At the risk of repetitiveness (you can say that again), here's yet another story from the New York Times about how rules limiting new construction wind up hurting people and hampering growth:
Some people aren't moving into wealthy regions because they're stuck in struggling ones. They have houses they can't sell or government benefits they don't want to lose. But the larger problem is that they're blocked from moving to prosperous places by the shortage and cost of housing there. And that's a deliberate decision these wealthy regions have made in opposing more housing construction, a prerequisite to make room for more people....
productive places aren't growing as fast now as economists believe they should — and as they would if they didn't impose so many obstacles on new development. Since the 1970s, land use restrictions have multiplied in coastal metros, making it harder to build in, say, San Jose, Calif., than in Phoenix. And the politics of development have become tense, too. In the Boston suburbs, the Bay Area, Brooklyn and Washington, people who already live there have balked at new housing for people who don't. As a result, housing prices have soared in the most prosperous places, making them inaccessible to lower-income workers and negating much of the allure of the higher wages there....
Were it not for all the restrictions on housing in the most productive places — if workers were able to more freely migrate to them — Mr. Herkenhoff and his co-authors and the economists Enrico Moretti and Chang-Tai Hsieh have estimated that the nation's G.D.P. would be substantially higher.
There are reasons that this would have potential as a national or even regional political issue. It has appeal to both conservative Republicans, who like rolling back regulations, and liberal Democrats, who at least profess to be in favor of helping the have-nots. The problem, as the Times article suggests, is that people who already own homes or apartments in these places like the status quo. They have seen their property values soar because of the limits on supply. They raise concerns about high buildings blocking sunlight or views, creating additional traffic, or further crowding already crowded public schools.
To some extent, this is a possibility that profit incentives may help solve. Eventually, the potential value of development sites becomes so high that it becomes economically worthwhile for a developer to spend the political money necessary to win approval to convert that surface parking lot or one-story retail building into a ten-floor 15-floor condo or rental apartment building. But I also think the politicians haven't quite found a way to talk about this issue in a way that wins over the homeowners who like the status quo. One direction to explore might not be an appeal to altruism ("help out the people who weren't lucky enough to buy houses here 20 years ago by making room for them, even if it means more traffic") but, instead, an appeal to self-interest (if we want the tax revenue to fund better parks and schools and longer library hours and more modern subway systems, we need to expand the tax base by allowing more growth). Another possibility to explore might be state governments providing incentives to fund improvements in cities and towns that do agree to accept more development.
