There’s a case brewing in the Ninth Circuit that has critical implications for the growing housing affordability movement. Housing has been a cornerstone of research at Mercatus for years now. Our Urbanity team has helped lead the charge on ideas to increase housing supply and affordability. This court case has caught their attention.
To that end, Emily Hamilton and Charles Gardner filed an amicus brief in Adams v. City of Seattle, a case that could reshape how cities approach housing affordability across the United States. They argue that Seattle's current housing policies may be doing more harm than good—and the implications stretch far beyond the Pacific Northwest.
At issue is Seattle's Mandatory Housing Affordability (MHA) program, which requires developers to meet specific conditions and pay fees to build new housing. The plaintiff in this case, Anita Adams, wanted to build an addition to her home for her two adult children. But her permit would not be approved unless she built two additional “affordable” housing units or paid over $70,000 into the city’s housing fund.
Emily and Charles argue a crucial point: Policies that restrict housing development while adding costs cannot possibly achieve their stated goal of making housing more affordable. It's a contradiction of basic economic principles, specifically, the law of supply and demand.
The case centers on the critical legal issue of whether cities can use their permitting authority to impose certain requirements on developers, and whether these requirements must have a clear connection to their stated goals. Emily and Charles argue that Seattle's approach fails this test, since restricting housing supply cannot logically lead to improved affordability.
This legal challenge matters because similar "inclusionary zoning" policies have been adopted by cities nationwide. If the court agrees with Emily’s and Charles’ analysis, it could prompt a fundamental rethinking of how municipalities approach housing affordability. Rather than imposing restrictions and fees that limit new construction, cities might need to explore solutions that actually increase housing supply.
As cities struggle with rising housing costs and limited supply, the court's decision could provide crucial guidance on which policies actually help— hurt—efforts to create more affordable housing.
Ashley Mehra argues that Biden's recent AI executive order stretches beyond the intended scope of the Defense Production Act, which was meant for managing physical defense supplies. The unintended consequence could be a slowdown in AI innovation.
Jordan Lofthouse and Leah Kral write that a polycentric approach—where multiple, overlapping decision makers in government, markets, and civil society work both independently and together—is effective at solving society's most complex "wicked" problems.
Dean Ball draws a surprising parallel between the US government's new "diffusion rule" for AI hardware exports and Britain's failed attempt to maintain textile manufacturing dominance in the 18th century.
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