In today’s issue, I’m going to explain an important shift for complexity-minded changemakers:
Moving from centralized decision-making to permissionless change.
This paradigm shift challenges the status quo and unlocks the wisdom of crowds.
For those of you who don’t know, the wisdom of crowds is the idea that the aggregated judgment of a large and diverse population often outperforms the decisions made by individual experts or a single person.
And it’s important because, as a changemaker who wants to inclusively empower as many people as possible, it offers a more nuanced and effective strategy than traditional collective action and top-down change approaches.
Let’s dive in to see exactly why this approach is so promising.
The common mistake
In the urgent battle against housing shortages and skyrocketing affordability challenges, civic leaders often find themselves at a crossroads.
The desire to alleviate these pressing issues can lead to a tempting but potentially misguided approach:
Putting more power in the hands of expert bureaucrats.
The allure of rent control, a classic example of such centralized intervention, stems from the notion that a capable bureaucrat, armed with data and insight, can regulate rental prices to protect vulnerable populations.
This approach is straightforward (which is why it appeals to so many), but its drawbacks are many.
First and foremost, it simplifies a complex issue by focusing solely on its symptoms – in this case, the high cost of apartment rentals.
That neglects other fundamental causal factors affecting the problem, like inflation, energy costs, mortgage rates, and labor costs.
Second, the simplicity of forcing rental prices lower through mechanisms like rent control leads to unintended consequences.
According to the vast majority of economists, the policy leads to decreased housing supply and quality, as some property owners find it economically unviable to invest in or maintain rental units.
So rather than helping, the policy exacerbates the shortage of affordable housing options.
Some say these are just hypothetical risks unlikely to happen, but my town of St. Paul proves otherwise.
A 3% rent control cap passed in 2021 meant to create more affordable housing led directly to an indefinite pause on the city’s main initiative to create more housing: the building of approximately 2,000 market-rate rental apartments.
Whoops.
Finally, the push for centralized control to enforce rent control poses significant costs.
Centralizing decision-making concentrates power in the hands of a few, potentially leading to bureaucratic inefficiencies, lack of responsiveness to local needs, and a disconnect from the diverse perspectives present within communities.
Granting more power to bureaucrats might seem like a quick solution, but it risks overlooking the invaluable insights and knowledge dispersed among the population.
What’s the alternative?
A better approach: permissionless change
Permissionless change is a concept that advocates for a decentralized and inclusive approach to addressing complex issues.
In the context of social change and problem-solving, permissionless change emphasizes empowering individuals and communities to take initiative and make decisions without requiring explicit authorization from centralized authorities.
It involves tapping into the collective intelligence and diverse perspectives of the population, allowing for experimentation, adaptability, and innovative solutions without unnecessary bureaucratic constraints.
The key idea is to shift away from top-down decision-making and embrace a more inclusive, dynamic, and locally informed strategy.
In the realm of housing affordability, repealing overly restrictive zoning laws is one permissionless way to directly address housing affordability by encouraging neighborhood evolution.
Restrictive zoning often limits the types of housing structures allowed in certain areas.
By removing these restrictions, communities can explore diverse housing options, including mixed-use developments, accessory dwelling units (ADUs), and affordable housing projects, catering to a range of needs.
Ironically, my city – which I just lambasted for their shortsighted policy rent control policy that is only making things worse – just passed sweeping zoning changes that will allow duplexes and triplexes on almost any lot.
Huzzah!
(Maybe I should build a studio apartment over my garage and personally contribute in a small way to reducing the problem?)
And I really like how Strong Towns, a national movement to make America’s towns and cities financially strong and resilient, frames this change as legalizing incremental change in housing and zoning:
“For too long, housing policy has put investor returns and macroeconomic goals over the universal human need for shelter. Restrictive housing policies have also prevented people from collectively building the prospering cities they desire. There should be no substantial barrier that prevents a neighborhood from evolving over time in response to local needs.”
Permissionless change isn’t a political position
Now, I can hear some of you protesting that permissionless change is just code for stealthily advancing a conservative, anti-government ideology.
But centralized control and decentralization are not inherently political positions because they represent organizational and decision-making structures rather than specific ideological stances.
And in fact, I think permissionless change possesses inherent qualities that can appeal to both conservative and progressive ideologies, as it aligns with principles valued by each group.
Here are reasons why it can be attractive to both ends of the political spectrum:
Decentralization and Local Empowerment
- Progressive Perspective: Progressives value inclusivity and empowerment, allowing local communities to actively participate in decision-making through permissionless change.
- Conservative Perspective: Conservatives emphasize limited government intervention and support decentralization, aligning with permissionless change’s emphasis on empowering local communities according to their unique needs.
Innovation and Adaptability
- Conservative Perspective: Conservatives champion free-market principles and innovation, finding support in permissionless change that encourages market-driven solutions without bureaucratic constraints.
- Progressive Perspective: Progressives seek innovative approaches and find in permissionless change a fostering of experimentation, enabling creative and diverse solutions to complex problems.
Individual Agency and Choice
- Progressive Perspective: Progressives emphasize individual agency and the right to participate in decision-making, principles upheld by permissionless change that ensures freedom and fosters ownership in societal change.
- Conservative Perspective: Conservatives value individual freedom and agency, finding alignment with permissionless change’s empowerment of individuals to take initiative and impact their communities.
Choosing based on context
As with all my recommendations, the best approach depends on the context and involves trade-offs.
Permissionless change is effective in complex local scenarios, where diverse solutions, community engagement, and adaptability are crucial.
In contrast, centralized approaches are usually better for matters of national security, emergency response, and situations demanding immediate, uniform responses without room for experimentation or local adaptations.
The key isn’t about siding with a progressive or conservative ideology, but about aligning the approach with the specific nature of the problem and goals at hand.
As it relates to housing affordability, my vote is for allowing people and communities to evolve over time in response to local needs.
See you next week.
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