Thinking Citizen Blog —“The American Housing Market is Stifling Mobility” (Ed Glaeser/David Cutler)
Thinking Citizen Blog — Tuesday is Economics, Finance, and Business Day
Today’s Topic: “The American Housing Market is Stifling Mobility” (Ed Glaeser/David Cutler)
To me, the greatest gap between American reality and the dream of equal opportunity for all is what I call the “daily Katrina” of unsafe streets, second rate schools, and unstable homes that drastically reduces the life chances of children born through no choice of their own in certain zip codes across America. My guess is that the number of such children is between ten and twenty million. But who’s counting? Who should? Now that I’ve blown off a little steam, let’s get down to today’s topic — how the housing market stifles mobility. On to some excerpts from an article by Harvard professors Glaeser and Cutler. Experts — please chime in. Correct, elaborate, elucidate.
GEOGRAPHIC MOBILITY MATTERS — A LITTLE HISTORY AND THE RECENT COLLAPSE
1. “Migration has been central to the American story since the beginning. In the early 19th century, New Englanders left the rocky soil of Massachusetts for the more fertile Ohio River valley. During the Dust Bowl of the 1930s, farmers fled Oklahoma for California. In the early 20th century, millions of African-Americans left the Jim Crow South to find work in the factories of northern cities.”
2. “Through the 20th century, mobility was an American tradition: In every year between 1950 and 1992, according to the Current Population Survey, more than 6% of Americans moved across county lines.”
3.”It’s a troubling sign that since 2007, geographic mobility has dropped by one-third, with fewer than 4% of Americans changing counties annually.”
NB: “The reason is clear: In the most prosperous cities and regions, insiders have figured out how to use regulations, laws, and institutions to make life easier for themselves and harder for everyone else.”
THE TRIUMPH OF INSIDER PRIVILEGE — THE CASE STUDY OF CALIFORNIA
1. “In California today, property owners consolidate their power by means of land-use regulations. Large parts of Marin County are essentially off-limits to development, sometimes requiring a minimum lot size of 20 acres. Nowhere in Marin is it permittted to build higher than 30 feet.”
2. And California’s Proposition 13, the property-tax measure passed in 1978, means that current homeowners, especially those who have remained in the house for decades, pay vastly lower property taxes than newcomers, because their homes are assessed based on historic prices.”
3. “Fighting to make sure you pay less than a newcomer who lives in an identical house is pure insider privilege. Yet California’s insiders have successfully cloaked themselves in the mantle of public service. “Save the Bay,” a nonprofit dedicated to environmental preservation of the San Francisco Bay, was founded in 1961 by three impeccably upper-class women, including the wife of Clark Kerr, the Chancellor of the University of California, Berkeley. The organization succeeded in limiting development through local ordinances and a 1972 California Supreme Court ruling that required all significant new projects to undertake an environmental impact review.”
THE CLIMATE IRONY — COASTAL CALIFORNIA CONSTRUCTION IS THE GREENEST
1. “Ironically, from a carbon-emissions perspective, building in coastal California is about the greenest form of development in the US.”
2. “Since coastal California has a mild Mediterranean climate, it requires little cooling in the summer and little heating in the winter.”
3. “Public transportation is plentiful as well. When environmentalists stop construction near Berkeley, they encourage more building in Texas and Arizona, which have far harsher climates that lead to far greater home energy use and use of cars.”
FOOTNOTE — WHAT CAN STATE LEGISLATURES AND THE FEDS DO?
1. “With housing, the key actors are state legislatures, because they can rewrite the rules of local zoning on a dime.”
2. “Last month, the California legislature passed a new law that could make the permitting of two-unit projects far more automatic. It’s a good beginning, but states should go further and only allow localities to impose regulations and rules that have gone through rigorous cost-benefit analysis.”
3. “They can institute one-stop permitting that allows new businesses to deal with a single authority instead of many overlapping government offices.”
NB: “The federal government can help, too: There is no reason why infrastructure dollars can’t be directed to communities that permit the most new construction.”
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