This is
a very short book at 57 pages that I read in one day. Matthew Yglesias is a
political writer I’ve followed on twitter for a while now so I kind of already
knew what the gist of this book would be: he wants American cities to
deregulate their zoning laws to allow for taller buildings in places with
higher demand and therefore prices. This would make housing more affordable. It’s
a very readable book for something about zoning policy and he uses real life
examples and metaphors to get his point across. Yglesias writes that, “architects
know how to design multifloor buildings and engineers can build elevators.
Public policy that restricts their ability to do so—not construction costs, or
the limited supply of land—is the main cause of high rents in America.
Yglesias
argues against rent control, as it “helps insiders, but for outsiders the rent
will be higher than ever.” This is because it will discourage building more
residential buildings, as no one will want to build them if they can’t make the
money. Yglesias also effectively disproves the idea that construction prices
have risen, quoting a study that find inflation-adjusted prices for building
materials in a “modest quality” home have only increased $2.50 from 1950 to
2006. However, the average home in 1950 was just 983 square feet while in 2006
it was 2,349 square feet. He isolated the truly high cost of real estate as the
permission to build on the purchased land. Even when one is allowed to build,
there may be other restrictions such as a requirement for a certain number of
parking spaces that reduce the ability to do so. These high prices force many
people to move to cheaper areas rather than places where they can get better,
higher paying jobs. Therefore, while people in the middle class are unable to achieve
prosperity as easily in Fargo as in Arlington, they are forced to move to a
place like Fargo because the cost of entering a place like Arlington is too
high. They may move to one of these areas but in a far, outlying suburb. This
can work, but causes a longer commute, a cause of obesity and marital strain—Yglesias
cites that, “Couples featuring one member with a commute of over forty-five
minutes are about 40 percent likelier to split up.” He points out that American
cities lack walkable urbanism, being that polls show Americans evenly split on
wanting to live in a suburban or urban lifestyle, yet, quoting a Brookings
Institution Fellow, “In most metropolitan areas, only 5 to 10 percent of the
housing stock is located in walkable urban places.” I think he makes some very
good points.
However,
I wonder what would happen if we implemented these policies, increasing the
supply of housing and therefore decreasing its price and the cost of rent. This
would be better for people who don’t yet have a home and wish to buy one, often
young people. It would also be good for renters. It would make no difference
for people who are planning to stay in their home until they die. However, it
would be very problematic for those who planned to sell their home for a profit.
Yglesias points out that it is very strange that we treat homes, unlike any
other used good, as something that gains value. Cars, appliances, and most
other things all lose value, while homes gain it (because of the stagnant
housing supply). However, this is likely no consolation to current homeowners.
I also wonder what would happen in financial markets if the idea of housing being
a good that always increases in value stops being true. Would it cause a
financial collapse? I really don’t know. An alternative could be to build
greater transportation networks, expanding cities horizontally rather than vertically.
This would probably solve the same problem, but it would cause more urban
sprawl, which reduces our land’s natural beauty. It’s a really interesting
problem and book, very relevant to the way that most of us live. I definitely
would recommend.
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