Median condominium prices in Chicago, notes Harvard urban economist Edward Glaeser, are $232,000. That's very low, even a shade under those in Trenton, N.J. (The King County median price for condos is $285,000.) What do those smart urbanists in Chicago know about affordability?
The answer, according to this interview with Glaeser,director of Harvard's Taubman Center for State and Local Government, is that Chicago is extremely pro-growth. Instead of layering on more and more land-use and design controls, Chicago has a pro-growth environment, and all those new housing units help keep the prices down. Glaeser explains:
Over the past two years, Chicago has permitted around 14,000 units per year. Los Angeles permitted less than 10,000 units in 2007 and 14,500 units in 2006. Yet Los Angeles has almost twice the land area and over 50 percent more population. It is substantially less dense than Chicago, and there is substantially more demand for Los Angeles, yet Chicago is building more. Bringing more units to market — think of all those cranes along the lake — explains in some part of why Chicago is more affordable. The absence of land-use controls [means] prices for condos will tend towards construction costs. After all, you can always build taller buildings.Similarly, Glaeser points to four of the fastest-growing areas in the nation, Atlanta, Dallas, Houston, and Phoenix, which "offer an astonishing high standard of living for ordinary Americans." These cities are comfortable serving the demand for big houses on the edge of urban areas, in effect trading sprawl for an ample supply of homes that keep the average price low. That seems like a bad trade-off for amenities cities like Seattle and Portland, but the compensation is a social one: those cities that "offer an astonishingly high standard of living for ordinary Americans."
Seattle's Is-Everybody-Happy? style of politics fondly imagines that you can combine quality of life, density, design-control, growth-constraints, and affordability. But in free-market America that's hard to pull off. Tamp down growth for all kinds of good reasons, and you will usually drive up housing prices. Mayor Greg Nickels, a native of Chicago, seems to understand that providing incentives for growth of apartment buildings in Seattle, even if we blot out the sky, is one way to tackle the affordability issues. Anybody got another idea?
