Why Housing Is So Expensive — Particularly in Blue States
- The five states in the U.S. with the highest rates of homelessness are New York, Hawaii, California, Oregon and Washington. Some of the bluest states in the country, not one red state on that list.
- Housing is fundamental. When you fail to provide it, that failure reverberates throughout society, it lays waste to all your other carefully laid policy plans and ideals
- That means a state like California — that prides itself on all the green energy infrastructure it’s building — is pricing people who would want to live in that infrastructure into states where they use more fossil fuels
Two housing affordability problems
- Supply hasn’t kept up with the demand: high-cost metros, places with great job markets haven’t been building enough housing to accommodate population growth and job growth for something like the last 30 years.
- Democratic places have very strong demand for housing so a lot of high-income people who bid up the housing prices
- Democratic administrations have imposed a lot of rules on construction processes (sometimes for progressive reasons like protecting the environment or giving voice to community)
- But in some senses, it’s now been — the impulse to give communities control has been weaponized by wealthy white communities, which then used this to say you can’t build apartments and low-income housing in our wealthy neighborhoods
- Housing cost is too high relative to low incomes: the poorest households everywhere in the country spend more than half of their income on housing costs, and that leaves them too little money left over to pay for things like food and transportation and health care.
- If you spend more than 30 percent, HUD says that you are cost-burdened. And if you spend more than 50 percent, they say you are severely cost-burdened
- Housing vouchers are actually one of the most effective anti-poverty programs we have.
- They can rent an apartment on the private market. They spend 30 percent of their income, whatever dollar value that is, and the federal government picks up the tab for the rest of this.
- Critique: if you just give everybody a voucher, or a check, or a subsidy, all that’s going to happen is that landlords or other kinds of housing suppliers are going to pocket that
- Response: works well for housing-abundant but highly priced areas. For supply-constrained places, we need to also build more homes.
- Small-d democratic processes where people get to engage in their local government and make their voice heard, are not actually that democratic.
- It’s not representative. And we know this, in part, from the work of political scientists who have looked at the characteristics of people who show up to a neighborhood meeting.
- Actually seems to disallow experimentation
- In theory: democracy allows compared to other systems is a lot of different kinds of systems to flourish and we can see what works best.
- But what is really striking reading your work and looking at housing is actually how little experimentation is possible. And this estimate you make, really, really is wild. That it is illegal to build anything except single-family detached houses on roughly 75 percent of land in most cities today.
- If most of the houses that already exist in your city are currently illegal under zoning, it raises questions about what the zoning is trying to do.
- Cambridge, Massachusetts is a perfect example. The vast majority of parcels in Cambridge, Massachusetts have what are called nonconforming uses. So the structure there is in violation of current zoning laws. Either it’s too tall or too close to the street or a structure that’s illegal.
- We’ve made communes illegal in a lot of places
- So the boarding house that had one communal kitchen, and meals got cooked, and everybody had, essentially, a bedroom, but you all ate your meals together or ate out at a restaurant all the time, that was very typical. And certainly earliest cities — workers moved from farms to cities, and they all just rented a room in a boarding house and that was pretty much the option. It was much, much cheaper.
- But what we’ve essentially done is say middle class preferences for having nuclear families and having your own kitchen and bath, that’s the only housing structure that’s allowed.
- What about the resurgence of co-living arrangements?
- We’ve really pushed housing as the engine of middle class wealth. We have really pushed people to stock a ton of their money and wealth and long-term financial security or intergenerational financial security in homes.
- And so that also creates a politics where people are very, very nervous about anything that might negatively affect their home values
- We think a lot about “Are there going to be any negative consequences to anybody from building here” — without thinking about the flip side, “if we don’t build here, what are the negative consequences?""