Monday, July 17, 2017

Economics Detective Podcast

Garrett Peterson over at the Economics Detective kindly asked me to be a guest on his podcast.  We had a great conversation.  I think Garrett managed to help me hit most of the main points of my housing research.

Podcast at the link.


  1. Great interview.

    But I writhed in agony while listening to the podcast---the words "property zoning" never are uttered!

    "Closed Access Cities" is a useful phrase, but it reminds me of a town with Broderick Crawford-manned Highway Patrol roadblocks. Maybe they refuse sewer hook-ups to newcomers. No new business licenses issued this year, sorry buddy, and don't be in town after sunset.

    Egads, I hope you have the words "property zoning" somewhere in your book. Just once, please! In a footnote, if not regular copy.

    Cities won the right to zone property in 1926, by Supreme Court ruling.

    Another thought: Yes, zoning is tight in closed access cities---but in the case of L.A., it is arguably even tighter in Orange County or Ventura County (to the north and the south), and in many close-in cities, such as Beverly Hills, or Santa Monica.

    In fact, one of the oddities is that you can build a skyscraper with condos in "liberal" downtown Los Angeles, but nowhere in OC or Ventura.

    I do not know the situation in a NYC, Silicon Valley or Boston exactly, but anecdotally, the same situation seems to exist. Close access cities become ringed with suburbs, which are also closed access. Two-acre minimums in Connecticut. Lincoln, Mass. is small town outside Boston, and every home is single-family detached $1+ million and woodsy. I assume that is due to zoning.

    It may be politically savvy not to use the words "property zoning"---even right-wing readers are uncomfortable with the idea of eliminating property zoning. "Uncomfortable" is a euphemism.

    Plus, many readers like the idea of making fun of frizzy-haired pointy-head hipsters in NYC and Boston. The pot and the kettle so to speak.

    I still think trade deficits are an issue to explore. Is there a reason nations with current account trade deficits tend to have housing price appreciation?

    Anyways, I congratulate you an excellent podcast and your host too.

    1. Zoning is one part of a much broader problem. It makes a nice shorthand, but I'm not sure it's the best shorthand. I like Closed Access better, because just calling the problem "zoning" allows for strawmanning, I think.

      You are right that LA and Orange Co. seem to have a similar problem and that Closed Access suburbs are generally bad. But, in cities where there is a more clear urban/suburban divide, price/sq. ft. increases sharply as you go toward the core. The problem is more pronounced there. The value of dense housing is much higher in Manhattan or San Francisco than it is in New Jersey or Contra Costa County, even if those suburbs have lots of problems.