Virginia Postrel explains how zoning and other land use restrictions contribute to income inequality and economic slowdown. Here’s her summary:
As I have argued elsewhere, there are two competing models of successful American cities. One encourages a growing population, fosters a middle-class, family-centered lifestyle, and liberally permits new housing. It used to be the norm nationally, and it still predominates in the South and Southwest. The other favors long-term residents, attracts highly productive, work-driven people, focuses on aesthetic amenities, and makes it difficult to build. It prevails on the West Coast, in the Northeast and in picturesque cities such as Boulder, Colorado and Santa Fe, New Mexico. The first model spurs income convergence, the second spurs economic segregation. Both create cities that people find desirable to live in, but they attract different sorts of residents.
As I’ve mentioned before I live in a neighborhood where plumbers live next door to middle managers. When you value this lifestyle, you necessarily value the conditions that foster it. Anything else is just kvetching.
Good article, whose main points indicate that the mother’s milk of government intrusion — increasing regulations and bureaucracy — once again puts up artificial barriers to free market expression. In this case it has to do with the greater the regulation of land use producing higher priced housing, which indirectly effects the diversity of people living in a certain area.
So, the whole idea of equality and diversity goes out the window due to the fickle hand of a bureaucrat who thinks he/she knows best. That’s why social progressive ideas, when implanted and implemented, tends to wring out the randomness of an individual’s upward mobility or success, replacing it with the doldrums of the masses, checking the correct boxes to stay within the growing, oftentimes nonsensical government guidelines of the moment.
Cheap land and high wages are needed for that. Driving land costs up through environmental and other practices isn’t helpful. (Some places are just going to get expensive regardless: San Francisco and Manhattan have land constraint problems. Manhattan is actually pretty big – until you shove 1.5 million or so people on to it.) Neither are policies designed to drive down wages. One of those old dead white guys used to write about this, I believe.
Local and state regulations are most problematic for me. I think they are consistently ignored as a source of regulatory inefficiency. Rent controls should definitely go. I think doing away with local housing rules is an interesting problem. OTOH, if you believe that having local govt run things is better, you end up with these restrictive regs that increase housing costs. OTOH, no one wants to use federal authority to stop communities from being restrictive.
Steve