The Solution to Expensive Housing Is More Housing


Finally, a book by a New York Times reporter who understands the crucial link between restrictions on the supply of housing and the price of housing! Golden Gates, by economics reporter Conor Dougherty, is a tour de force. It’s a rare book that mixes careful, nuanced reporting, painless economics lessons, interesting history of California, and pitch‐​perfect humor, but Dougherty has written one.

Dougherty, who was a housing reporter for the Wall Street Journal for a decade, must have learned a lot in that job. He knows and understands the economics literature on the connection between supply and price, as evidenced by his treatment of the pathbreaking work of Harvard’s Ed Glaeser and Wharton’s Joseph Gyourko. (See “Zoning’s Steep Price,” Fall 2002.) Furthermore, Dougherty understands that when more luxury housing is built, that frees up housing that is then sold to people slightly lower on the wealth scale, and on down. He also understands the negative consequences of rent control.

That’s not to say that I agree with everything in the book. In particular, the author underplays both the bad consequences of rent control and the good that would result from massive housing deregulation. But those defects are way more than offset by his understanding of the harm done by restrictions on building.

This is from David R. Henderson, “The Solution to Expensive Housing Is More Housing,” Regulation, Spring 2021. It’s the lead book review, an honor I rarely get.

Another highlight:

Early in the book, Dougherty introduces a number of important players. First is a colorful character named Sonja Trauss, a teacher in the East Bay who dropped out of the doctoral economics program at Washington University in St. Louis, emerging with a master’s degree. Trauss started San Francisco Bay Area Renters’ Federation, an organization that favors allowing more housing to be built. She was an early advocate of YIMBY (Yes In My Back Yard), the opposite of NIMBY (Not In My Back Yard). As Dougherty puts it, “Sonja was for anything and everything, so long as it was built tall and fast and had people living in it.” Trauss later became a full‐​time activist for the cause of more housing, and Dougherty tracks her movements carefully.

Trauss has a way with words and Dougherty has a keen ear for those words. She understands 19th‐​century writer Frederic Bastiat’s point about the unseen consequences of government regulation. At a hearing in the East Bay city of Lafayette, she pointed out that many of the people who would be affected by a decision to allow more housing “don’t know who they are yet” and that some of them are not even born. It’s Bastiat’s seen versus unseen.

One more highlight:

The book also discusses Harvard labor economist Lawrence Katz. Few people probably know — I didn’t — that when he graduated as Berkeley’s top economics undergrad, Katz devoted his whole 1981 commencement speech to one of the main causes of the high price of housing in the Bay Area: restriction of supply. He pointed out something that few of his classmates probably knew: just 10 years earlier, “California house prices were not much greater than the national median.”

Read the whole thing and read the book.



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Ezra Klein on California Housing Restrictions

In much of San Francisco, you can’t walk 20 feet without seeing a multicolored sign declaring that Black lives matter, kindness is everything and no human being is illegal. Those signs sit in yards zoned for single families, in communities that organize against efforts to add the new homes that would bring those values closer to reality. Poorer families — disproportionately nonwhite and immigrant — are pushed into long commutes, overcrowded housing and homelessness. Those inequalities have turned deadly during the pandemic.

This is from Ezra Klein, “California Is Making Liberals Squirm,” New York Times, February 11, 2021.

I like large parts of this Klein article, which is unusual for me. One thing I’m seeing is that there seems to be an alliance among libertarians, liberals like Ezra, and a few others to reduce government restrictions on housing. Last month I finished a review of Conor Dougherty’s excellent book Golden Gates: Fighting for Housing in America. It will come out next month in the Spring edition of Regulation. Dougherty delves nicely into some of the somewhat hopeful signs for housing in America.

I don’t endorse everything Klein says in the op/ed, especially on the Central Valley’s middle-speed rail, euphemistically called high-speed rail. But there’s a lot of good stuff in the piece.

By the way, in Pacific Grove, where I live, you can walk 20 feet without seeing the sign he sees, but it’s hard to walk 200 feet without seeing such a sign.

HT2 Glenn Reynolds.



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