Editor’s Note: These few paragraphs by “anti-planner” Randal O’Toole say everything that needs to be said about how flawed policies artificially inflate the price of housing, making it unaffordable to any middle class family. California provides perhaps the most egregious example of this misanthropic bias towards “smart growth,” and “urban service boundaries,” the practical effect of which is to destroy the ambiance of existing suburbs through absurdly high-density “infill,” create gridlock on boulevards and freeways, and artificially elevate housing prices into the stratosphere. The irony, if you can call something so cruel mere irony, is that wealthy elites who can afford to live in unsullied, low-density enclaves reap fantastic returns on investment as these asset bubbles are relentlessly inflated, simultaneously patting themselves on the back for “saving the planet.” But as prime, and very abundant, lands for new towns and cities lie fallow – such as the east slopes of the Mount Hamilton range, thousands of square miles of open space within a short drive of Silicon Valley – young working families are one paycheck away from defaulting on mortgages they cannot possibly hope to ever pay off.
Paul Krugman argues that housing costs, not taxes, are what is drawing people to Georgia and Texas and away from California and New York. He’s partly right, but he’s mostly wrong.
What he fails to see is that the same impulse that attempts to control land uses in California, making housing expensive, also makes unduly regulates California businesses and boosts taxes to make California undesirable. The same impulse the attempts to control rents in New York City also leads to nanny-state rules and excessive bureaucracy that makes that city undesirable to many businesses.
Contrary to what Krugman says, housing prices in California and New York are high not because they’ve run out of land. California especially has plenty of land available while a good share of the New York and Connecticut counties bordering New York City are rural open space. Nor are prices high because cities won’t allow higher densities: if California cities didn’t have urban-growth boundaries, few people would want to live in higher densities.
The real problem is a government-knows-best mentality that puts the desires of a few above the needs of the many. That same mentality leads California to impose the most restrictive rules on greenhouse gas emissions and leads New York to spend more than $2 billion a mile on subway tunnels. Until regulations like this and the taxes needed to support them change, California and New York will remain undesirable places to expand businesses, which is why they grow so slow.
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About the Author: Randal O’Toole is an American public policy analyst. The majority of O’Toole’s work has focused on private land rights, particularly against public land use regulations and light rail. Since 1995, he has been associated with the Cato Institute as an adjunct scholar and frequent anti-light rail campaigner. O’Toole was the McCluskey Visiting Fellowship for Conservation at Yale University in 1998, and has served as a visiting scholar at the University of California, Berkeley and Utah State University. O’Toole studied economics at the University of Oregon. This post was originally published on O’Toole’s blog, The Antiplanner, and appears here with permission.