Ah, supply-side economics. That oft-discredited relic of the Reagan administration. The failed policy that has done more to create income inequality than anything Sam Walton could dream up. You’d think that if anybody still believed in it, the Sam Brownback crash-and-burn would have convinced them otherwise.
But here we are in the Year of Our Lord 2022, and somebody from the “moderate” Phil Scott administration has the gall to trumpet a policy as “supply-side.” Yikes.
“This is a supply-side proposal to build more homes, literally to subsidize contractors, home developers and builders to build more homes at the price point that working Vermonters can afford,” [Housing Commissioner Josh] Hanford said.
That quote, which didn’t age well from the moment it left Hanford’s mouth, is about Gov. Scott’s proposal to spend $5 million on a pilot program to pay contractors to rehabilitate decrepit housing stock.
Before I go on, let’s note that the governor is addicted to pilot programs. (Or should I say he suffers from a pilot program use disorder?) It’s a way to get a foot firmly wedged in the policy door without really making a commitment. The Legislature will usually go along because it seems churlish to turn down a tiny investment for a pilot project. But if it’s judged a success, which it always is, lawmakers can’t resist the pressure to expand it and make it more of a drain on the treasury. See also: remote worker grant program.
Back to the merits of the idea, or lack thereof. The root problem is that the cost of building supplies has made it unprofitable to build or rehab anything that won’t bring an immediate return of close to half a million bucks or more. Scott’s solution? Toss some money in their laps.
Another side note. This would be a nice sloppy wet kiss for Scott’s buddies in the contracting industry. Those with long memories might recall that Scott formally announced his first bid for the governorship at the annual meeting of the Association of General Contractors. Just in case you were wondering who his core constituency was.
To be sure, Scott is trying to address a real problem. Something needs to happen to get more affordable housing built in Vermont. Old housing stock is a good place to start because (a) we’ve got it and (b) rehabbing would bring more immediate results than green-lighting new construction projects.
But supply-side? Honestly?
Scott’s proposal is included in his FY2022 budget adjustment bill, because that’s the fastest way forward. Senate Economic Development Committee chair Michael Sirotkin (D-Complacency) is throwing cold water on the idea. Not the pilot proposal, just the fast-tracking of it.
The only good thing about labeling this idea “supply-side” is that it might chase Democratic lawmakers away from it. But I will never underestimate Sirotkin’s — and his committee’s — taste for unproven development schemes. Especially pilot programs.
I mean, what’s the harm? It’s only the camel’s nose under the tent.
And it’s only a small giveaway to a powerful constituency.