Borrowing the phrase popularized in Jimmy McMillan’s recent run for Governor
of New York, Slate blogger Matthew Yglesias
writes a timely and important book arguing that rents in highly productive American cities are too high as a result of government policies that have profound impacts on national health, environmental quality, and economic growth. Available only as an e-book through Amazon, Apple, and other e-book providers
, The Rent is Too Damn High
is a quick and easy read, and while not perfect, the book makes a strong push in the direction of changing assumptions about density and development.
The core argument in the book is that government policies restrict density. This creates scarce housing in highly productive cities in the Northeast and on the West Coast, thereby pushing up the price of housing and driving many people to move to sprawling sunbelt cities where people are less productive, less healthy, and cause more harm to the environment.
High prices provide two key signals: first, people find it desirable to live in dense urban cities, and second, high prices indicate that there is insufficient supply to satisfy all of the people who would like to live there. While the arguments are not entirely new, Yglesias’ book nicely synthesizes these different concerns into one coherent narrative.
Debunking Myths that Constrain Vertical Growth
The book effectively debunks numerous assumptions that often appear in newspaper commentary on housing. Commentators ranging from daily newspapers to investment advice columnists to HGTV frame owning a home as an investment. Yglesias explains how it is better to think of a home as a place to live than as an investment, since, if homeowners ever want to cash in on the successful
investment, then they would have to pay for another place to live (which, especially if the new home is nearby, may well appreciate in cost as much as the old home appreciated in value).
A large share of the book discusses limits on density. Even Houston, with “no zoning,” uses minimum parking requirements and other rules “that don’t technically constitute ‘zoning’” to keep density low. Many cities, from sprawling Kansas City to relatively dense Washington, D.C., impose height maximums that prevent the construction of more housing in desirable locations.
Since the invention of the elevator we have been able to build structures where people live in many reasonably sized units that sit on a small footprint of land. Yglesias argues that more supply of housing would permit more people to live in highly desirable and productive places, and in theory this should bring down costs in those places.
I was disappointed that the book did not do much to discuss the institutional questions regarding who can do what
to promote density. There was no discussion of inclusionary zoning requirements or integrated land-use planning with growth requirements such as California’s SB 375. The law has caused a good deal of controversy
by requiring cities to permit the construction of new housing
, often at a greater density than is typical in California cities.
Just as my skepticism peaked when I finished the book, an article in the San Francisco Chronicle
reminded me how ridiculous assumptions about housing can often be. The article suggests
that San Francisco needs more single-family detached homes in order to such homes will become more affordable for families. This follows the typical yet flawed logic that in other cities, there are lots of single-family detached homes and in those cities single-family homes are affordable, so if San Francisco built single-family homes, they would be affordable here.
Even assuming the city could find space to build a serious number of single-family homes without demolishing multi-unit buildings and exacerbating the housing shortage, newly constructed single family homes in San Francisco would hardly be “affordable” because there is excess demand for housing in San Francisco. It is this type of myth that needs debunking and Matt Yglesias’ book is an easy read that explains why these frequently-made arguments in favor of low-density development are wrong.
Failure to Correct Myths About Rent Control
Readers familiar with rent control and struggles against gentrification will be disappointed by the treatment of these issues. Yglesias criticizes rent control as a disincentive to new construction, without acknowledging that rent control explicitly excludes new construction in New York City, California, and everywhere else I could find (except this Principles of Economics
This error is quite common, and some reviews
of the book praise the book for explaining the principle clearly. There are reasonable arguments for and against rent control, but there is no reason to continue repeating a conventional argument about a hypothetical rent control policy that exists only in the imagination of economists.
While this is a myth that needs some debunking, Yglesias’ dependence on it does not defeat his core argument that more density would help restrain rising rents, or, at a minimum, would at least permit more people to live in desirable places.
Too Little Housing in San Francisco, or Too Few San Franciscos?
As I reached the end of the book, I was somewhat unsure if Matt Yglesias thinks the problem is that there are no skyscrapers in Haight Ashbury, or that there are not enough places with the density of Haight Ashbury in the Bay Area suburbs. I suspect his answer would be probably both, but to let the market decide by deregulating development in both places.
This argument for deregulation is troubling. It reminds me of the argument advanced in the 1990s that electricity regulation created bad incentives, which, like the regulations on density Yglesias criticizes, harmed productivity, health, and the environment. However, the deregulation-focused strategy failed.
While debate about whether electricity restructuring was a good idea remains contentious, important policy choices clearly resulted in more successful electricity market restructuring in Massachusetts than in California. The same is true for density, for some of the same reasons.
Residential housing, like electricity, is bound up in a web of government activities and regulations, many of which cannot realistically be avoided. For instance, the density that a neighborhood can support depends on transportation access.
Overbuilding in one neighborhood burdens the transit connections for other neighborhoods. As another example, fire codes
often dictate the width of streets and sidewalks, thereby limiting the capacity for the neighborhood to house more people. The list goes on.
This isn’t to say that Yglesias’ main argument in favor of density is wrong, but rather that he points in the wrong direction for a solution. Rather than deregulation, density can be achieved through managed growth, permitting and encouraging residential density near job centers and transit stations.
In short, better to build La Défense
than the Kowloon Walled City
. Despite my disagreement over the direction of the solution, The Rent is Too Damn High
is an excellent read that raises important issues for the future of development in America.