More on Housing as Infrastructure

Casey Anderson, the Chairman of the Planning Board, is writing a enlightening series of posts on the economics and trends that affect Montgomery County on The Third Place. Two recent ones are important enough that I want to repost them on the Friends of White Flint blog. We posted the first one titled,  Real Estate Development *Is* Infrastructure, yesterday.

Today, we discuss More on Housing as Infrastructure. Highlights of this interesting post are below, but it’s worth your time to read the entire article.

If we don’t have enough housing, workers will continue bidding up the cost of existing residences until only the very affluent will be able to afford decent housing in convenient locations. Lower-income residents will either be priced out entirely or face crowded, substandard housing conditions in remote locations with long and difficult commutes.

The problem is that restrictive land use policies tend to hurt the poor and middle class while discouraging businesses from locating and expanding here, because their workers are squeezed by the high cost of housing. This might drive some people away and discourage others from coming in the first place, but it would do so only by raising the cost of living and degrading the quality of life of all but the wealthiest residents – not to mention weakening our tax base by reducing our economic competitiveness.

Along with roads, transit, schools and parks, the provision of housing sufficient to support a high quality of life at affordable prices is a fundamental building block of an equitable and sustainable economy. It might seem counterintuitive, but in addition to exacerbating inequality by keeping out the poor or forcing them into substandard housing far from employment opportunities, high housing costs are also bad for the economy because they drive out younger workers who are priced out of the market and then move to lower-cost areas, leaving behind older residents and a shrinking tax base.

The DC region now has the highest cost of living in the entire US, and Richard Florida has made the point that housing costs are the main driver in cost of living differences. In the above chart, for example, you can see that the main difference in cost of living between Montgomery County and several other jurisdictions comparable in population is represented by housing – food and transportation costs don’t vary all that much. In other words, our high cost of living is almost entirely attributable to housing.

Read the rest of this post here.

Real Estate Development is Infrastructure

Casey Anderson, the Chairman of the Planning Board, is writing a enlightening series of posts on the economics and trends that affect Montgomery County on The Third Place. Two recent ones are important enough that I want to repost them on the Friends of White Flint blog today and tomorrow.

This first one is titled,  Real Estate Development *Is* Infrastructure.  You can read some of its more salient points below, but it is worth grabbing your favorite snack and reading the entire post.

If the supply of housing does not keep up with even modest growth in jobs and population, residents who don’t have much choice about where to live and work will get squeezed hardest while residents who have skills that are most in demand elsewhere (who also tend to get paid more and therefore pay more in taxes) may consider taking a job in a place where they can get more and better housing for their money.

The people whose choices of work location are constrained tend to have fewer skills that command a premium in wages, but this is not uniformly true – for example, people who work for trade associations, think tanks, law and lobbying firms, and other employers oriented around the nation’s capital might not find jobs that suit their skills in Pittsburgh, Austin or Raleigh. On the other hand, if we want to diversify away from reliance on government as the foundation of our job base we need to draw and retain people (and employers) who aren’t tied to the government, such as computer scientists or biologists. In this instance, the relative cost of living (driven largely by housing) is highly relevant to our competitiveness.

That’s why real estate development is essential to what most people think of as economic development, i.e., the ability to encourage employers to bring high quality jobs to Montgomery County. The point is that real estate development is infrastructure. Whether it involves construction of housing, office buildings, or for that matter retail space, real estate development supports economic activity directly and indirectly by serving basic human needs, i.e., creating places for people to live and work (not to mention to get a haircut, visit a doctor, have their clothes dry cleaned or put their kids in day care).

Read Casey Anderson’s entire blog post here.