Last weekend I read Matt Yglesias's concise 76-page critique of housing policy, The Rent is Too Damn High. I agreed with pretty much everything he says, and I think everybody who's interested in these issues should read it. I want to pick up on a couple of the points Yglesias made, but then to go in a different direction. Yglesias is mostly talking about the average price of housing relative to average incomes, and that's important, but I want to talk about the distribution of housing prices: how and why some houses and apartments are more expensive than others, and what that means for access (and therefore for justice and equal opportunity), for society, and for our other goals: increasing efficiency and reducing carnage and pollution.
Suppose that tomorrow there's a revolution in New York City. Zoning and rent control are abolished, and every member of the City Planning Commission and the community boards is sent off to the reeducation camps. Spreading out from the Empire State Building, developers cover the New York area in parking-free high-rises until there's enough housing for everyone, at affordable prices. Sounds great, right?
Almost. But all housing is not created equal. Some apartments are bigger, some have better views, some have are more conveniently located. Some come with relatively superficial amenities like pools and package services. Some are dangerous or bad for your health, from crime, pollution, bad construction or neglect.
Some housing differences are a matter of taste, like neighbors who play loud salsa music or cook Indian food. Some people choose their housing out of racism, moving out if a Black family moves in. Some people want to live near people like them. Some people want to live where there is ethnic diversity, with no single group dominating.
All these factors affect the price of the housing. People who can't afford higher rents will necessarily have to put up with some undesirable features, like bad views, loud music, crime or a long commute. And that's where issues of fairness arise.
Even though I sometimes talk about market solutions to various problems, I am not a libertarian. I believe that some people are poorer than others through no fault of their own - including twentysomethings and creative types as well as members of stigmatized minority groups - and therefore need something to balance out the inequality of opportunity that comes with inequality of wealth. I also believe that some people are less wealthy than others because they've chosen a career that benefits society in some way - like teaching or cleaning toilets - and society should compensate for that. I believe that it's good for people to live near others of different economic backgrounds, and for kids to grow up with other kids who come from different walks of life.
One way of accomplishing this is through a top-down program like subsidized artist housing or Section 8 vouchers. A similar method is the "inclusionary housing" programs, which are very problematic. There is a more market-oriented solution, though: build more cheap housing. And cheap housing is bad housing. The next question is: bad in what way?
If the only determinant of an apartment's price is its distance from job centers, then the poor and the young will all wind up living on the outskirts of town, paying for their poverty with long inconvenient commutes. If the only determinant of price is proximity to a hazardous waste dump, or neglected housing stock, or gang activity, then the poor and the young will wind up in substandard housing, exposed to toxins and victimized by gangs. If the only determinant of price is proximity to "the right people," then the poor will wind up clustered together, having little contact with other social classes.
To prevent segregating the poor into inconveniently located bad housing with crime and pollution, we need to make some safe, solid housing available closer in, integrated with the rich people's housing. that is still affordable. In order to do that, we need to allow housing that's cheap in the non-dangerous, non-segregated ways. That means housing that's small or ugly, with crappy views and no doormen. Maybe housing that allows loud music if it doesn't bother anyone else. Regardless, it should still be well-built and well-maintained, and safe from pollution and crime.