Harvard economists have proven one of the major theses of American Nightmare, which is that land-use regulation is a major cause of growing income inequality in the United States. By restricting labor mobility, the economists say, such regulation has played a “central role” in income disparities.
When measured on a state-by-state basis, American income inequality declined at a steady rate of 1.8 percent per year from 1880 to 1980. The slowing and reversal of this long-term trend after 1980 is startling. Not by coincidence, the states with the strongest land-use regulations–those on the Pacific Coast and in New England–began such regulation in the 1970s and 1980s.
Forty to 75 percent of the decline in inequality before 1980, the Harvard economists say, was due to migration of workers from low-income states to high-income states. The freedom to easily move faded after 1980 as many of the highest-income states used land-use regulation to make housing unaffordable to low-income workers. Average incomes in those states grew, leading them to congratulate themselves for attracting high-paid workers when what they were really doing is driving out low- and (in California, at least) middle-income workers.
As Virginia Postrel puts it, “the best-educated, most-affluent, most politically influential Americans like th[e] result” of economic segregation, because it “keeps out fat people with bad taste.” Postrel refers to these well-educated people as “elites,” but the Antiplanner simply calls them “middle class.”
If you’re reading this then you like me have suffered from Migraines and I’m sure you’ve taken viagra in india many medications to help deal with the attack when it begins. This in turn viagra sildenafil http://valsonindia.com/wp-content/uploads/2018/09/Final-Notice-of-EGM.pdf creates a distance between a husband and wife. Avoid taking Kamagra Jelly in certain conditions You should not take canada pharmacy tadalafil navigate to these guys without any medical supervision. Let’s cialis in canada look at how Vardenafil helps to cure male impotence with Kamagra. Middle class doesn’t mean middle income; it means people with managerial, creative, or other jobs that require thinking, not repetitive or physical labor. As a proxy, the Antiplanner uses a college education: less than 30 percent of working-age Americans have a bachelor’s degree or better, and these roughly constitute the middle class. Though some people with college degrees flip burgers just as some without such degrees gained enough knowledge on the job to be promoted into management, it seems likely that about 30 percent of the population are middle- or upper-class while 70 percent are working- or lower-class
Census data show that, in the late 1970s, the average worker with a high school diploma but no college education earned more than 64 percent as much as the average worker with a bachelor’s degree. By 2010, it was less than 53 percent.
As the Antiplanner has previously pointed out, the barrier between the 1 percent and the 99 percent is far more porous than the one between middle class and working class. The rising cost of higher education and the high cost of moving into regions with land-use regulation prevent less-educated people from bettering themselves. Increased regulation of commercial operations limit people’s ability to start small businesses. Increased traffic congestion also hits working-class people harder than middle-class workers as the former are less likely to be able to take advantage of flex-time, telecommuting, and other ways of avoiding congestion.
Britain, which has regulated land use since 1947, is suffering many of the same problems. As the Telegraph reports, this regulation has divided “the nation between old and young, haves and have-nots.”
Of course, many urban planners still refuse to believe that land-use regulation makes housing expensive. Never mind the fact that economists at Harvard, Whartons, and a wide range of other universities agree that it does. Let’s just ignore the fact that such regulation is destroying our economy and oppressing low-income families. All that is important is that the middle-class elites who benefit are happy.
Here are the key charts from the Antiplanner’s video proving that planners caused the bubble:
http://www.debunkingportland.com/bubble_chart.html
Thanks
JK
Jim, I respectfully disagree.
But if you replace the word planners with the words elected officials (who must approve or reject what the planners propose), then we are in agreement.
Whenever I read a piece like this, I don’t think of Harvard economists, but of the hugely-entertaining left-wing folk singer/songwriter Utah Phillips. I tried to hear him at every opportunity, and the first time I did around 1978, he sang a song about the gentrification of Seattle’s (or Portland’s?) skid road called, I think, “They’re Runnin’ the Bums Out of Town.”
It’s not just the bums anymore, but the poor, the blacks, the Mexicans and other recent immigrants, and everyone else who can’t pay the rent.
Now I think I’ll get out my copy of the IWW Little Red Songbook I bought from Phillips and lead my friends in a round of “We Have Fed You All for a Thousand Years.”
Harvard economists have proven one of the major theses of American Nightmare, which is that land-use regulation is a major cause of growing income inequality in the United States.
If, by proven you mean “explains only about 1/3 of the variance”, then yes, they proved it. Otherwise, they’ve found one of the multiple factors involved, and one that explains the phenomenon less well than chance.
I know its your job to blow this issue out of proportion, but when you do it, don’t link to the paper you claim supports your assertion. Oh, I know most of the adherents to the ideology won’t read the paper, but still.
DS
By “proven”, we mean “of expected sign and statistical significance”, and consistent with theoretical model’s prediction.
By “provenâ€, we mean “of expected sign and statistical significanceâ€, and consistent with theoretical model’s prediction.
It explains less than half the variance.
That is: chance has greater predictive capability. That’s what we mean when we question assertions of ‘proven’.
DS
That’s not the correct interpretation. You’re conflating the overall goodness-of-fit of the model with the significance of the variable of interest.
The authors tested their hypothesis about a relationship between regulatory stringency and income convergence. They found evidence of a statistically significant relationship between these variables with the expected sign. The fact that the estimated parameter was statistically significant means, among other things, that it is not likely that this relationship came about by chance.
Ah. Yes, I agree and I think both our points are valid, and I’m being unclear. I agree that rich areas have made it harder to build anything but housing for the rich. What I’m saying is that the home price increase is not the only reason for the divergence.
BTW, right away they mention Glaeser’s work (that they extend in a different way), which we’ve discussed here several times, and it is instructive: Glaeser (et al) found that the zoning for larger minimum lot sizes was a major reason for the price rises in the U.S. NE.
That is: zoning to keep lower incomes out. This paper looked at appellate court cases to find regulation changes, which captures more than lot sizes: it capturs uses (MFR bans, accessory dwellings, covenant design controls, etc which are indicators of different measures to maintain/raise quality of life).
You’ll find several planners on here lamenting this sort of zoning and asserting that eliminating Euclidean zoning would partially solve for the large-lot single-fam American Dream that limits housing supply.
DS
The middle class is to blame? WTF?
The main factor of income disparity between 1970 and today is inflation. Who gets to use newly printed money? Bankers and the 1%. Who are tertiary consumers of newly printed money and therefore pay the full cost of inflation? The middle class. Who benefits the most from inflation? Large debtors, and the gov’t of the USnA is the largest debtor in the world. Banks+Gov=Reason for the crisis and income disparity. It’s not that hard to figure out and there’s no need to throw planners under the bus. At least, not for the housing bubble, which was caused by extended low interest rates set by the Federal Reserve at gov’t behest to manipulate the economy to the benefit of the 1%.
I’ve said all this before, so I’ll stop repeating it.
But the Antiplanner does his readers a disservice by not examining the Austrian School theory on the business cycle and by scapegoating planners.
“Census data show that, in the late 1970s, the average worker with a high school diploma but no college education earned more than 64 percent as much as the average worker with a bachelor’s degree. By 2010, it was less than 53 percent.”
This is a statement on the declining value of a high school diploma caused by government schools’ inability to adapt to the changing economic landscape.
Government schools are Prussian dinosaurs predicated on coercion and mass production of mindless automatons who won’t question their benevolent corporate masters and government overlords. From 1970 to 2010, manufacturing went from a quarter of GDP to under 13%, but public schools continued forcing children into an obsolete system built to churn out factory workers.
Video of American Nightmare:
//vimeo.com/45418756
Thanks
JK
Its far easier to correlate the income inequality trends to the enacting of the income tax in 1913 and its increase in rates through 1981, when rates on top earners an unearned income began a 30 year period of being slashed, causing, shockingly, more income to flow to those in the top brackets.
Most studies that purport to show increases in inequality typically focus on self-reported pre-tax incomes, so marginal income tax rates have little to do with it. The 30-year period you point to also coincides with a number of other trends that represent viable explanations for income divergence, especially increases in returns to skill and expansion of global market/scale effects, which make the returns to the development of new products much larger.
Any discussion of the decline in wages of the average American would have to include the decline of the influence of labor unions resulting in blue collar wages significantly going down. While many in transit celebrate contracting out in transit as a way of saving money – which it does – it would be good to remember how it saves money – by paying people less.
As others have pointed out, the major zoning that has afflicted the less well off is the suburban exclusionary zoning with such things as minimum lot size. This is then compounded by those same suburbs attracting shopping centers, office parks and light industry making certain that most of the workers can’t afford to live there. These various places of employment are set back nicely from the road, in most cases with no sidewalks so there is little grouping of destinations, again due to zoning. Then we wonder why transit doesn’t run full in the peak period trying to serve these places. Yes planners, elected officials, and developers have caused major problems but it is primarily the suburban planners, elected officials and developer who have done so.
“the major zoning that has afflicted the less well off is the suburban exclusionary zoning with such things as minimum lot size”
That’s a major myth that has no basis in reality. Almost all incorporated suburbs of Houston are zoned, yet housing remains very affordable.
Zoning does not make housing unaffordable if it is responsive to the market; that is, if the zoning of greenfields can be easily changed in response to what the owners or developers want to do. This is the way it works in most of the Midwest and South; it is mainly on the Pacific Coast and New England states where zoning and planning have made housing unaffordable.
Consider this: according to the Coldwell Banker home price index, in 2011 a 4-bedroom, 2-1/2 bath home in a middle-class neighborhood in Houston (no zoning) costs $187,000; in Atlanta (zoning) $255,000; in Portland (growth management), $357,000; in Boulder (slow growth), $860,000. So zoning may have added a little to the cost of housing, but growth management is the main culprit.
To play devil’s advocate, is it possible that homes are more expensive in Portland and Boulder because they are prettier cities closer to great natural features? (I know we’ve had this conversation here before and many don’t consider the Gorge and the Front Range amenities.) Is it also possible that houses are more in these areas because geography limits growth?