Yes, Smart Growth Caused the Mortgage Meltdown

Wendell Cox, one of the Antiplanner’s faithful allies, argues in a new paper that “smart growth exacerbated the international financial crisis.” Of course, the Antiplanner has said this at least since last December (and The Best-Laid Plans predicts such an outcome), while some of the Antiplanner’s loyal opposition remains skeptical.

Skeptics probably won’t be persuaded by Cox, simply because his arguments are similar to those previously made here. “Excessive land-use regulation,” says Cox, led to artificial housing scarcities. This drove up prices and led people who would otherwise have been able to afford a mortgage at prime rates to turn to subprime loans. Of course, the loosening of the credit market contributed, but without smart growth, we would currently have a “subprime mortgage problem” rather than a full-blown international economic crisis.

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