I was sent two articles (one in The Atlantic the other in Bloomberg View)  this last week about the fact that in the United States that more liberal and progressive cities usually have very expensive housing, so expensive that it can be linked to greater income inequality between the have’s and the have-nots in a city. The data and charts that have started the discussion were originally written about at Trulia, a real estate site. In that post, the author looked at election data from the 2012 election and relative housing prices in a number of cities in the United States:

 

Here’s two more charts from that post that look at price, per square foot, for housing in red and blue cities.

 

 

 

The author then asks what we all want to know:

 

 

What does all this mean? The point is not that Democrats cause expensive housing, lower homeownership, or greater inequality. Determining whether and how the political views of voters or their elected officials affect local housing markets is the stuff of scholarly research, not short blogposts. But because blue markets are less affordable, have lower homeownership, and have greater income inequality, political leaders in Democratic-leaning and Republican-leaning metros may push for different policies.

How does this work in blue cities? Megan McArdle, author of the post in Bloomberg View has lays it out pretty well:

Consider, too, that the liberal base is composed of a large number of small interest groups with a long and successful history of lobbying government for laws. Those groups have paid a lot of attention to enabling this sort of action, making sure that their local political institutions have lots of avenues by which small groups can affect the legislative process. Everything has extensive community review, and it’s easy for local groups to file lawsuits that block some undesirable project.

So when a local developer proposes to, say, build a huge housing project down the street, every neighborhood is well supplied with folks who have organizing experience and know how to lobby against something they don’t like. Those organizers have a lot of tools to fight with.

Liberals are very good at “taking it to the streets” when they don’t like something, and in cities like Seattle that could mean marraige inequality or the microhousing project down the street. Filling rooms with angry people, aggrieved about an issue is a liberal organizing trademark. The problem, however, is that in most cases in Seattle, the angry people are single family homeowners pressuring elected officials to enact policies that will constrict housing supply driving up rents for people moving to the city.

Derek Thompson, author of the post in The Atlantic quotes economist Matthew Kahn:

I asked Kahn if he had a pet theory for why liberals, who tend to be vocal about income inequality, would be more averse to new housing development, which would help lower-income families. He suggested that it could be the result of good intentions gone bad.

“Developers pursue their own self-interest,” Kahn said. “If a developer has an acre, and he thinks it should be a shopping mall, he won’t think about neighborhood charm, or historic continuity. Liberals might say that the developer acting in his own self-interest ignores certain externalities, and they’ll apply restrictions. But these restrictions [e.g. historic preservation, environmental preservation, and height ceilings] add up, across a city, even if they’re well-intentioned. The affordability issue will rear its head.”

The idea that enough data and planning can create policies that will create a certain outcome, including good design and low prices, simply ignores economic reality. But when backed with the same organizing tactics used to support civil rights, for example, that economic reality gets exchanged for a political one, and policies that are inflationary get enacted in the name of lowering prices. It’s a trend Seattle still has a chance to buck. Unless we do, we’re dooming people with less money to compete with wealthier people for rental housing, a competition they are sure to lose.