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Tuesday, July 29, 2014

How Big Cities That Restrict New Housing Harm the Economy

The Washington Post piles on the horrible land use regime in San Francisco (and the counter-productive protests against new luxury housing):

Here's the first point, for locals: New housing supply benefits the entire city, even if that new supply takes the form of luxury condos. Tenant activists have regularly objected to new luxury developments as just another sign of gentrification. But even if that housing is intended for high-income tech workers, it will take some pressure off the existing units that those tech workers have occupied at the expense of middle- and lower-income residents. In effect, this means that affordable housing advocates who want to block new high-end developments are simply making the city more expensive.

Here is Moretti's broader point, from some research he has been conducting with Chang-Tai Hsieh at the University of Chicago (h/t Tim Lee): By preventing more workers who would like to live in the city from moving in, San Francisco — and this also goes for New York, San Jose, Boston, Washington, D.C., and to a lesser extent Seattle — is holding back the U.S. economy from being as productive as it could be.

http://lawprofessors.typepad.com/property/2014/07/how-big-cities-that-restrict-new-housing-harm-the-economy.html

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