| I'm talking about perception, not policy. OP's paper is about perception among "rationally ignorant voters", specifically: > This paper suggests another, complementary explanation for the over-regulation of metropolitan land use: the failure of ordinary voters to appreciate that large, exogenous increases in regional housing stocks would put downward pressure on prices, coupled with voters’ tendency to blame housing providers (developers and landlords) for high prices. and > Studies of interregional migration in response to negative employment shocks have tended to find that mobility is lower than economists had expected (Autor, Dorn, and Hanson 2013; Greenland, Lopresti, and McHenry 2019; Yagan 2019; Choi et al. 2024). Similarly, US metro areas with greater regulatory barriers to new supply experienced less housing-stock growth and less in-migration, but no more out-migration, than less constrained metros from 1990 to 2000 (Molloy, Nathanson, and Paciorek 2022). Such frictions mean that regional housing supply shocks will have larger effects on regional than on national prices. > But again, laypeople have no reason to know of these research studies. Nor do ordinary people have first-hand experience with large, sudden shocks to their metro-region’s housing supply. Regional housing stocks have changed slowly, especially in recent years. Between 2008 and 2023, the total housing stock in the United States increased at an annualized rate of only 0.7 percent, with much of the growth concentrated in only a few active markets (US Census Bureau and US Department of Housing and Urban Development 2023a). Meanwhile, national median home prices have risen consistently except during recessions (US Census Bureau and US Department of Housing and Urban Development 2023b). It would be no great leap for the layperson to infer that only macroeconomic factors and financial markets, and not local supply-side factors, such as land-use restrictions, determine housing prices. Part of that perception is in locals' belief that new high-end local housing stock can help affordability _only_ if it frees up affordable units in the local market. If the perception is that new high-end units aren't freeing up lower-end units _in the same market_, then locals are going to complain to electeds and oppose new developments, regardless of whether it's rational to do so. It's Sisyphean to prove to a local that an outsider buying up an attractive unit priced out of the local's reach is actually a good thing for the local; there's no visible benefit and they receive no tangible relief from it. They couldn't afford a home before the new stock is built, and they can't afford a home after the new stock is fully occupied. Either the benefits are on a long timescale, or there are larger problems than housing stock influencing affordability. The "people moving in to the new expensive houses are leaving their old houses" argument then becomes a non-starter because of the "rationally ignorant" but anecdotally pervasive argument among locals that these new developments aren't helping them. - Locals see an influx of people from other cities/states/countries moving into attractive units that were built with prices that locals already can't afford. It doesn't matter whether that influx is 10% of the new stock or 100% of the new stock; these new outsiders stand out in _perception_ regardless of reality. - Locals likewise don't see a short-term increase in attractive housing stock that they can afford, else they'd have already tried to acquire it. - Developers point to affordable, vacant housing stock, but when that stock isn't in equally attractive places to live as the unaffordable stock, locals don't consider it to be beneficial to them. The fact that the unattractive place would likely become more attractive over time is a hard sell in places where that pitch has failed to materialize in the recent past due to things unrelated to housing stock (COVID, local recessions, outmigration events). - Locals seeking affordable housing in attractive areas start advocating for enforced rent modifications or pricing mandates that developers oppose. - Locals are voters who can influence electeds that control policy, and non-locals who haven't yet moved here aren't, so the battle enters the political sphere with a tilt toward locals. Either the government caters to voters and enacts anti-development policies, causing developers to slow down in or exit the local market, or developers lobby the government, causing voters to rebel against electeds and protest harder against developers. The cycle grinds local regulation to a standstill. Locals get no net benefit in the local housing market, perpetuating the underlying problems. Everyone's perception of everyone else in the situation degrades further, making further changes harder to enact. |