Here’s an interesting piece in The Washington Post today that should be provoking some discussion among people concerned with housing affordability: In expensive cities, rents fall for the rich – but rise for the poor.
The conventional wisdom is that a housing oversupply will cause the costs to go down – the famous law of supply and demand. If we just allow developers to build plenty of housing, rents will sink. But that appears not to be happening.
The article, which is pegged to information from Zillow, does not address Charlotte specifically. So while maybe the same is true here it′s also possible that given the growth pressures in this fast-growing city – named by Zillow as the nation’s fourth-hottest housing market – the top rents here are staying high.
The most significant ponderable here, I think, is whether – if that old law of supply and demand appears not as reliable as we′ve been led to think – the free market on its own can provide enough housing at a price more city residents can afford. The City of Charlotte is helping with its housing trust fund, but it seems doubtful we can simply build our way out of the problem.
I was talking last week with a zoning and planning lobbyist in Charlotte – a guy whose planning background doesn′t stop him from generally hewing to a basic free-market approach. He said he′s starting to believe cities should consider housing affordability as part of the basic package of infrastructure the local government provides like streets, police and fire service, parks, public health services, etc. Maybe the city builds it, maybe it helps other people build it, maybe it helps people afford it, or maybe there′s another way to accomplish this, he said.
The conventional wisdom is that a housing oversupply will cause the costs to go down – the famous law of supply and demand. If we just allow developers to build plenty of housing, rents will sink. But that appears not to be happening.
The article, which is pegged to information from Zillow, does not address Charlotte specifically. So while maybe the same is true here it′s also possible that given the growth pressures in this fast-growing city – named by Zillow as the nation’s fourth-hottest housing market – the top rents here are staying high.
The most significant ponderable here, I think, is whether – if that old law of supply and demand appears not as reliable as we′ve been led to think – the free market on its own can provide enough housing at a price more city residents can afford. The City of Charlotte is helping with its housing trust fund, but it seems doubtful we can simply build our way out of the problem.
I was talking last week with a zoning and planning lobbyist in Charlotte – a guy whose planning background doesn′t stop him from generally hewing to a basic free-market approach. He said he′s starting to believe cities should consider housing affordability as part of the basic package of infrastructure the local government provides like streets, police and fire service, parks, public health services, etc. Maybe the city builds it, maybe it helps other people build it, maybe it helps people afford it, or maybe there′s another way to accomplish this, he said.
For a generally fiscally conservative guy to propose that speaks, I think, to the reality Charlotte and many other cities face: Too many residents don′t earn enough money to afford much of the available housing. And beliefs about how the marketplace can provide it may need some readjusting.