Tuesday, April 22, 2014

Liberals and Exorbitantly Priced Hovels

By Thomas Sowell

Liberals advocate many wonderful things. In fact, I suspect
that most conservatives would prefer to live in the kind of world envisioned by liberals, rather than in the kind of world envisioned by conservatives.

Unfortunately, the only kind of world that any of us can live in is the world that actually exists. Trying to live in the kind of world that liberals envision has costs that will not go away just because these costs are often ignored by liberals.

One of those costs appeared in an announcement of a house for sale in Palo Alto, the community adjacent to Stanford University, an institution that is as politically correct as they come.

The house is for sale at $1,498,000. It is a 1,010 square foot bungalow with two bedrooms, one bath and a garage. Although the announcement does not mention it, this bungalow is located near a commuter railroad line, with trains passing regularly throughout the day.

Lest you think this house must be some kind of designer's dream, loaded with high-tech stuff, it was built in 1942 and, even if it was larger, no one would mistake it for the Taj Mahal or San Simeon.

This house is not an aberration, and its price is not out of line with other housing prices in Palo Alto. One couple who had lived in their 1,200 square foot home in Palo Alto for 20 years decided to sell it, and posted an asking price just under $1.3 million.

Competition for that house forced the selling price up to $1.7 million.

Another Palo Alto house, this one with 1,292 square feet of space, is on the market for $2,285,000. It was built in 1895.

Even a vacant lot in Palo Alto costs more than a spacious middle-class home costs in most of the rest of the country.

How does this tie in with liberalism?

In this part of California, liberalism reigns supreme and "open space" is virtually a religion. What that lovely phrase means is that there are vast amounts of empty land where the law forbids anybody from building anything.

Anyone who has taken Economics 1 knows that preventing the supply from rising to meet the demand means that prices are going to rise. Housing is no exception.

Yet when my wife wrote in a local Palo Alto newspaper, many years ago, that preventing the building of housing would cause existing housing to become far too expensive for most people to afford it, she was deluged with more outraged letters than I get from readers of a nationally syndicated column.

What she said was treated as blasphemy against the religion of "open space" — and open space is just one of the wonderful things about the world envisioned by liberals that is ruinously expensive in the mundane world where the rest of us live.

Much as many liberals like to put guilt trips on other people, they seldom seek out, much less acknowledge and take responsibility for, the bad consequences of their own actions.

There are people who claim that astronomical housing prices in places like Palo Alto and San Francisco are due to a scarcity of land. But there is enough vacant land ("open space") on the other side of the 280 Freeway that goes past Palo Alto to build another Palo Alto or two — except for laws and policies that make that impossible.

As in San Francisco and other parts of the country where housing prices skyrocketed after building homes was prohibited or severely restricted, this began in Palo Alto in the 1970s.

Housing prices in Palo Alto nearly quadrupled during that decade. This was not due to expensive new houses being built, because not a single new house was built in Palo Alto in the 1970s. The same old houses simply shot up in price.

It was very much the same story in San Francisco, which was a bastion of liberalism then as now. There too, incredibly high prices are charged for small houses, often jammed close together. A local newspaper described a graduate student looking for a place to rent who was "visiting one exorbitantly priced hovel after another."

That is part of the unacknowledged cost of "open space," and just part of the high cost of liberalism.


Thomas Sowell is a senior fellow at the Hoover Institution, Stanford University. He is author of Intellectuals and Raceand Economic Facts and Fallacies


4 comments:

  1. I suspect that if somebody followed the money, they would find that these "open space" laws are created and funded by foundations with ties to developers and major landowners. If so, this would run counter to the mythology and messaging we are bombarded with. For the image of a greedy developer who just wants to get their hands on pristine open land for their profit is a constant meme in the mainstream. Readers of EPJ have read many post that demonstrate how these do-gooding foundations and advocacy groups are just front groups for crony capitalist.

    But the restrictions on the market make huge profits possible. Whether it is alcohol during prohibition or Silicon Valley dirt during some misguided green craze, the same principles apply.

    Perhaps a campaign associating these restrictions with the type of greed and self serving destructive behavior reserved for an evil capitalist archetype might wake people up.

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  2. Ah, yes. The idiot shit turd Left and their ENDLESS hypocrisy. Their action hugely increase prices while at the same time they pretend to care about the poor. LOL! they're either liars, completely stupid, or in denial. With most of them it's probably the last one since their entire belief system is based on emotion not reality.

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  3. I have a slightly different view. I wonder if the Silicon Valley's exorbitant housing prices are due less to liberal/Progressive politics per se and more to do with self-interested homeowners of various political persuasions wanting their home values to remain high at the expense of renters and newcomers to the area? In San Francisco, many of the homeowners are opposed to efforts to densify their neighborhoods. This is at odds with the environmentalist and progressive philosophy of discouraging suburban sprawl, which leads to long commutes and thus increases pollution, by encouraging "Smart Growth" (i.e., transit-oriented, walkable, dense development). You would think that San Francisco, given its leftist leanings, would embrace the trend of more people moving there and more development happening there as opposed to further development of far-flung suburbs like Tracy and Brentwood, but all of the protests against gentrification in the Mission District and the difficulty that developers have with building high-rise apartment buildings indicate otherwise.

    Now, yes, I agree with Thomas Sowell that open space regulations promulgated by leftists have led to increased housing prices, since there isn't enough supply in the Peninsula to meet the housing demand. But, ironically, these open space preserves promote the very sprawl that environmentalists and many progressives detest so much. This is exacerbated by the fact that the self-interested Peninsula homeowners are against efforts to allow their cities to densify to meet the housing demand. The combination of open space protections and opposition to densification has led to only one response: sprawl. Since many people who wish to live in the Peninsula can't afford it due to the restricted supply of housing, they move further and further out until they find places that they could afford. For some people, those places are inner East Bay cities like Fremont and Berkeley. For others, this means outer East Bay cities like Danville, Pleasanton, and Walnut Creek. For still some others, this means relatively far-flung places like Tracy and Brentwood, which have very long commutes to the job centers in San Francisco and the Silicon Valley.

    Now, had the open space in the Peninsula area been developed, or had these cities allowed more dense development, perhaps Tracy and Brentwood could have remained rural towns instead of the exurbs they are today. But the Peninsula's policies have led to sprawl. And then the same landowners in San Francisco and the Peninsula who support such policies have the gall to complain about proposals to widen freeways and bring improved transit to those new communities that were caused by their opposition to growth....

    So, while the left does have a hand in the Silicon Valley's high housing costs, it's the self-interested homeowners who deserve even more of the blame. I wouldn't be surprised if they support the environmentalists, not because they fully agree with environmentalist ideology (many environmentalists at least support Smart Growth; these homeowners want no growth), but because they want to protect their home values at all costs.

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  4. That explains why Stanford's football coaches live on campus as part of their remuneration.

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