March 2016
growth,” writes Avent, referring to NIMBYism, or “not-in-my-backyard” sentiments. “In doing so they make their cities more expensive and less accessible to people with middle incomes. Those middle-income workers move elsewhere, reducing their own earning power and the economy’s potential in the process. Residents use government zoning rules, historical designations and public pressure to block changes of all kind. ThePerilsof Planning: HowLocal Government Undermines Homeownership Not only are rising housing costs and ballooning taxes driving Americans out of coastal big cities, but so called “smart growth” regulations and restrictive zoning and land-use laws are driving housing costs up, according to Randal O’Toole, a senior fellow at the Cato Institute inWashington, D.C., a libertarian think tank. Severe local “smart growth” building restrictions — like minimum lot size laws, “open space” laws, height restrictions, rent controls — discourage developers from building new homes and drive up the price of housing, argues O’Toole.
Glaeser, Jason Furman andMatthewRognlie, have been arguing that building restrictions by local governments on building more housing in and around economically vibrant areas has slowed economic growth and hurt economic mobility. But not everyone buys the zoning restriction argument. According to Dowell Myers, professor of urban planning and demography at the University of Southern California, housing migration slowed across much of the country after the Great Recession, and it hasn’t picked up since. Interstate Migration Declining
Dowell Myers Urban Planning Professor USC Los Angeles, California “ The only big trend I can see are millennials. They’re the sleeping giant. But they are slow to get into the housing market because of student loan debt. ”
“The majority of experts who say land-use restrictions cause housing prices to rise don’t live in California,” said Myers. “The big thing is this: All of California’s big cities are surrounded by mountains and the ocean. The big metros are confined geographically. Restrictions are placed to protect the environment. And we treasure and protect the environment, namely the ocean and the mountains.” Still, people are moving, but there are cross currents, with no clearly defined trends, according Myers. He said the Great Recession has put the breaks on interstate migration. He said the housing crash and high unemployment during the recession made it harder to move. And Americans may no longer find it worthwhile to move if employers aren’t willing to pony up bigger raises. Even now, millennials have remained cautious about moving, putting a drag on state-to-state migration. “The only big trend I can see are millennials,” said Myers. “They’re the sleeping giant. But they are slow to get into the housing market because of student loan debt. You want to make it easy for them to buy houses.” Myers said states like California and New York still lure hundreds of thousands of immigrants from across the globe, especially from China and India, but Texas, Florida and the Carolinas are far more magnetic for people already living in the country. Continued Next Page
“Government planners are good at producing two things: shortages of goods that people want, and surpluses of goods they don’t want,” writes O’Toole, author of “American Nightmare: How Government Undermines the Dream of Homeownership.” “In places with relatively unregulated housing markets, housing is inexpensive, and when demand increases — whether because of population growth, low interest rates, or loosened lending standards — homebuilders build more homes. When single family homes are restricted, housing becomes expensive, and increases in demand lead to higher prices rather than more housing, while decreases in demand result in lower prices — in other words, a housing bubble.” Urban planners and other sprawl opponents believe that Americans waste land by living in low-density suburbs and that they waste energy by driving too much, claims O’Toole. He argues that we can rebuild the American dream of homeownership by eliminating federal, state and local policies that distort the free market for housing.
O’Toole and other economists like Thomas Sowell, Edward
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