybi movement.

Edith Harold: Thank you. We have time. It looks like for a couple more. So Thomas Powell asks, considering the growing role of accessory dwelling units ADUs in addressing housing shortages, how do current regulatory frameworks both support and limit their ability to meaningfully increase residential density in urban and suburban neighborhoods? Do you want to answer the first part? The second part is just in your view, what specific regulatory reforms or zoning changes could better align ADU development with the need for higher density while still addressing the concerns of existing communities?

James S. Burling: Well, in many parts of the country, building accessory dwelling units, granny flats, whatever you want to call 'em, is illegal in single family neighborhoods. Now, some states like California has really surprisingly for California has led the way and has made it much easier to build accessory dwelling units. And a lot of people are starting that process. Local communities across California have resisted any way they can, but through some litigation and concerted efforts, ADU are now being built, it will have an impact. I mean, every bit helps. ADUs alone are not going to solve our housing crisis. There is a companion part of this, not only ADUs, but allowing people to convert single family homes into duplexes or triplexes or replacing older single family homes with a duplex or a triplex or even a small apartment building, all make sense. It will increase density, but there are ways of dealing with that.

Cities have always dealt with that. Traditionally, as cities have gotten older and bigger, they've gotten more dense from the interior out. Oftentimes you have zoning today that does not allow any densification in cities. So you have more and more built out, which causes sprawl. Now, sprawl isn't necessarily a bad thing. People like their suburbs, but I think the choice should be given to people to decide where they want to live. If they want to live in a duplex in the city, they want to live in a small apartment building, that should be their choice, and developers should be able to accommodate that. If you want to live out in the outlying areas, that too should be okay. But ADUs and what's called light touch density improvements that allow the duplexes, triplexes, or quads to be built can go a long way to solving our housing crisis. Studies have shown that in areas that have allowed this kind of conversion, you've had a significant gradual increase in population over time with the impacts that people are afraid of really not having taking place. Property values don't go down. Property values instead increase if you can make more use of your property.

Edith Harold: Wonderful. We just have one more question. In many parts of the economy, such as healthcare, government has chosen to make some of individuals pay more in order to enable others to pay less, rather than increasing taxes in the face of this general trend, can property issues escape?

James S. Burling: Well, property is subject to this trend, and this is the idea of making new home buyers pay exorbitant fees to build a new home. We had a case just the last term or the term before at the Supreme Court. Yeah, last term at the Supreme Court where George Sheets was told to pay $24,000 to put on 10 acres of land, a manufactured home of 1800 square feet. And the fee was for transportation improvement in the county. It was way out of whack with any demand that he caused. But in California, their fees are between 20 to $156,000 per housing unit. I mean, these are extraordinarily costs that are put on the people that have not yet moved into a community and were who don't vote for taxes. So if you put a stop on that kind of thing, and the Supreme Court's opinion in the George Sheets case will go a long way toward that because we won. The court said, you can't do that. That will require the city to look at itself. Do we really need to have these infrastructure improvements? And if we do, taxpayers across the board should pay for it. And then the politicians who think these are good projects will be accountable. The taxpayers don't think we need this project. They won't have the taxes raised for it. It won't happen. But simply putting the cost on a certain segment of society, especially those who have not yet moved into a community, is blatantly unfair and I think largely unconstitutional.

Edith Harold: Well, thank you so much. I'll just open it to both you and Professor Claeys for any final comments.

Prof. Eric Claeys: I want to congratulate Jim on the publication of his book and I hope everyone in the audience runs out and buys a copy or runs to the computer and downloads one on Amazon.

James S. Burling: That's right. And the book is, of course, "Nowhere to Live, The Hidden Story of America's Housing Crisis." It's in bookstores, well, not at bookstores everywhere yet, but it certainly is on Amazon, Barnes & Noble. But I think you would like it because it is an interesting read. It's not written with tons of legal jargon and legalese. There are a lot of endnotes, but you don't have to read the endnotes if you don't want to. My publisher said, don't have footnotes, have endnotes. So it is very readable. It's entertaining, and I think everybody who's read it tells you they've learned a few things from it. So please buy the book. You'll learn something. And hopefully, more importantly than just buying the book to satisfy my ego, you'll understand what we can do to get out of the housing crisis and start to work towards a regime that respects property rates greater than we respect them today.

Edith Harold: Great. Well, on behalf of the Federalist Society, thank you so much to Jim Burling for speaking about your new and important book today, and Professor Claeys for moderating. We're so grateful for your time and expertise. Thank you also to our audience for joining us. We really appreciate your active participation. You can stay up to date with announcements and upcoming webinars on our website fedsoc.org or on all major social media platforms. Thank you once more for tuning in and we are adjourned.