Guess what? At long last somebody has come along and made the case for the connection between land-use regulation and the rise in housing prices that led to the collapse of the “bubble” in 2008. And not just any ol’ somebody. The author of this new book is Claude Gruen, a well-known planning maven who knows what he is talking about.
Gruen’s new book is New Urban Development (Rutgers Univ. Press 2010) Here is the publisher’s blurb:
“The recent recession is one result of how local planning laws and practices have stifled competition, discouraged innovation, and artificially pushed up prices in America’s most economically vibrant regions. Economist and consultant Claude Gruen unravels the story behind how these unintended consequences have resulted from the evolution of local zoning, growth controls, and laws intended to increase housing affordability.”
Sounds right to us.
Afterthought. All this reminds us that in recent decades two presidential commissions on housing reached the conclusion that NIMBY-inspired land-use regulations have been implicated in the excessive, rapid rise in housing costs, that preceded the bursting of the “bubble.” And it was those high housing prices that made it necessary — at least subjectively so — for improvident home buyers to take on excessive debt in the belief that rapidly rising home prices had become some sort of new economic order, and would bail them out.