The pattern
is this: Despite hysteria over high home prices, in most parts
of the United States housing is quite affordable. But in some
places housing prices are astronomical -- three times the national
average in much of California, for example.
Despite
the old rule of thumb that housing should cost no more than one
fourth of your income, there are parts of California where tenants
and new home buyers pay at least half their incomes for housing.
This can
be a serious problem in such places because it means that only
the other half of people's income is available to pay for such
frills as food and clothing.
These dire
situations are more likely to be featured in the media, partly
because bad news sells newspapers and gets higher television ratings.
Moreover, media elites are more likely to be living in the places
where housing prices are out of sight -- places like Manhattan,
coastal California, and the posh suburbs around Washington or
various other cities.
It is a
very different story in most of the rest of the country. A scholarly
study published in the October 2005 issue of the Journal of Law
and Economics concluded: "In the sprawling cities of the
American heartland, land remains cheap, real construction costs
are falling, and expanding supply keeps housing costs low."
In some
cities, housing prices have actually declined as the housing supply
has expanded. None of this is rocket science. It is supply and
demand.
Why then
are there particular places where housing costs have skyrocketed?
In those
places, much of the land is prevented by law from being used to
build housing. These land use restrictions are seldom called land
use restrictions.
They are
called by much prettier names, like "open space" laws,
laws to "preserve farmland" or prevent "sprawl,"
"greenbelt" laws -- or whatever else will sell politically.
People who
already own their own homes don't worry about whether such laws
will drive housing prices sky high. Somebody else will have to
pay those prices while existing homeowners see the value of their
property rise by leaps and bounds.
Meanwhile,
land that might otherwise provide homes for others becomes in
effect free park land for themselves, while such upscale communities
use "open space" laws to keep out the masses. The crowning
touch is that such self-interest is depicted as idealism.
A famous
economist named Joseph Schumpeter once said that the first thing
someone will do for his ideals is lie. Some people distinguish
little white lies from black lies but the biggest lies of all
are green lies.
To hear
environmental zealots tell it, they are just trying to save the
last few patches of greenery from being paved over. But in fact
the land area of the United States covered by forests is more
than three times as large as the land area covered by all the
cities and towns across the nation.
Only about
5 percent of the land is urban. In other words, you could double
the size of every city and town in America and still nine-tenths
of the land would be undeveloped.
Some of
the biggest hysteria about "saving" land is found in
places where most of the land is already off-limits to building.
Some of the biggest crocodile tears about a need to "preserve
farmland" come from people who are not farmers, and who know
little and care less about farming.
Chronic
agricultural surpluses that cost the taxpayers billions show that
there is too much farmland producing more than the market can
absorb, while the growing of these surplus crops puts all sorts
of chemicals into the ground, water, and air. But the green liars
don't mention that.
Their real
agenda is keeping out other people. Home builders who would enable
other people to move into their community are called selfish and
greedy. Green liars consider themselves morally far superior to
"developers."
