Must-Read: Matthew Yglesias: The valid point that people raise about new construction…
: “The valid point that people raise about new construction is this: Rich people like fancy houses…
…Rich people also like upscale neighborhood retail. So you can get an upward spiral in which fancy houses lure rich residents who lure fancy retail which lures more rich residents. There’s truth to this, but the thing you have to recognize is that a ban on building fancy new buildings is not the same as a ban on fancy houses…. People buy-up the existing housing stock and start renovating it. They create bigger units, and reduce the population density per square foot. They install granite countertops. And they unleash the upward spiral that people are worried about. What is maybe true is that if you banned not just new construction, but new renovations then you could maybe prevent richer people from moving into a neighborhood and raising prices. Or you could just ban new people from moving-in altogether. Or maybe you could allow new residents, but only if they fit the demographic profile of existing residents. I don’t want to claim that preventing the character of a neighborhood from changing is totally impossible. But to actually achieve it requires a much more robust policy response than stopping people from putting up new buildings…. Within the realm of plausible ideas that people actually consider, the best way to respond to a surge of demand for living in a neighborhood is to identify a handful of genuinely crucial historic buildings to preserve and then let people build as much new housing as is economically feasible. The neighborhood’s character will change as a result, but trying to prevent all change is silly policy objective whereas ‘maximizing the number of people who can live where they want to live’ is a pretty reasonable one.