Tuesday, December 22, 2015

Megan McArdle: "Gentrification Is an Irresistible Force"

If you've been following the debate about gentrification (there! I used the 'G' word) you've probably read about the paradox the anti-gentrification groups find themselves in. By opposing development and new housing they risk getting 'gentrified' out of the very cities and neighborhoods they are trying to 'save'. Look no further than the failed social experiment in San Francisco. 

Megan McArdle wrote a long piece in BloombergView about gentrification and in the article she cites the number of tactics used to stop the process, or at least slow it down:
  • City-wide upzoning
  • Increase the crime rate
  • Underfund schools and education initiatives
  • Inclusionary zoning
  • Rent control
  • Scatter site development
  • Tax credits
  • Vouchers
But none of theses tactics solve the problem: there is not enough housing. So what happens when the supply is too low? The prices go up. This is exactly what happened in San Francisco. This sentence from the BloombergView article stood out:
Gentrification tends to stop when affluent people stop wanting to move into the city -- and while there are many government-sponsored ways that we could potentially achieve this end, they would involve things like deliberately underfunding schools, and allowing crime to rise. [emphasis added]
And this from the end of the article:
     If this sounds like I’m pointing and laughing at activists hoist by their own petard, let me say that this is the furthest thing from my mind. I don’t want another Robert Moses, and I do want more housing built, and unfortunately, there is an inevitable tradeoff between these priorities. The trade we made has limited the government's ability to preserve and create affordable housing while also limiting its ability to destroy communities. And I don't see any way to make a different one at this point, so blame is sort of beside the point. Maybe the legal changes of the 1970s were a mistake, but if so, they are a mistake that we cannot easily undo.
     And so here we are: The government simply has relatively little power to create more affordable housing in the face of massively increasing demand for homes in desirable cities like Washington, New York and San Francisco.
And you can add the desirable Palm Beach County to that list.