“Affordable Housing, Racial Isolation” is a New York Times editorial about how decades of government intervention in what had been a housing market (costing taxpayers $trillions) has resulted in more racial segregation than if the government hadn’t waded in. The Times, naturally, suggests that the remedy for this failed government program is more government programs (i.e., certainly don’t give poor people cash and let them buy whatever they think has the most value to them).
A lot of cities, including Boston and New York, have what folks who profess concern about lower socioeconomic classes characterize as a “housing crisis.” The solution thus far is to give a handful of fortunate people multi-million dollar apartments for free or a tiny fraction of the market rent. But that leaves out a lot of people who would like to live in a $3 million Manhattan or $2 million Cambridge apartment. I’m wondering if the real problem is that only a few parts of the U.S. are places where anyone would want to live. In how many neighborhoods can you (a) walk to everything you need, (b) not be visually assaulted by hideously ugly buildings and concrete road infrastructure, and (c) enjoy a community/social experience without too much effort? For Latin Americans, as noted in my non-profit ideas page, the answer is “almost any colonial town or city.”
The typical neighborhood in the U.S. does not suffer from sky-high housing prices. The “housing crisis” might simply be that hardly anyone rational would want to live in the typical neighborhood in the U.S., which puts crazy pricing pressure on the few nice places.
Could we deploy the trillions of tax dollars that the central planners currently spend on housing for the worthy poor toward making more communities desirable instead? With a dramatic increase in supply the market price of an apartment in a neighborhood worth living in would fall all by itself.
The person I’ve read the most on this topic is probably Matt Yglesias (“The Rent is Too Damn High”). As you imply, people want to want to live in the limited number of areas where there are desirable living amenities and/or promising economic opportunities. I think the bulk of Matt’s critique is that local land-use policies are almost always controlled by the incumbent home-owners who have every incentive (property appreciation, NIMBYism, etc.) to constrain the supply of new housing stock and push disruptive infrastructure development elsewhere. The SF Bay Area is an exemplar of this dynamic. On the other end of the spectrum might be Texas.
Seems that Americans like to live in stand-alone house with 2 cars garage and nice lawn. Manhattan is expensive because it attracts foreign and domestic capital and young professionals, Cambridge is a small elite town that can not be replicated on large scale. People from Latin America seem to have no trouble to leave their walkable social communities to come across US southern border into ugly non-walkable US communities.
The other side of this coin is that there is too much housing and infrastructure in places that are far away from the successful and crowded spaces. This creates a backstop in many ways.
Insofar as you can move operations from NYC to Detroit or the Appalachian mountain regions or non-NFL cities, you can take the pressure off big cities. Of course, Detroit is paying for the social services provided by a bigger city in the past and phone companies are allergic to fiber broadband, not because it can’t be made profitable, but it can never be as profitable than charging $95 for a double-play with DSL.
Most of the cities in America have been hollowed out into sprawlvilles. It’s illegal to build more Brooklyn, San Francisco, Cambridge, or the like, though those traditional cities are the most desired places and lifestyles in America (except a big house in the country, but few of us are farmers anymore).
http://capntransit.blogspot.com/2015/04/they-cant-go-back-to-ohio.html
With every government hurdle, those who are already in the housing business benefit. Those who want to come in and help the situation are locked out.
Once location, location, location is not longer the mantra of real estate professionals, the higher prices will stabilize. All neighborhoods will have an equal proportion of wealth.
Paul Houle, unemployment in large successful cities in the North East is much higher than in less crowded places with better living conditions and cheaper real-estate of the country, including some Appalachian regions that remain lively populated even though not as crowded as megapolises on the shore. Shops, plants and jobs of course move to such location but at a slow pace: for example, financial industry remains in NYC because big shots and budding big shots like Manhattan playground as well as because the industry is entrenched in local institutions.
Living on welfare in Manhattan has got to be more interesting than working a couple of low-wage jobs in most other parts of the U.S.