The rent is too damn high—unlike the price of Matt Yglesias’s new book

A nice little book leads us to ponder some large questions about improving American cities.

Like much of life, the academic job market is a Keynesian beauty contest—one in which the judges try to guess the contestant that other judges will find most attractive. When we academics receive a promotion, we often receive headhunter calls from rival universities. I received several such calls when I received my current professorship. One was from a school in DC. Another was a school in New York. The third was located in San Francisco. In all three cases, I took a quick glance at the various local real estate sections, pondered my current $1,000 monthly mortgage payment, and gasped at the high financial hurdles I would need to surmount in making such a move.

I don’t want to move, anyway, though it is somewhat unnerving to realize that housing prices so constrain my potential future choices.  And these episodes remind me of the barriers that constrain so many people who want to work and live in the most productive and prosperous sections of our country. The unnecessarily high cost of housing in our coastal metropolises is a huge social and economic problem. Many millions of people would benefit from better policies to facilitate denser and more intelligent urban development. Outmoded approaches to planning and preservation—along with the perverse political economy of cities and suburbs–lead us to limit the construction of high-rise apartments near transportation hubs, impose zoning restrictions on the construction of small-scale affordable housing in many of the places people most want to live and work.

This harms the environment, fosters urban congestion, and slows the entire economy. Greater density would bring other benefits, too. Population density creates opportunities for niche producers of goods and services that would otherwise be impossible. You won’t see too many Cambodian restaurants in rural New Mexico, for example.

Matt Yglesias has just written a terrific little book on these issues. It’s called The rent is too damn high. I sprung $3.99 for it and read it on a flight. (FD–he is a casual acquaintance.)

I don’t generally plug books here. I will now. Yglesias is certainly not the first to swim in these waters. The modern arguments go back at least to Henry George more than a century ago. Ed Glaeser and RBC’s own Matthew Kahn have usefully contributed to this debate. I particularly like Yglesias’s book for teaching, because it is such a well-argued and engaging, totally accessible contribution to this debate. If you are interested in housing, urban policy, or the environment, you should read it.

As I prepare for my morning commute, I wonder if Yglesias should be angrier about the issues he notes. Affluent, organized constituencies greatly benefit from policies that impose wide social costs. Restrictive zoning and preservation policies keep housing artificially scarce, protecting the interests of current property owners. Not entirely by accident, these same policies prevent families of modest means from accessing safe neighborhoods with good local schools. Almost by definition, that’s part of what people are buying when they move into these exclusive communities.

Neither liberals nor conservatives give such issues much analytic attention the subject deserves. Liberals are rightly attuned to the value of stable neighborhoods that remain on a human scale. We correspondingly overlook the human, environmental, and economic costs of policies designed to curb development and to limit population density. Conservatives all too readily overlook the harm done to poor people by exclusionary policies that maintain high home prices.

Land in nice places is expensive. We can’t do very much about that. It should be cheaper and easier to build large buildings to house people on top of this expensive land. We need to open our great cities. Matt’s little book is a nice way to think about these very large issues more productively.

Author: Harold Pollack

Harold Pollack is Helen Ross Professor of Social Service Administration at the University of Chicago. He has served on three expert committees of the National Academies of Science. His recent research appears in such journals as Addiction, Journal of the American Medical Association, and American Journal of Public Health. He writes regularly on HIV prevention, crime and drug policy, health reform, and disability policy for American Prospect, tnr.com, and other news outlets. His essay, "Lessons from an Emergency Room Nightmare" was selected for the collection The Best American Medical Writing, 2009. He recently participated, with zero critical acclaim, in the University of Chicago's annual Latke-Hamentaschen debate.

35 thoughts on “The rent is too damn high—unlike the price of Matt Yglesias’s new book”

  1. In my little piece of zoning-restricted paradise (where the County spends over $18000 per student) prices jump/drop dramatically at school district boundaries. One thing which would help even out housing prices is vouchers, so that families would be confident they’re not stuck at a low-performing school if they buy a house in its district. Mike O’Hare’s recent remarks about small rentals – the three-deckers of metro Boston, e.g., are also worth thinking about.

  2. We use something like half of urban land for roads and duplicative parking lots everywhere (Shoup has shown there are many multiples of parking spaces for each car, perhaps 20 or more I don’t recall the number). Removing that, and changing property taxes on buildings+land to land taxes would result in huge gains in housing density. (Plus the gains in housing density would not come with gains in vehicle congestion, as parking is one of the best indicators of VMT)

  3. I don’t disagree with Yglesias’ policy recommendations, but there’s a lot more good metropolitan housing than Yglesias probably thinks there is. I’ll offer myself as an example. Zillow has my place at only $300K. I live in a very large urban house next to a beautiful park. There is only moderate crime and some decent schools nearby. My kid is in a fantastic preschool that only costs $70/week. I’m only an hour commute away from Manhattan, which by NYC standards, is quite reasonable. Taxes are relatively low–again by local standards.

    But few yuppies would live in Newark, NJ. The desire to self-segregate is far greater than any rational benefit from self-segregation.

    This being said, I will concede that the NYC metro area suffers from a severe housing shortage at the low and mid ends. But yuppies impose much of the shortage on themselves.

    1. Would you send your kid to a public high school in Newark? Now, there are public charter schools there that are fine and do admirable work. But I would stab myself in the eyeball with a screwdriver before I sent my kid to Shabazz or Weequahic or Central or Barringer. Those places are drop-out factories, centers of dysfunction, and training grounds for delinquency.

      1. Ah, you seem to know Newark pretty well. Technology High isn’t bad, although it is at best decent. But that’s about it; I have to agree with your stab-in-the-eyeball assessment for most Newark high schools. OTOH, K-8 followed by private school is a lot cheaper than Montclair if you have less than 3-4 kids.

        My point isn’t that Newark is Paradise. It’s not. But in dollars-and-cents-and-safety-and-education terms, it isn’t so bad. But nobody wants to recognize this.

        1. So… vouchers! You can live where it’s cheap, and send your kid to a school you like. So can everybody else. Result: Short Hills loses some of its appeal, and Perth Amboy gains. What’s not to like?

          1. Uh . . . no vouchers. That’s not how it works in Newark. It’s mostly charter schools, and some political entrepreneurs whose power base is providing high-quality social services, rather than the old Tammany model of jobs. It’s also pretty good at attracting outside money, both public and private, which fuels the entrepreneurs and charter schools. And then there is the Roman Catholic Church, which has been very creative in housing (largely one entrepreneur in vestments), as well as fulfilling its traditional role in urban education.

            And to repeat the point I am trying to make but which seems to get lost: yuppies overlook the excellent cheap housing, the decent-to-good K-8 education, the reasonable safety in the safer neighborhoods. Never underestimate the forces of self-segregation.

    2. “Only” $300K? The rule of thumb is that you are supposed to buy a house with a price tag of about 3x your annual income, so you can afford the mortgage (ignoring this rule is what set off the real estate bubble). This means to afford your house, you’d need an annual income of over $100K a year. About 10-12% of U.S. households make that much. What about the other 90%?

      1. That “rule of thumb” is totally out of date, since the size of the mortgage payments is based on an assumed mortgage rate. Nowadays you don’t need to get an ARM to get an amazingly low rate, so the “rule of thumb” needs to be recalibrated.

  4. Yglesias has blogged about being somewhat surprised that my enviro/progressive town of Mountain View California is supporting significant increases in housing stock. I’m concerned that he has a simplistic view of environmental perspectives, and that he will overapply his prescription of dropping zoning and letting the market rule. While legitimate to some extent in promoting high density development, what we really need environmentally is a sharp divide in land use between high density development and very low density/rural agricultural/open space on the other. That environmental need isn’t reflected in prices and won’t be filled by a free market.

    That said, I’m reacting to his blogging, and his book might be more sensitive to the issue – haven’t read it yet.

  5. In the old days, we used to respond to the problem of not enough room in great cities by building new great cities.

    As an ex-new-yorker, I tend to think that rampant wealth inequality, rather than lack of places to build new superbuildings, bears a large part of the blame. You could build the 5 boros up to a solid 20 stories (thereby rendering them a place almost no one but the positionally-competitive would want to live) without significantly putting a dent in the fraction of units snapped up by the top 1 percent and their scions.

    1. You could build the 5 boros up to a solid 20 stories (thereby rendering them a place almost no one but the positionally-competitive would want to live) without significantly putting a dent in the fraction of units snapped up by the top 1 percent and their scions.

      While I admire your attempt at quantitative precision, I have a strong hunch that your speculation is wildly inaccurate.

  6. Sorry, but you’re all wet here. I think everyone deserves a nice place to live, but the solution to that isn’t to ruin the nice places that already exist, which is *exactly* what happens when you let developers run wild. They have no incentive to build decent society — they just build, sell and run. Especially in areas, like LA, where the planning process is basically corrupt, and this is spoken of openly. [Insert standard plug for public campaign finance.] Tell me, who do our leaders work for, the people who live here, or the people who might move here, later, if they let their campaign contributors make a quick buck?

    Your ideas might work in places with decent transit, but I imagine people already flock to those, even without loosening restrictions.

    From where I sit, all the theorists who try to push TOD seem to live in single family homes, which in my book means, they should have no say at all.

    1. You do realize that your comment essentially says that, because the planning process is thoroughly corrupt, we shouldn’t loosen the planning process, right? Your second paragraph is wrong on two counts. The first is that people *aren’t* flocking to places with decent transit because it’s too expensive to find housing there. The second is that a crucial precondition for more transit is higher density.

      And your last paragraph reaches the point of absurd, since it obviously shows that you haven’t read anything Yglesias has written on the subject, since he often discusses the fact that he *doesn’t* live in a single family dwelling.

      So, my advice is to stop commenting until you’ve actually read what your criticizing.

      1. You’re right, I don’t read Yglesias, except every now and then on Slate. Nothing I’ve seen so far has made me want to invest the time in one of his books, but if I come across one, I promise to flip through it. Just to be polite. But I hope you’re not suggesting that everyone else commenting here has read the book, because I would be very surprised.

        Maybe the places with good transit already have the right number of people living in them. Who’s to say? My answer: not a bunch of theorists. If Yglesias actually lives in multi-family housing, good for him. Where I live, the decision makers most decidedly do not. And if people want to *vote* in favor of higher density, I would have no argument. But that’s not how it works. Maybe you live somewhere better managed, in which case I’m happy for you. (Actually, where might that be? Love to know.)

        Now, why would high density be a precondition for decent transit? I would think people would just as easily move to a city that already had it, as the opposite. Of course, no one would build a system where there were no people, so your point has some validity. At a minimum, I wonder if we would agree that it would be foolish to cram large numbers of people into a place that had demonstrably poor transit, but that’s exactly what the powers at be in LA are doing. And it frustrates me very much. So, I don’t take this kind of TOD happy talk very well. But that’s just me.

        1. Who’s to say? My answer: not a bunch of theorists.

          So you’d rather give the power to a bunch of self-interested individuals who don’t even know the theory? And which people should have the vote on what someone can do with the property that they own? You apparently think that the correct answer is more than just the person who owns it. But how far does that radius extend? Do the people that live within a block of the property get to vote? Within a mile? Within some arbitrarily defined city boundaries?

          That’s the problem. You have people that buy in very desirable places and then do their best to make sure that as few people as possible can follow them. Along the way, they work to ensure that transit doesn’t become a viable option be making sure that density never gets high enough for it to work.

          Now, why would high density be a precondition for decent transit?

          Because that’s the only way it can draw enough riders to be worth it. There is a reason why high density cities have transit and low density ones do not.

          I would think people would just as easily move to a city that already had it, as the opposite.

          Well, they would, but people like you are opposed to doing the things that would let them afford to. At this point, I frankly have no idea what you are arguing, because you aren’t making any sense. Saying this after what you have said before indicates that you have no understanding of what is being said.

          1. “There is a reason why high density cities have transit and low density ones do not.”

            As an exception to the rule, I give you DART.

          2. Well, most if not all of my arguments are based on living in LA, so if you aren’t familiar with this city – and by that, I don’t mean just the Westside — then I agree, my arguments probably don’t make any sense to you.

            So, we can let this drop.

  7. So, now that I’m feeling a little calmer, here’s the thing: the things that one would need to make hyper-density humane and perhaps even, for those few who are *into that sort of thing* enjoyable, will not happen.

    You won’t get parks, you won’t get decent transit, you won’t get good schools, you won’t get _____ … because those things cost public money.

    But the density? Oh sure, that you can have.

    This is the thing that people don’t understand when they get hypnotized by all the TOD talk.

    1. Again, you’re just simply wrong. Flat out wrong. First, all of the evidence suggests that there are, in fact, a lot of people into that sort of thing. If there weren’t, they wouldn’t be driving up the price of the housing you claim that they don’t want. Second, the historical pattern is pretty clear: if you get higher density, you get better transit. I’m having trouble thinking of any counterexamples to that. In your first post, you mention Los Angeles, but that’s a place that has adamantly rejected higher density, so it’s no surprise that they don’t have much in the way of transit.

      1. Amazing how little a lot of folks know about L.A. which, in fact, has both very high density areas (Hollywood, Westwood, quite a bit of Beverly Hills, downtown L.A., etc.) and mass transit (see, for example, the subway map for L.A. Metro system at http://www.metro.net/). I have several friends in L.A. who regularly go to cultural events via the subway and who regularly take the subway or the express dedicated Orange bus line to work. And, the subway is usually quite full of folks.

        1. Wow. Okay, here’s the deal: we do have a subway here in LA. And, it’s great, it really is.

          But it hardly goes anywhere yet. It’s an infant. Meanwhile, it’s a huuuuuuuge city, with very spotty bus coverage, and jammed roads.

          Please note: I am just the messenger. I didn’t design the place, I am just stuck in it. (And it has some good things too.) Me and a few million other people.

          The housing market here is *not* on fire, actually. I do agree, Mr. Neal, that many of the condo prices seem to be quite outlandish, suggesting that there are rich people enough to buy them, but, it’s never made that clear how well the sales are going. So, I really don’t know if there are that many people who want them. Maybe there are. Plus, guess what? Those condo owners … are very likely to drive cars. Even if they live on top of the subway because … it doesn’t go where they need to get to.

          Someday, maybe it will. But it will be many years, and I don’t see why everyone who isn’t rich — ie, everyone who isn’t politically represented here — should suffer.

          1. Oh, and I haven’t even gotten to air pollution yet. Another good reason not to cram more people here.

            I am all for being green, but let’s be smart about it.

          2. Also, the transit in the LA area is laughably designed. Take for example the Light Rail, which doesn’t go anywhere near the airport. You have to pay a private company something like $8 to ride their bus several miles to the train station, so you can pay $2.50 to be whisked efficiently for a couple dozen miles. It’s nuts. I live in Pasadena, and I’ve pretty much given up on LAX because I can’t efficiently get there. With the connections, the light rail can take well over an hour and a half, plus a fifteen minute walk at the end, and driving means expensive parking and likely traffic jams.

          3. Oh, and I haven’t even gotten to air pollution yet. Another good reason not to cram more people here.

            This just isn’t true. Given good density, local amenities, and quality transit not used only by poor people, it’s quite easy to pack in a lot of people while still having green space and fresh air.

          4. But it hardly goes anywhere yet. It’s an infant.

            And it seems that you want to strangle it in its crib.

            Again, your argument doesn’t make any sense. If there isn’t any demand for those condos, then your fears of more people moving in are baseless. The only way that can happen is if there actually are people that want to move there.

            You should really pause in your posting long enough to figure out what your argument is.

          5. Warren Terra: you said, “Given good density, local amenities, and quality transit not used only by poor people, it’s quite easy to pack in a lot of people while still having green space and fresh air.”

            And that might very well be true, in cities where people have those things.

            But since I don’t live in one, I am quite naturally opposed to higher density.

            I agree though that as a *theory,* it all sounds dandy.

          6. Hi again Warren — as far as the airport, I agree that it’s too bad the subway doesn’t go there. But it was the same in the Bay Area, for whatever reason. You had to take a bus to Oakland Airport.

            You might try and see if there’s a bus, though. If there were a nearby stop, and someone could drop you off, that might work. There are a lot of lines, though MTA is cutting back. Actually, they’re famous for getting sued by bus riders for favoring the subway lines.

          7. I spoke too soon. I didn’t find a direct bus route on metro. Now, the LAX website says there is a free shuttle from the Aviation station on the Green Line, but if it’s a pain to get to the Green Line at your end, that won’t help that much.

            I’ll ask my transit wonk friend. He can get anywhere on public transit. This works for him because he’s never in a hurry (my idol).

          8. Last time I answer myself (today), I promise!

            Warren, here’s what my friend says: take the Gold Line from Pasadena to Union Station and then non-stop LAX Fly-Away bus from there. A little over 1 hour travel time. Fare 8.50 total.

            Of course, real world time might vary a bit. Also, I have no idea how near the Gold Line you are.

            Happy traveling!

  8. The book’s title wouldn’t have the palimpsest quality if the founder of the community movement of working people feeling the pain of big-city land-use policy hadn’t given the name to his movement. An e-book of sober economic analysis by a Slate writer appropriated the name of a grass-roots movement of poor urban people who appropriated a cute and vivid colloquialism.

    I think I’m trying to say that Jimmy McMillan should get a royalty.

    P.S. maybe the title only resonates if you’re from New York.

    1. Yglesias has mentioned Jimmy McMillan and the source of his title on numerous occasions.

  9. So I’m not going to read this book because it isn’t in my local library, but I have to wonder if Matt talks at all about where the rent is too damn low? I mean San Francisco has high rents, but it is a very small city. Nearby Oakland has low rents (comparatively) and is also small. If you really want low rents in San Francisco, an alternative method would be to annex Oakland. I mean that’s how New York grew at the end of the 19th century. It annexed Brooklyn and built a subway to get all those new New Yorkers into downtown for work. Isn’t that the bigger story rather than NIMBYism and zoning laws? Based on his blog posts Matt seems rather ignorant and naive regarding urban issues. Sad, considered he cares enough to write a book about it.

    1. I don’t have an opinion on whether SF should annex Oakland, but I used to live in Oakland and work in downtown Berkeley. My roomie worked in downtown SF. She could get to work in 20 minutes via the Casual Carpool, a miraculous system in which drivers picked up strangers near a freeway onramp and whisked them downtown.

      Whereas I could either drive to a 51 bus stop and endure a crowded, long bus trip, that got me to work really wishing for a drink, or drive to a BART stop one stop away from downtown, park there and hop on BART, which is what I did. All that took about an hour. I shouldn’t bash the 51 too much though, it’s a great line.

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