Priceless politics

Thomas Sowell
Posted: Jun 03, 2002 12:00 AM

While Senator Barbara Boxer is trying to get the federal government to declare more than two million acres in California off-limits to development, California's other Senator, Diane Feinstein, has already brokered a deal that takes 16,500 acres off-limits. That's about twice the size of San Francisco.

Both of these liberal Senators -- and many others -- have repeatedly wrung their hands over a lack of "affordable housing" in California. Meanwhile, they are doing all they can to prevent any housing from being built on ever more vast areas of land.

There is a lot of talk these days about "connecting the dots" but nobody is connecting the dots between making land artificially scarce and making housing unaffordable -- or impossible to build. Prices automatically connect the dots, when transactions take place in a free market. That is because everyone has to bid against everyone else and those who want to use land for the benefit of swamp animals have to bid against those who want to use it for housing people.

But no one as demonized as "developers" is allowed to bid when land changes hand by government fiat. Politics is priceless. However much government decisions may end up costing the taxpayers or imposing other costs in other ways, officials who actually make these decisions face no price tag for what they choose to do.

Whether or not they will pay a political price for their decisions depends on how well informed the public is, how diligent the media are in exposing what is going on, and how long a memory the voters have. But all these things are very iffy -- and very different from automatically facing a price tag at the moment when a decision is made, as people do in supermarkets or stock markets every day.

It is not just United States Senators who can ignore prices. When local politicians vote for something as mundane as restrictions on how high they will allow buildings to be built in their communities, there is no cash register ringing to tell them -- or the voters -- how much this is going to cost in higher housing prices, much less how many more people are likely to lose their lives needlessly on the highways getting to and from work. Why do height restrictions affect housing prices? Because the shorter the buildings, the more of them will be needed to provide a given amount of housing, and the more widely spread out these buildings will have to be.

In other words, more land will be required to house the same number of people -- and land is not free. In many places, such as California coastal communities with "open space" laws severely restricting building, the cost of the land can greatly exceed the cost of the housing on it.

The more widely spread out people are, the longer that more of them will have to travel on highways or by other transportation to get to work. Clogged highways are just one of the hidden costs of height restrictions on buildings. The people who die on those highways commuting from the greater distances caused by height restrictions are yet another cost.

Everyone likes open space, but few ask: At what price? The great attraction of politics, for some people, is that it allows them to impose their inner vision of the good life, without being restricted by costs that are inescapable when you make decisions through the marketplace. That is also what makes such busybodies so dangerous to other people.

California housing prices on the San Francisco peninsula are the highest in the country and are more than three times the national average. None other than Senator Diane Feinstein herself said a couple of years ago: "It is estimated that half of all renters in California spend 50 percent or more of their monthly incomes on rent."

What these renters are paying for is not the cost of housing but the astronomical cost of the land on which housing is built. Ultimately they are paying for the ego trips of other people who preen themselves over their diverting of land from housing to "open space" and "wetlands" -- all the while talking about a need for "affordable housing."