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The New York Sun

 

Fight for Housing

May 09, 2007

By Edward L. Glaeser

Last month, the U.S. Census reported that the three metropolitan areas that added the most people since 2000 were Atlanta, Houston, and Dallas. Each of them grew by more than 800,000 people since 2000. There was not a single place in the Northeast or Midwest that was among the 30 fastest growing metropolitan areas in the country. The New York City area expanded by only 2.7%.

These numbers update a 50 year trend where the population of the Sunbelt has boomed and New York City has gone from housing one in every 20 Americans in 1950, to a much lower share today.

Does the rise of the Sunbelt reflect high levels of economic productivity, the glorious amenity of warmth, or, perhaps, just abundant new construction?

Prior to 1900, almost all urban growth was driven by the productivity advantages that came from a good location near waterways, rich soil, or coal mines. New York’s 19th century growth reflected the productivity advantages.

The city’s main industries — sugar refining, the garment trade, and publishing — were in New York because its harbor gave them ready access to inputs like raw sugar and cotton and ready access to markets along the Hudson, Erie Canal, and Great Lakes.

In the 20th century, rising incomes and declining transport costs allowed inner-city migrants to look beyond wages to quality of life. One hundred years ago, climate drove the first great Sunbelt boom in the growth of Los Angeles. Los Angeles’s warm winters attracted prosperous Midwestern farmers who were tired of Minnesota’s cold weather.

Los Angeles’s natural beauty attracted writers, like L. Frank Baum and Edgar Burroughs, whose manuscripts could be easily shipped east for publication. The city’s major industries, like aerospace and Hollywood, were pioneered by people, like Donald Douglas and D.W. Griffith, who left their eastern companies and moved to Los Angeles for its weather.

While the climate explains the growth of coastal California, it does not explain the success of Atlanta, Houston, and Dallas. Their pleasant winters are offset by terrible summers. None of the cities have access to coastline or particularly beautiful scenery.

The National Association of Realtors tells us that the median sales price in 2006 in Los Angeles was $585,000 dollars and $775,000 dollars in San Jose. Meanwhile the median sales price in Houston and Dallas in 2006 was $150,000 dollars and the median sales price in Atlanta was $170,000 dollars. Low housing prices imply that demand isn’t too hot.

Moreover, these places are not particularly productive. Median family incomes in Houston and Dallas are less than $40,000, while America’s average is $55,000 dollars. Income levels in the surrounding counties are higher, but still less than the American average.

So why are these Sunbelt places growing ? It is because they build vast amounts of housing. Houston may not have great summers or high productivity, but it does know how to build new homes.

Last year, the Houston metropolitan area allowed 71,000 building permits. Since the number of homes essentially determines the number of people in a community, Houston’s fondness for development drives its population growth.

The growth of places like Houston, Phoenix, and Las Vegas is a reaction to the fact that starting in the 1970s, coastal California became far less willing to permit new housing.

A growing environmental movement, typified by the movement to “save” San Francisco Bay, stopped new construction close to the coasts. The Supreme Court of California supported this movement with seemingly pro-environment rulings, like Friends of Mammoth.

The net impact of these rulings on the environment is far less clear, because California didn’t stop new development, California environmentalism just pushed that development further out, both to inland California and to the desert around Phoenix and Las Vegas.

What does this mean for New York City? First, as a nation, our strategy of letting local special interest groups, like the New York City Landmark Preservations Commission, control new construction is bad environmental policy.

When we empower local anti-growth groups, we ensure that new development will move from where people live now to currently pristine areas where no one might object to moving to.

Second, middle income Americans benefit from new construction that keeps housing affordable. East coast elites like to think of themselves as being partisans for the poor, but the Texas growth machine is doing a much better job of building homes that average-wage earners can buy.

Third, New York is not doomed by our climate. If greater New York was built like Houston, we would grow like Houston. That growth would be good for poorer New Yorkers, for New York businesses, and for the environment. Despite his support for development, Mayor Bloomberg can’t achieve this result on his own.

It is a great irony that New York’s pro-growth politicians, such as the mayor, are in the city where growth is most difficult and anti-growth homeowners dominate the suburbs where development is intrinsically easier.

It makes sense to support the mayor’s fight for more housing, but it also makes sense to ask whether the suburbs can be pushed to provide more new homes as well.

Original Source: http://www.nysun.com/opinion/fight-for-housing/54138/

 

 
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