Alleviating Poverty and Freeing the American Dream

October 17th was World Poverty Day. First observed in 1987, World Poverty Day recognizes the challenges facing those struggling with poverty, and it provides an opportunity to discuss reforms to help the impoverished. Last month, ALEC’s Commerce, Insurance, and Economic Development Task Force hosted a webinar series called Free Market Ways to Promote Opportunity and Alleviate Poverty, featuring discussions on three key policy areas: housing affordability, benefit cliffs, and fines and fees reform.

On the webinar, Salim Furth and Nolan Gray, both from the Mercatus Center, spoke about housing affordability reform in the states. They particularly focused on zoning restrictions and regulations that erect barriers to building additional (and affordable) housing.

Zoning restrictions limit the land uses and types of developments or renovations possible on certain pieces of land. For example, large portions of urban areas are zoned for single-family dwellings only, which has led to many Americans being priced out of cities and the high-paying opportunities and jobs in them. To address these types of problems, Salim Furth’s brief titled Housing Reform in the States: A Menu of Options outlines four different categories of housing reform.

Both zoning reform and regulatory reform are featured prominently in a second Mercatus resource, Liberalizing Land Use Regulations: The Case of Houston, which was written by Nolan Gray. As the policy brief explains, Houston, Texas experienced significant growth by loosening housing restrictions on minimum lot sizes in 1998. Originally, the city required “that every parcel of land in a defined area meet a specified minimum square footage.” After easing this restriction, over 25,000 residential parcels smaller than 5,000 square feet were developed, and there was an increase in housing built in typically middle-income neighborhoods.

Next, Will Krumholz from the Archbridge Institute discussed benefit cliffs, which occur when “higher wages result in lost benefits that cost more than the original pay increase.” They often disincentivize welfare recipients from crossing income or personal thresholds, lest they find themselves ineligible for benefits worth more than a raise or even a second salary. Krumholz also discussed laws that create “marriage penalties,” which can lead to a less stable environment for children.

Finally, Priya Sarathy Jones from the Fines and Fees Justice Center and Jaimie Cavanaugh from the Institute for Justice presented on fines and fees reform. These reforms tackle the fines that are imposed to punish people “for minor traffic and municipal code violations, misdemeanors and felonies” and the fees that are used to fund the justice system and other government services. As ALEC has detailed, fines and fees imposed by the criminal justice system should be reasonable, transparent and proportionate. They should not conflict with the goals of improving public safety, reducing recidivism, or ensuring victims receive restitution, nor should they inhibit the ability of offenders and ex-offenders to meet their financial obligations to their families.

As part of its efforts to stop this cycle, the Fines and Fees Justice Center has launched the Free to Drive campaign to help curb debt-based license suspensions and has partnered with the Institute for Justice to identify policies that progress these reforms. ALEC’s Criminal Justice Task Force has produced the similarly aimed Resolution in Support Of Limiting Driver’s License Suspensions to Violations That Involve Dangerous Driving and the Resolution on Criminal Justice Fines And Fees.

The CIED Task Force continues to work on policies that help people access the great opportunities and resources available across the states. The Occupational Licensing Review Act seeks to reduce unnecessary and expensive licensing requirements that often act as barriers to entry to lucrative occupations. Another model, the Home-Based Business Fairness Act, allows people to run non-intrusive businesses from their homes. Finally, the Resolution on Occupational Licensing and Student Loan Defaults would prohibit the stripping of occupational licenses from people who have defaulted on their student loans. These model policies from the CIED Task Force aim to give all people the freedom to pursue their American Dream.

To join the email list for future CIED webinars or to be connected to one of the speakers, please email Gretchen Baldau at