More and more, we have to receive government permission to exercise basic rights. This subverts a fundamental notion of liberty: first comes freedom, then comes government to secure that freedom. We’ve begun instead to slip into a world in which any freedom we enjoy exists as an indulgence granted by government–a government that can withhold or grant permission according to its own whim.
Many people need permission to purchase a weapon, have a job, or build a home. As Thomas Paine said, freedom “granted” by government is a tenuous freedom indeed: “Toleration is not the opposite of intolerance, but is the counterfeit of it. Both are despotisms. The one assumes to itself the right of withholding liberty of conscience, the other of granting it. The one is the Pope, armed with fire and stake, and the other is the Pope selling or granting indulgences.” In other words, if the government says: “You have my permission,” we shouldn’t respond with fawning gratitude. Instead, we should disavow freedom footnoted by government sufferance.
Among its many problems, a “tolerated” freedom lets the government use its permission as leverage. Seattle has offered an example of this issue with something it calls the “Grand Bargain.” Under the Grand Bargain, housing developers must shell out cash or set aside some of their units for affordable housing. Many cities have attempted such “mandatory inclusionary zoning” programs to address inflated housing costs. A noble cause, yes. But a shakedown for the poor is still a shakedown. The “Grand Bargain” isn’t so grand, given that the city is just throwing around unequal bargaining power granted by Seattle’s ability to withhold permission. Yesterday, PLF issued a letter to Seattle, reminding them that our Supreme Court has said that governments can’t use their permitting authority to demand ransom.
Permits are often essential to make any valuable use of property. Government can thus pressure a permit seeker to give up a property right in exchange for the permit. By this means, governments try to evade the constitutional requirement that they compensate people when taking their property. Lawyers often call these “exactions.” The Supreme Court forbids this kind of extortion under the “unconstitutional conditions doctrine,” which “vindicates the Constitution’s enumerated rights by preventing the government from coercing people into giving them up.”
Governments may, however, impose exactions under narrow circumstances. All permit conditions must meet two criteria: (1) the exaction has to fix a problem caused by the proposed project (often called the nexus test); and (2) the exaction must be roughly proportional in scope to the project’s impact. So, if a high-rise apartment complex will burden current sewer lines such that they’ll need to be renovated, a city might condition the project’s approval on the developer’s promise to pay for a fair amount of the sewer work.
Doubtless, Seattle wants to resolve a serious problem here–the ever-growing cost of housing. But new housing is not the bad guy. Rather, housing costs are a consequence of broader market forces like job growth and the city’s own land-use regulations that hinder supply and increase construction costs. New supply actually offers to ease rocketing prices, not fuel them. The city fails to demonstrate otherwise.
First off, the city can’t show a nexus proving that new homes make housing more expensive. The city draws out a long trail of speculative inferences to fight against the classic rule that increasing supply will lower price. In essence, the city says that more housing means more move-ins, more move-ins means more consumers, more consumers means more workers, and more workers means more move-ins who can’t afford market-rate housing. This thin and hypothetical chain doesn’t demonstrate that any given individual housing project has a direct result on the affordability problem. The city can’t rely on abstract and generalized theories–it must demonstrate that each project will have a specified and individual impact on the the affordability crisis.
Even if the city could prove that new housing makes it harder to afford living in Seattle, the city has to show that its demands are proportional to a project’s actual impact. That means the city has to make an individualized determination regarding each project’s effect on affordability and tailor the set-aside or in-lieu fee based on that impact. No such individualized determinations exist here. Rather, the city imposes blanket requirements that apply across entire zones. The failure to make case-by-case assessments regarding proportionality dooms the Grand Bargain.
Seattle’s scheme only highlights the dangers that arise when we let government withhold or grant permission to exercise basic rights. After all, you aren’t truly free if you must grovel for permission to be free. But for now, at least, when we do have to get permission, we should fight extortion leveraged in exchange for a tolerated freedom.