Economist Thomas Sowell has just published a new book called “Economic Facts and Fallacies” in which he sets out to debunk a number of widely-held misconceptions, especially about smart growth and land use planning.
Sowell quotes figures showing people paid a smaller percentage of their incomes on housing at the start of the 20th century than at the end, after many government jurisdictions had passed land use controls, zoning bylaws and other statutes to control growth, writes Mike Saint, CEO of Saint Consulting.
He compares San Francisco and Houston. The first has implemented many measures to control growth, including blocking any development on large tracts of land and has some of the highest home prices in America. The other, Houston, has no zoning or other land use restrictions. “Adjusting for inflation, real housing prices in Houston in the early 21st century were found to be 15 percent below the 1980 peak.” But “a nationwide real estate firm estimated that a typical middle class home on a quarter acre lost that costs $152,000 in Houston would cost more than…one million dollars in San Francisco.”
Sowell says government’s attempts to implement land use planning and controls have driven up the prices well beyond cost of living increases. And in places like San Francisco, this has had the additional unintended consequence of driving out the poor and minorities. In San Francisco, the Black population declined from 1970 (before land use restrictions started) to 2005 from 96,000 people or 13.4% of the city population to 47,000 or 6.5% of the population in one of the country’s most liberal jurisdictions.
Is smart growth a new kind of racism? Does central economic planning drive up prices well beyond what would otherwise be justified? Sowell would say “yes”. What do you think?