News and Commentary
Bernie Sanders has released a new housing plan that would spend 2.5 trillion over the next decade. While the plan should be applauded for wanting to promote construction, the embrace of rent control and comparative quiescence on zoning reform will make it difficult to achieve those construction goals.
California has adopted a 5% inflation-adjusted cap on rent increases. While this is a relatively mild form of rent control, we should still expect constricted supply and higher rents statewide.
“Development Dividends” would give community members equity stakes in new constructions. The purpose of the proposal is to secure local political support for more buildings.
California just banned single family by allowing everyone to build accessory dwelling units. Renting out these smaller homes can expand housing supply and serve as meaningful source of income. However, there is still a need for more middle housing like multi-family dwellings.
Minneapolis just made it very difficult for landlords to check a renter’s history, credit score, or criminal record. This rule seems like a poor way to correct for the real problems facing low-income renters.
New Research
A paper in NBER examines the role of location in driving innovation. High tech clusters attract human capital that can then easily move between firms. The study documents how an exogenous shock to Rochester’s photography industry slowed down invention in all of the city’s high tech sectors. Allowing more people to work in high-productivity locales matters for innovation. As such, making cities more affordable should be an important part of any strategy for encouraging long-run economic growth.
An article in Vox EU examines the impacts of gentrification. The authors find that there are no meaningful effects on displacement or public health.
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