The always-interesting Joel Kotkin is out with a new essay exploring the implications of skyrocketing housing costs—especially in coastal blue cities—for America’s politics and settlement patterns:
There’s little argument that inequality, and the depressed prospects for the middle class, will be a dominant issue this year’s election. Yet the most powerful force shaping this reality—the rising cost of housing—has barely emerged as political issue. [. . .]Driven in part by potential buyers being forced into the apartment market, rents have risen to a point that they now compose the largest share of income in modern U.S. history. Since 1990, renters’ income has been stagnant, while inflation-adjusted rents have soared 14.7 percent.
As Kotkin emphasizes, this is a middle-class issue. But it’s also a generational issue: Rising rents and housing costs hit young people, whose incomes are lower than the incomes of older Americans, especially hard. The ability to buy a home or afford a decent apartment is a major element of achieving adulthood, of being able to support oneself, and being able to start a family. Making home ownership attainable is essential to making young people feel that the American economic system can work for them.As we’ve said before, prohibitive housing costs are at least in some ways a policy choice made by constituencies with political power in America’s big blue cities. Upper-middle class professionals tend to prefer restrictive land-use regulations because of their cultural preference for Manhattan-style “density.” Union monopolies on construction drive up housing costs. And rent control and other policies meant to help subsidize the poor often end up favoring wealthy property owners while squeezing upwardly mobile young people.Getting housing policy right is one of the most important things a country can do for itself—and getting it right means making it work for young people.