Krugman Misses Mark on Housing Policy
Paul Krugman’s November 30, 2015 New York Times Op Ed, Inequality in the City, has created a firestorm. To suggest that over regulation through zoning is a primary cause of rising housing prices in larger and older cities such as New York misses the boat. And, to run a supply and demand economic analysis to conclude that simply increasing the supply of housing in a market like New York to meet the demand will drive prices down such that more affordable units will come on the market is not a credible argument. Allan Mallach offers a thoughtful counterpoint to Krugman’s argument.
But let’s go a bit further. As I have often argued, thoughtful affordable housing policy is a necessity for every community. Zoning regulation, including inclusionary zoning, is an important tool to achieve this goal. Every community is different, and large, built out cities, like New York, have no choice but to have strong, comprehensive zoning codes. Even here in South Florida, we have achieved build out in the eastern sections of the urban corridor. Though high rise condos, apartments and office towers continue to be erected up and down the coast, developers have been able to do this through expensive land assemblies. Land costs coupled with high construction costs result in high housing costs. South Florida is more like New York than San Antonio. As I have previously argued and as Mr. Mallach argues, it is incumbent on local governments to create strong affordable housing policy. Regulation can be useful.