A recent study by Dr. Chang-Tai Hsieh and Dr. Enrico Moretti titled Growth in Cities and Countries, found that highly productive cities such as Seattle are limiting not only their own local economic potential, but also the national economic potential, by restricting their housing supply. Hsieh and Moretti call these highly productive cities “innovation clusters,” distinguished from other areas by their exceptional growth in labor demand over the last four decades. Seattle’s innovative businesses and culture has fueled the growth of companies like Microsoft and Amazon, but also many others. As they grow, they need more workers and those workers need a place to live if they move here.

However, strict anti-development land use policy in Seattle and cities of similar economic productivity has choked local housing supply, thereby reducing the labor supply available to take advantage of this demand. Insufficient and excessively expensive housing means that Seattle cannot take full advantage of its economic potential. If more workers could relocate to Seattle, they would maximize their own productivities and earn higher wages while enhancing and optimizing Seattle’s overall productivity.

This problem of inefficient labor distribution is not unique to Seattle, and when aggregated across the whole country, it leads to sizable output and welfare losses. Indeed, Hsieh and Moretti estimate that inefficiently allocated labor supply in the United States could be lowering average worker salaries by up to $7,400 per year, or, in terms of total economic output, costing us 13% of US GDP, or roughly $1.7 trillion.

Because of its naturally dynamic and innovative commercial environment, Seattle is a very economically efficient city, and by clamping down on housing supply, we limit the ability of others to add to and benefit from that efficiency. In other words, restricting housing development directly inhibits and destroys one of the greatest things our city has to offer. It is time for opponents of high-density housing development to understand that by protecting their own isolated interests, they harm the outside community to a much greater magnitude than they themselves benefit. As Hsieh and Moretti state, restricting housing supply results in “a large negative externality imposed by a minority of voters on the entire country.”

While foregoing restrictive land use policy would require some degree of sacrifice on the part of existing residents, they, along with prospective residents, the city as a whole, and the country as a whole, would all benefit greatly from the ability to better allocate labor across the country. Average wages would rise, productivities and welfare levels of cities would increase, and the strength of the US economy as a whole would improve. Ultimately, Hsieh and Moretti’s findings illustrate that relinquishing authoritative control over land use in the interest of the greater good would yield far-reaching benefits that would repay their initial sacrifice many times over.