Thomas Sowell

Too many people who talk about a lack of "affordable housing" seem to think that this is something the government must build or subsidize. It never seems to occur to them that government activity is itself one of the biggest reasons for housing being unaffordable. Nor are they likely to check out the fact that housing is far more affordable in communities where the government is not nearly so active.

The two cities with the highest housing prices in the country are both in California -- San Jose and San Francisco. Many other California communities, mostly along the coast or on the San Francisco peninsula, have stratospheric rents and astronomical home prices. Yet, in the same state's interior valleys, you can rent luxury apartments in developments with their own swimming pools and tennis courts for a fraction of what ordinary apartments cost in places like San Francisco.

A big part of the difference is political. The kind of politics that have earned California the title of "the left coast" pervade the coastal areas and the San Francisco Bay area, while whatever conservatism there is can be found largely in the state's interior.

The building of housing is severely restricted along the California coast by "open space" laws, severe zoning ordinances and draconian environmentalist rules. Meanwhile, the building of apartments is made unprofitable by rent control laws in places like Berkeley, San Francisco and Santa Monica.

It is in places like these that you can expect to encounter "no vacancy" signs and outrageous housing prices. But, in the interior -- in places like Sacramento or Modesto -- you can rent a modern luxury apartment for less than a thousand dollars a month or buy a fine new house for less than half of what the same house would cost along the left coast.

At one time, California housing prices were not so out of line with housing prices in the rest of the country. Then, beginning in the 1970s, laws and policies began to severely restrict the building of homes and apartments, especially in areas dominated by affluent yuppies and alumni of 1960s campus radicalism. For example, homes in Palo Alto -- adjacent to Stanford University -- quadrupled in price in one decade.

As for housing priced low enough to be affordable by the poor, most of that kind of housing was originally built for people who were not poor. People tend to move up the housing ladder as their incomes rise. This means that housing tends to move down the ladder as it ages, with rents declining. That has been one of the main sources of affordable housing for the poor.

Thomas Sowell

Thomas Sowell is a senior fellow at the Hoover Institute and author of The Housing Boom and Bust.

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