Government Policies Designed to Raise Housing Prices Are Never Progressive

One of Arlington’s great strengths is the rich layers of diversity in its people: linguistic, culinary, cultural, and perhaps most importantly, economic diversity.  From the immigrant living in rental housing on the western edge of the Pike, to the Gen Y crowd sharing houses along the Orange Line, to the large single family homes along Military Road, Arlington historically has a wide range of incomes in its residents.

Recently, though, this range of diversity is spoken of by civic activists and politicians as a two-sided coin: the deserving poor on one side, and the increasingly wealthy landed gentry on the other.  The newly wed couple of hourly workers, the single-parent federal government employee and the two-schoolteacher household that need housing that consumes a reasonably low portion of their budgets – they are not part of the conversation about affordable housing.

In no place is this more evident than the debate about the “revitalization” of the Columbia Pike corridor, in particular in statements in which the speaker advocates in favor of the streetcar.  CPRO‘s comments are representative of this way of thinking, but it is certainly not alone.  It claims that the streetcar has “the proven potential to create…real estate value.”  Read: one of the streetcar’s main purposes is to raise the price of housing.  Arlington Streetcar Now sings the same tune.

“Value” is essentially the amount of money that a given seller would accept, and that a given buyer would be willing to pay, for a specific asset.  Rising prices then, are a zero sum game: for every “winner” that has more money than they paid for their home, a seller has less money to do other things with their life (spend, save, donate).

Stated another way, government policies designed to raise the real price of houses mean that existing capital holders enjoy a windfall, while aspiring property owners must work more or spend less on the other areas of there life to afford the home.

As noted in a recent post, there is ample evidence that even the pro-streetcar board members do not believe that existing government plans are sufficient to preserve the existing stock of the 6,000+ affordable housing units on the Pike corridor.  But that’s not the point of this post; rather, point is that affordable housing should not be solely about the poor.

Progressive government policy should foster a vibrant, diverse community in which the younger generation that are not sickening wealthy have some sort of reasonable housing options as they age (beyond moving outside of Arlington).  Progressive government policy is not inter-generational wealth transfers to those that own homes from those that must sacrifice retirement savings, student debt reduction, or contributions to a worthy charity in order to have a roof over their head in a decent community with good access to jobs and transit.

It is basic economics that creating a more desirable community can increase housing values.  But that is a negative effect of urbanism that needs to be mitigated, not a strategy for a supposedly proud progressive community.

* * *

For a more articulate piece on this topic, check out this excellent article by Josh Barro.  Matt Yglesias and Ryan Avent make similar, more detailed points in their books.

Advertisements
This entry was posted in Housing, Pike Streetcar. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s