Should-Read: Noah Smith: How Affordable Urban Housing Stays Affordable

Should-Read: Noah Smith: How Affordable Urban Housing Stays Affordable: “San Francisco’s black population has declined… Hispanic population has… fallen in some historically Hispanic neighborhoods like the Mission District…

…The obvious explanation is economic: Rents in San Francisco have gone way up. Despite measures like rent control designed to shield existing occupants, rising rents put inexorable pressure on low-income residents to move out—they increase local prices for food and other goods, and they give landlords an incentive to evict rent-controlled tenants by any means they can find. Higher rents also discourage new low-income tenants from moving into the city.

How can rising rents be checked? One way is… an economic slump, possibly severe. A safer approach would be to build more housing… worth trying, for anyone worried about the exodus of low-income residents and disadvantaged minorities from the city. That’s why it’s so puzzling to see progressive activists fighting tooth and nail against the idea of allowing more housing development….

Zelda Bronstein… falls back on the old argument that new apartments in expensive cities are expensive:

Private developers don’t take advantage of permissive zoning or incentives to build affordable housing, because doing so doesn’t yield the profits that they and their investors demand…Because affordable housing doesn’t yield acceptable profits to real estate investors, the only way a substantial amount of it is going to get built is if it’s publicly funded.

Bronstein’s notion that housing is only affordable if government builds “affordable housing” is a common fallacy. The affordability of an apartment doesn’t depend solely on the inherent value of its roof and walls; it depends on the market. There are plenty of rentals in San Francisco that used to be affordable housing, and now are luxury units. Conversely, if prices go down, existing luxury units might morph into affordable housing…. We shouldn’t let suspicion of developers override rational consideration of the economics of housing…