The NYTimes magazine this week is a jam-packed real-estate-centric issue. There are several articles I found interesting, but the story on Edward L. Glaeser is fascinating, enlightening and truly eye-opening. What fascinates me the most is his recognition and articulation of the interconnectivity of all of these issues – land use, transportation, social cohesion, human capital, human settlement patterns and importantly the need for growth and evolution of cities.
A few choice snips regarding rising housing prices:
Glaeser and several colleagues considered two explanations. First, the possibility that builders in the metro area were running out of land and that home prices reflected that scarcity. The second hypothesis was that building permits were scarce, not land. Had the 187 townships in the metro area created a web of regulations that hindered building to such a degree that demand far outstripped supply, driving prices up?
Almost as a rule, Glaeser is skeptical of the lack-of-land argument. He has previously noted (with a collaborator, Matthew Kahn) that 95 percent of the United States remains undeveloped …
While many of his academic peers were looking at, and denigrating, how the majority of Americans have chosen to live, Glaeser (though no fan of the aesthetics of sprawl himself) didn’t think an economist should allow taste to affect judgment. “You shouldn’t go around thinking that all these people are just jackasses for deciding to drive an automobile,” he says.
Civilization is an organic, living thing, an entity that is constantly changing. How are we going to grow? I’ve said it before – we are a young, sometimes infantile, country. We are going to grow.Â The solution is not as simple as saying “grow here;” as that just hasn’t worked in Albemarle County. Other areas are struggling with growth, but there does not seem to be any real community cohesion or planning.
Perhaps most applicable to our region is this –
Homeowners, he points out, have a strong incentive to stop new development, both because it can be an inconvenience and also because, like any monopolist, stopping supply drives up the price of their own homes. “Lack of affordable housing isn’t a problem to homeowners,” Glaeser says; that’s exactly what they want.
Update 3/7/2006: There is an excellent discussion about this article at Asymmetrical Information that touches on sprawl, politics, affordability and more. 72 comments and counting … if you can find the time, you’ll read gems such as:
In my experience, smart growth doesn’t lead to affordable housing because it produces neighborhoods that are highly desirable for professionals and people without children.
It’s not designed to make housing affordable, it’s designed to make a given area sustain a larger population with a smaller footprint and less traffic.
So are you agreeing then that there’s pretty much no policy prescription that Democrats can rally around as an entire party that actually leads to affordable housing?
Unchecked sprawl, for all its faults, does make housing more affordable than development restrictions.
Whew. One of the best parts of the New York Times’ real estate magazine is online. When reading a long story online, a great annoyance is clicking through to the next page (in this case, seven!) of the article. The whizzes at the NYT heard my silent groans and installed a nice feature. In addition to the “printer friendly” option, they have a “single page” option. So simple, and so appreciated. Thank you.