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Housing prices, assessed evaluation and YIMBY
When local government artificially lowers the supply of available housing below what the market would demand, the cost of remaining housing goes up.
If we want to provide property tax relief to struggling families during an economic downturn and high inflation, one way to do that is for state government to limit the authority of local government to restrict the supply of housing and increase the cost of new homes that are built.
In the state of Indiana, your property tax bill is composed of two things: The property tax rate and the assessed evaluation of your home. When local government increases the assessed evaluation, your property taxes go up without a corresponding increase in the property tax rate. This does not, however, mean you have an increase in real wealth. Your home may not have had any improvements in the last year, and you might even have less income than you did the previous year.
There are many factors that contribute to this: The trends in the housing market, disruption of supply chains, inflation and more. But one of the things that contributes to upward pressure on the housing market is restrictive planning and zoning laws. This is simple supply and demand economics: When government artificially lowers the supply of available housing below what the market would demand, the cost of remaining housing goes up. Plus, restrictive zoning can make housing that does get built more expensive through mandates and a lengthy appeals process.
This is an opportunity for the Republican super-majority in the state legislature to intervene. Restricting the authority of local government to regulate development would ease the pressure on home prices and allow for more affordable housing. Restricting local government authority would also help create jobs by removing obstacles, and would even help provide housing and protection to battered women. It would also help protect private property rights, which is allegedly one of the principles of the Republican Party.
What about "home rule" and local control? "Home rule" is fine as a general principle, but should not override the rights of individual citizens. It is a principle of limited government to have control be as local as possible, but government must not be allowed to run roughshod over its citizens, especially if it takes away their rights. Everyone instinctively knows this. The question is not whether state government should restrict the authority of local government, but how that authority should be restricted. YIMBY laws would be a justifiable limitation on local authority.
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