Misconception: Gentrification is caused by development. Misconception: There is a natural conflict between homeowners and renters, where renters should naturally prefer higher density, and homeowners should prefer lower density.īoth renters and homeowners benefit from higher density zoning, renters because it lowers their rent, homeowners because it increases the value of the land they own. Decoupling these two ideas is essential to understanding these issues.
Nobody buys a refrigerator expecting to sell it for more than they paid for it. The land under the house is the investment. These misconceptions cause much of the political conflict about it.Ī house is a depreciating consumption good like a refrigerator.
We have the wrong language for it, and incoherent mental models for how things actually work. The most interesting point I picked up from reading this: We as a society just don't know how to think about land use and development. This is largely because the people who would provide child care (and would make a comfortable income doing so) can't afford to live in the valley due to its misguided land use restrictions. For instance, there are a ton of young professional couples in the valley with young children, yet childcare is expensive and hard to find. This leads to shortages and high prices for essential services. This makes everyone worse off, but the poor most of all.įor instance, the tech industry is booming in Silicon Valley, but very few people can benefit from that boom, because very few people can live close enough to benefit from it.
The US economy is built out of a relatively small number of skilled workers and capitalists earning lots of money, with the rest of the employment in services supporting them (and in services supporting the people supporting them, and so forth.) High density living is prohibited by law in most of the country, so the people working in those support jobs can’t live near the places where it is most profitable to work them. Yglesias makes a convincing argument for a surprising cause of US's worsening economic inequality : Pervasive low-density residential zoning.
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