So What If New York Is Unaffordable? That Helps the U.S.
AUG 22, 2016 9:00 AM EDTBy Conor Sen
There's no real national debate when it comes to housing policy.
Journalists and pundits on one side shout: "We need more development and density so cities will be affordable and livable." For good measure they add: "People who don't support more development and density are heartless and just defending their own property values."
The other side … is probably a bit daunted and chooses not to pipe up.
Well, I'm piping up.
The pro-development pundits tend to live in expensive and hemmed-in cities like New York and San Francisco. I do not. As an Atlantan, I see many benefits of density limits in highly desirable communities.
When housing demand in one area exceeds supply, the obvious benefit is for people who already own homes there, as their properties become more valuable. But this rising price also benefits the communities to which people move if they cannot afford the first area. This is a wealth transfer from the most desirable communities to the upwardly mobile ones. The tens of thousands of people who leave New York and California every year act as sources of new demand in the places to which they move, like Florida, Texas and Colorado.
But sure. I get it. New Yorkers and San Franciscans see those departures as a failure of policy and would prefer to build, baby, build. I complained in unison with them when I lived in San Francisco. No longer.
Here in Atlanta, as in the rest of the Sun Belt, job migration is the driving force of the economy. Corporate relocations and expansions are celebrated here the way billion-dollar tech startups are celebrated in Silicon Valley. The "New South" would not have developed were it not for people looking to flee the crowded and expensive cities of the Northeast.
Some economists argue that this migration from high-cost to low-cost cities acts as a drag on productivity and national output, because less dense cities are less productive than more dense cities. This theory is running up against a new reality, however. If you think of wages as a proxy for productivity, the numbers back this up: San Francisco tech workers have less and less of a salary advantage over tech workers in other cities.
Even if the productivity argument holds, there are economic equality and civil rights benefits to migration from coastal metros to less-developed ones like those in the Sun Belt. Job convergence between metros "spreads the wealth," ensuring that tech workers in Raleigh and Atlanta and manufacturing workers in South Carolina and Alabama have access to good jobs too.
This logic applies even within state lines. Urbanist Pete Saundersmakes the point about Chicago in particular: Most cities don't have a shortage of housing, just a shortage of housing in the neighborhoods where wealthy young people want to live. Policies that constrain development in the more-developed parts of cities can facilitate development in less-developed neighborhoods. Here in Atlanta, upper-middle-class workers who can't quite afford Buckhead or Brookhaven have created a development boom in Chamblee, a city with a military and manufacturing legacy. Rising land prices in Midtown have led to increasing amounts of activity in long-neglected neighborhoods to the south surrounding Downtown.
Over the past 50 years, Southern communities with more-developed business interests have made progress on civil rights before those with less interdependence with the national economy. One of the reasons Atlanta made more progress on civil rights in the 1960s than Birmingham was the local business community was afraid of losing access to Northern capital. Similarly, when "religious freedom" bills and other measures seen as anti-gay arose in Indiana, North Carolina and Georgia, national business interests like Apple and Pfizer (not to mention Nascar) pressured politicians to stand by gay rights. Donald Trump's shrinking electoral map is in part due to the spread of well-educated professionals to Virginia, Colorado and North Carolina.
Those facts all reflect economic relationships that would not exist, or would not be as strong, without housing constraints in coastal communities that accelerate the migration of talent and jobs to these communities. Density limits in leading cities fuel the economies of rising cities like Atlanta. The new economies of rising cities like Atlanta fuel economic equality and civil rights.
Housing constraints in some cities accelerate economic development in emerging parts of the country. They decrease economic inequality between metro areas and lead to economic interdependence that drives civil rights. And they offer some promise to ease the pain of waning communities in the Rust Belt, Appalachia and beyond. A country where the vast majority of talented people move to one or two cities might be an economist’s idea of utopia, but a nightmare to those of us concerned about equality of economic opportunity.
New Yorkers and San Franciscans can be forgiven for wishing for more and more development to bring down their housing costs. But if you zoom out, the current constraints are benefiting the nation as a whole.
It has an effect similar to the transfer in federal tax revenue every year from New York and California to poorer rural states like Mississippi and Arkansas. Yet pundits don't seem scandalized by this movement of money; they dwell on the movement of people.
Some economists argue that this migration from high-cost to low-cost cities acts as a drag on productivity and national output, because less dense cities are less productive than more dense cities. This theory is running up against a new reality, however. If you think of wages as a proxy for productivity, the numbers back this up: San Francisco tech workers have less and less of a salary advantage over tech workers in other cities.
Even if the productivity argument holds, there are economic equality and civil rights benefits to migration from coastal metros to less-developed ones like those in the Sun Belt. Job convergence between metros "spreads the wealth," ensuring that tech workers in Raleigh and Atlanta and manufacturing workers in South Carolina and Alabama have access to good jobs too.
This logic applies even within state lines. Urbanist Pete Saundersmakes the point about Chicago in particular: Most cities don't have a shortage of housing, just a shortage of housing in the neighborhoods where wealthy young people want to live. Policies that constrain development in the more-developed parts of cities can facilitate development in less-developed neighborhoods. Here in Atlanta, upper-middle-class workers who can't quite afford Buckhead or Brookhaven have created a development boom in Chamblee, a city with a military and manufacturing legacy. Rising land prices in Midtown have led to increasing amounts of activity in long-neglected neighborhoods to the south surrounding Downtown.
Over the past 50 years, Southern communities with more-developed business interests have made progress on civil rights before those with less interdependence with the national economy. One of the reasons Atlanta made more progress on civil rights in the 1960s than Birmingham was the local business community was afraid of losing access to Northern capital. Similarly, when "religious freedom" bills and other measures seen as anti-gay arose in Indiana, North Carolina and Georgia, national business interests like Apple and Pfizer (not to mention Nascar) pressured politicians to stand by gay rights. Donald Trump's shrinking electoral map is in part due to the spread of well-educated professionals to Virginia, Colorado and North Carolina.
Those facts all reflect economic relationships that would not exist, or would not be as strong, without housing constraints in coastal communities that accelerate the migration of talent and jobs to these communities. Density limits in leading cities fuel the economies of rising cities like Atlanta. The new economies of rising cities like Atlanta fuel economic equality and civil rights.
Housing constraints in some cities accelerate economic development in emerging parts of the country. They decrease economic inequality between metro areas and lead to economic interdependence that drives civil rights. And they offer some promise to ease the pain of waning communities in the Rust Belt, Appalachia and beyond. A country where the vast majority of talented people move to one or two cities might be an economist’s idea of utopia, but a nightmare to those of us concerned about equality of economic opportunity.
New Yorkers and San Franciscans can be forgiven for wishing for more and more development to bring down their housing costs. But if you zoom out, the current constraints are benefiting the nation as a whole.
It has an effect similar to the transfer in federal tax revenue every year from New York and California to poorer rural states like Mississippi and Arkansas. Yet pundits don't seem scandalized by this movement of money; they dwell on the movement of people.
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