Building the Future: Fixing the Global Housing Crisis
This is the second of a two-part series on the global housing crisis. Read the first part here.
The affordable housing crisis in America and many other advanced countries keeps getting worse because it is largely dominated by the wrong voices talking about the wrong places.
For years the YIMBYs and NIMBYs have debated development in urban centers: While “Yes in My Back Yard” advocates seek to “build, build, build” ever more density in urban centers for environmental reasons, the “Not In My Back Yard” forces want to limit development often to preserve property values and the existing character of neighborhoods.
Meanwhile, housing prices have continued to rise to often unsustainable levels from San Francisco to Seoul, putting the dream of home ownership out of reach for many who are forced to pay much of their salaries in rent. Both YIMBYs and NIMBYs rely on heavy-handed regulation and other policies that discourage and complicate home ownership. Their effects have been particularly severe in California, Canada, Australia, Britain, and other places where policies aimed at funneling more people into dense urban areas by making it expensive to build in the suburbs and exurbs are negatively distorting the market.
There is now a growing pushback to this approach. Even some long-time advocates of forced densification and urban growth boundaries are recognizing that “sprawl” is not only here to stay, but that it offers a cohesive and market-friendly way to spur greater construction and lower prices. Given enough freedom, the market can do much to address the housing problem.
In the future, the shift from urban centers to suburban and exurban growth will likely be accelerated through the rise of remote work and new transport systems such as autonomous vehicles. A recent study by the Federal Reserve Bank of Kansas City noted that demographic conditions, the rise of online work, and migration to less expensive regions create conditions for a family-friendly housing boom. The issue is how to meet this burgeoning demand and build a society where the opportunity for home ownership becomes ever greater.
Market-Based Solutions
Trying to force people to live in dense urban areas against their wishes contributes to the continued outflow of people to suburbs and exurbs, and from highly regulated to less regulated states. It is not enough to simply call for building more houses as a solution to the crisis when regulation-heavy “urban containment” policies have increased land-related costs and made housing affordability impossible in many regions.
Thanks to market forces, peripheral development has long been the way cities have grown virtually everywhere in the world. Contrary to the claim that density represents social and economic progress, wealthier countries are producing ever more decentralized cities. Even in places like Tokyo, London, Paris, and New York, the vast majority of population growth takes place in the periphery. As one report put it, “human settlement has always tended to sprawl out from key urban centres.”
Read the rest of this piece at: Real Clear Investigations.
Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and and directs the Center for Demographics and Policy there. He is Senior Research Fellow at the Civitas Institute at the University of Texas in Austin. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.
Wendell Cox is principal of Demographia, an international public policy firm located in the St. Louis metropolitan area. He is a Senior Fellow with Unleash Prosperity in Washington and the Frontier Centre for Public Policy in Winnipeg and a member of the Advisory Board of the Center for Demographics and Policy at Chapman University in Orange, California. He has served as a visiting professor at the Conservatoire National des Arts et Metiers in Paris. His principal interests are economics, poverty alleviation, demographics, urban policy and transport. He is author of the annual Demographia International Housing Affordability Survey and author of Demographia World Urban Areas.
Homepage photo: Deane Bayas via Pexels.
