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As far as I can tell, it is a myth that building high-income-targeting housing does not help, in aggregate, low-income earners. See the concept of filtering, wh

As far as I can tell, it is a myth that building high-income-targeting housing does not help, in aggregate, low-income earners. See the concept of filtering, which is well-studied and sees two effects: 1. middle-high-income households moving into more expensive units, middle-low-income into the space left over from that move, etc. 2. the slower effect of declining values from aging housing stock. Okay, but you're still skeptical. I do honestly understand, you probably should be; I definitely don't regard myself as the best person to argue about these things. Knowing that, I should make a less ambitious case on this one and point out that "grabbing cheap land" for expensive construction is far better than letting it go empty and not contribute via taxes to the local government's coffers. And yes, I'm aware of the criticism of LVT. But isn't it obvious? If we have politicians who are virtuous enough to enact an LVT, I think we've tunneled into an alternate reality operated by saints, so that just about resolves itself.

eesmith 7y ago
There are other downstream consequences. Consider in a simple model two cities, A and Z, which are next to each other. In A, the city focuses on high-end housing. It's successful. Rich people move to A. Rents go up on older housing, to meet the market demand, including the temptation to sell the plot, raze the structure, and build new high-end housing. As a result, poorer people move to the more affordable Z. This is exactly what's predicted in your #1. Since the expensive housing is in A, that city gets more tax money, which goes to schools, libraries, parks, etc. Z doesn't have that revenue source, so ends up with worse quality schools, libraries, parks, etc. The citizens of city A all have cars, and don't like all the non-residents coming through and using "their" libraries, parks, etc. so convert most streets to cul-de-sac versions and don't provide mass transit. The citizens of Z, many with service worker jobs in A, must therefore buy cars in order to keep their jobs. Which lowers their overall income, and makes it harder to save up money. Z responds by building more low-cost housing, but this is further away from A (where the jobs are), and doesn't address the unequal tax base. > But isn't it obvious? Well, yes. That is my point. I pointed out that if you assume you have a solution, then of course there's a solution. Remember, you argued "You could have the most evil landlords, corrupt politicians, and aloof newcomers, and an economic solution would still fix the problem." What economic solution is there if you have normal people? Not saints, and not demons.
- eesmith 7y ago
  Here's another downstream consequence, for London. When a lot is converted to high-end apartments, the population density may go down. For example, what may have been an apartment house for 20 families (5 floors, 4 per floor) may be 10 or even 5. Or, as is the case in London, the apartment may be occupied only occasionally. Neighborhood business often depend on local traffic. If there are fewer people, then there is less need for barbershops, and corner shops, and the like. Owners may need to quit, sell their property, and move elsewhere. These are stressful. Grocery stores may switch to high-end/expensive foods. As a result, the non-rich who live there have fewer options, and a lower quality of life. Now, this may not be a problem for those who use economics to maximize "gross domestic product" or other easily measured value. But it may worsen, say, "Gross National Happiness." Economics doesn't guide us on what to maximize. That's what politics does.

eesmith 7y ago

There are other downstream consequences. Consider in a simple model two cities, A and Z, which are next to each other. In A, the city focuses on high-end housing. It's successful. Rich people move to A. Rents go up on older housing, to meet the market demand, including the temptation to sell the plot, raze the structure, and build new high-end housing. As a result, poorer people move to the more affordable Z. This is exactly what's predicted in your #1. Since the expensive housing is in A, that city gets more tax money, which goes to schools, libraries, parks, etc. Z doesn't have that revenue source, so ends up with worse quality schools, libraries, parks, etc. The citizens of city A all have cars, and don't like all the non-residents coming through and using "their" libraries, parks, etc. so convert most streets to cul-de-sac versions and don't provide mass transit. The citizens of Z, many with service worker jobs in A, must therefore buy cars in order to keep their jobs. Which lowers their overall income, and makes it harder to save up money. Z responds by building more low-cost housing, but this is further away from A (where the jobs are), and doesn't address the unequal tax base. > But isn't it obvious? Well, yes. That is my point. I pointed out that if you assume you have a solution, then of course there's a solution. Remember, you argued "You could have the most evil landlords, corrupt politicians, and aloof newcomers, and an economic solution would still fix the problem." What economic solution is there if you have normal people? Not saints, and not demons.

eesmith 7y ago
Here's another downstream consequence, for London. When a lot is converted to high-end apartments, the population density may go down. For example, what may have been an apartment house for 20 families (5 floors, 4 per floor) may be 10 or even 5. Or, as is the case in London, the apartment may be occupied only occasionally. Neighborhood business often depend on local traffic. If there are fewer people, then there is less need for barbershops, and corner shops, and the like. Owners may need to quit, sell their property, and move elsewhere. These are stressful. Grocery stores may switch to high-end/expensive foods. As a result, the non-rich who live there have fewer options, and a lower quality of life. Now, this may not be a problem for those who use economics to maximize "gross domestic product" or other easily measured value. But it may worsen, say, "Gross National Happiness." Economics doesn't guide us on what to maximize. That's what politics does.