Rand Paul’s GOP Plan to Help Cities Only Kind of Wrong

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Some people are having fun busting on Rand Paul for venturing to opine on how to help Detroit, but this actually is a really good sign. The dynamic where Republicans don’t even try to compete for city votes actually really sucks for cities, because it means Democrats don’t try to compete there either. I don’t mean Democrats don’t try to get votes in cities. They certainly do, but it’s mainly by reminding urban voters how much they hate national Republicans – not by actually competing to defend their ideas on how best to help cities. Urban voters get big government solutions from Democrats on the one side, and crickets on the other.

Now Rand Paul is stepping into the void with a Jack Kemp-style plan he thinks will help Detroit by (you guessed it) lowering federal taxes and relaxing federal regulations!

This prescription sounds like a joke by now, because it’s the magical one-size-fits-all remedy Republicans propose for every problem. And at the federal and state level, it is a joke, epitomizing the creeping boredom in the Republican Party with actually thinking about public policy or trying to use government to make people’s lives better.

But at the local level, Paul is onto something. Not the federal taxes and regulations though. That’s not really the issue at all. The best thing the federal government could do to help cities is arguably phasing out the mortgage interest tax deduction, and turning it into a housing credit everyone gets regardless of whether they rent or own. That’d be a tax increase for a lot of people, but it would stop distorting the land market in favor of large-lot detached single family homes in the suburbs.

What cities really need is a holiday from local taxes and regulations – specifically, taxes on land improvements, zoning regulations that curtail dense multi-family housing construction and the use of empty buildings for business uses, and big government mandates to oversupply parking.

A city Republican Party worth supporting would champion these kinds of free market means to achieve the progressive ends of cheaper housing, reduced auto dependence, and lower time and cost barriers to opening small businesses. Free market economics actually has lots of good ideas to offer cities in this vein, and it’s an important perspective that too often goes undebated in jurisdictions dominated by Democrats.

Some Republicans get this. Friend of the blog Ron Beitler is a young Republican who just got elected to a Commissioner position running on these ideas in Lower Macungie Township – a fast-growing Republican-dominated exurb of Allentown. And Rand Paul could ask his friend Pat Toomey about his work getting a land value tax into the Allentown charter, which reduced the cost of building new housing by shifting the property tax burden off of value-adding new construction and onto worthless speculators.

But most Republicans don’t get this at all. Exhibit A is the latest effort by Northeast Philly Republican Councilman Brian O’Neill to stop a methadone clinic from opening in his district by choking off by-right uses for all doctor and dentist offices.

It’s the ultimate in thumb-fingered big government solutions that end up hurting way more than they help, in this case by throwing up a bunch of red tape for regular medical offices to open in an underserved area of the city.

And yet the city Republican Party doesn’t see that at all, arguing that putting a bureaucrat between a building owner and a doctor who wants to rent her building is the True Conservative position. Randy Lo Basso reports on this ideological dissonance:

The bill, which would apply to only the 10th and 6th Councilmanic districts, was passed through Council, then vetoed by Mayor Michael Nutter. Yesterday, Council overrode the veto by a large majority: 16-1.

But before the veto happened, an obviously pissed off Republican City Committee, members of which had been working to stop the Frankford Ave. clinic since the controversy first erupted, sent out a press release quoting several members with the headline: “Mayor Nutter Doesn’t Care About the Residents of Northeast Philly.”

The release quotes both new chairman of the Philly GOP Rep. John Taylor, and executive director of the party Joe DeFelice, the latter of whom notes, “Mayor Nutter has aspirations for higher political office and his liberal bonafides would be severely diminished should he sign this legislation. It is unfortunate that the Mayor has, once again, turned his back on the residents of the Northeast.”

Uh, what? The free market position in this debate is to let medical businesses open where they want. The big government position is to micromanage where each individual office can open.

This is exactly the kind of overweening regulation businesses need relief from for cities to grow and prosper, but Republicans have no interest in applying the best insights of their political ideology to city-level issues. It’s a shame.

This entry was posted in Miscellany.

5 Responses to Rand Paul’s GOP Plan to Help Cities Only Kind of Wrong

  1. The mortgage deduction doesn’t care about the lot size as I mention in a previous post. You can get it for a row house with almost no backyard or a condo or yes, a 10 acre estate although I believe there are upper limits but not being in that earnings area I can’t say for sure. Home owners drive the economy far more than apartment dwellers or condo owners. Maintenance, upkeep, renovation, remodel, new appliances, yard work or landscaping etc etc.. Apartment dwellers can’t do that and condos have limitations.

    To try and require everybody to live in a box because you think it is a good idea is rather socialist – in my opinion of course.

    • Jon Geeting says:

      Of course it does. The mortgage interest deduction grows with the cost of the house. The bigger and more expensive the house, the bigger the subsidy. There is no upper cap. Also, I am almost positive that it cannot be used for income-producing properties like multi-family apartments or mixed-use buildings.

      For that reason, most of the benefits of this policy flow to the top 25% of the income distribution. It would be better to cap it and give everyone an equally-sized less generous housing tax credit and let the free market determine how big of homes people want to buy.

      Subsidies exclusively for homeownership are prescriptive bullshit. That is the real social engineering. You are deliberately misunderstanding your own ideology to suit your pro-suburban tribal affiliation, starting from the premise that suburban homeowners like yourself are awesome and right, and working backward from there. Very sloppy self-serving thinking.

    • publius says:

      Also most city homeowners don’t benefit from the tax credit since they are lower-income folks who take the stand deduction rather than itemizing. The vast, vast, majority of itemizer are suburban middle class folks.

      Maybe having policies that make people live in the suburbs is socialist–ever consider that. Or maybe your name being Albert is socialist—ever consider that one. The word “socialism” has a meaning and it isn’t just everything you just dislike.

  2. Julieann Wozniak says:

    Rand Paul’s GOP outreach to minority voters, in Detroit!, is equally misguided. He and the GOP are a bit clueless and uncaring about what we Americans want.

  3. GDub says:

    I’m a little unclear why things would be better if Rand Paul didn’t speak in Detroit. He’s a human, interacting with humans and making his case. If people boo him, or say “here’s my life and what I’m looking for” or just disagree with him–people listen and even change their outlook. So what if he’s “misguided”?

    As Jon points out, any politician can trade principle for rewarding constituencies at the cost of broader economic development or well being. Sometimes a little competition can be helpful.