More Thoughts On Why The Rent Is Too Damn High

I actually wrote my last post before realizing that it was one of the central ideas in Matthew Yglesias' book: The Rent Is Too Damn High.  I'm really glad that the this relationship between development and rising rents, or as Yglesias calls it "the mirage of gentrification", is getting more popular exposure.  Hopefully this, combined with the numerous other calls for increasing densification will actually have an influence on public policy.

While Ryan Avent and Edward Glaeser show the simple case that allowing development will alleviate rental prices, Yglesias' continuation of the theory to explain WHY policy makers think development causes higher prices is the key of why development continues to be fought.  One added problem here is what I explained in my last post: any cause of NIMBYism strengthens the perceived link between increases in density and rent prices.

In this way, Charlie Gardner is right in his take on this book: cities can't simply "build" their way to affordability.  They can build their way to relative affordability, but there will always be a relationship between denser city center and unaffordability.

I plan to do a lot more thinking on where exactly denser development should be occuring.  I'd like to suss out whether it's more useful to build more housing units in a city core or just outside a city core.  One thing to note is in order to increase affordable housing, it makes sense to start at a location where housing prices are simply high and not astronomical.  

In the coastal cities, there can never be enough development in major city centers to handle the demand to live in prime locations.  In some coastal cities (though not all) you also have a steep drop off in density, meaning outside of the core areas the metro area is more spread out and can't take advantage of the economies of scale you get with density.

Perhaps instead of building up an area like Manhattan, we should try to make other areas like Manhattan.  For recently gentrified outer borough neighorhoods, realize that they were gentrified for a reason.  Instead of building up those areas with the intent of making them more affordable, develop the already affordable frontier neighborhoods to make them more desirable.  While I agree that we should remove a lot of restrictions we have on development in central cities, this additional policy focus will help the entire region become more liveable, and thus make more liveable areas affordable.

No comments:

Post a Comment