Calling on the Federal Government to Legalize Main Street

Jonathan Coppange, a visiting senior fellow at the R Street Institute researching urbanism and civil society, writes an in-depth op-ed describing the effects of federal policy on the country's housing market. Coppange's core claim: "the Federal Housing Administration has to relegalize Main Street."

Coppange credits FHA standards for loans for the federal prohibition of Main Street in smaller and distressed communities. "To this day," writes Coppange, "FHA standards for loans, which set the market for the entire private banking sector, prohibit any but the most minimal commercial property from being included in residential development."

"As a groundbreaking report [pdf] by New York City’s Regional Plan Association found, these standards are 'effectively disallowing most buildings with six stories or less,'" adds Coppange. "And depending on the program, a building could have to reach to 17 stories before it is eligible for participation in the normal housing markets."

In addition to supporting some of the recommendations included in the Obama Administration's Housing Development Toolkit, Coppange also suggests raising caps on commercial space and income. Although some of the commentary following the Obama Administration's release of the toolkit noted the Executive Branch's lack of influence over housing policy at the local level, Coppange insists that even with local reforms, "small-scale building efforts would too often die in the halls of the FHA and the Department of Housing and Urban Development."