Happy Tuesday, and welcome to another edition of Rent Free. This week’s lineup includes:
- D.C.’s “worst landlord” is the city government itself.
- The pushback against applying YIMBY reforms to California’s wildfire rebuilding efforts
- A measure permitting developers to erect apartments in commercial zones moves toward passage in North Carolina
- The potential limitations of a CEQA reform?
But first, our lead item examines what a Rhode Island eminent domain victory for a property owner reveals about the growing YIMBY-libertarian coalition in housing policy.
What a Rhode Island Eminent Domain Case Says About the YIMBY-Libertarian Convergence
Last week, a federal district court in Rhode Island rejected Johnston’s attempt to seize an vacant parcel through eminent domain to block a proposed apartment project.
Rent Free Newsletter by Christian Britschgi. Get more of Christian's urban regulation, development, and zoning coverage.
The ruling against Johnston and in favor of the Santoro family of developers—who held the site through several affiliated entities—is a welcome corrective given how egregiously the town behaved.
After Johnston Mayor Joseph Polisena threatened to “use all the powers of government” to block the Santoros’ 254-unit project (while vowing to “roll out the red carpet” for single-family development on the site), the municipality fashioned its own customized eminent domain process to seize the property in the dead of night without any advance notice to the owners.
You can read the full decision here, as well as Reason’s prior coverage of the case here, here, and here.
What makes this case particularly relevant for our discussion is that it stands as another illustration of the merging of libertarian legal activism with YIMBY-style regulatory reform.
The Santoro family was represented by the Pacific Legal Foundation.
Libertarian-leaning public-interest law groups like the Pacific Legal Foundation and the Institute for Justice have long litigated takings suits on behalf of property owners. Their judicial activism has helped establish limits on governments’ power to seize property through eminent domain or to extract concessions during the permitting process.
Where property-rights litigation has fallen short is in curbing the perceived ability of governments to impose whatever zoning rules they want.
Since the Supreme Court’s infamous 1926 decision in Village of Euclid v. Ambler Realty, both state and federal courts have generally afforded governments wide latitude to impose use and density restrictions without strong constitutional checks.
By contrast, in the realm of zoning, legal challenges have often stalled, whereas political activism has grown more effective.
Over roughly the past decade, the contemporary YIMBY movement has transformed zoning from a background, almost joke-worthy issue to a high-visibility political concern.
Advocacy from YIMBY proponents has spurred many states and cities to enact reforms liberalizing zoning rules and/or enabling developers to bypass local land-use constraints when constructing housing.
Rhode Island is a prime example, having enacted reforms in 2023 that let developers pursue denser projects than local zoning would ordinarily permit, as long as a portion of units are affordable.
The Santoro project drew on that law; unable to block the project through zoning, the town turned to eminent domain and soon confronted the constitutional limits that govern property seizures.
One should expect more jurisdictions to adopt practical YIMBY zoning reforms. When they do, more places will find themselves needing to approve projects they’d rather avoid or attempt to thwart them via steep permitting fees and eminent-domain seizures.
When municipalities take the latter route, property owners can press constitutional arguments that the governing restrictions amount to an unconstitutional exaction or that the taking is a pretext.
In short, YIMBY-style reforms are expanding the number of feasible projects on paper, and libertarian constitutional advocacy is helping those projects survive the approval process.
D.C.’s Worst Landlord Is the District Itself
NOTUS has a new investigation into the dismal condition of housing units run by the D.C. Housing Authority (DCHA).
The outlet notes that DCHA faces more than 2,500 outstanding code violations from the city’s building department, totaling about $2.2 million in unpaid fines. The authority owns and oversees roughly 8,500 units across the district.
That tally of unresolved violations eclipses those faced by any private landlord, earning DCHA the label of the city’s “worst landlord,” according to NOTUS.
The agency has a long record of problems. A scathing federal probe from 2022 described units plagued by mold and pests, and an agency so inefficient it couldn’t even identify which units were vacant versus occupied. It was estimated that about one-fifth of public-housing units were empty.
City council members described the agency at the time as “completely dysfunctional.”
D.C. Councilmember Janeese Lewis George, who won the district’s Democratic primary and is the leading candidate to become mayor, is a strong advocate for expanding city-owned, mixed-income “social housing.”
One wonders how well that approach will fare given the district’s track record in managing the housing stock it already owns.
The Backlash to YIMBY Reforms in Wildfire-Ravaged L.A.
Politico has a detailed new piece on how local and state officials are aiming to keep developers from leveraging recent state housing reforms to replace burned-out homes in the L.A. metropolitan wildfire zones with denser housing.
In January 2025, the fires razed around 16,000 homes, businesses, and other structures. Many of those affected, likely underinsured, have chosen to sell their land and move elsewhere.
That has opened opportunities for investors to acquire these properties and redevelop them with more housing. To that end, some have attempted to use newly enacted state housing laws that simplify subdividing residential lots and constructing duplexes within single-family zones.
As Politico explains, this move has drawn pushback from local residents and their representatives who view the activity as unfair and opportunistic. Lawmakers have introduced measures to block wildfire-rebuild efforts from relying on these state reforms.
Developers counter that they provide the capital and resources needed to reconstruct areas that burned. If they cannot use state reforms to increase housing, they will build fewer units—though likely more expensive ones—that conform to local rules.
“We can have seven homes or we can have 70 homes. So the question is, which option best helps the neighborhood recover from the fire?” one developer told Politico.
The prevailing policy stance for construction in fire-affected zones has been to expedite approvals for homeowners rebuilding exactly what was lost, while imposing new constraints on any other kind of development.
Gov. Gavin Newsom has issued executive orders to curb “speculators” buying fire-affected properties and to suspend the state’s duplex law in the wildfire zone.
The practical outcome has been a sluggish rebuilding process. As noted in this newsletter previously, only 28 occupancy certificates have been granted for completed rebuilds.
It’s a predictable consequence of restricting capital and profit incentives in the rebuilding effort, leaving financially stressed homeowners to shoulder most of the work.
North Carolina Legislature Advances Residential-in-Commercial Reforms
Most state legislatures have wrapped up their sessions for the year, but in North Carolina lawmakers keep moving. They may finalize one of the year’s most ambitious housing reforms.
Hidden within the broad regulatory reform package is a provision letting property owners develop apartments on commercial and light-industrial properties.
The residential-in-commercial clause of Senate Bill 445 would require local governments to approve these redevelopments by-right, stripping discretionary approvals and public hearings from the process.
Localities would be barred from applying a minimum height lower than 60 feet to these projects.
The measure would apply to cities with populations of at least 50,000 and located in counties with populations of at least 275,000.
Additionally, the bill would permit homeowners to add accessory dwelling units to their properties.
The approach mirrors Texas’ SB 840, which passed last year, authorizing apartment construction in commercial zones in large cities within large counties.
As the Texas Tribune recently noted, the law has produced notable early results, with an estimated 8,400 new units in the state. While overall multifamily permitting declined in Texas, it rose in the 19 cities covered by SB 840, according to the Tribune.
That success has not come without friction, as some local governments attempt to curb the impact by imposing minimum densities or requiring luxury amenities like Olympic-size pools on SB 840 projects.
Likewise, North Carolina’s reform could face similar obstacles. The bill’s text is concise, which may give localities room to impose cost-increasing requirements on residential-in-commercial redevelopments.
In contrast, the North Carolina Legislature also advanced a broad parking reform that exempts noncoastal development from mandatory parking minimums.
Parking mandates commonly hinder new apartment construction, since surface lots waste space and underground or elevated parking facilities are costly to build.
Cities such as Minneapolis that eliminated parking minimums have seen a surge in smaller-scale apartment construction.
Senate Bill 445 cleared the Senate unanimously last week, according to CBS17, and now moves to the House where passage is expected.
If CEQA Is Defanged, Will Project Opponents Just Find Another Way To Stop Development?
California voters will decide on a ballot measure that would substantially streamline environmental reviews under the California Environmental Quality Act (CEQA).
As readers likely know, CEQA is often deployed by opponents to slow down or block infrastructure, housing, energy projects, and more.
The Building an Affordable California Act (BACA), sponsored by the Chamber of Commerce, would drastically narrow the scope of CEQA reviews and impose binding timelines for completing those reviews and resolving legal challenges.
Legal commentators contend that BACA could effectively end CEQA as a meaningful check for a wide range of projects, from highways to new subdivisions.
Eric Biber, in a piece for Legal Planet, offers an insightful look at some practical consequences of BACA’s sweeping reach.
Biber notes that requiring project sponsors to pay union wage rates would constrain the value of expedited review for private projects not currently subject to those requirements; cities’ comprehensive plans could still block projects needing zoning changes, he adds.
Overall, Biber argues that if CEQA reform diminishes the law’s power to stall projects, opponents will pivot to alternative legal and political tools to hinder development—legislation, lobbying, and litigation under other statutes among them. “The veto that CEQA litigation provided as a symptom, rather than a cause, of broader public resistance to major public works projects. Without CEQA litigation, I think that resistance will use other channels, many of which already exist, such as lobbying, ballot initiatives, and litigation under other legal tools,” he writes. “Those approaches may (or may not) be as effective as CEQA lawsuits, but they will not disappear.”
That said, BACA’s substantial CEQA reforms would almost certainly accelerate many projects.
One might assume opponents of today’s projects rely on CEQA precisely because it is the most effective tool in their arsenal. If CEQA’s power is curtailed, they’ll gravitate toward other delaying methods, albeit at greater cost or with less certainty of stopping projects entirely.
Assuming the reforms pass, more projects would likely proceed more rapidly. In addition to speeding up approvals, BACA could serve as a powerful tool for discovering other anti-growth mechanisms embedded in California law that warrant reform or abolition.
Quick Links
- The Cato Institute releases a new analysis on the costs of zoning in the Greater Boston area.
- A fresh study in the Journal of Public Economics finds that implicit land taxes push up population density and business formation.
- The Argument features a compelling piece outlining new evidence that inclusionary zoning requirements have a sizable negative impact on housing supply.
- San Diego neighborhood activists are resisting a proposed 23-story development in Pacific Beach. The project’s scale stems from a zoning quirk that allows some units to be treated as hotel rooms. Notably, Rep. Scott Peters (D–Calif.), a frequent sponsor of supply-friendly housing bills, opposes the plan. In a letter to San Diego Mayor Todd Gloria, he cautions that a project of that size could polarize resistance to other infill housing efforts.
- Santa Fe is weighing higher development fees to boost affordable housing production. Good luck.
