The Part of Rent Increases That Really Is Rich People’s Fault

I tend to be pretty defensive of rich people and developers when it comes to urban growth, since I think they’re often blamed for things they really have no control over — specifically, the idea that they’re responsible for increasing housing prices. Not to say they don’t play a role, but the biggest issue is demand for housing. You can’t really blame rich people for wanting nice homes, or to live in the city, and you really can’t blame developers for wanting to build things where demand is hot, because if they don’t build then prices rise even more.

So when I read this Moneybox article on Slate, it seemed like a good opportunity to show off my progressive liberal bona fides and stick it to rich people for being jerks. Yglesias describes the problem:

Low income people in a gentrifying neighborhood see both new luxury construction and rising rents and it’s difficult to persuade them that even more construction is the answer. But that’s because we’ve so firmly shut the door on the idea of adding housing supply in the neighborhood that are already the priciest ones in town. Once the focus of the conversation settles narrowly on a handful of transitional neighborhoods, it’s almost too late to have a sensible conversation. But you have a twofold limitation on supply. On the one hand, the total number of new units is capped so people only want to build luxury. On the other hand, new construction in the fancy neighborhoods is absolutely prohibited.