Daily Archives: February 3, 2015

Seeing the Supply for the Houses, or the Houses for the Supply

In cities facing housing crunch problems like rising rents and gentrification, there are generally two schools of thought about how the problem should be addressed. One school holds housing supply paramount, noting that land use restrictions like zoning suppress development of market rate housing, which invariably drives up places and causes displacement. This school focuses on liberalizing land use controls as the solution to housing issues. The other school holds community integrity paramount, focusing on regulatory measures that prevent existing residents from being evicted.

The difference in tactics between these two groups often leaves them at odds with each other. However, these schools of thought are two sides of the same coin, with similar goals but approaching the problem from opposite ends. Call the land use liberalization advocates the “macro” view, focusing on overall regional housing supply, and the anti-displacement advocates the “micro” view, focusing on the stories of individuals affected by rapid neighborhood change.

If you’re mainly worried about regional housing supply (and regional is the level that ultimately matters), you need to recognize that individual stories matter. There is value in neighborhoods that cannot be monetized, something the urban renewers of yore learned the hard way. Places like California have been building up a deficit of housing for decades, something that will take years for a functioning housing market to rectify.

If you’re mainly worried about displacement, you need to recognize that regional housing supply matters. Economic models are not abstractions that economists seek to impose on people, they describe how human beings interact with each other under a given set of regulations and traditions. The land use regulations we have today, which constrain housing supply, require that somebody lose, be it existing residents or would-be immigrants. In the absence of increased housing supply, all you can do is pick different losers.

See the forest for the trees, or see the trees for the forest.

The key is to realize that we all share a common goal – a city that is affordable and accessible to all those who want it. When land use liberalization advocates and anti-displacement advocates argue with each other, we let the truly responsible parties – wealthy neighborhoods that stifle any and all development – off the hook.