How Harris's housing plan could work (a bit better)

Megan McCardle has an excellent article out arguing that the best parts of Harris's housing plan are unlikely to actually happen. Building 3 million new homes[1] is an admirable goal but one that may be beyond the reach of any president.

Perhaps such volume would be possible if government could speed things up and lower costs by streamlining red tape. But that is harder than it sounds, politically and practically.

Most regulatory barriers to building are state and local, not federal, and any attempt to override them must pass strict constitutional review, which could tie them up in court for years. Even if the administration finds some way around the federalism issues, actually getting local governments to expedite reviews is as much a management problem as a legal one, and her administration cannot micromanage every county seat and town hall.

The bad news? The on the ground situation locally often is much worse than national narratives about "red tape" would have it.

A big part what makes permitting processes isn't just the letter of the rules. The administrative complexity adds costs by slowing projects down and requiring additional technical expertise. In addition, it's often extremely unclear what permits are even required.

New housing construction can involve building permits, zoning approvals, environmental assessments, inspections, utility connection applications and more. The challenge lies in navigating the often fragmented and unclear regulatory landscape, where requirements can vary across different government departments and jurisdictions.

Inefficient permit discovery can lead to delays, increased expenses, and even legal issues if proper permits are overlooked. Uncertainty in what permits are even required slows projects down and surprise permit requirements raise the cost of capital.

Those soft costs raise barriers to entry in new construction, lowering the supply of new housing development and increasing the ultimate price Americans pay in the housing market.

The good news? This extremely broken administrative apparatus means that there is ample room for improving permitting process and government operations under existing state and local housing construction policies.

Streamlining the permit discovery process through centralized, user-friendly digital platforms can not only save time and money for builders but also ensure compliance with regulations, ultimately contributing to safer and more efficient housing development.

Numerous cities have successful pilots with modern digitally native permitting tools -- both for housing construction and more broadly. There's a growing ecosystem of gov tech companies with tools that are orders of magnitude better than the too often the default of opaque, impossible to navigate permit forms.

What if the federal government used its standard setting, technical resource provision and successful digital government initiatives like 18F, USDS and US Digital Corps to improve local permitting?

The next presidential administration could help pioneer a new digital protocol for permitting applications. Unlike cajoling or micromanaging cities across the country, that digital leadership is emphatically in the national purview.

The federal government could use a system of carrots and sticks to ensure that every housing construction permit across these United States adheres to baseline digital competence.[2] Will that solve the housing crisis or guarantee 3 million new homes?

No, but it's hard to imagine the housing crisis getting solved without a digitally competent permitting function.

[1] Back in 2016, a McKinsey report that the then new Newsom administration almost embraced called for 3.5 million new homes in California. Something about a smaller headline number at the national rather than the state level just seems to call for additional ambition.

[2] Analogously, the federal government ties street maintenance funding to the use of the standardized pavement condition index.The pavement condition index (PCI) was a very successful standard from the sixties in need of modernization. See here for a blog post explaining the opportunity with digital off the shelf sensors to better count potholes and other street defects. That's a separate topic, however.