The Harvard Growth Lab, an economic growth and development policy research group, finds that Wyoming has insufficient housing to meet its demand.
Eric Protzer, a senior research fellow for the lab, said Wyoming could take a number of steps to make its housing much more friendly to the free market.
Wyoming generally carries a reputation of being a low-regulation state, which Protzer said to a certain extent is justified. But he told the Wyoming Legislature’s Regulatory Reduction Task Force on Monday that doesn’t extend to the state’s housing sector.
When it comes to building places to live, the Cowboy State is quite the opposite, he said.
“There is good evidence that Wyoming is in fact highly over-regulated,” Protzer told the task force.
One solution the lab found is more urban growth for Wyoming, a notion that drew a tepid response for state lawmakers.
Rural To Urban
State Sen. Mike Gierau, D-Jackson, co-chairman of the task force, said Protzer’s recommendations would amount to a “sea of change” that may not be widely accepted by Wyomingites.
“What you’re talking about is an urbanization and trying to get those economies to scale,” Gierau told Protzer.
Protzer said he understands a hesitation to embrace the Growth Lab’s suggestions but said the economic benefits would outweigh any concerns of a cultural shift as long as changes are held to Wyoming’s largest communities.
Although he said it’s extremely unlikely the next Denver or New York City will form in Wyoming at any time in the foreseeable future, he said Wyoming would benefit to have one or two cities with 100,000 people. This would nearly double the size of Wyoming’s two largest cities, Casper and Cheyenne, and likely boost the state’s overall population by about 20%.
“That would by itself bring a lot of benefits that would actually stabilize rural life,” he said.
Not The Cowboy Way
Rep. Bob Davis, R-Baggs, questioned what kind of pressure this population growth would put on the state’s water sources. In Colorado, many private water rights have been sold to municipalities along the Front Range, thereby weakening agriculture in those areas.
Protzer said water and sewage infrastructure needs to be improved around the state, and he would encourage this to take place alongside any deregulation measures.
He also said a fear of an urban decay brought on by high-density housing is unjustified as long as a regulating agency is diligent with the type of development it allows and facilitates new industry alongside new housing.
Jackson resident Rebecca Bextel questioned Protzer’s arguments and expressed doubt that urban expansion has ever been successful in the United States.
“More people in Wyoming does not make it better,” she said. “If that was the case, we’d all be sitting in New York or California right now.”
Bextel believes that deregulation of housing would change Wyoming’s identity and turn it into San Francisco.
Task Force member Ken Hamilton of the Wyoming Farm Bureau said urban management practices can have a negative impact on agricultural industries, something that has caused many Colorado ag producers to move to Wyoming.
“At some point, just by the nature of our system, those urban areas are going to start dictating to the rural areas, sometimes to the extent that you drive those rural people out,” he said.
Protzer suggested the idea of also establishing laws that protect Wyoming’s agriculture community from outside growth.
Impediments
The Growth Lab identified Wyoming’s housing density and approval processes as obstacles to economic growth.
A 2017 study from the CATO Institute, a Libertarian think tank, found that Wyoming is in the top third of U.S. states when it comes to land-use regulation and zoning regulations. A part of this study was determined based on lawsuits per capita.
“If someone files a lawsuit about something, they better have a damn good reason why,” Protzer said. “There is something painful in the economy and they are pursuing that lawsuit to try and overcome that.”
Protzer said free market forces should be the ultimate determining factor in the housing market.
Sen. Bob Ide, R-Casper, a real estate agent, strongly agrees and said overregulation leads to a sacrifice of private property rights. He mentioned how six Wyoming counties have no zoning regulations.
“You’ve just got to back off the onerous regulations,” he said.
Jerimiah Rieman, executive director of the Wyoming County Commissioners Association, expressed concern that by eliminating the right to have zoning regulations, counties may be handcuffed in facilitating growth.
Protzer said the supply of housing in Wyoming is not responsive to price changes. He said prices have remained elevated in Wyoming above where basic economic fundamentals would suggest they should be, and these trends are deeper and beyond economic effects brought on by the COVID-19 pandemic.
“It’s insufficiently responsive to demand, so you’re not getting enough supply to meet the demand that exists for housing,” he said.
Protzer said the Growth Lab discovered that most counties in Wyoming have less responsive housing flexibility than the average U.S. county. This is an important statistic, he said, because America's housing supply is not considered particularly responsive to overall pricing.
Protzer said this scenario leads to bidding wars, which further balloon prices.
He said the discrepancy between a buyer’s demands and what the market is offering is a signal of an institutional blockage unrelated to cyclical ups and downs of the Wyoming economy, which has serious implications for the future of the Cowboy State’s economy .
Red Tape
Protzer said the true market demand that Wyoming consumers want is in many cases not allowed because of restrictions.
He cited examples in the communities of Cody, Gillette and Rock Springs, where a significant number of property owners possess property that barely meets their city’s minimum lot size requirement.
Protzer acknowledged concerns that by encouraging moderate urban growth in some Wyoming communities, the towns might take on more of a big-city type feel. But he also mentioned that even if the population density of Wyoming were doubled, it would become equal to the density of North Dakota, another sparsely populated rural state.
He said there are certain communities where city code takes into account people who oppose housing projects, which makes it harder for local town councils to approve them. Protzer said this creates a "vetocratic," rather than democratic, process. He recommended doing organized public surveys to gauge the true public opinion about a housing project.
Bextel questioned this as well, saying the opposite happened in her community when discussing a proposed public housing project that was strongly opposed but still approved. She said in this instance, the public was attempting to protect public property, but was ganged up on by private property interests.
Power To Control
Many Wyoming business owners have stated in recent years that it is difficult to find workers because their communities are too expensive for them to live in. Protzer said business owners in Jackson have wanted to build housing for workers but have been held up by local regulations.
“You’ve got people who do not own the land saying, ‘I’m going to tell you what you can or cannot do with the land,’” he said. “That’s a very inefficient solution.”
Protzer even suggested, somewhat in jest, of the possibility of adding a light rail line over Teton Pass to Victor and Driggs, Idaho, paid for by Jackson billionaires.
David Fraser, executive director of the Wyoming Association of Municipalities, said housing is a major pinch point felt throughout the state. He believes there needs to be a cultural shift to help people more easily attain housing, mentioning the small town of Meeteetse in northwest Wyoming, where he said there are no long-term rentals available.
Although he admits the problem won’t be solved with a quick and easy fix, he said a few Wyoming communities have already started making steps toward addressing it.
Would It Work?
By making changes to housing regulations in just a few of the state’s larger communities, Protzer said Wyoming could have an easier time diversifying its economy.
Since it began producing fossil fuels, Wyoming has been a boom-and-bust economic state, highly dependent on the cycles of those industries. Protzer said it’s an unfortunate reality for the Cowboy State that the rest of the world is out to “decarbonize.”
“There’s a threat that some of that revenue eventually goes away, so having some urban centers of some kind of scale … it provides some kind of alternative activity that at some point stabilize the economy of Wyoming and perhaps even make that rural activity more viable into the future regardless of what happens to the carbon economy,” he said.
To better insulate Wyoming from boom-and-bust cycles, a push to diversify the state’s economy has drawn more support over the last decade.
Protzer said even if economic expansion was limited to a few of the larger Wyoming cities, there would still be a trickle-down benefit for smaller communities.
He also mentioned how Wyoming has the highest percentage in the country of young adults who were born in the state now living elsewhere and cited housing affordability as one of the biggest factors behind this trend, also known as "brain drain."
“If you want to keep Wyoming Wyoming, then there is an argument that you want to give your young people resources to stay,” he said.
Protzer said there are economic and cultural benefits to bringing these former residents back, a demographic that could be attracted by a more urban culture in their towns and cities.
He also brought up the idea of bringing back territorial jurisdiction in Wyoming.
Bextel didn’t like that idea either.
“If we bring back territorial jurisdiction in Wyoming, I’m going to be living in Teton County, California, not Wyoming,” she said.
Leo Wolfson can be reached at leo@cowboystatedaily.com.
