Tuesday, May 28, 2013
Matt Yglesias continues to bang the drum about the damage of over restrictive land use policies in our nation's most desirable cities:
You know what sounds like could provide a huge lift to the American labor market? Suppose a bunch of rich foreigners decided they wanted to buy expensive items manufactured right here in the United States of America. Imagine they especially wanted to buy houses, lifting boats specifically in the construction sector that's been hammered by years of a weak housing market. Great news, right? Sadly not in today's United States where we manage to make lemons out of every cup of lemonade, and a surge in foreigners wanting to buy up New York City real estate is of course portrayed as bad news:
“There’s a great deal of interest in New York, which is seen as relatively cheap compared to other global cities,” said Yolande Barnes, director of research for Savills, an international real-estate firm.
The growth in high-end projects in Manhattan comes as housing for the working and middle class is in increasingly short supply in the city. These buildings are proving so profitable that they are warping the local real-estate market, making it more difficult to put up more-affordable housing.
By the same token, foreign interest in snapping up pieds a terres in New York City ought to be great news. It should create a lot of jobs for architects and construction workers. It should create upstream jobs for the people who cut the timber and make the metal that goes into buildings. It should create jobs in factories as people build the stoves and refrigerators to stock the new houses. And it should create downstream jobs as the construction workers and oven manufacturers take their paychecks to buy a new car or a night on the town. There should be a construction boom in New York and a construction boom in Silicon Valley and it should be providing lots of employment for working class men. But instead we're having housing shortages in New York and in Silicon Valley. Not because we don't have the technology to build lots more houses, but because we don't have the zoning codes.