If you want cheaper housing, return to the a la carte menu

In affluent and desirable areas throughout America, from San Francisco to Manhattan, it’s difficult to rent and downright impossible to buy — even with an income of $100,000. So long as the economy remains buoyant, it’s unlikely that much will change. That said, long experience has shown that building more housing will, eventually, bring supply and demand into line.

However, if we want to build more, it’s necessary to end rent controls, allow high-density market-rate development, create new transportation infrastructure, provide direct subsidies for below-market-rate housing (sorry conservatives), develop some in “greenfield” areas (sorry environmentalists), and do away with endless regulatory delays. And even with an ideal legal and regulatory framework for building and renting–which isn’t going to happen anytime soon–it will still take decades to build enough housing. In the short term, however, there’s an easier and better way to provide a lot of low-cost housing right now: make it easier to sell housing a la carte.

{mosads}It’s simple: While everyone needs a place to sleep and access to a toilet, just about everything else found in a typical suburban tract home ought to be optional. For instance, those who want to eat all meals out or “cook” in a microwave don’t need a full kitchen, just like people who use their cars only on weekends may find it perfectly acceptable to park a mile or two away from home, and people who can put up with showering at a gym every day should certainly have that right. Dormitory and even open-plan barracks-style housing should be available to those who want it. The fact that most people want more privacy and comforts than these settings provide is irrelevant: lots of people live in neighborhoods and housing types that plenty of others wouldn’t like.

For this housing boom to happen, the first steps are obvious: so long as the spaces meet basic safety and sanitation requirements, substantially any area should be open to letting people build and live there. If a property owner wants to convert a garage into a “granny flat,” transform a few floors of an office building into apartments, or build some low-cost housing units in a former warehouse, the law shouldn’t stand in their way.

But changing the laws for zoning and planning isn’t going to be enough; laws also need to change to allow property owners to experiment with different ways of making money off of different kinds of housing. While it is not practical to eliminate the package of “tenants’ rights” associated with conventional apartments in nearly every state, styles of housing that aren’t appropriate for families with children should give landlords and tenants more latitude to figure out popular, profitable ways to provide housing that people want and can afford.

These alternative limited-amenity arrangements aren’t anything novel. Developments like the luxe WeLive “dorms for grownups” and often decrepit old-style single room occupancy hotels do exist in many cities. But we need more of them–and more places like them. Such less-than developments already characterize much housing in cities like Tokyo and were common in American cities as well before misguided laws ended their economic viability after World War II.

Society has changed a great deal since a la carte housing was common in America and it’s likely that past forms won’t fit modern tastes and mores. But making it easier people to pick–and pay for–what they want in a housing unit could offer a huge supply of affordable housing in many of the parts of America where it is currently lacking.

Eli Lehrer (@EliLehrerDC) is president of the nonprofit R Street Institute (@RSI), an organization that supports limited government in Washington, D.C.