Left and Right Agree: $15 Should Mean More Housing Supply!

A recent article in the National Review about Seattle’s recent embrace of a $15 minimum wage (eventually) cites a housing study completed by the Wharton School of Business in 2007. The study conducted by economist Joseph Gyourko, includes an index based on the regulatory environment in cities across the United States. The higher the number, the harder it is to build housing.

Seattle 2.39
Honolulu 2.32
Austin 2.08
Los Angeles 2
San Francisco 1.96
San Diego 1.59
Phoenix 1.24
Raleigh 1.02
Atlanta 0.7
Denver 0.49
Miami 0.36
Charlotte -0.08
Dallas -0.14
Las Vegas -0.34
Chicago -1.15

The author of the post, Reihan Salam, is writing for a right leaning journal and pointing out that even with the big boost in minimum wages in Seattle (eventually), with housing costs being so high much of the benefit will be consumed by housing costs. And those costs are sure to rise as long as we make it hard to build housing here.

As you can see, residential land-use regulation is very stringently regulated in Seattle, or rather it was when the index was constructed in the mid-2000s. Seattle’s local land-use regulations are actually more stringent than San Francisco’s. This contributes to high housing costs in Seattle. When the Census Bureau developed its cost-of-living index for U.S. cities, using a “mid-management standard of living” as its reference point, it found that housing costs 140.3 percent as much in Seattle as the nationwide average. This is far less than in San Francisco (281 percent), but it is quite high all the same.

Yes, he is a skeptic writing for an outlet founded by William F. Buckley, so it must be suspect. But he’s pointing out what we’ve been saying all along, it might feel good to say you’ve raised the minimum wage, but without addressing the many rules and regulations that conspire to reduce housing supply, it may not be such a big win. In fact, pushing up wages with out addressing housing supply is a recipe for more inequity, with minimum wage earners forfeiting more of their new earnings toward scarce housing.

Just a few days later, though, the New York Times Magazine (an unassailable source for Seattle’s liberals) ran an article called Rent Asunder by Shaila Dewan, about housing economics. Here’s what the Times had to say about housing and housing price:

Today, cities that want to actually solve their housing problems will have to stomach . . . forms of psychic dislocation, not necessarily for those being housed, but those with strong ideas about their city should look and fell like. Many of the things that we cherish most about urban living are the very things that we cherish most about urban living are the very things that make housing more expensive.

The article goes on to quote recently elected New York Mayor Bill de Blasio saying that affordability is “going to take a willingness to use height and density to the maximum feasible extent.”

So while we might pat ourselves on the back about raising the minimum wage both right and left agree: we need to make room for growth in our cities. All the process, review, even if it isn’t motivated from people just trying to stop things from happening, won’t help lower prices. And if we resist new housing because it is different, dense, too tall, too small, or blocks our view of the winter light, we’re consigning more people to a struggle to find a place to live.

 

Comments are closed.