After California’s menthol cigarette ban, smugglers are filling the void

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Just five days after we published our review of what happens when states ban or levy high taxes on tobacco products, reporting out of California confirms what we already knew: Bans and high taxes fuel black markets.

California banned the sale of menthol cigarettes in 2021. And needless to say, it hasn’t gone according to plan. From the Orange County Register: 

When policymakers made the decision to prohibit menthol cigarettes, their aim was to reduce the supply of these products in the market. However, an underground market was ready to ensure a steady supply and continued use of these products.

How does the author, retired police officer and La Mirada, Calif., Mayor Pro Tem Andrew Sarega, know this happened? Researchers started dumpster diving. 

By analyzing the contents of trash in California, researchers began discovering the emergence of a menthol cigarette brand “Sheriff.” In fact, they figured out that “Sheriff” is the fifth-most popular discarded brand in the state. 

This inexplicable prominence, coupled with the cartel’s association with it in Mexico, strongly points towards their involvement in disseminating these illicit menthol cigarettes across California.

Moreover, California’s ban on menthol products has led to the emergence of other new cigarette products being sold across the state. 

Also, shortly after the ban took effect, other new cigarette products entered the market. These cigarettes looked just like traditional menthol products, with blue and green packaging, but somewhere on the pack is a designation that they are “non-menthol.” This was clearly meant to confuse menthol cigarette smokers to continue lighting up, and it appears to be working, with the study showing roughly 7% of discarded packs were these menthol “work-around” products.

The bottom line, as the reporting demonstrates, is that when the state uses the force of government to ban a multi-million-dollar product, that doesn’t eliminate the demand for the product. And as long as that exists, another actor—criminal networks—will work to supply it. 

In addition to the Mexican cartels, the Golden State has seen another actor emerge to fill the void and benefit from California’s prohibition. Illicit flavored vaping/e-cigarette products from China have also poured into California as a result. 

The survey unearthed another staggering statistic—98% of discarded vapes featured flavors, despite the FDA’s lack of approval for flavored e-cigarettes. Highly flavored brands like Elf Bar, Flum, and Funky Republic, mostly originating from China, should not even be on the market and are banned at the federal, state, and often local level. Yet these illegal products remain readily available across California.

Now, if these are the effects at the state level, just imagine the unintended consequences of this kind of policy on a national level. 

It’s no secret that the U.S. Food and Drug Administration’s federal menthol cigarette ban would be a gift to the black market.

 

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Manchester could boost its housing supply by allowing more duplexes

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Manchester is often seen as the center of multifamily housing in the state, while smaller cities and surrounding towns are viewed as less hospitable. But Manchester’s land-use regulations are unusually hostile to one relatively popular form of multifamily housing: duplexes. 

Two-family housing is permitted on only 18% of Manchester’s buildable area, according to the New Hampshire Zoning Atlas, created by the Center for Ethics in Society at Saint Anselm College. 

That puts the Queen City smack in the middle of New Hampshire’s cities when it comes to permitting duplexes. 

Here are New Hampshire cities ranked by the percentage of buildable land on which duplexes are allowed:

Claremont: 86%

Dover: 57%

Rochester: 56%

Berlin: 45%

Nashua: 42%

Laconia: 19%

Manchester: 18%

Portsmouth: 17%

Concord: 15%

Lebanon: 14%

Somersworth: 10%

Keene: 6%

Franklin: 5%

Besides Bedford, the municipalities surrounding Manchester are much friendlier to duplexes:

Goffstown: 74%

Londonderry: 63%

Litchfield: 59%

Merrimack: 55%

Auburn: 31%

Hooksett: 21%

Manchester: 18%

Bedford: 1%

“I was a little bit surprised about how restrictive Manchester is toward duplexes, but it makes sense when you think about it,” Jason Sorens, senior research faculty at the American Institute for Economic Research and the principal investigator of the New Hampshire Zoning Atlas, said. 

“The very fact that Manchester has had a lot of blue-collar housing near the center in the past has made single-family neighborhoods, particularly in the North End, very protective of their status. And at the same time, business and commercial districts in the city sometimes (not always) allow multifamily development but restrict one- and two-unit buildings. 

“It seems to me the latter problem is easy to fix: There’s no constituency for keeping small-scale housing out of commercial districts. Mixed-use and planned unit developments should be lawful across everything that is now zoned commercial or business.”

On small lots (less than one acre), only 1.9% of Manchester’s buildable area is open for duplex development. 

“Even in the single-family districts, legalizing duplexes is a small step, because ADUs are already legal under state law,” Sorens said. “All you have to do is remove the maximum size requirement (currently 750 square feet), and duplexes are then effectively lawful.”

Manchester is slightly more hostile to triplexes than duplexes. On only 17% of Manchester’s buildable land is three-family housing allowed. 

Opposition to multifamily housing typically arises from fears that large apartment buildings will be erected next to single-family homes, changing the character of residential neighborhoods. But the Zoning Atlas shows that municipalities, including the state’s largest city, can add to the state’s housing stock just by reducing restrictions on duplexes. 

Making it easier to build duplexes and multifamilies in Manchester would make homes and apartments more affordable. The median home price in New Hampshire is up to $490,000, according to the New Hampshire Association of Realtors (NHAR).

These monthly median prices have been increasing for 43 consecutive months (since February 2020). And for the second straight month, the affordability index sat at 59—both an all-time low and a 15% drop from one year ago.

Monthly median gross rent for two-bedroom units in the state is $1,764. 

Duplexes and triplexes offer options for both homeowners and renters. They can be great starter homes that double as investment properties for young couples and individuals. 

To get more of them, municipalities will have to change their land-use regulations, not just to allow more duplexes and triplexes, but to reduce secondary regulations that prevent them from being built. 

“Beyond duplexes, you really have to look at how the zoned density compares to the existing density,” Sorens added. “On much of the West Side, multifamily development is allowed, but tight floor area ratios, low maximum heights, and inappropriate parking minimums have made it impossible to increase density there at all. The strict regulations haven’t gentrified these neighborhoods despite rising rents; instead, they’ve helped create a homelessness problem downtown.”

Though Manchester has allowed the construction of more large apartment buildings, its burdensome restrictions on small multifamily options keep the city’s housing supply artificially low, raise prices, and limit options for city residents. 

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The FTC’s Amazon lawsuit New Hampshire joined is a mess of bad economics

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New Hampshire Attorney General John Formella has joined 16 other state attorneys general in the Federal Trade Commission’s (FTC) lawsuit alleging that “Amazon is a monopolist” that engages in illegal anti-competitive behavior.  

But a close read of FTC Chairwoman Lina Khan’s suit reveals a confused and ultimately unconvincing case that Amazon (a) is a monopoly player and (b) has harmed consumers. 

If the FTC prevails in this legal case, it appears likely that consumers and small businesses, including the 4,500 small-to-medium-sized New Hampshire businesses that sell on Amazon and the many thousands of Granite Staters who shop online, will be harmed, not helped.

The lawsuit makes two primary claims. The first is that “Amazon is a monopolist.”

Therefore, the first test of the lawsuit’s merits is whether this statement is accurate. 

Monopoly

In a free, competitive market, not all competitors succeed or survive. Innovators regularly surge past existing players to gain large market share, becoming temporarily dominant. Though this is a natural function of a competitive market, some see this simple economic fact as evidence that a particular market is not competitive, confusing competition with the actual number of competitors at a given point in time.

This misunderstanding is at the heart of the FTC’s lawsuit against Amazon. 

“Monopoly exists when a specific individual or enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it,” Nobel-winning economist Milton Friedman wrote in Capitalism and Freedom. Amazon clearly is not a monopolist under Friedman’s definition. What about the FTC’s definition?

The FTC’s website offers guidance outlining the legal steps required under U.S. antitrust law to prove that a company is a monopolist. 

“As a first step, courts ask if the firm has ‘monopoly power’ in any market,” the FTC explains. “This requires in-depth study of the products sold by the leading firm, and any alternative products consumers may turn to if the firm attempted to raise prices.”

To be a monopolist, the FTC must prove that the company has (1) “monopoly power” in a market and (2) achieved or held onto its leading position in the market through “improper conduct.” 

Even if a company has a large market share (typically over 50%), that market share has to be durable and has to preclude competitors from entering or, once entered, offering products and services at low prices. 

The existence of competitively priced alternatives readily available to consumers in the market would be one way to demonstrate that a dominant player is not, in fact, a monopolist.

Amazon clearly does not exert monopoly control over the U.S. retail marketplace. In 2022, only 14.5% of all retail sales in the United States were online. The rest (85.5%) were done in brick-and-mortar stores. 

Walmart, not Amazon, is the top American retailer, with a nearly 17% share of the retail market, followed by Amazon’s 14.28% share, CVS’s 8.96%, Costco’s 6.51%, and Home Depot’s 4.37%. 

So, Amazon is hardly a retail monopoly.

What about online commerce? Amazon is the number one e-commerce company in the world. Does that make it a monopolist? 

Amazon accounted for 37.8% of all online sales in the United States in 2022. E-commerce data company PYMNTS pegs its share of e-commerce spending in 2023 at 48%. That’s a lot, but a monopoly it does not make. 

Walmart, Apple, eBay, and Target round out the top five online U.S. retailers. Despite Amazon accounting for the greatest share of e-commerce sales, Walmart.com, eBay.com, and AliExpress.com are the three most visited e-commerce websites. Etsy.com, Samsung.com, PlayStation.com, and BestBuy.com remain popular sites as well.

Though Amazon is the largest player (at the moment), it faces real competition. Before the FTC lawsuit was filed, Supermarket News reported this summer that Walmart’s share of online retail sales grew from 5.7% to 6.7%—a 17% increase—in the first quarter of the year. Amazon’s share grew from 43.7% to 47.9%—a 9% increase. Walmart’s comparable e-commerce sales grew by 27%. In the second quarter of this year, Walmart’s global e-commerce sales were up 24%. 

If Amazon has achieved an illegal level of market dominance, one would expect its competitors to be losing revenue and market share. But its largest competitor, Walmart, posted $573 billion in revenue in 2022 versus Amazon’s $514 billion. And Walmart’s share of online retail commerce is growing, not shrinking. Its stock is up 13.5% this year. For an alleged victim of an illegally dominant monopoly player, it’s doing extremely well. 

The FTC clearly understands this fundamental issue with its case, which is why the agency very carefully alleges that Amazon has a monopoly over “the online superstore market and the market for online marketplace services.” 

As these are two innovations that Amazon pioneered, it’s to be expected that the company maintains a large lead in these areas. That in itself is not a violation of U.S. antitrust law. But defining Amazon’s market in such a novel, limited, and arbitrary fashion is the only way the FTC can possibly claim that Amazon holds monopoly power. 

As Peter Jacobsen at the Foundation for Economic Education writes: “Notice how important these words are for the FTC. If you remove the word ‘online’ then clearly Amazon has no monopoly. There are lots of superstores. If you remove the word ‘superstore,’ again there is no monopoly. Amazon does not have a monopoly on online stores.”

That’s precisely why the FTC asserts that “brick-and-mortar stores and online stores with a more limited selection are not reasonably interchangeable with online superstores for the same purposes and are thus properly excluded from the online superstore market.” 

That’s a neat trick. The FTC deliberately excluded the markets where most American retail transactions occur so it could articulate the existence of a completely separate market ruled by Amazon. But the “online superstore” market is not a meaningfully distinct market. It’s just one part of a broader American retail market.

The FTC’s attempt to invent a distinct online superstore market is undermined by actual consumer behavior. PYMNTS reports that 28% of U.S. consumers have used a cell phone to assist with shopping while in a brick-and-mortar store, with 9% comparing the in-store price to prices offered by other merchants. 

The FTC might consider online superstores a distinct and separate market, but consumers do not.   

It’s not even clear precisely what an “online superstore” is. The Merriam-Webster dictionary defines “superstore” as “a very large store often offering a wide variety of merchandise for sale.” The FTC devotes several pages to attempting to define “online superstore.” It concludes by claiming that online superstores are so attractive that consumers won’t even shop at other types of online stores, even if they offer lower prices. 

“Even though such stores may price certain items comparably with online superstores, shoppers do not seriously consider those stores as reasonable alternatives to online superstores for a significant portion of their shopping needs.”

Again, real life contradicts the FTC’s claim. The Internet is full of online retail outlets that aren’t superstores and yet somehow manage to have customers. In 2022, the fastest-growing e-commerce site was not a superstore, but a clothing store. In fact, 10 of the 15 fastest-growing e-commerce sites last year were not superstores. Consumers do not always prefer superstores, either online or in person.  

“Online stores that sell unique, can’t-get-anywhere-else products will always have an edge over the mass-produced goods you find on Amazon,” e-commerce services provider Shopify notes, further undermining the FTC’s case. 

The FTC supports its narrow market definition by arguing that “[o]nline superstores are distinct from, and not reasonably interchangeable with, brick-and-mortar stores. From start to finish, online superstores provide a vastly different shopping experience from physical stores.” 

The fact that online superstores provide a different experience for shoppers is an inherent feature of a competitive retail market.

Anti-competitive practices   

The FTC attempts to buttress its claims by asserting that Amazon has engaged in “anti-competitive” practices. It does this primarily by making a case against certain requirements and practices deployed by Amazon to govern its own Amazon Marketplace. However, the FTC doesn’t conclude its case with a convincing demonstration of consumer harm. 

A study by Profitero of about 15,000 products sold online found that Amazon had the lowest online prices compared to 13 other major retailers in the United States. In fact, Amazon’s prices were, on average, 13% below rivals like Target and Walmart.

If Amazon offers consumers low prices, then what’s the FTC’s beef? The agency claims that Amazon leverages its Amazon Prime service to attract more consumers and to coerce sellers who choose to sell on Amazon Marketplace to use its fulfillment service, Fulfillment by Amazon (FBA). The agency deems this to be anti-competitive behavior.

But Amazon cannot compel anyone to use its marketplace. It offers incentives instead. For consumers, a wide variety of low-price products delivered quickly is the appeal. For sellers, access to a huge market of engaged customers is the appeal. 

Amazon’s fulfillment service is valuable to sellers because it lets them outsource services such as warehousing and packaging to Amazon directly, saving time and resources on the back end. 

FBA also offers access to Amazon’s Prime delivery service. Prime is valuable to sellers because it provides value to consumers. 

The FTC claims that “the Prime subscription fee makes subscribers feel as though they must make the subscription fee worth it by making more purchases on Amazon.” 

In other words, incentivizing subscribers to purchase more products on its platform as opposed to shopping on competitors’ platforms is anti-competitive and monopolistic. So, creating value for consumers is…anti-competitive?

Many retailers use similar rewards systems. Big-box stores such as BJ’s and Costco have up-front membership fees similar to Amazon’s Prime fee. Coffee shops, fast-food restaurants, and many other retailers offer rewards points and programs to encourage customer loyalty. Rewarding repeat business with discounts or enhanced services is not unique to Amazon.

“Forcing sellers to use FBA to obtain Prime eligibility impedes competition and the growth of independent fulfillment providers,” the FTC claims. 

The FTC is complaining that Amazon wants to control the packaging, warehousing, and delivery of products offered under its own branded loyalty program on its own website. But ask any restaurant owner about their experience with Grubhub or DoorDash, and it’s easy to see why Amazon would want to control this end of its business. It’s the only way to ensure quality. 

Amazon can have a perfectly legitimate business reason for not allowing another company to offer fulfillment services under the Amazon Prime brand. The FTC pretends that the only possible outcome of such a policy is to reduce competition, when in fact an obvious outcome is that Amazon can maintain a consistent, quality experience for both consumers and sellers. 

And, again, Amazon doesn’t force sellers to use its fulfillment service. But if sellers want to take advantage of the Amazon Prime brand, as many do, then Amazon has every right to couple FBA with its Prime service, as they go hand-in-hand.

Offering Prime as part of FBA is a chief way in which Amazon distinguishes itself from other independent fulfillment providers. If these competitors’ survival depends on how well they compete with Amazon Prime, how is that anti-competitive behavior on Amazon’s part?

The FTC also argues that “Amazon raises sellers’ costs by forcing them to split their inventory to sell across multiple sales channels.” What the FTC means is that a retailer who wants to sell on Amazon Marketplace, as well as Walmart or eBay marketplaces simultaneously, must divide its inventory among separate warehouses and fulfillment services. 

It neglects to mention that it’s the seller’s own choice to split inventory in order to access Amazon’s extensive consumer base while also selling through other channels. No one has to sell on Amazon Marketplace. It’s a choice, and that choice comes with tradeoffs. If retailers don’t think the tradeoff is worth it, they have many other options.

Contrary to the FTC’s assertions, Amazon doesn’t force sellers to use its fulfillment service or split their inventories. Rather, sellers do it because of the value added.

As the lawsuit makes clear, the FTC envisions an imaginary “perfect” market where every company that enters can survive and thrive by selling similar products for similar prices while not one competitor tries to gain a competitive edge over the others. But no such fantasy market exists. And if one did, its consumers would be harmed by the absence of aggressive competitors who seek dominant market share.

“Throughout the history of anti-trust prosecutions, there has been an unresolved confusion between what is detrimental to competition and what is detrimental to competitors,” economist Thomas Sowell writes in Basic Economics. “In the midst of this confusion, the question of what is beneficial to the consumer has often been lost sight of.”

Sowell’s point applies to the FTC’s lawsuit. There’s no disputing that Amazon is a giant corporation. But big doesn’t automatically equal bad. What’s important is identifying consumer harm. The FTC has failed to do this.

The agency fails to demonstrate that Amazon is a monopoly or that its alleged anti-competitive practices have, on net, harmed consumers or sellers. 

The changes to Amazon’s practices that the FTC wants to see would likely raise prices and reduce service quality and consistency—all in order for the company to be deemed “competitive” in a made-up market that the agency invented.  

It’s a disappointment that New Hampshire has joined a lawsuit with so many obvious flaws and with so many potential downsides for consumers.

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Bans and high taxes fuel black markets for tobacco & vape products

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As the Biden administration gets closer to finalizing its proposed rule banning the sale of menthol cigarettes and flavored cigars nationwide, a well-known aphorism comes to mind: “The road to hell is paved with good intentions.”

The administration’s logic behind the federal ban is that doing so will reduce smoking and correspondingly improve public health. This is the same logic used to justify increasing tobacco taxes or banning tobacco and vaping products at the state level. 

When a state bans flavored tobacco or increases excise taxes on cigarettes, legal cigarette sales in the state tend to fall as a result. But what about illegal and out-of-state sales?

High cigarette taxes and bans on flavored tobacco products create black and gray markets through which smugglers become the new suppliers of these products. 

Tax rates and smuggling

The Mackinac Center for Public Policy tracks cigarette smuggling in the United States. Its 2021 report showed how cigarette smuggling increases as excise tax rates on tobacco products increase. 

New York, which taxes cigarettes $4.35 a pack, saw the highest rate of inbound smuggling—54.48%. The total number of smuggled packs, more than 254 million, was second in the country behind California’s more than 465 million. California also had the second-highest inbound smuggling rate (44.02%) and a tax rate of $2.87 per pack.

When taxes get high enough to encourage large-scale smuggling, tax revenue falls as people stop buying from legal vendors and start buying on the street, and as some vendors switch to out-of-state suppliers and simply don’t report or pay taxes on those purchases. As a result of their high taxes, California and New York saw the two largest revenue losses—more than $1.3 billion and $1.1 billion, respectively. 

With a tax rate of $3.51 per pack, Massachusetts had the fourth-highest inbound smuggling rate (37.59%) and the ninth-highest number of smuggled packs (more than 63 million), resulting in the sixth-largest revenue loss (nearly $224 million) in 2021.

Where were these Massachusetts and New York smugglers purchasing these products? Mostly in New Hampshire. 

With by far the lowest state tax on cigarette products in the Northeast ($1.78 per pack), the Granite State saw one of the highest outbound smuggling rates in 2021 (-34.13%, which translates to more than 32 million packs). 

As smugglers crossed into New Hampshire to purchase cigarettes, the State of New Hampshire collected an additional $58 million in revenue. 

High cigarette taxes incentivize illicit market activity, encouraging smugglers to purchase products in low-tax states, cross state lines with them, and consume or resell the products in high-tax states. 

A similar dynamic takes place when a state bans tobacco products. 

Bans and black markets

After Massachusetts banned flavored tobacco in 2019, JAMA Internal Medicine found that flavored tobacco sales dropped in the state. Successful policy, right?

Not so fast. “In fact, the flavor ban has been far from successful, as sales in both New Hampshire and Rhode Island experienced double-digit growth—almost making up for the entire decrease in Massachusetts,” according to the Tax Foundation.

After Massachusetts’ ban, total sales of flavored tobacco in New England fell by only about 1% from June 2019–May 2020 to June 2020–May 2021. 

While sales of flavored tobacco decreased by 24% in Massachusetts between the year before the ban to the year after the ban, they increased by 22% in New Hampshire, 18% in Rhode Island, and 6% in Vermont. 

In fiscal year 2021, Massachusetts lost out on $125 million in tobacco excise tax revenue as sales shifted to other states. 

It’s a mistake to equate falling cigarette sales at licensed, regulated shops with an equivalent decline in smoking. The evidence shows that high taxes and bans on tobacco products shift a lot of activity to the black market. 

A University of California at San Diego study of Massachusetts licensed tobacco retailers in the two years before and the two years after the flavored cigarette ban found that the number of new tobacco retail licenses fell by 53% after the ban, with the total number of retail licenses falling by 5.8%. This finding, combined with the documented increases in out-of-state sales and cross-border smuggling, underscores the point that the ban has not ended menthol cigarette smoking in Massachusetts, but rather has moved these products onto the black market. 

Responding to incentives

Massachusetts created strong incentives for people to buy tobacco products elsewhere and bring them into the state for personal use and/or sales. People responded just as expected.

It’s important to recognize that criminals respond to incentives too. Gangs and drug smugglers can increase their revenues by adding cigarette smuggling to their repertoire of illicit activities. In the name of public health, states can find themselves strengthening existing organized crime networks and even creating new ones by imposing bans or high tax rates. 

Bans and punitive tax rates also induce evasive behaviors among otherwise law-abiding citizens. 

The Massachusetts Department of Revenue’s Illegal Tobacco Task Force issues press releases boasting of its enforcement of the state’s tobacco laws. Those press releases list people charged with running large-scale smuggling operations that include flavored tobacco, vapes, and marijuana. But they also include store owners arrested, convicted, and jailed for purchasing tobacco products out of state to avoid Massachusetts’ high taxes. 

It’s worth noting that the task force is part of the Department of Revenue. It was created “to address the problem of illegal tobacco distribution in the Commonwealth and the loss of millions of dollars of legitimate tax revenues to the state every year [emphasis added].” Massachusetts’ tax policy stimulated so much tax evasion that the state created a separate team just to find and punish tax evaders.

The solution to this interstate smuggling, some advocates argue, is a nationwide ban. Such policies used to be called “prohibition.” But as that term has fallen out of political favor, advocates instead use the term “ban” now.  

There is a large overlap between the people who want to ban tobacco and vaping products and the people who want to maximize government revenue for social welfare programs. Those two goals are in conflict. A Tax Foundation analysis of a proposed menthol cigarette ban shows how.

“A nationwide ban would result in a federal revenue decline of $1.9 billion in the first full year after prohibition,” according to the Tax Foundation. “In the states, the decline in excise tax revenue would be $2.6 billion, the decline in sales tax revenue would be $892 million, and the decline in MSA payments would be $1.2 billion, for a total state revenue loss of $4.7 billion.”

In New Hampshire, where menthol cigarettes make up 34% of the state’s market, a federal ban would mean more than $49 million in lost revenue, of which 71% would be a decline in excise tax revenue. 

And just like Massachusetts’ ban resulted in 90% of its lost sales merely moving to neighboring states, a federal ban would increase sales and consumption of other tobacco products like non-flavored cigarettes, and it would move sales and consumption of menthol cigarettes underground. 

For example, according to Reason Foundation, “approximately 22 million additional packs of nonmenthol cigarettes were sold in those states in the year after [Massachusetts’] flavor ban, leading to a net increase in cigarette sales.”

Where will illicit menthol cigarettes come from after a nationwide ban is enacted? The same place so many other banned products do: China. 

In 2020, the U.S. Food and Drug Administration banned flavored vaping products. It boasts that since the ban, it has rejected 99% of requests to sell new e-cigarettes, implying that the ban has reduced access to undesired products. 

But CBS News reported in June that the “number of different electronic cigarette devices sold in the U.S. has nearly tripled to over 9,000 since 2020.”

The FDA’s ban excludes disposable vape products. So, predictably, consumers migrated to disposables. But closing that “loophole” isn’t the solution advocates think it is. The surge in different vape products sold has been “driven almost entirely by a wave of unauthorized [emphasis added] disposable vapes from China.”

Consumers and suppliers always find ways to circumvent federal bans.

The primary achievement of such bans will be to replace legal, regulated products with illegal, unregulated ones, often from unscrupulous manufacturers. In a legal market, manufacturers and sellers have strong incentives to build market share by building trust with consumers. Legal markets promote accountability. Black markets do the opposite. Manufacturers and sellers have strong incentives to conceal their identities, which weakens accountability and reduces consumer safety. 

Any federal ban would bolster illicit trade, flooding the market with less safe products from unaccountable manufacturers. 

The goal of high cigarette taxes and flavored tobacco bans may be an altruistic one, namely to reduce smoking and improve public health. But the actual outcome of such policies is what’s important. Creating black markets, reducing accountability, shifting money from legitimate businesses to criminal networks, and reducing overall economic and personal freedom create a net negative for the economy and society. 

Reducing teen smoking is a worthy goal. Which is why it’s already illegal for teens to smoke. Rather than using policy levers that distort market incentives and infringe on the personal freedom of adults, activists should focus on improving their efforts to educate young people about the risks of smoking.



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Republican Primary voters in NH want to restrain the federal government, not American businesses, a Competitiveness Coalition and Josiah Bartlett Center poll finds

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The Competitiveness Coalition, in coordination with The Josiah Bartlett Center for Public Policy, find in a poll of 800 likely Republican primary voters, released Sept. 5,  that these voters want the federal government to focus on inflation, the cost of living and the economy, and not get distracted by attacking American tech companies.

On New Hampshire-specific issues, the poll shows huge support among Republican primary voters for ending the Interest & Dividends Tax, and little support for raising electricity costs to fight climate change. 

The key findings of the poll include:

  • More than 70% of GOP primary voters believe there is too much government regulation.
  • New Hampshire Republican presidential primary voters are focused on the economy: just under half (48%) of primary voters said either inflation and the cost of living (28%) or jobs and the economy (20%) were the most important issues.
  • At just 4%, breaking up large technology companies is a bottom-tier issue position for Republican presidential primary voters in New Hampshire.
  • Fully 72% of GOP primary voters are opposed to the Biden Administration establishing new regulations that would break up large technology companies such as Amazon, Apple, and Google, including 47% who are strongly opposed.
  • If these regulations were to go into place, these voters are concerned about the impact they would have on their own lives, including Google starting to charge for their services (34%), and Apple no longer being able to ensure the safety and security of downloaded apps (also 34%).
  • Supporting breaking up large technology companies has the potential to be electorally damaging for Republican candidates, especially when informed this could give the advantage to Chinese tech companies. Seventy-four percent (74%) of GOP primary voters are less likely to vote for a Republican candidate after hearing that, including 59% who are much less likely.
  • Fully 80% of GOP primary voters support eliminating the Interest & Dividends Tax to make New Hampshire truly income-tax-free. 
  • Asked how much more they’d be willing to pay per month in higher electricity costs to convert New Hampshire power plants from natural gas to renewables, 59% said they’d be willing to pay nothing more, 23% said $5 more, 9% said $25 more, 4% said $50 more, and 3% said $100 more.

“It’s clear that Republican voters in the First In The Nation state oppose the misguided Biden antitrust agenda and believe it will exacerbate the challenges of Bidenomics,” said Scott Brown, a New Hampshire resident, former U.S. Senator and Ambassador and chair of the Competitiveness Coalition. “The candidates competing in the Granite State would be wise to take heed and advocate for policies that will bring economic relief rather than additional pain. We have far too much regulation on our innovators already, and breaking up successful American success stories to the benefit of the Chinese Communist Party is the exact wrong approach.”

Andrew Cline, president of the Josiah Bartlett Center for Public Policy, added that the poll reinforces that New Hampshire voters are looking for basic good governance, not more government activism. “The message from Republican primary voters in New Hampshire is simple. They’d prefer to restrain the federal government, not American businesses,” Cline said.  

Additionally, the poll, which was conducted after the first Republican presidential debate, shows Donald Trump with a significant lead on the Republican presidential primary ballot. The former President currently garners 47% on the primary ballot, giving him a more than 30-point lead over his closest challengers (Ron DeSantis and Nikki Haley, both at 10%).  Chris Christie and Vivek Ramaswamy both sit at 8%, with no other candidate receiving more than 5% of the vote.

  • Trump: 47%
  • Ron DeSantis: 10%
  • Nikki Haley: 10%
  • Vivek Ramaswamy: 8%
  • Chris Christie: 8%
  • Tim Scott: 5%
  • Mike Pence: 4%
  • Doug Burgum: 2%
  • Will Hurd: 1%
  • Asa Hutchison: 1%
  • Larry Elder: 1%
  • Undecided: 4%

On behalf of the Competitiveness Coalition and The Josiah Bartlett Center for Public Policy,  NMB Research conducted a statewide survey of N=800 likely Republican presidential primary voters in New Hampshire. The survey was conducted August 25-31, 2023 and has a margin of error of plus or minus 3.46%.  All surveys were conducted by live interviewers, with 78% of interviews conducted with cell phone respondents (N=623) and 22% of interviews conducted with landline respondents (N=177).

Launched in April 2022, the Competitiveness Coalition is a first-of-its-kind group educating the public and advocating for policies that put consumers first while fostering innovation and attracting new investment. For more information, please visit competitivenesscoalition.com. Members of the press can contact the coalition at [email protected]. The Josiah Bartlett Center for Public Policy is New Hampshire’s free-market think tank.

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Affordable housing is N.H.’s top economic problem, leaders & voters agree

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New Hampshire voters rank affordable housing as the state’s No. 1 problem, according to a UNH Survey Center poll released on August 28. State business and political leaders agree, saying housing affordability is the top problem holding back the state’s economy. 

“Oh, it’s number one,” Gov. Chris Sununu told Drew Cline, president of the Josiah Bartlett Center for Public Policy, on the WFEA Morning Update. “The lack of housing for middle and lower-income families is absolutely number one because…. Without the housing, you don’t have the employees. Without the employees, the businesses can’t grow. If the businesses can’t grow, then economically everything becomes stagnation.”

In June 2023, housing affordability in the state reached a new record low for the second consecutive month, according to the New Hampshire Association of Realtors. With an affordability index of 61, the state’s median household income was only 61% of what’s necessary to qualify for the median-priced single-family home at current interest rates.

At the same time, median prices for single-family homes in New Hampshire hit their highest point ever at $495,000—an increase of $30,000 from the previous month’s record high. Condos notched a record median price of $400,000 in June too. 

Rents are also hitting new heights. The median cost of a two-bedroom apartment soared 11.4% over the past year alone to $1,764 a month.

Despite New Hampshire’s growing economy—ranked fourth overall, third in economic growth, first in economic opportunity, and last in poverty rate by U.S. News & World Report—the state is 36th in housing affordability.

“I would rate housing affordability number one currently among issues or challenges impacting New Hampshire’s economy,” Michael Skelton, president and CEO of the Business & Industry Association (BIA), told the Josiah Bartlett Center.

“It’s unquestionably the single most important problem facing New Hampshire’s economy,” said Jason Sorens, senior research faculty at the American Institute for Economic Research and author of the Josiah Bartlett Center’s landmark 2021 study linking local land-use regulations to the state’s housing shortage. 

Several leaders also agree that land-use regulations are a leading cause of the issue. 

“Most of the affordability problem is due to local land-use regulations,” Bob Quinn, CEO of the New Hampshire Association of Realtors, concluded. “They increase development costs or eliminate the opportunity to build entirely.”

“Local land-use regulations are certainly part of the issue, on par with NIMBYISM [Not-In-My-Backyard-ism],” Keene Mayor George Hansel said.

It comes down to a problem of supply and demand: Limited supply of housing with steady or increasing demand leads to an increase in prices. By restricting what can be built and where, zoning laws are suppressing the supply of housing, resulting in New Hampshire’s current housing shortage, state housing experts and business leaders say.

“There is simply not enough housing for people to rent in New Hampshire,” Ben Frost, deputy executive director of New Hampshire Housing, said on WMUR.

According to the CATO Institute’s Freedom in the 50 States—an index of personal and economic freedom—New Hampshire ranks 40th in land-use freedom, a product of local land-use regulations obstructing supply.  

These zoning regulations include minimum lot size, setback, frontage, minimum square footage, and design requirements, among others—all of which make it difficult to build and/or increase the costs of building.  

“We know developers are interested in building more housing and there are generally financing options and capital available to do so, [but] the challenge they most often face is finding a place to build,” BIA’s Skelton observed. “Local land-use regulations and zoning (minimum lot size being the most prominent) and infrastructure (water/sewer, etc.) availability and requirements, to me, are the most significant local regulatory issues impacting what can be built and where.”

As the New Hampshire Zoning Atlas demonstrates, single-family housing is allowed by right on 90% of the state’s 3.6 million acres of buildable land, yet most municipalities don’t allow single-family homes on small lots (less than one acre). 

In fact, homes on lots of less than one acre are permitted on only 16% of the state’s buildable land. 

The median lot in New Hampshire is 49,223 square feet, according to the Angi U.S. Lot Size Index. This is the second-highest in the country. 

In New Hampshire, minimum lot size requirements can exceed dozens of acres. Districts in Groton, New Boston, Peterborough, and New London require lots to be a minimum of 25 acres (1.089 million square feet).

Zooming in on the Manchester area, 89% of the buildable land in the city and surrounding towns (Auburn, Bedford, Goffstown, Hooksett, Litchfield, Londonderry, and Merrimack) allows single-family housing, but only 33% of that buildable area is open to new single-family homes (after accounting for existing development, vacancies, and growth potential). 

Just 21% of the Manchester area’s buildable land allows single-family homes on small lots. This drops to merely 7.8% when considering only vacant or underdeveloped space.

“It’s not the only factor, but it’s the predominant factor, and it’s easily the most important factor we can actually do something about,” Jason Sorens, the principal investigator of the New Hampshire Zoning Atlas, noted about local zoning laws. 

“We can’t do much about steep slopes and poor soils, and expanding sewer and water service takes time and expense. Growing the construction workforce is another lever, but that will take a long time. Local land-use regulations drive at least 50% of the affordability problem, and we can change them,” Sorens added.

Multifamily development is heavily restricted as well. While housing for five or more families is permitted on 44.2% of New Hampshire’s buildable area, only 21% of this land allows these large-family developments on smaller lots.

Reforming a city’s zoning regime can be quite an undertaking. “Keene has dramatically streamlined and rewritten our land-use codes in the last three years,” Mayor Hansel said. “This was an expensive effort, costing more than $500,000 on top of internal staff time devoted to the rewrite effort. Smaller communities, without full-time planning staff, would have a hard time tackling something like that.”

Though some communities might want to avoid a full rewrite, smaller changes such as reducing minimum lot sizes, eliminating overlay districts (zoning districts that overlap original zoning districts), and increasing density limits (how many housing units can be built in a given area) would have significant impact.

Mayor Paul Callaghan offers Rochester as a model for other municipalities looking to make quick progress on this front. 

“In 2018 we increased the density allowance in and around our three urban centers (East Rochester, Downton Rochester, and Gonic) to allow for more density (and therefore less cost to developers),” Mayor Callaghan said. “And then in 2019 we did away with density requirements altogether in Downtown Rochester and allowed for some residential units on the ground floor level.”

“The system really works when it’s clicking, and the number one thing holding it all back…is housing,” Gov. Sununu told Cline. “And it isn’t, ‘Well, the government needs to build more housing.’ We’re investing more in housing than we ever have.” 

In fact, the 2024–25 state budget spends a record $25 million for the affordable housing fund. 

“But the locals need to permit it,” the governor continued. “Local, even small towns, need to talk to their businesses who are struggling to find employees and say, ‘Maybe if we just put five units up here or we let a small multifamily complex with seven, ten units go over here,’ that in itself can just be a game changer for a lot of small businesses in town to make them more economically viable.”

Capturing the full economic extent of the challenge, the governor added, “Everything moves positively when you have the housing and you can bring in the employees.”

 

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After Maui wildfires, The Boston Globe again calls for repeal of the Jones Act

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The devastating wildfires on the Hawaiian island Maui have triggered a debate over a protectionist shipping law that’s hindering relief efforts. Even some who typically support government intervention in the economy are speaking out against the century-old law. 

The Merchant Marine Act of 1920, or the Jones Act, is a federal law that restricts shipping between U.S. ports to ships that are U.S.-owned, U.S.-built, and U.S.-crewed only. Those restrictions make it harder for mainlanders to help their fellow Americans, such as Puerto Ricans and Hawaiians, after serious disasters. Seeing this, The Boston Globe has called for the act’s full repeal, citing the increased costs of cargo and shipping and the delayed arrival of relief aid. 

Relief efforts for Americans who happen to live on islands are hampered by a century-old shipping law that delays the arrival of short-term aid and makes long-term recovery more difficult and costly…. One not so small suggestion, Mr. President: Ask Congress to repeal the Jones Act, which continues to be a hindrance every time disaster strikes islands.

By connecting the Maui tragedy to the Jones Act, The Boston Globe has again put itself on the side of long overdue free-market reform in this policy area.

Foreign shipbuilding long ago outstripped that being done in the US — and it’s far less expensive. A recently constructed container ship built to serve Hawaii from the mainland carried a price tag of more than $225 million, according to the CATO Institute, compared to $41 million for a similar South Korean-built ship. Operating costs of American vessels, that same study noted, are roughly three times that of their international counterparts.

Thus, the protectionist Jones Act simply adds to the cost of everything carried on those US vessels. A 2020 study by the Grassroot Institute of Hawaii estimated that the Jones Act cost the average Hawaiian family some $1,800 a year and cost the islands overall some $1.2 billion a year. So, yes, it will constitute a substantial burden on Maui’s recovery.

After Hurricane Fiona struck Puerto Rico last September, The Globe pointed out that the Jones Act hindered relief efforts and subsequently called for its repeal. 

Once again, Puerto Ricans are paying the price for an antiquated shipping law that makes food and other goods more expensive on the island. The law is inexcusable in ordinary times — and downright scandalous now, when the island is reeling from yet another natural disaster. 

One hundred years of protectionism in U.S. shipping has artificially inflated the price of goods for all Americans, as well as the cost of shipping itself. And by shielding U.S. shipbuilders from foreign competition, the Jones Act has stunted U.S. shipbuilding while the rest of the world has thrived in a competitive global market. 

According to the U.S. Department of Transportation, the United States has only 99 ships that are Jones Act-compliant for domestic transports. Meanwhile, there are more than 60,000 commercial vessels in the ocean around the world.

Whether it be wildfires in Hawaii or hurricanes in Puerto Rico, this anti-free-market law burdens the shipping of crucial aid to U.S. islands and their people. And while the Jones Act’s ramifications are on full display when places like Hawaii and Puerto Rico need emergency relief, the adverse effects of the federal law reach New Hampshire consumers as well. 

High energy costs have been hurting Granite Staters for years, and the Jones Act plays a supporting role. New England’s limited access to pipelines and minimal pipeline capacity make its entire energy grid more dependent upon shipping oil and natural gas from other states when demand heightens during the winter months.

For New Hampshire to access the bulk of U.S.-produced oil and gas, though, would involve transporting fuel on tankers from domestic producers like Texas or Pennsylvania.

There’s just one problem: The United States doesn’t have any liquid natural gas (LNG) tankers that are Jones Act-compliant to ship oil and gas from Texas or Pennsylvania to New England. And foreign-made tankers are prohibited from shipping oil and gas between U.S. states because of the Jones Act. The results include higher energy costs for Granite Staters, a greater reliance on imported fuel, and higher odds that New Hampshire suffers blackouts during periods of peak energy demand. 

The best option for Granite State consumers would be to allow any tanker to make deliveries directly between U.S. ports. (New England governors have repeatedly sought Jones Act waivers to allow that.) 

This would help open New Hampshire’s energy grid to domestic fuel, doing so at a lower price than imports. In fact, a J.P. Morgan analysis finds that merely suspending the Jones Act could save consumers 10 cents per gallon of gas just by allowing more inexpensive foreign ships to transport domestic gas between U.S. ports.

The Jones Act even contributes to New England’s traffic troubles. Because the law effectively prevents transporting domestic cargo over coastal waters, the freight that otherwise would be shipped is instead hauled by truckers, further clogging the interstates surrounding New York City and Boston. 

It shouldn’t take a natural disaster for the Jones Act to face this kind of scrutiny. But The Globe deserves credit for taking these periodic opportunities to educate the public on the law’s harmful effects and argue forcefully for its repeal.

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Support for new housing surges as local boards keep saying no

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Large majorities of Granite Staters support changing local land use regulations to allow the construction of more housing, the latest annual affordable housing survey from the Center for Ethics in Society at St. Anselm College reveals.

Support for more housing options has surged in the last year as home prices and rents have hit new records in New Hampshire. But despite huge and unprecedented levels of support for relaxing local regulations, news stories show that local boards continue to block new housing proposals when small groups of local residents turn out to oppose them.

In our hyper-partisan era, it’s unusual to get anywhere near 80% public support on an issue. Yet in New Hampshire, 78% of registered voters now agree that “my community needs more affordable housing to be built.” Only 18% disagreed. That 60-point gap was a 40-point gap last year. 

Opposition to housing construction often comes from older voters who don’t want to see their communities change—and who already have homes. Younger people who face the prospects of huge rents and few available starter homes tend to take a more permissive view of new housing construction. The effect of high rents and home prices on younger voters was shown in the results of this new poll. In the survey, “not a single voter under 35 disagreed with the ‘more affordable housing in my community’ position,” according to the Center for Ethics in Society. 

Voters have grown more receptive even to the idea that affordable housing should be built in their own neighborhood. The survey found that 58% of voters agreed that “My neighborhood needs more affordable housing to be built.” Support grew threefold in one year, from +7 in 2022 to +21 in 2023.

Significantly, voters have come to link the state’s severe housing shortage to local planning and zoning regulations. The survey found that 60% of voters agreed that “New Hampshire towns and cities should change their planning and zoning regulations in order to allow more housing to be built.” That 26-point gap was just a 12-point gap last year.

 

When the Josiah Bartlett Center asked voters in our 2021 poll whether they “support relaxing some local regulations to make it easier to build homes for people who need them,” 45% said yes and 34% said no. The growth over just two years in support for relaxing local land use regulations is remarkable. 

Highly restrictive local land use regulations became pervasive throughout New Hampshire because they once had broad support. The damage they’ve done to the state’s housing market has become so obvious that support for anti-housing positions is collapsing.

The Center for Ethics in Society asked voters if “New Hampshire should do more to prevent housing development and keep the state the way it is.” Only 45% of New Hampshire voters disagreed with that statement in the 2020 survey. (Support was at 31%, with the rest undecided.) In this year’s survey, 59% of voters disagreed, representing a 14-point swing since 2020. 

At the Josiah Bartlett Center, we’ve warned for years that if local governments continue to choke the housing supply by maintaining overly restrictive land use regulations, support for blanket state laws to override those regulations will grow. Sure enough, that is happening. 

In 2021, 37% of voters supported and 38% opposed “a bill to allow property owners to build duplexes, triplexes, and fourplexes on any property served by municipal water and sewer, and where the zoning allows residential development.” Opposition to such a law has fallen nine points to 27%, and support has risen to 43%. 

In the Legislature, opposition to such legislation is driven by a perception that voters back home disapprove. But that disapproval is eroding. If local governments don’t swiftly change course and begin allowing more housing, legislators will be pushed by voters to offer a state solution.

Manchester has made strong gains, approving approximately 2,000 new units’ worth of new construction in recent years, according to city officials. But projects still run into road blocks there, and in many other municipalities local boards routinely thwart new construction as a matter of course. 

A few recent examples:

  • Portsmouth’s Zoning Board of Adjustment voted against a plan to convert an abandoned animal hospital into 16 housing units. 
  • Swanzey’s Zoning Board of Adjustment voted against a proposal for an 18-unit residential development. 
  • Seabrook’s Zoning Board voted against a 332-unit luxury apartment development at the former greyhound track. 
  • Brady-Sullivan continues a two-year fight to convert old office building to apartments. 

A sentiment often heard at local planning and zoning board meetings is that multi-family housing belongs in cities like Manchester, not in smaller communities. But most voters disagree with that, and the disagreement is growing stronger.

This year’s survey found that 64% of voters disagreed with the statement, “Our suburbs and rural towns should have mostly just single-family homes. Apartments, duplexes, and townhouses should be built only in cities.” That’s up from 61% two years ago. 

After years of surging housing costs—and a concerted effort by reformers (including the Josiah Bartlett Center) to highlight the role local regulations play in driving those costs higher—overwhelming majorities of Granite Staters now support relaxing local land use regulations.

It’s now up to voters and boards to take up this cause at the local level. If they don’t, it’s only a matter of time before legislators pass state laws to free developers and property owners from the local regulations that prevent the market from supplying people with the homes they want and need.   

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State cuts needless red tape from barbershop booths

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The new state occupational licensing overhaul (House Bill 409) passed this session and signed by Gov. Chris Sununu on August 8 eliminated a little-known, triple-license requirement for barbers and others in the beauty and grooming industry, serving as a perfect example of how license requirements can easily get out of hand. 

Both barbers and barbershops have to be licensed in New Hampshire, a common practice nationally. But for years New Hampshire also required a “booth license” for independent barbers who rented a booth in a licensed barbershop.

Like hair stylists, barbers can be either employees or independent contractors. It’s not uncommon for salons and barbershops to rent booths to stylists and barbers who work for themselves. 

In these situations, the state required three licenses: 1. The barber had to obtain a barber’s license; 2. The barbershop had to be licensed; 3. The barber who rented a booth inside the already licensed barbershop also had to get a separate booth license. 

This booth license applied to all barbers, cosmetologists, manicurists, and estheticians in New Hampshire looking to rent space.

These independent practitioners had to pay a two-year, $75 fee and subject their individual booth to a state inspection—even though the shop itself was already subject to licensure and inspection.

House Bill 409 lifted that unnecessary triple licensure, among many other changes. HB 409 reorganized the Office of Professional Licensure and Certification (OPLC) and streamlined the state’s regulatory regime for occupations in the beauty and grooming industry.

Since the governor signed the bill earlier this month, licensed beauty and grooming professionals renting a space in a licensed shop no longer have to get a separate booth license. 

The Keene Sentinel reported that practitioners are already expressing gratitude for the change. Jeanne Chappell, Keene Beauty Academy president and chair of the state board that regulates barbers, cosmetologists, and estheticians, said the booth license was duplicative.

“This will save time and money, and also you won’t have to hold two licenses to be a booth renter,” she told The Keene Sentinel. 

Eliminating unnecessary and repetitive licensing paperwork was the goal of HB 409, and immediately after passage the bill is already providing relief.

This regulatory unburdening comes on the heels of HB 594, which allowed the OPLC to recognize out-of-state occupational licenses. Barbers, cosmetologists, manicurists, and estheticians are among the many practitioners who can quickly get licensed in New Hampshire if they hold a valid, current, and substantially similar license in another state. 

Occupational licensing requirements are sold as a necessary health and safety measure. Often, though, they create obstacles to employment without providing any measurable health or safety benefit. The now eliminated booth license was a perfect example of how these regulations can generate costs and burdens without improving health or safety.



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How housing regulations push youth to socialism

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Jason Sorens at the American Institute for Economic Research has posted a provocative essay connecting young people’s affinity for heavy-handed government economic intervention to overly restrictive land use regulations.

Restrictive land use regulations play a significant role in driving housing costs higher. That’s very well documented.

Government zoning regulations that limit homebuilding are a big factor in housing costs over the long run. A lot of research has shown this, but so does common sense. Look at the populations of Boston, Houston, Miami, and San Francisco over time. Between 2010 and 2020, Boston’s county (Suffolk) grew 2 percent, Houston’s county (Harris) grew 16 percent, Miami-Dade grew 7 percent, and San Francisco County grew 8 percent. Clearly, San Francisco’s huge expense is not solely a result of hot demand; otherwise, its population growth rates would be much higher than those of the others. Boston also looks pretty bad when you compare rents to population growth, while Houston looks amazing. It has accommodated rapid growth at moderate rents.

What’s less well known is that persistently high housing costs, caused by a long-term supply shortage, price younger adults out of the housing market, and in their frustration they demand government remedies. The longer the shortage persists, the more extreme their proposed remedies become.

Right now, left-of-center states and localities are experimenting with rent control and public housing, would-be solutions to the problem of rising rents that economists know are incredibly costly. Simply reforming zoning would be a better solution.

Not only do artificial restrictions on the housing supply turn people toward radical economic interventions, but they also tend to make communities more left-leaning over time.

A standard-deviation increase in housing regulation makes a place shift toward the Democrats about three percentage points over the next eight years, because noncollege voters, who are becoming the Republican base, move out.

“But won’t building apartment high-rises bring in more Democrats than Republicans?” I often hear. Yes, usually, but by increasing housing supply these high rises will make single-family homes cheaper in the suburbs, keeping blue-collar families from moving to Texas or Florida. And building tract subdivisions in the suburbs directly helps blue-collar families stay put.

Many Democrats and progressives are at least somewhat free-market on housing, because they want to keep rents down. That’s admirable. On the other hand, democratic socialist types insist on harmful “solutions” like rent control and public housing. Republicans and conservatives have largely sat on the sidelines of zoning reform so far. But the data strongly suggest that to fight the radical left, we need to build more homes.

A lot of Republicans and conservatives believe that strict zoning is a way to protect their communities politically right-of-center. The opposite tends to be true. It makes them more left-of-center over time and causes people, particularly the young, to seek more government economic interventions.

 

 

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