EMR was hoping that the RICH-PERSON, POOR-PERSON post of last Sunday (25 July) would generate substantive ideas on how to narrow the Wealth Gap.

No such luck.

There HAVE to be better answers than

Dictator / demagogue – driven socialism on the one hand, and

Demise of civilization driven by “I have mine” greed, xenophobia and 18th century concepts of rights without commitments to 21st century responsibilities

on the other.

Before going on, let us clear the air on the issue of “over regulation” of shelter being responsible for kicking off the Great Recession:

EMR received a note from a housing professional in Austin (that is in Texas) and here are some quotes:

“When you clean up the RICH-PERSON, POOR-PERSON post please toss out all that trash about how land use controls are what have saved Texas from high foreclosure rates.

“At least set the record straight:

“There are three major reasons that the foreclosure rate is lower in the Texas’ Regions that had growing economies than in other southern states:

“1. Very stringent usury laws that have the impact of controlling the use of second mortgages, the size of down payments, the cash one can take out of a refi, multiple dwelling investments, etc.

“2. Very high property tax rates that make running up the price of housing an unattractive idea for everyone but flippers who are caught by the usury laws anyway.

“3. Texas has squandered vast sums of oil revenue on roads and expressways rather than spending it on quality of life investments. Houston, for example, has three beltways, multiple radials, including toll roads and still is near the top of the Texas A&M congestion measures year after year.

(EMR addressed the gross overbuild and dysfunctional design of Texas’ limited access roadways in Column # 50 Interstate Crime, 14 March 2005.” (All columns are now accessible from the RESOURCES page at www.emrisse.com)

The Texas roadway building extravagance opened up vast areas in ‘the next county out’ and so there has always been an over build of Wrong Size House, Wrong Location.)

“’The reason for fewer foreclosures is less regulation’ myth is just the latest zone of deception that has been a hobby horse for ideologies and idiots on the topic of ‘onerous regulations’ for years.

(That is especially true for those who write for and quote “The New Geography” – Kotkin, Cox, et. al. As EMR has pointed out, the lack of regulation has generated not one whit of difference in settlement patterns at the Dooryard or Cluster scale in Texas vis a vis other states – just more scatteration due to excessive road building.)

“There have not been the high foreclose rates in Texas like there have been in California, Nevada, Arizona, Geogia and Florida.

“However, Texas has quality of housing for those at the bottom of the food chain on a par with Arkansas, Mississippi and Alabama.

“The idea that less regulation is a solution for Affordable and Accessible Housing is worse than wrong, it is fraud and borderline criminal because so many at the bottom of the food chain are deceived by these misrepresentations.

“Those at the bottom of the food chain cannot afford big, scattered, detached dwellings in Texas any more than they can anywhere else.

“While housing is less expensive in Texas, lower income families spend more to own and drive cars than they do on food or housing – and in some cases both.”

That pretty much wraps up the “over-regulation” issue.

By the way on the topic of Affordable and Accessible Housing, she recommends a new report from Todd Littman


On the topic of settlement pattern dysfunction and its most vocal apologist (Joel Kotkin), it is worth reading about the recent debate between Kotkin and Chris Leinberger at


In a recent Blog post, Leinberger says that after this debate, he realized that he and Kotkin actually AGREE on many aspects of the shape of the future, they just use different Vocabulary.

Robust Vocabulary and comprehensive Conceptual Framework – understand the need for them or flounder in Geographic Illiteracy and Spacial Ignorance.

OK, enough about cleaning up after the last post, lets see if there are not SOME ideas for narrowing the Wealth Gap. Please do not bother with more blabber about ‘freedom’ and ‘rights’ without responsibilities. Also avoid tossing rocks at empty pigeon holes.

How about some REAL insights into how to narrow the Wealth Gap and provide a safety net without abandoning a market economy and democracy.


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  1. Anonymous Avatar

    Jim and EMR – Here's question for you. Let's assume the validity of your premise — sprawl is bad. But does that require compact growth at existing cities or communities? For example, Washington, D.C. — the city is terribly mismanaged and delivers very little in terms of quality services. Or Chicago, the city is crime infested. Should growth be concentrated in those cities or concentrated in locations beyond the existing central city?

    For example, would it be reasonable to bypass Washington and concentrate growth at Frederick, MD or Fredericksburg, VA? How about bypassing Chicago and concentrating growth a Rockford, IL?


  2. Larry G Avatar

    with respect to TMT's comment about densifying the Fredericksburg Area, be advised that Virginia has codified the concept of UDA – Urban Development Area – which are defined thus:

    " Urban development areas. Sets certain densities in urban development areas according to the population of the locality that designated the urban development area. The bill also requires that, to the extent possible, certain federal funding and state water and sewer facility and public infrastructure funding be directed to urban development areas or other designated growth areas. The bill mandates that the Commission on Local Government report on localities' compliance with the statute requiring the designation of urban development areas. "

    WHERE these critters are to be designated is left up to the localities and both Stafford and Spotsylvania plan on designating such areas but where we run into issues is that a significant number of folks who live in these areas – do not work there – but instead in NoVa.

    So – of course both localities have decided that they'll designate such areas adjacent to I-95 and the VRE rail.

    Now I mention this because of the obvious disconnect between what EMR and folks of his thinking – are recommending and just how divorced the planners and other cheerleaders (developers?) of UDAs are from what EMR is advocating.

    The other two flys in the ointment are:

    1. – security… the best, most optimized housing situation in the world in no good if people live in fear of their lives.

    2. – perhaps more problematical, the idea that government will decide who will fund these things and who will be the recipients – and folks may have noticed there is a serious insurrection these days with those who don't agree with that concept.

  3. E M Risse Avatar
    E M Risse


    Interesting question.

    Jim Bacon is fully adsorbed with dysfunctional fiscal management at the nation-state scale so EMR will take a shot at answering it.

    First, your question shows how large dysfunctional governance looms in the minds of those who see the need for Fundamental Transformation.

    Evolving a new and functional governance structure is theoretically very easy compared to the other problems facing humans. There is a process outlined in The Shape of the Future and a preview of that process in Column # 25 from 16 Feb 2004 (“The Shape of Richmond’s Future” (should have been “The Shape of Richmond New Urban Region’s Future” – Oh Well). This and all columns are now accessible on the RESOURCES page at http://www.emrisse.com

    Second, to abandon and relocate urban fabric that now serves (all be it imperfectly) 75 to 85 percent of the 310,000,000 citizens in the US would be prohibitively expensive in time, money and physical resources.

    More important, unless there is a transition to a functional governance structure that reflects 21st century economic, social and physical reality BEFORE the move, humans would take the same problems to the new venues. (For example consider TMT’s recent exposure to the conflicts in Reston. That is on a smaller scale and exists even though there is a recognition of some of the organic components of human settlement.)

    EMR is quite familiar with both Greater Fredericksburg and Greater Rockford and sees no sign that either is on the cusp of Fundamental Transformation in governance structure.

    There is a lot of loud wailing about the results of the failure of the federal governance structure to evolve to functional governance Agency structures. The wailing is mainly “the anger of ignorance” but it is wailing and throwing rocks at empty pigeon holes, none the less.

    HOWEVER, it is the state which is primarily to blame because all 50 states have failed to use their ‘reserved powers’ to transition to functional governance structures at all six levels of organic structure below the scale of the New Urban Region. The problem is especially acute at the Cluster, Neighborhood, Alpha Community, SubRegional and New Urban Region scales. (OK, it is bad at the Alpha Village scale too…)

    A perfect example of state level ignorance is the fabrication of UGAs in Virginia noted by Larry. The potential of designation of UGAs in greenfield locations masks the reality that there is ALREADY too much land devoted to Urbanside land uses.

    For example see the report by Todd Littman cited in the main post concerning the location for the dwellings needed to solve the Affordable and Accessible Housing Crisis.

    Hope that helps, TMT.

    Keep up the good work. Abandon the rest, no one can do it all.


  4. Larry G Avatar

    …… http://www.emrisse.com

    Wow! If I missed this before, my apologies.

    Congrats EMR!

  5. " Urban development areas. Sets certain densities in urban development areas according to the population of the locality that designated the urban development area. The bill also requires that, to the extent possible, certain federal funding and state water and sewer facility and public infrastructure funding be directed to urban development areas or other designated growth areas."


    Well, that's one way to change the wealth gap: give some people huge subsidies for density in order to preserve valuable open space, and give the people who preserve open space nothing but more regulation on how not to use it.

  6. Larry G Avatar

    well… consumption produces jobs… and more wealth… and that is the basic idea behind the stimulus and unemployment payments.

    so the idea that we cannot afford the less wealthy to become more wealthy is bizarre…

    but you cannot have an enduring government where a majority of people feel that money they earn through hard work is being taken away from them and given to folks who won't work for it.

    but in my view – the one entitlement that people support is (at least in theory) equal opportunity to a good education – and we know that we have a terrible system where fail 20% even at the "good" schools, and another 30% would not pass a standardized NAEP/PISA test for literacy and proficiency – and these are the "good" schools.

    The urban schools have a 40-50% failure rate and the ones that do pass would score in the lower third of the standardized tests for proficiency.

    These people do not become adults who are capable of earning a living, paying taxes, providing for their food and shelter much less medical care and each one of these folks becomes a direct tax burden of the folks who do have jobs.

    And we know – right now – that the deficit is headed in a very bad direction PRIMARILY because of entitlements – despite all the blather about the "cost of govt".

    And I am not the bearer of this bad news about education – virtually every CEO in this country is saying that we have a crummy education system.

    I think we have become screwed up as a nation and truly have lost our way as to the original strengths of our culture – which was that everyone work for a living – at what you had to – to earn a living – and that we'd all get access to a decent education.

    Our education system has become corrupted to be college-prep for the college-bound and the rest of them can cut bait.

  7. It isn't only fear of your lives: it is the generalized hassle of such living arrangements. It is fear of the government which will use any excuse or even subterfuge to get more money from you. higher expenses of all kinds, lousy schools, and a generally dirty and noisy environment.

    Such arrangements are held up as being green, but I argue that expense is an indicator of resources used. Since such places are more expensive to live in, they use more resources, and that is not green or sustainable. One reason that such places are falling apart is that they are not sustainable because they are not maintainable.

  8. "These people do not become adults who are capable of earning a living, paying taxes, providing for their food and shelter much less medical care and each one of these folks becomes a direct tax burden of the folks who do have jobs."


    Come on. Suppose "these people" had jobs.

    Would you really want them doing work for you? You think they are a burden now? Let's spend 10 times as much money to raise their proficiency by 10% and turn them loose running, and making, and repairing things that can really cost us.

    Let's get them to monitor the sensors on the Metro tracks, the oil well shutoff valves, and the sewage treatment plants. Let's get them all jobs where they can really screw up.

  9. Larry G Avatar

    "these" are the same ones in Europe and Japan that receive enough education to become a non-entitlement member of the workforce – and they do it will less money per student than we do.

    the wealth gap has pretty serious consequences.

    People that don't have sufficient education to earn a living – require food stamps, subsidized lunches for their kids, housing vouchers, and in some cases jail cells.

    the more folks you have like this – the higher the taxes will be on those who do have decent educations.

    choose your poison.

    when you have large numbers of unemployed and unemployable teens in urban areas – the people who do have jobs flee and abandon those areas no matter how "functional" they are from an accessibility and affordability perspective.

    so yes.. I do want the KIDS of "these people" as educated as we can get them – because even if we pay twice as much to educate them – that is less than all the taxes they won't pay and all the entitlements others will pay for them.

  10. Anonymous Avatar


    I cannot believe the gall of whoever ‘hydra’ is.

    I recall back in the spring you telling me about an article on Texas mortgages.

    I looked it up and it is The Big Money column by Alyssa Katz in the April 4, 2010 Wash Post. You can buy a view here:


    It says just what you said it did. There is more to the Texas mortgage story on Ms. Katz website here:


    It is somewhat complex and perhaps some do not call it ‘usury’ but that is what it is. There are other laws but the key is cashing out from refinancing.

    In addition the other two reasons that Texas avoided the foreclosure bust – very high property tax rates and too many roads – are right on too. Too many roads is the reason there are so many scattered houses for urban workers in Texas and here in West Virginia.

    Until you hear from someone else in Texas with real knowledge PLEASE delete all the trash about restrictive land use controls.

    And come see me after you retire. We have some nice houses that are in town and you can walk to everything you need on a daily basis and UPS will deliver the rest.

    A Real Estate Pro

  11. You have way more faith in the process of education than I do.

    I've known way too many PhDs that couldnt think their way out of a paper bag.

    Education, in all of its various flavors is great when the right person gets the right education, wheter it is in music or underwater demoliton. But I also think there is a case for educational triage.

  12. Larry G Avatar

    we're not talking about PHDs. We're talking about workforce education – where one has to be literate enough to read instructions and communicate effectively with others and to solve real world problems like figuring out how much a deck will cost to build or a plumbing job – which involve more math than some kids actually get in school these days.

    Europe and Japan have dual tracks for college and non-college.

    The difference is that the non-college track still requires academic rigor, still requires a baseline level of English, Science, and Math literacy because in today's world most decent paying non-college jobs require that level of literacy and we are literally leaving those kids behind …despite the program with that name on it.

    I only see two options:

    1. – don't educate, leave behind and they don't pay taxes and require entitlements and jail cells

    2. – educate as many as you can to minimize 1.

    If someone sees a third option, please weigh in.

    as long as we give "free" treatment at ERs, every one of these folks is going to get their medical care at the ER until they reach 65 and then they get Medicare.

    Can we do this?

    I don't think we can.

    Name another industrialized country that has succeeded .

  13. "I cannot believe the gall of whoever ‘hydra’ is."

    Hydra's Gall was a poison used by Hercules, if I recall correctly.

    There is no poison here. I'm merely representing that there are other viewpoints than the one presented by EMR.

    At the risk of being called out for use of a logical fallacy, (appeal to knowledge) I'll point out that the references I posted are published in various journals of various political persuasion and they use their own name.

    Regardless of how Texas did it, Texas avoided much of the housing collpase seen in other places and Texas governemtns are suffering less from budget problems as a result. Those places with the most restrictive building policies frequently are places that have suffered the most in loss of houing value and foreclosures.

    These are not the cause of the housing meltdwon alone, but it is clear that they are a contributing factor. In fact, one way some communities are relieveing the problem is to relieve some of the restrictions, such as moe than one family under one roof, home operated businesses, etc.

  14. Larry G Avatar

    but what Texas did not do – was do much different with regard to property rights and density.

    Ask yourself what the Texas "model" is that we'd replicate in NoVa?

    If you cannot answer that question, then claiming that Texas does it "right" is bogus.

  15. E M Risse Avatar
    E M Risse

    Thank you Larry re the Website comment!

    By the way, you and TMT may find of interest on the topic of house location, the “Open Letter to Steve Fuller” on the CURRENT PERSPECTIVES page at http://www.emrisse.com .

    Hey REP, good to see you.

    Do not worry, all extraneous material will be deleted.


  16. Anonymous Avatar

    Multi-Snakehead is no Hercules.

    With respect to the Wealth Gap:

    The answer is:

    Those at the top of the Ziggurat need to understand that their happiness and safety depends on there being happy and safe citizens at the bottom of the Ziggurat.

    Those citizens at the bottom are the ones who provide goods and services that EVERYONE needs.

    They cannot be immigrants who are forced to provide cheap labor.

    They also cannot be professionals (my gynecologist wears a sari) and technicians trained at the expense of other nation-states (so does the person who reads my mammograms).

    Those at the top must be smart enough to willingly share their wealth / power / opportunity OR

    they can try to force those at the bottom to live in servitude – slavery and its contemporary equivalents.

    As noted in Dr. Risse’s last post:

    One always comes back to the fact that The Wealth Gap is not sustainable in a world with instantaneous communications, mass literacy and weapons of mass destruction.

    You saw what the Saudi’s and UAE did yesterday to Blackberry use, right? They see the handwriting on the wall. So does China vis a vis Google.


  17. If it doesn't work for PhDs, what makes you think it will work for people with a lot less to work with?

    There are some people that don't work, some that won't work, and some that shouldn't work.

    Here is an example that didn;t affect me,but I happened to learn about it. If you checked the DMV website on Saturday, it would tell you the wait time for service at the Fair Oaks DMV center was eight minutes.

    That's eight minutes AFTER you get your DMV service number. The actual line to get into the DMV DMV was over four hours. And that is after DMV charges $5 extra for using counter service. Obviously the price isn't high enough.

    I'll bet the moron who put inaccurate and incomplete information on the website has a good education. And this isn't an isolatied situation: DMV misinforms people routinely.

    Or how about this little gem of intelligence and education at work. The automatic door locks and windows in my wife's car failed. There are forty fuses in that thing and no decent diagram to say which is which. Plus, they are so tiny and inaccessible you need to be a contortionist with a magnifying glass to inspect them, and articulated forceps to get them out, let alone replace them.

    No problem though, there is an actual key on the trunk. The key activates, guess what, an electic lock – no manual override. The groceries would still be in the trunk if the back seats didn't fold down.

    And this stroke of German engineering genius comes from people with degrees.

    I'm sorry, I just don;t think "education" in the generic professional sense is the answer.

  18. Larry G Avatar

    " How about a respect for freedom and property rights that recognizes you have to give what you expect to get? "

    so what would look different in NoVa if we adopted the Texas Model?

  19. Anonymous Avatar

    Larry G asked, "so what would look different in NoVa if we adopted the Texas Model?"

    For starters, we would not have all the development in Loudoun County if property owners in Fairfax County along Route 7 between Tysons Corner and the Loudoun County line had had the same freedom to develop as in Loudoun.

    The large lot zoning north and west of Tysons Corner forced the majority of housing into Loudoun.

    The results are long commutes and the 5 billion Dulles Rail boondoggle.

    We could have Lansdowne and Lowes Island in Great Falls instead of a dysfunctional antiquated road network and zoning subsidized millionaire CEO housing.

    The problem is ongoing whether the elephants or donkeys are in control.

    There is a 116 acre parcel next to Reston just north of the Dulles Toll Road known as the Bachman property. The edge of it is only 3/4 of a mile from the Wiehle Metro Station which is under construction. For 10 years the owners tried to get a land use change to allow a more appropriate housing density. Instead of hundreds of more affordable small lot homes, town homes and apartments and some community open space, the property is now being developed as 52 two acre lots with homes selling between 1 and 2 million dollars each.

    The last developer who tried to change the zoning, WCI, went bankrupt and the land was sold cheap to NV who doesn't care to try again and will make a quick buck and move on to building more housing in outlying counties.

    In a Texas world, there would be thousands of apartments, town houses, and virtually zero lot line single family homes built there.

    That would be thousands fewer commuters from outlying counties. Think of the fuel consumption that would be saved from a 20 mile shorter commute for that many people. Think of the future increase in traffic congestion that would be avoided.

    Dirty capitalists like the zoning restrictions on supply because it drives up the price, making it profitable to build expensive concrete high rise housing on their land holdings. One of the big Tysons land heirs was chairman of the last Task Force and voted against allowing even 1 house per acre on the Bachman property. Leftists like zoning because they like government to control everything. Politicians like the contributions from developers, engineers, land use attorneys, etc. Selfish NIMBYS who fear the others like the restrictions as well.

    In Texas, everything is cheaper. Housing is cheaper, retail store space is cheaper, office space is cheaper, apartment rents are lower. Everyone benefits from the freedom, except the gatekeepers who want to create an artificial shortage and then collect higher rents.

    Freedom is the best solution which respects the rights of everyone involved. I suspect that with freedom, a lot of settlement patterns would evolve to something Ed Risse would be happy with.

    Right about this, but NOT LEFT OR RIGHT

  20. Mimi Stratton Avatar
    Mimi Stratton

    How about a tiny tax on bankers that would give billions to tackle poverty and climate change?

  21. Accurate Avatar

    But Larry let's talk about education. Right now we have available, affordable (free to the students) education through the 12th grade. Do the students who graduate impress you? I have to deal with them on an almost daily basis and the vast majority of them can't do math without a calculator (even simple math like 4 X 9) and can't read above about a 4th grade level. There is a ton of speculation as to why this situation is reality. However, in a large majority of the cases you find that the students don't want to – they don't care. To the vast majority of students school is just a social gathering. And the teacher unions don't really care. Not because they are necessarily uncaring (most start out with high aspirations) but they are 'taught' that they (the teachers) no longer have control over the classroom. They are instructed to pass kids who they know shouldn't be passed. Eventually it becomes a job that they are just interested in getting retirement from. Can't do what kids need to have done because of fear of law suits. Can't do what needs to be done because of fear of school administration. Expectations are low and the kids know that. As long as our education system sucks rocks, the country will continue on it's downhill slide.

  22. Larry G Avatar

    well.. I don't really disagree with most of what Accurate says only that I have hopes that we can turn it around….and if we don't then we will truly end up with about 1/3 of us paying taxes to fund the other 2/3's entitlements.

    I actually see that as much a threat to us as the deficit.

    We do have schools that do accomplish the goals – but we have so many more that do not and we have way too many schools that are basically college-prep resume generators and the ones that are not on a college track are free to fail though with NCLB we can't be as overt about as we used to be.

    I read that foreign auto manufacturers are shocked at the educational status of the workforce in our southern states and that they actually prefer Canada (which ranks well on international education attainment) and has universal health care so they get an educated workforce and avoid the embedded health care costs in their products – which allows them not only better profits but reinvestments into quality manufacturing process which, in turn generate good value, highly reliable cars- like the Toyotas and Hondas…

    I think we have lost our way in this country. We are all about excuses and blame these days and manning up to them is to be avoided at all costs.

  23. I just watched an attractive young lady who got straight A's through eighth grade get two answers right on Smarter Than a Fifth Grader. She didn't know what a yak was, and she thought the planet with the largest ring system was Earth.

    Lord help us.

  24. Emr has not refuted the observed and measured fact that more regulation leads to higher prices.

    Unless the reg also leads to more value, it means prices have farther to fall leading to more underwater mortgages and more defaults.

  25. In the previous post, anonymous writes in a post critical of multi-snakehead:

    "How is redistributing ‘power’ different from redistributing excess wealth which is the result of excess use of power or use of excess power?"


    Do you read your own stuff?

    With equal rights, equally enforced, power is equalized. This results in less "Excess Power" which contributes to but is not the sole cause of wealth.

    But redistributing wealth implies taking wealth earned legally and ethically along with wealth that is taken through the use of assymetric powers.

    The writer goes on to suggest that
    "It would make more sense to focus on the distribution of “opportunity.’".

    I'd suggest that equal power implies equal opportunity, and these are essentially the same thing. However, redistributing wealth is not the same thing, especially if it indiscrimiinately applies to wealth gained from better application of what started as equal opportunity (which is after all, a matter of limiting unequal power.)

    Multi snake head

  26. Anonymous goes on to say:

    "But a sustainable society still needs a safety net for those that do not accept the challenge of ‘opportunity’

    There are different levels of competency. It does not matter of how much ‘opportunity’ (or power) is available, some cannot take advantage of opportunity or avoid abuse of power.

    What is the safety net for those citizens – a safety net that provides a sense of self-worth and creates happiness as well as safety?"


    The first paragraph seems both condescending and illogical. Why do we need a safety net for those who are able but unwilling to participate in opportunity?

    The second paragraph is close, but misses the point. Some people cannot avail themselves of power or opportunity and will fail regardless. They need a safety net, true enough.

    But if power is truly equalized and enforced then those other (rich and able) people won't have the excess power that allows them to take advantage of those than cnnot succeed.

    And the third paragraph finally gets around to the point: we need a safety net for those that are unable to participate in our society. There is no reason to be condescending, begrudging, or elitist about this.

    We may very well be reaching the point of complexity in our society when fewer and fewer people will have the tools to participate. We have already virtually eliminated conventioal farming and manufacturing as a means of support for millions of people.

    Does that mean we are not going to provide them with the benefit of goods and foods we now produce virtually without labor?

    A poor person in Deckens time had not an apple a pear a plum nor cherry , nor even a crust of bread. Today, a poor person doesn't have a cell phone and a VCR.

  27. “When you clean up the RICH-PERSON, POOR-PERSON post please toss out all that trash about how land use controls are what have saved Texas from high foreclosure rates."


    "…one way to interpret the high costs of housing in superstar cities like New York or San Francisco is pent-up demand for a very restricted supply. Harvard’s Edward Glaeser has been making this point for years, calling for both of those cities to relax zoning and end the NIMBY battle to permit more and denser building. "New York and greater San Francisco are the two most productive areas in the country," he wrote, "but people have increasingly moved to lower-wage Sun Belt cities because those areas have low housing prices created by unfettered supply."

    And this is from EMRs own citation:


    But, what is Glaeser calling for? He is calling for relaxed zoning for the Urban areas and presumably stricter zoning for non-urban areas.

    In other words, a huge subsidy for certain landowner over others.

    Not exactly what one would call a fair allocation of location dependent costs.

  28. From the same citation:

    "…the city of Irving, Texas has spent $1 billion of its own money to guarantee a new line of the DART light rail system through Irving is finished. Why? Because light rail and the density it creates can drive up land values from $5 per square foot to $200 per square foot."


    OK the city of Irving spent WHOSE money on this?

    The citizens money, not their own money.

    And who is going to benefit from $200/sq ft land?

    All the citizens or just a few?

  29. And more:

    "the ratio [of family with children to those without] is more like 33-67, on its way in the coming decades to 14 percent with children and 86 percent without — obviating the need for yards and good schools."


    Well, that's an optimistic outlook for the future. At that rate we will have to worry more about Alzheimers, nursing homes, and hospice care.

    We won't need walkable urban spaces any more than we need suburban ones. Urban mass transit will be smart wheel chairs.

    And of course no one will want a yard or good schools. But if they do, a home with a nice yard should be dirt cheap. We'll probably outsource schooling to Japan via the internet.

  30. Larry G Avatar

    there's something missing from this and that is – the simple idea that a 3-bedroom home with a front and back yard is not possible for almost any amount of money in downtown New York City.

    And even if you could afford it, it would be just bizarre…

    so then we move on to comparing what would be "typical" market-priced housing in a place that is uber-dense verses your classic exurban sprawl and the numbers don't compute.

    Land "restrictions" in Spotsylvania are not like land restrictions in Portland are not like land restrictions in New York City.

    and of course – neither is the housing.

    so you're not even not comparing apples and oranges.. you're not comparing kumquats with coconuts… with turtle eggs.

    You could try to make the argument – in general – for a given type of housing… like exurban sprawl or like 1000 square foot apartments or a 800 square foot loft in their respective types of settlements but comparing a 3 bedroom exurban home with a NYC apartment or a Dallas townhouse doesn't make any sense and changing "restrictions" is not going to turn one into another one.

    Now we can talk about how land use "restrictions" …"restricts" housing in NYC …or we can talk about how it might "restrict" housing in Spotsylvania but there is no way .. no matter how many restrictions you remove that you've ever going to get Spotsylvania type exurban subdivisions in NYC or even FAIRFAX for that matter… – as a consequence of loosening up "restrictions"

  31. The point is that A) EMR seems to claim that regulations ahve no effect on the coost of housing or subsequent forclosures, and B) Glaeser and others are claiming that regulation does raise housing prices, and that people make lifestyle and even careere choices as a result. As Accurate apparently did.

    Lowering regulations in New York styl housing will lower the cost of new york style housing and make increased density possible.

    Same for Fairfax, and same for Spotsy, and same for Fauquier.

    But then you have Loudoun, which has built many more homes than Fauquier and it also has homes that are several times as expensive on average,and sell quicker. Because Loudoun has jobs.

    This is not a question of comparing apples and kumquats, because there are a continuum of housing and commuting choices. EMR would like to take the commuting choices away and/or claims that they are going away regardless.

    But because there is a continuum of housing choices, if housing prices go down in Ballston, they will go down somewhat in Fairfax,even for somewhat disimilar homes, and so forth.

    What amuses me is the call for relaxing the rules in places like Tysons because density is good, and it lowers home prices, but such an idea is still bad everyplace else.

    I don't have any problem with any of this except as it applies to Kaldor Hicks efficiency. And except for the fact there are some really lousy arguments out there.

    If loosening the rules in one place takes land from $5/sq ft to $200/sq ft, it is partly becaus you have not applied the same standard in the surrounding areas. You are offering a subsidy by preventing fair competition.

    OK, you are doing that for ostensibly good social reasons.

    Fine. All I'm suggesting is that this needs to be done fairly. If you are going to keep some people out of the market so others can make a bundle and do wonderful things for the environment, then you need to be prepared to share that wealth.

    And we know that EMR is all about sharing the wealth, so there should be no argument.

    Consider older SFH neighborhoods in close in Fairfax. Loosen the regs on half acre or quarter acre lots and some of those homes would turn into townhouses and even apartments overnight.

    The cost of townhouses throughout the area would fall, and at the same time, the cost of SFH might go up, because they would be harder to find.

    The higher cost of SFH in Fairfax might translate to higher SFH prices in Spotsy, or the lower prices for townhomes in Fairfax might cause SFH and townhomes in Spotsy to go lower.

    Regardless of what anyone claims tothe contrary, it seems to me pretty well established that stiffer regs cause higher prices. the evidence is pretty strong that this leads to overreaching for mortgages, and if markets fall, more upside down mortgages, and more foreclosures.

    Did this cause the housing collapse? No, but it almost certainly contributed.

  32. "..we move on to comparing what would be "typical" market-priced housing in a place that is uber-dense verses your classic exurban sprawl and the numbers don't compute."


    Well, thats where we part companay. I'm pretty certain that they absolutely compute. If they didn't, why would so many people be trying to control the rules of the game?

  33. Larry G Avatar

    I think it is ludicrous to claim that places like NYC or NoVa do not have "affordable" housing because of land "restrictions".

    If one classifies "affordable" as a detached single family dwelling with a front/back yard in a subdivision then the reason they are expensive in places like NYC and NoVa is not because of land-use restrictions but because virtually every acre of land HAS BEEN developed and very little is available and what is available is very expensive because of the shortage of buildable parcels – not because of any land-use restrictions.

    When we talk about places that have millions of people living in houses in dense proximity to each other – it's just ludicrous to claim that there are not more houses because they are being "restricted".

  34. I think it is ludicrous to claim that places like NYC or NoVa do not have "affordable" housing because of land "restrictions".


    You are partially correct. Land restrictions are one part of the equation and demand is the other.

    The question isn't whther New York and NOVA would have affordable housing with fewer restrictions, it is whether the housing would be somewhat more affordable. And that really isn't a question: of course it would be more affordable.

    And the trickle down effect would make it slightly more affordable in adjacent jurisdictions as well.


    I think the actual definition of affordable is when the average home can be purchased with a payment equal to or less than one third of the average income. therefore and affordable home in New York or Fairfax or Loudoun is a lot more expensive than an affordable home in Spotsy or Fauquier, because the salaries are higher.

    I don't even know why you are going around on this. Even those who promote more housing restrictions admit it will cause higher prices, and in many cases that is WHY they want more restrictions.

  35. "…what is available is very expensive because of the shortage of buildable parcels – not because of any land-use restrictions."

    Obviously you have not tried to develop something in New York. it can take years or even decades to get through the permitting process.

    There are hundreds of buildings the owners would love to tear down and re-develop, but they are prevented by various restrictions, like rent control.

    Even in Fairfax, it took me 18 months to get a building permit for ONE SFH. The delay cost me about $30,000 extra for that house. I can tell you for a fact from personal experience that regulations increase costs substantially. Which I would not have minded if I could see $30,000 in value or safety as a result, but I didn't. All that delay was nothing but bureaucratic chicken poop.

    I recently spoke to a guy who was on the construction committee for his church, which was putting up a new chapel. He was two years into it and about ready to strangle people at the county offices.

    Regulations not only make housing more expensive, they make religion more expensive.

  36. "….homes are expensive in high cost areas primarily because of government regulation, that is,
    zoning and other restrictions on building. According to this
    view, housing is expensive because of artificial limits on
    construction created by the regulation of new housing. It
    argues that there is plenty of land in high-cost areas, and in
    principle new construction might be able to push the cost of
    houses down to physical construction costs. This is not to
    imply that high prices exist in areas with weak demand
    fundamentals. A strong demand, because of attractive
    amenities or a thriving labor market, is essential. However, this
    hypothesis implies that land prices are high, not due to some
    intrinsic scarcity, but because of man-made regulations.
    Hence, the barriers to building create a potentially massive
    wedge between prices and building costs."

    Edward Glaeser

    "The Impact of Building
    Restrictions on Housing


    He goes on to say:

    "…we find a robust connection between
    high prices and regulation. Almost all of the very high-cost
    areas are extremely regulated—even though they have fairly
    reasonable density levels. Again, we interpret this as evidence of
    the importance of regulation.
    As a whole, our paper concludes that America does not
    uniformly face a housing affordability crisis. In the majority of
    places, land costs are low (or at least reasonable) and housing
    prices are close to (or below) the costs of new construction. In
    the places where housing is quite expensive, building
    restrictions appear to have created these high prices…."

  37. Larry G Avatar

    " it is whether the housing would be somewhat more affordable. And that really isn't a question: of course it would be more affordable."

    more affordable if land restrictions (as opposed to other non-land-restrictions regulations were removed?

    I think you are conflating two different issues here.

    "And the trickle down effect would make it slightly more affordable in adjacent jurisdictions as well."

    again.. are you talking about restrictions on LAND or the regulations required when you build – like fire code, etc?

    "I think the actual definition of affordable is when the average home can be purchased with a payment equal to or less than one third of the average income. therefore and affordable home in New York or Fairfax or Loudoun is a lot more expensive than an affordable home in Spotsy or Fauquier, because the salaries are higher."

    and what would you say if the locality had a regulation that said you could not build something unless it met the "affordable" criteria?

    "I don't even know why you are going around on this. Even those who promote more housing restrictions admit it will cause higher prices, and in many cases that is WHY they want more restrictions."

    nope. there might be some that have their misguided notion but many more simply want the infrastructure and facilities to be there for the new growth – a plan for paying for it – rather than building first and then having the levels of service degraded and very expensive to catch back up.

  38. Larry G Avatar

    " … It
    argues that there is plenty of land in high-cost areas, and in
    principle new construction might be able to push the cost of
    houses down to physical construction costs. "

    and it is Grade A nonsense.

    where are you going to find substantial EMPTY/VACANT parcels in most urban areas besides Detroit?

    all this does is promote more ignorance – a willful ignorance on what the actual issues are and you cannot begin to approach solving the issues until you admit what they are and what they are not.

    If you want to call a land restriction – rules that prevent a refinery from being built next door to condos.. well you got me dead to rights.

    Welcome to the world of zoning where your "right" to build a refinery has indeed been "restricted".

    Want to destroy a school or a church?

    Just allow the guy next door to build the worlds biggest porno shop or a slaughterhouse.

  39. Anonymous Avatar

    Nope it isn;t just land restrictions; it is restrictions of all sorts. As I pointed out, you don't mind safety issues or things that actually get you something. But it is not things like fire code that hang you up, those are pretty well defined.

    What kills you is the total BS, like three months for a driveway permit, for a driveway that already exists. Like the county claims you have a soil problem and the soils engineer says you don't.

    Even in New York there is land to be had, but it might have a building on it already. that isn't a problem, but the regs are a huge problem.


    Anyway, read the article. what he does is find out the price of new construction in an area, then he compares it to the price of existing housing. If existing housing costs way more than new construction plus the price of land, then it must be that something is preventing new construction.

    And, as he points out, it does not happen everywhere, just in the places that have a lot of restrictions.

  40. "..and what would you say if the locality had a regulation that said you could not build something unless it met the "affordable" criteria?"


    I'd say thank you and start tomorrow, if they wouold actully let me. When I was done some person that needed affordable housing would thank me.

    But, if there was such a regulation it would mean that every new house would be below average in cost. Why would the county do that?

    Because it would mean that you could not aford to pay for the cost of all the other restrictions. combined withthe other ixisting rules, that would pretty much stop construction, because therre would not be a way to profit.

  41. Anonymous Avatar

    Welcome to the world of zoning where your "right" to build a refinery has indeed been "restricted".

    And welcome to a world where we now face periodic shortages and inflated costs for refined products. Regulations ncreasethe cost of everything, not just houses.

  42. Welcome to the world of zoning where your "right" to build a refinery has indeed been "restricted".


    Scare tactics and changing the subject.

    The topic is whether restrictions on housing cause higher housing prices. That is pretty near irrefutable.

    Besides that, why do you suppose there would be a restriction against putting a refinery next door?

    It would be to keep housing prices high.

  43. Why would you buy a house that cost you more than building a new one, plus the cost of the land?

    Because you ar not "allowed" to build a new one. or because the cost of building a new one exceeds the cost of an old one, after you pay for all the additional restrctions.

  44. Larry G Avatar

    these regulations that you are citing are everywhere regardless of and separate from land-specific regulations that might be explicitly designed to slow down growth in some areas.

    You and the folks you cite have not broken out the land-specific regs here and instead of claiming that ANY regulation has that effect – and that's simply not the case.

    even in ole Spotsytucky, they were charging an arm and a leg for a 12×12 deck – more than the cost of the materials…

    and if you want to add wiring .. they'll want it certified by a professional – yet another "regulation"..

    but these kinds of regulations are not intended to restrict land-use nor do they have than effect…

    but to lump them all together under "land use regulations" that make affordable housing scarce is simply not the case.. a less than honest approach to the issue in my view.

    I know.. everybody's doing it these days.. just take an argument and twist it to suit one's philosophy and voila.. we can "prove" that affordable housing is scarce because of land-use "regulations".

    only problem is – it's not true and because this is cited as the crux of the issue -we can't even get to the things that might help produce more affordable housing.

    But I'm quite sure if a locality required affordable housing as part of any residential development proposal that the property rights folks would be up in arms about taking away people's "rights" …

    I actually have a common-sense proposal for affordable housing that I'll relate upon request.

  45. I have no beef with inspections or certifications for safety. I do have a problem with requirements that call for installatiojn by a licensed professional just to keep them employed.

    In my case, my aplication was first rejected because the county believed I was in an unstable marine clay area. In spite of the fact that this had never been a problem for any of the surrounding house. At the counties suggestion I hired a soils engineer who came with a truck to drill core samples. He found no problem, and in fact the site is mostly rock.

    I had no problem with that because it could be a serious structural issue.

    But I had a big problem when the county simply rejected the report from a professional engineer. Sight unseen, and the county refused to send someone to see the site in person.

    The engineer was livid. The county then had me hire another engineer to design a foundation that would withstand the nonexistent clay soil. All of that cost $12,500 plus three months.

    For nothing, because after I finally got a permit it took a hoe ram to chisel out an excavation for the super reinforced foundation and footings. Additional cost for the special foundation was another $5000.

    There was no reason for any of this except to discourage me from proceeding by raising the cost. No benefit to anyone but the engineers. There is no reason for this anymore than a deck permit that costs more than the materials.

  46. If the county wants more affordable housing all they have to do is issue the permits.

    If the county wants premium housing at affordable prices, they can simply buy it and then resell it at a loss.

    What they do instead is extortion. Force someone else to buy it and then resell it at a loss. This is nothing more than an off budget tax

  47. James A. Bacon Avatar
    James A. Bacon

    EMR's original post raised a provocative question: How do we narrow the wealth gap?

    There are many reasons behind the surging share of national income claimed by the Top 1% of the population. Here's one: The high rollers and gamblers on Wall Street created a money machine in bonds, derivatives and synthetic permutations thereof during the 1990s-2000s real estate boom that siphoned hundreds of billions of dollars from the pockets of middle Americans into their own pockets.

    I would wager that the real estate crash did a lot to bring those guys back down to earth. It will be interesting to see what the IRS data for 2009 and 2010 report on income inequality.

  48. Larry G Avatar

    I don't know how all of the folks on Wall Street will fare but I offer the following thought and that is … pretty much everyone on Wall Street is fairy financially literate and current on all things financial including government regs and changes, etc

    whereas much of the middle class is pretty much clueless and thinks that getting a "good" mutual fund saves a lot of otherwise hard work trying to figure out what "safe" investments are – although we certainly learned a thing or two recently.

    Those down a notch are essentially financially illiterate … except knowing what entitlements they qualify for.

    So.. my prediction is that most of Wall Street will make personal lemonade out of this economic lemon .. with things like income-averaging to take advantage of their losses and the folks that got hurt – will stay hurt… and the folks that get entitlements will continue to receive them.

    Winners = rich & entitlement recipents

    Losers = middle class


  49. "created a money machine in bonds, derivatives and synthetic permutations thereof during the 1990s-2000s real estate boom that siphoned hundreds of billions of dollars from the pockets of middle Americans into their own pockets."


    How much did you have invested in hedge funds?

    OK, so if you had stock in Fannie mae or the big banks you took a bath, but for most people those billions in losses were all on paper, mostly on their home value. Most of those people are still in their homes and still making the same payments on the same intrinsic value.

    People who spent their equity or bought into the bubble late took real losses and ultimately lost their home. But many lost their home only because they lost their job, which was a result of panic set off by the big losses.

    So who took the big losses? The biggest losses were taken by the biggest players: the ones who should have known better.

    And some of thiem did know better. Despite taking a billion in personal losses Cayne still walked away from Lehman Brothers with $10 million.

    I don't think there is any way to "equalize wealth" without stealing from the wealthy or any justification to do so. But I do wonder how Cayne got his $10 million protected and others who lost a similar portion of their wealth got nothing.

    As I see it, the anger in America today isn't over bailuts for the big guys, its because they got bailouts and the little guy didn't.

    It is about equal property rights and equal power to defend those rights.

  50. Larry G Avatar

    moral of the story:

    The Wall Street Cats have a much better chance of landing on all fours than the Main Street smucks that take it on the nose.

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