Wednesday, October 29, 2014

Why are Lefty Cities so Unaffordable?

Lefty cities seem to have the worst affordability crises, according to Trulia chief economist Jed Kolko.

Derek Thompson at The Atlantic has more:
Kolko's theory isn't an outlier. There is a deep literature tying liberal residents to illiberal housing policies that create affordability crunches for the middle class. In 2010, UCLA economist Matthew Kahn published a study of California cities, which found that liberal metros issued fewer new housing permits. The correlation held over time: As California cities became more liberal, he said, they built fewer homes.

"All homeowners have an incentive to stop new housing," Kahn told me, "because if developers build too many homes, prices fall, and housing is many families' main asset. But in cities with many Democrats and Green Party members, environmental concerns might also be a factor. The movement might be too eager to preserve the past...

I asked Kahn if he had a pet theory for why liberals, who tend to be vocal about income inequality, would be more averse to new housing development, which would help lower-income families. He suggested that it could be the result of good intentions gone bad.

"Developers pursue their own self-interest," Kahn said. "If a developer has an acre, and he thinks it should be a shopping mall, he won't think about neighborhood charm, or historic continuity. Liberals might say that the developer acting in his own self-interest ignores certain externalities, and they'll apply restrictions. But these restrictions [e.g. historic preservation, environmental preservation, and height ceilings] add up, across a city, even if they’re well-intentioned. The affordability issue will rear its head."


  1. Why are Lefty cities so unaffordable? That's an easy one. They are keeping out the "vibrants" that they want to force and guilt other people to live with. Basically they are shielding themselves from the world they have created

  2. As soon as we point out that liberal polices are the reasons why many cities cost of living is high they try to shift the blame to wealthy people moving into neighborhoods. I remember reading an article in the New York Daily News a month ago on how various middle class neighborhoods are becoming too expensive to live in, all they did was to shift the blame to wealthy people but not one mention of high taxes, excessive regular and so on.