It is a challenge to speak to you today about regulatory barriers to affordable housing. I have long experience in this field, since I was on the Senator Paul Douglas's National Commission on Housing Problems in 1967 and Jack Kemp's Commission on Regulatory Barriers to Affordable Housing in 1989, plus a lot of similar efforts in between and since.

An key question is: what has changed in that time, especially since the Kemp commission's report in 1991? I believe regulatory barriers to affordable housing have gotten worse because of an nationwide intensification of NIMBY attitudes by an implicit conspiracy among the homeowning majority in most suburban communities.

To explain this change, I must describe two sets of forces that have influenced housing markets, especially in the 1990s. They are structural conditions and dynamic forces.

The first structural condition has been best described by Bill Fischel in his book, The Homevoter. He claims - I believe correctly - that homeowners dominate most suburban governments and want those governments to adopt whatever policies will raise the market values of their homes, which are their principal financial assets.

Homeowners dominate such governments because they are a big majority, they have stronger incentives than renters to care about housing policy because of their home investments, and they are less mobile and so more attached to their localities.

Most homeowners believe allowing lower-cost housing into their neighborhoods - especially multi-family housing - will reduce the values of their homes and permit lower-class people to arrive and use their schools. So they oppose such housing.

A second structural condition is a great increase in citizen participation in land-use decisions over the years. Housing development was once politically dominated by homebuilders, but their influence has been overshadowed. Local citizens have become more informed and better organized to fight neighborhood changes. And planning laws require more citizen participation. Also, new environmental laws require countless studies before developments can be approved. Each such step is chance for a lawsuit.

A third structural condition is the homeownership bias in federal housing policy. Owners receive large-scale tax benefits that encourage investment in bigger dwellings.

Poor renters comprise the vast majority of people with serious housing problems, but the magnitude of the subsides they receive is small compared to benefits received by homeowners - especially wealthy homeowners. This bias strengthens the political dominance of local governments by homevoters vs. renters.

This bias is justified by claims that homeowners are better citizens, though the evidence for that is slight. The claim that homeownership helps build household wealth is sounder. But the people who need outside help most are poor renters.

The fourth structural condition is the fragmented control over land-use decisions built into American local governments. This results in parochial attitudes by local officials, who adopt policies designed to benefit only their voting constituents and push off costs onto other. Nobody has the interests of each region as a whole at heart.

Several dynamic forces operating within those structural conditions have produced a rising tide of hostility towards affordable housing, expressed in higher regulatory barriers.

The most important dynamic factor is inescapable regional population growth. Many metropolitan areas are going to grow fast whether their residents want to or not because of both natural increase and immigration from outside. Our CAGR is about 1.24% per year for the whole nation. We cannot stop immigration from abroad except by literally killing border crossers, and we are - thankfully - not willing to adopt such a brutal policy. So we are surely going to grow, especially in certain attractive regions.

No specific region can control its own growth rate. That is determined by its basic traits, such as location, climate, topography, demography, and past investments in businesses and institutions. The most attractive big regions grow much faster than the nation - 5 above 3% per year, and 9 more from 2 to 3% in the 1990s.

Attempts by local governments to limit their own growth just push the region's growth to other parts of the region - usually farther out, aggravating sprawl. But because local governments are parochial, they care only about their own growth rates. Hence they foster the delusion that local policies can stop regional growth.

The second dynamic factor consists of the problems that accompany fast growth, and especially rising traffic congestion. However, it would occur even with no growth, since Americans keep driving more vehicles farther per capita each year. These problems irritate millions of citizens, who conclude slower growth would help.

In reality, there is no cure for rising traffic congestion - it is an inescapable trait in all modern metropolitan areas throughout the world. Congestion is the balancing mechanism we use so we can pursue other goals, such as broad choices of where to live and work. Population growth will make it get worse everywhere, motivating even more people to think - wrongly - that local policies could halt congestion. Such policies cannot stop regional growth, which is the cause of growth problems.

Growth does produce more problems, which would be lessened if it stopped. But we cannot stop it. Also, growth produces many important benefits, such as more young workers to support our aging population and fuel rising output.

The third dynamic factor is the smart growth movement, a reaction to growth that is designed to produce partly-spurious, partly genuine agreement among three groups with very different goals: environmentalists and slow-growth advocates, those who promote growth including the housing industry, and central-city advocates.

The smart growth movement contains three axioms hostile to affordable housing. They are: strong citizen participation, support for fragmented local control over land-use policies, and an implicit principle that local government should never adopt policies that might inhibit increases in home values. That is why local governments block affordable housing - to keep home values increasing.

This hostility is disguised as fiscal responsibility under the theory of fiscal zoning. No new local uses should be permitted if they add more to spending than to tax revenues. Multi-family housing is considered a fiscal loser, although it generates fewer children per unit than most single-family housing - except the costliest. In fact, fiscal zoning denies shelter for all low-wage workers, even though every local and regional economy must have such workers to function. For this reason, universal use of fiscal zoning is a disaster for any region as a whole.

The hidden conspiracy to avoid jeopardizing rising home values is tacitly supported by homebuilders and the mortgage finance industry, which have trillions of dollars in existing homes at stake. No policies that might greatly raise overall housing supplies and therefore stop or slow rising prices can be tolerated. Yet any general increase in affordability requires at least some declining housing prices.

The result of all these factors is that we are increasingly refusing to create additional housing affordable to the lower elements of our income groups, even though we are reducing existing supplies of low-cost units. Yet we constantly receive more people in those groups, even when the poverty rate falls as a percentage of total population.

Therefore, we must resort to more overcrowding in older neighborhoods to house our poorest households - i.e., slum housing. In reality, America has always depended upon over- crowded and often deteriorated slums to accommodate its poorest urban dwellers - we still do. But we don't like to admit it, or to confront the practices we must adopt as a result. An example is differentially-enforced housing codes, which we must loosely enforce in poor areas to avoid throwing thousands of poor onto the streets.

Faster population growth, including many poor immigrants, plus rising hostility to housing production in certain regions - especially California - has accelerated our resort to overcrowded slum housing and far outlying sprawl to provide shelter. This is worsening the quality of life even for many middle-class households.

I do not have time to discuss remedies in the short period allotted to me. But it does not matter, because politically we are not going to adopt them soon. That is thanks to the local dominance of housing policies by anti-affordability homeowners, and the greater political strength in our national electorate of homeowners in general plus big financial institutions with a huge stake in rising home values.

We will react only when shortages of affordable housing start to seriously injure two groups who also have political strength. One is employers who cannot find low-wage workers nearby; the other is middle-class households who cannot afford decent housing without overly long commutes to less costly far-out homes.

Until these groups start to suffer throughout a region and across the nation, and the the expansion of slum housing reaches crisis proportions in at least some regions, not much, if anything, will be done. On that happy note, I will stop.