Latest Scholarship

April 30, 2018

Changing the politics of housing in California

by Christopher S. Elmendorf, Richard Frank and Darien Shanske

[Cross-posted from the San Francisco Chronicle]

The recent defeat of Senate Bill 827, state Sen. Scott Wiener’s bill allowing 5-story buildings near transit hubs, was an enormous setback for California’s efforts to make housing more affordable while reducing greenhouse gas emissions.

Our state is now in a serious bind.

The only way to make California housing widely affordable is to build a lot more of it. We could do this with Texas-style suburban sprawl — Houston has boomed while remaining affordable — but that would sacrifice the environment. The alternative is to add residential density to existing neighborhoods, near job centers and mass transit.

California picked density over sprawl a decade ago, when it enacted SB375, a commendable law that requires local governments to plan for energy-efficient, transit-oriented development. Yet most city and county planners report that this planning mandate has had “little to no impact on actions by their city.”

The defeat of Wiener’s bill and the so far meager impact of SB375 speak to a deeper truth: California is not going to achieve large-scale, high-density development near transit unless it can change the local politics of housing.

In theory, the state might induce pro-housing political realignments with taxes and subsidies — for example, reallocating property tax revenue to cities that allow dense housing near transit and starving those that don’t. But the quick demise of SB827 suggests that serious penalties are not yet enactable, and subsidies would have to compete with many other General Fund priorities.

We think California can bolster pro-housing forces at the local level without bringing down the hammer or breaking the bank. Consider these alternatives:

1. Leverage “cap and trade” to make the climate consequences of density more transparent — and more tangible. The linchpin of California’s climate change regime is the state’s cap-and-trade program, which puts a statewide ceiling on greenhouse gas emissions from industrial sources and requires emitters to buy allowances for their releases. California could strengthen pro-housing forces in city politics by folding local governments into the cap-and-trade program.

The state would issue a formula estimating the per-dwelling climate impact of new developments, taking account of proximity to transit, size, materials and parking. When a local government permits new housing that’s more climate-efficient than the typical new unit statewide, it would be rewarded with credits to sell in the cap-and-trade market.

This would give pro-housing “YIMBY” activists a green cudgel to wield in local fights over development. Using the state’s formula, proponents could quantify the environmental benefits of each project near transit. Meanwhile, budget-minded city officials would have a fiscal incentive to upzone land near transit. The more transit-friendly development the city permits, the more allowances it would earn to sell in the greenhouse-gas market.

2. Reframe local debates with state reporting of “housing potential” along transit lines. Guardians of the status quo point out that San Francisco has increased its housing production in recent years. But the picture would look quite different if we compared current production to the city’s potential for transit-friendly housing, rather than to the city’s very modest output over the past few decades.

3. Let cities recapture the value they can create by upzoning and streamlined permitting. Opponents of Wiener’s bill called it a giveaway to developers. They had a point. Rezoning a lot from single-family use to five-story apartments increases its value tremendously. Why should the landowner keep all that profit? When local governments control rezoning, they can demand ancillary benefits such as affordable-housing units, infrastructure investments, and more. All this is standard fare — and not just for major rezonings, but for individual projects under the highly discretionary permitting rules that prevail at the local level today.

Yet project-by-project bargaining has major downsides. The uncertainties and delays, and the inefficient medium of exchange (in-kind benefits rather than money), contribute to the result we see all around us: an inadequate supply of new housing. Local officials surely understand this, but right now they have no way to profit from clear, nondiscretionary rules for development.

To encourage development on lands near transit, California should allow cities to share directly in the property value created by upzoning and permitting reforms. Cities could be authorized to impose “special assessments” for upzoning or permit-streamlining on lands within a half-mile of transit — recouping, say, 50 percent to 75 percent of the value added. The state law authorizing such value-recapture assessments would probably need to be approved by referendum vote. But once it is enacted, cities would have a fiscal incentive to supplant project-specific haggling with transparent, value-enhancing and development-enabling rules.

Our state’s housing-affordability crisis was decades in the making, and these solutions won’t work miracles overnight. But if state-mandated upzoning is off the table, and state-mandated planning is ineffectual, we had better start thinking about ways the state might intervene at the root, targeting the local politics of housing.

September 14, 2017

Bigger Pies, Better Resource Allocation, or Information? Three Futures for Education Rights Litigation

By Chris Elmendorf & Darien Shanske

[Cross-posted from Education Law Prof Blog]

Education is special in the eyes of the law. State constitutions rarely require the government to spend money on anything, let alone to spend it well. Yet virtually every state constitution provides for a system of free public schools, and many courts have treated state governments as having a legally enforceable duty of care with respect to education.

But what exactly does this duty of care entail? One might expect this question to be reasonably well settled, as public-interest lawyers have been litigating education rights cases since the early 1970s. It is not. Two competing visions of the duty of care are playing out today in cases across the country. One holds that the state’s primary responsibility is to provide an ample fiscal “pie” for local school districts. Funding arrangements must ensure that all districts can afford to pay for decent facilities and programs. This vision motivates many of the claims that were filed in response to school-funding cutbacks during the Great Recession. The other vision holds that the state’s primary duty is to allocate efficiently whatever funds it appropriates for education. Informed by conservative critiques of public-sector bloat and interest-group politics, this vision calls on courts to redirect wasteful spending and unfetter local school administrators, but without touching the “political” question of how much to spend. The better-allocation vision undergirds a recent and exhaustively detailed trial court ruling in Connecticut, as well as challenges to teacher-tenure and seniority rules now pending in Minnesota, New York, and New Jersey.

Conservative opponents of bigger-pie litigation have long argued that the empirical evidence of the effect of school spending on student outcomes is too shaky to warrant judicial intervention. Liberal critics of the new teacher-tenure lawsuits have started making precisely analogous arguments in better-allocation cases, with no apparent sense of irony. But no one has asked whether states themselves might bear constitutional responsibility for the lack of reliable information about likely effects of plaintiff-sought reforms.

In a forthcoming law review article, we pose and answer this question, developing a new, information-centric vision for education rights litigation. Under our account, the states’ primary responsibility today is to structure their educational systems so that researchers and policymakers can figure out which interventions or reforms would actually improve the constitutional performance of the school system. Courts uniformly agree that the constitutional function of public schools is to prepare children for a lifetime of productive participation in economic, political, and civic life. But researchers know very little about the effects of educational reforms on adult outcomes—and the states bear much of the blame for this.   

As our article explains, states exercise enormous control over the production of knowledge about education, especially about long-run effects. This control is wielded through the architecture of administrative data systems; through the rules for assigning students, programs, and funding to schools; through the manner in which educational reforms are implemented; and through the terms on which the state provides access to administrative data.

States already possess constitutionally urgent information about the outcomes that schoolchildren realize as adults. This information is scattered across tax, voting, health, welfare, and criminal justice agencies. But, for the most part, state record-keeping systems have not been designed to enable linkage of educational and other records—and record-linkage is necessary to understand the long-run impact of educational reforms. Some states have actually banned the use of critical administrative datasets for research purposes. Likewise, in rolling out educational reforms, states rarely consider whether the rollout will enable credible tests of the reform’s effects. (Typically this requires well-defined “treatment” and “control” groups, which are similar to one another on average.)

Judicial recognition of a state duty of care with respect to the production of knowledge about education wouldn’t turn children into lab rats. States would still have to protect student records from privacy-compromising disclosures, and state officials, not researchers, would continue to set priorities.

But states would no longer be free to ignore how their own decisions affect what can be learned about the long-run effects of the state’s educational policies and programs. At a minimum, states would have to issue and periodically update a plan that identifies barriers to learning about how the state’s educational objectives can be achieved, and that explains what the state intends to do about it. Arbitrary barriers, such as flat prohibitions on the linkage of educational and other administrative records, would be vulnerable to constitutional attack. And in “bigger pie” and “better allocation” litigation, courts would consider not only whether the plaintiffs’ evidence is strong enough to order statewide reforms, but also whether the difficulty of learning about the effects of spending levels or allocative constraints without the cooperation of the state warrants a test of the plaintiff-sought remedy, which would be implemented temporarily in a randomly selected subset of schools or school districts. 

Our informational gloss on the state’s duty of care with respect to education offers a way forward in the many states whose courts have, on separation-of-powers grounds, declined wade into the Stygian swamp of funding and allocative disputes. Courts can address barriers to the production of knowledge about education without touching large-scale questions about how much to spend on education and how to spend it. Whatever else the states may owe to disadvantaged children, at least the states must make it possible to learn whether their efforts to better educate those children are doing any good.

September 8, 2017

School Improvement Hinges on Access to Student Data

By Chris Elmendorf & Darien Shanske

[Cross-posted from Education Week]

The state should know lots about those students: their standardized-test scores, whether they voted, their criminal records, their income, etc. The state replies that it does not have this information collected in a manner that is accessible. And, to add insult to injury, the state explains that it would not release the information anyway because of privacy concerns.

You decide to proceed with pre-K in your district regardless, but, so that future researchers can learn something, you ask the state if you can assign pupils to the pre-K class through a random lottery given that there will not be enough spots for everyone. The state refuses. A local education researcher asks if you can work together to at least keep track of key administrative data for the children within and without the program. To do that, you need help from the state, but again the state refuses.

That scenario is neither fanciful nor uncommon. Despite some improvements, many states do not maintain the data in a usable manner that education researchers need, much less do they use program rollouts as a regular opportunity to conduct controlled experiments. On the one hand, this failure makes sense. Organizing and managing administrative data is not costless, especially if privacy concerns are properly taken into account. Furthermore, as a matter of practical politics, not much of a constituency exists for the collection of good data that will yield conclusions many years in the future-a time frame that for most politicians or administrators makes no sense.

At the same time, the failure to generate high-quality data is untenable. Education is by far the biggest expenditure made by state and local governments. The cost of collecting good data and making the information available is not even a rounding error compared with state and local education budgets. It would be one thing if educational researchers were doing well enough with the data they have, but the expert consensus is that they are not. And this is not because there is a lack of researchers or analytic methods. (Indeed, something of a revolution is going on in the social sciences when it comes to the use of administrative data. For example, a much-celebrated recent study by Raj Chetty and colleagues demonstrated that social mobility in the United States depends greatly on where a child grows up, based on careful analysis of years of tax-return data.)

If education research is not to be left behind, states need to devote resources to collecting the data and making those data available to researchers. There are models for doing so. In some Nordic countries, each citizen is given an administrative-record number that is used throughout the government. When a researcher requests data, the government provides the data, but using a different set of numbers to protect privacy. That arrangement has enabled education research that would be difficult or impossible to carry out elsewhere, such as studying the effect of publicly provided day care on labor-market outcomes decades later&-just the question our hypothetical superintendent was hoping to answer.

"If education research is not to be left behind, states need to devote resources to collecting the data and making those data available to researchers."

The policy prescription is clear: States should aim to collect and disseminate first-rate educational data. A good place to start on this project is with the checklist provided by the nonprofit Data Quality Campaign, which emphasizes the record-keeping arrangements needed to track students over time and across administrative databases.

States should also organize themselves so that opportunities for controlled experiments are not squandered. In many cases, states already roll out programmatic changes in pieces; it would not cost much more to do so in a manner that enables credible inferences about the reform's effects.

What if a state refuses to take reasonable steps to assess the effectiveness of its biggest outlay? Can the states be forced into self-reflection? We think the answer is yes.

Virtually every state constitution provides for a system of free public schools. Most states have been sued under those provisions, with the plaintiffs claiming that states are not distributing funds equitably or just not spending an adequate amount. Plaintiffs have a mixed record in such suits, though it should be noted that many states changed their educational system because of the threat of such a lawsuit.

As a result, there are many states where the constitutional provision concerning education has been litigated and in which the courts have held that the state has a legally enforceable "duty of care" with respect to education. We argue in a forthcoming law review article that if this duty of care means anything, it must at least mean that states take reasonable efforts to enable the assessment of how their public education systems are performing. That is, leaving aside whether states must spend more money or spend more fairly, they must at least have some reasonable system in place to assess their compliance with the constitutional command to provide a decent public education.

Especially in states with courts that have proven willing to impose dramatic solutions, such as spending and other mandates, we think that even the threat of litigation should motivate state officials to provide education researchers the data they need. To be clear, our vision of states' duty of care with respect to education wouldn't turn children into lab rats. States would still have to protect student records from privacy-compromising disclosures, and state officials-not researchers-would continue to set priorities. But whatever else the states may owe to disadvantaged children in particular, at least the states must make it possible to learn whether their efforts to better educate those children are doing any good.