January 31, 2012 Back to urbanism for a moment – price volatility and overregulation
As focused as I am on Mitt vs. Newt today, I saw something urban-related that I was also interested in.
One argument I’ve seen a lot of in the blogosphere: land use regulation (especially pro-environmental “smart growth”-type rules such as growth boundaries) lead to high prices which leads to housing price volatility.
But I just learned that four housing markets actually have housing prices below 2000 prices. But none of them are high-price or high-regulation. The four biggest losers: Atlanta, Detroit, Las Vegas, Cleveland. Not Los Angeles, Not San Francisco. Not Boston. Not New York. Not Portland But four regions that have been fairly affordable and, as far as I know, aren’t more overregulated than other places. That tells me that high costs aren’t the primary cause of volatility – or more precisely, that other factors are more important.
This doesn’t mean that Boston- level housing costs are a good idea. I think super-high housing costs, like sprawl, reduces quality of life even if it doesn’t lead to housing bubbles. But I think trying to blame every concievable crisis on anti-affordability regulation makes about as much sense as blaming every conceivable crisis on sprawl.