News and Commentary
A new medium post from Joe DiStefano of Urban Footprint goes through the potential effects of the recently postponed SB 50. The benefits of the jobs-rich area provisions, upzoning areas near placed with high prospects for economic opportunity, will likely have a greater impact than the upzoning near public transit. Meanwhile, “the grumpy economist” John Cochrane described SB 50 as “almost sane housing supply.”
A New Hampshire local newspaper argues for the legalization of ADUs to improve housing affordability in Manchester. Housing affordability is an issue everywhere, and even relatively small changes like allowing ADUs can move the needle.
The New York Times lays the blame for housing affordability on wealthy, overwhelmingly liberal, NIMBY cities. While there’s a bit of a selection problem associated with laying the blame on liberals in these cities (they’re far more likely to be able to afford these expensive properties in the first place), it does remain a glaring failure of liberal policymakers in these areas.
In markets with elastic housing supply, regional income inequality decreases as people move from low-productivity areas to high ones, and capital moves from more expensive labor markets to cheaper ones. A restrictive housing market, as this New York Times article argues, makes it more financially viable for low-productivity workers to move to low-wage areas with cheaper housing.
New Research
The American Economic Association has put out several articles on the effects of rent control. Here’s a quick rundown:
- A study of a 1994 change to San Francisco’s rent control policies led to a decline in the long-run supply of housing.
- The end of rent control in Cambridge, Massachusetts caused a 16% decline in crime and $10 million in benefits, while increasing property value growth by 10%.
- “Second generation” rent control is a policy that exempts new construction from rent control. A paper found that these policies produce a positive effect on the value of vacant, buildable land.
- A study of rent control in Paris, France finds that rent control increases spatial misallocation, but this can be alleviated by increased funding for transportation infrastructure.
- When rent control is implemented, how much to landlords seek to put their units into the market-rate housing pool? This study found that while landlords generally don’t turnover tenants to move units back to market-rate housing, they increase the rate at which they convert housing to condos (which aren’t subject to rent control), increases by 54% when condo prices rise by 5.4%.
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