Sunday, March 05, 2006

NYT: Home Economics

More food for thought from the NYT Sunday Magazine's special on Real Estate, this time at the macroeconomic level of urban development and housing supply. A profile of iconoclastic economist Edward L. Glaeser.
Homeowners, he points out, have a strong incentive to stop new development, both because it can be an inconvenience and also because, like any monopolist, stopping supply drives up the price of their own homes. "Lack of affordable housing isn't a problem to homeowners," Glaeser says; that's exactly what they want. "The thing you want most is to make sure that your home is not affordable if you own it. And for that reason, there's absolutely no reason to think that little suburban communities with no businesses that are run essentially by their homeowners will make the right decisions for the state as a whole, for the business in the area, for the country as a whole."

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