The Unbreakable Contradiction in Our View of Housing

Daniel Kay Hertz, a young urbanist from Chicago, [his website is] has written the most succinct expression yet of why the whole issue of housing is a dilemma for Americans.  It got a fair bit of notice, and was reproduced in The Atlantic.  Anyway, in the article he says this:

Here are two ideas that, if you’re like most Americans, you probably mostly agree with:

  1.  Government policy should help keep housing broadly affordable, so as not to price out people of low or moderate incomes from entire neighborhoods, cities, or even metropolitan areas.
  2. Government policy should protect residential neighborhoods from things that might negatively impact housing values, because homes are an important investment and wealth building tool.

Having read them together like that, you’ve probably already jumped ahead to the big reveal, which is that these two ideas are almost entirely mutually exclusive. The first essentially says, “Use housing policy to keep home prices down”; the second says, “Use housing policy to keep home prices up.”

It’s no wonder, then, that housing policy is a bit confused.  The same municipal governments that require that housing on scarce urban land be taken up only with resource-intensive, high-building-cost single family homes; that use zoning to separate out unwanted apartments, shops, transit lines, and other uses on the grounds that they may hurt home values; and promote neighborhood beautification and other projects on the grounds that they will raise housing values, also issue affordable housing reports trying to understand why home prices aren’t lower, and levy ‘impact fees’ on new development for the alleged crime of, you know, raising home values.

Thus the eternal contradiction.  Hertz goes on to explain that blacks, in particular, were less included in the opportunities of homeownership of the period we now call the Great Compression or the Trente Glorieuse (1945-75) and so for this reason, when they now have similar incomes to whites, they have much less wealth. Hertz is not sure how to resolve this issue.  I’m not either.  But it makes me wonder what my father, who owned Home Savings of America and died in 1968, thought about this; were there reasons for owning your own home other than that it is a ‘wealth building tool’?  I think there probably are.  Did they even think of it, at the time, as a ‘wealth building tool’?  I wonder.  [The best books on the history of zoning and land use regulation are the works of William Fischel, which I will not take the time to discuss here.]  The Compression, as I remember – and yes I’m so old as to be able to remember a lot of it – was a time when we could accept platitudes like “home ownership is good, education is good, culture is good” without facing the issue of why these things are good.  At least I don’t remember my father or his friend Dr Franklin Murphy racking their brains about why these were good things.  But the cultural consensus has been destroyed, and we have been fighting culture wars for up to 50 years now, and the question of why certain things are good can no longer be avoided.  The Christian has one view of why education and culture are good, the New Ager or ‘spiritual but not religious’ type another, the Muslim another, and the secularist yet another.  I think if we take a close look, we’ll find that home ownership is another issue of this kind.

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