Edward Glaeser offers a better alternative to Kamala Harris’ ideas for improving Americans’ housing options.
Vice President Kamala Harris correctly identified one of America’s biggest problems when she said that “there’s a serious housing shortage.” America’s affordable-housing crisis exacerbates wealth inequities, leads low-income parents to live in neighborhoods with less upward mobility and reduces our country’s capacity for economic growth, innovation and adaptation to regional shocks. Unfortunately, her proposed solutions seem too small and too poorly targeted to generate enough housing to make America’s most productive places more affordable.
Our next president could do much to unwind America’s housing shortage, which has its roots in regulations enacted by innumerable municipalities. But “not in my backyard” towns won’t start building out of the goodness of their hearts. To unleash enough new building to bring affordability, we need to dust off our history books and remember how this country raised the legal alcohol drinking age. The National Minimum Drinking Age Act of 1984 demanded states raise the minimum age to buy or publicly possess alcohol to 21 — or face a reduction in federal highway funds. The threat of losing such funds is a big stick.It will take a forceful solution to address such a big problem. Nominal rents have risen by 6.5 percent a year since the start of the Biden administration and continue to surge even while overall inflation is dropping. …
… In unveiling the beginnings of her economic platform, Ms. Harris announced a housing plan that includes demand-side subsidies like $25,000 for all first-time home buyers. The problem, however, with any policy that gives more money to buyers is that it pushes up demand, which only pushes up prices further, as housing supply has become ever more rigid amid development opposition. …
… But no reasonable cash handout is likely to achieve much in the more prosperous suburbs that are NIMBYist ground zero. The opposition to change is too strong.
