Too Long for a Tweet, Too Short for a Blog Post XXXI

http://voiceandexit.com/wp-content/uploads/2015/02/Alex-Tabarrok.jpgHere's an excerpt from something I just read on Quora by Alex Tabarrok of Marginal Revolution, "Why isn't there more labor mobility in the US? Why don't more people move from low to high-growth cities?" (emphasis is author's):

Why has housing become so expensive in high-productivity places? It is true that there are geographic constraints (Manhattan isn’t getting any bigger) but zoning and other land use restrictions including historical and environmental “protection” are reducing the amount of land available for housing and how much building can be done on a given piece of land. As a result, in places with lots of restrictions on land use increased demand for housing shows up mostly in house prices rather than in house quantities.

In the past, when a city like New York became more productive it attracted the poor and rich alike and as the poor moved in more housing was built and the wages and productivity of the poor increased and national inequality declined. Now, when a city like San Jose becomes more productive, people try to move to the city but housing doesn’t expand so the price of housing rises and only the highly skilled can live in the city. The end result is high-skilled people living in high-productivity cities and low-skilled people live in low-productivity cities. On a national level, land restrictions mean less mobility, lower national productivity and increased income and geographic inequality.
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