William A. Fischel: Growth Controls & Housing
NYU Urban Seminar
40 Washington Square South
Thanks to William A. Fischel for leading this NYU Urban Seminar, titled "Do Growth Controls Cause High Housing Prices, or Vice Versa? A Political-Economic Explanation for Variation in American Zoning Policies." This was based on his paper, "The Rise of the Homevoters: How OPEC and Earth Day Created Growth-Control Zoning that Derailed the Growth Machine".
"In the 1970s, unprecedented peacetime inflation, touched off by the oil cartel OPEC, combined with longstanding federal tax privileges to transform owner-occupied houses into growth stocks. The inability to insure the newfound value of their homes converted homeowners into “homevoters,” whose local political behavior focused on preventing development that might devalue their homes. Homevoters seized on the nascent national environmental movement, epitomized by Earth Day, and modified its agenda to serve local demands, thereby eroding the power of the prodevelopment coalition called the “growth machine.” The post-1970 shift in the American economy from manufacturing employment to knowledge-based services rewarded college graduates and regions that specialized in software and finance. Residents of suburbs in the larger urban areas of the Northeast and West Coast used existing zoning and new environmental leverage to protect their rising home values. The entrenchment of these regulations has slowed the growth of the economy and increased national income inequalities. I argue that the most promising way to stanch this trend is to reduce federal tax subsidies to homeownership."
Please find the Furman Center's write-up of Fischel's seminar here.
The NYU Urban Seminar is co-hosted by the Marron Institute and the Furman Center.
Tile image courtesy of La Citta Vita.