How big cities that restrict new housing harm the economy

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How big cities that restrict new housing harm the economy
© David Yu - Flickr
How big cities that restrict new housing harm the economy
© David Yu – Flickr

For the last couple of years, San Francisco has been erupting with periodic protests aimed, rather imprecisely, at a nexus of grievances related to gentrification, affordable housing, transportation, the tech industry, newcomers to the city, its changing skyline and Silicon Valley to the south. The city is screaming, although at what its protestors seem a little confused.

“In my view, the whole debate here misses the point,” says Enrico Moretti, an economist at the nearby University of California at Berkeley. “People are marching against Google buses when they should be marching for more housing permits.”

At the root of San Francisco’s tension is a mismatch of supply and demand: Affluent workers have been flocking to the area for its tech jobs, but as the number of jobs in the region has grown, the number of housing units to accommodate people taking them hasn’t remotely kept pace. As a result, rents are going up. Low-income residents are pushed out. Landlords who see more lucrative opportunity in condo conversions have ramped up evictions.

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