Awhile back we discussed the effect of wetlands conservation, among other things, on housing prices in Boston (Wetlands regs ...). Our foil was Ed Glaeser*, a Chicago economist at Harvard (ahem, an institution that is ranked slightly higher than AppState). Sunday's NYTImes has a great piece on him, Home Economics, and here is an excerpt from the intro paragraph with a last sentence that the typical env-econ reader will love:
Edward L. Glaeser grew up on the East Side of Manhattan, went to school in Princeton, N.J., and Chicago, lived for a time in Cambridge, Mass., and Palo Alto, Calif., and recently moved with his wife and young son to a house on six and a half acres in the affluent suburb of Weston, Mass. To Glaeser, this last move has been a big adjustment. For one thing, he is not a good driver, and the new commute has prompted him to leave his house by 6 a.m. so as not to get ensnared in the morning rush hour. For another, Glaeser and the suburbs are clearly an unholy marriage of sensibilities, especially since his new house is bordered by about 600 acres of conservation land. "I wake up every day, thinking, My goodness, how many units of housing could you build here?" he says.
Lots of fun stuff in the article.
It mentions the study that we mentioned above, the fact that land isn't scarce but that unregulated land is. The regulations are what increase housing prices. Here is a mention of Environmental and Urban Economics blogger, Matt Kahn:
He (Glaeser) has previously noted (with a collaborator, Matthew Kahn) that 95 percent of the United States remains undeveloped and that if every American were given a house on a quarter acre, so that every family of four had a full acre, that distribution would not use up half the land in Texas.
And this confusion about the political ideology of economists:
But Glaeser has many admirers, and several research collaborators, on the liberal end of the spectrum; he likewise displays an odd enthusiasm for progressive efforts like those by London's mayor, Ken Livingstone (Glaeser affectionately calls him by his popular nickname, Red Ken), who imposed a stringent "traffic tax" on vehicles in the center city to reduce congestion.
I think most all of us economists would support Red Ken's efforts, if the traffic congestion creates negative externalities. Also, he hates rent control. No duh, we economists all do. This is one reason economists are so hateable. If you are liberal we seem conservative. If you are conservative we seem liberal. Why can't we make up our minds?
Finally, and more substantively, the article discusses his recent research on city size (I was telling my spouse this story after the warm up band and before Wilco came out last night [um, they rocked!], she was unimpressed, but what does she know). Why haven't northeastern cities lost as much population as southern and western cities gained? i.e., why doesn't everyone leave Detroit? Part of the answer is in housing prices. As people leave a city, housing prices fall leading to much more affordable housing. Lower income people are attracted to the declining city and its population doesn't fall as much as the new cities gain. The problem is that this doesn't reverse a city's decline, it exacerbates it, as less educated people replace more educated people.
*Glaeser is the same guy (along with Hahn) who, rightly, we think, suggests that we should consider not totally rebuilding NOLA.
