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More on Red/Blue states and housing

Steve Sailer linked to my post Blue state/red state and the high cost of housing, and wrote the following comments:

I'd agree to some extent, but keep in mind that developers can make huge profits in highly restricted blue areas, too, precisely because supply is restricted by the government, so the value of land is artificially high. Further, why do politicians in blue zones restrict development? Because that's what the voters (primarily homeowners) want?

There's a natural evolutionary cycle from low density Republican to high density Democrat that you can see in places like the San Fernando Valley. Fifty years ago, The Valley was a dusty hicksville on the outskirts of LA, so the Valley's small number of homeowners wanted the population to increase so they would gain more of the civilized amenities that require a certain density to make economically feasible, like paved roads, sewer hook-ups, local shopping, nice restaurants, and the rest. So, they voted Republican to make it easier for developers. (This doesn't mean they were libertarians. The Valley is dependent on massive government water projects. The movie Chinatown is highly bogus on the history of The Valley's water supply, but the essential point is that government was required to make The Valley bloom.)

Somewhere along the line, a tipping point was reached, and today, Valley homeowners think the place is more than full already, and don't see how increased density -- with its increased traffic, noise, etc. -- will make their lives better, so they vote Democratic to hinder further development through environmentalism and the like.

link to Steve Sailer post

The point of my article is that Red states vote for Republicans, and Republicans support a free market approach to housing development that results in lower housing prices. Blue states vote for Democrats who support a highly regulatory approach to housing development that results in higher housing prices. I'm not sure why Steve Sailer is disagreeing.

Steve says that developers can make big profits where land use is highly regulated, and that's true, but not really the point of anything. Some people can get rich by playing ball with the liberals who create excessive government regulation. Ayn Rand's book Atlas Shrugged was about this very topic: Dagny Taggart's brother got rich by bribing government officials, while the more moral people like Dagny and Hank Rearden got rich by actually providing better products and services.

Steve also says that homeowner voters in Blue states intentionally support politicians who will make their houses more expensives, thus enriching themselves at the expense of have-nots who can't afford to buy a house. Steve has discovered that a lot of people who support liberal issues are hypocrites! This is interesting, but not really related to the basic point of my argument.

Steve says that traffic and noise causes people to vote Democratic to prevent development. This assertion is not born out in the statistics. Using the website used by Steve, www.laboratoryofthestates.com, we see that Red state Arizona where I used to live voted 54.9% for Bush and had a relatively low housing inflation of 152.9% from 1980 to 2004. Then we look at Blue state Vermont, a state with no large cities and not a place where many people are moving to. Vermont voted 38.9% for Bush but had a housing inflation of 238.7%. This difference is not explained by traffic and noise, it's explained by the political orientation of the voters, and the natural economic policy differences between the left and the right.

In Arizona, we didn't try to fix the traffic problem by restricting development. We fixed it by building more highways!

Democrats say that high housing costs are a problem. If they think that, they could easily fix the problem by adopting red state housing policies. The very high correlation between a state's percent vote for Bush, and housing inflation between 1980 and 2004 (the coefficient is -0.74 according the the aformentioned website) is the proof that Democratic housing policies cause high housing prices.

posted Wednesday, December 29, 2004

1 Comments:

By calwatch:

No, the reason the Valley is largely Democratic is because of changing demographics. White flight has resulted in those older homeowners moving out to Ventura County, Santa Clarita, and the Antelope Valley. Meanwhile developers became too permissive and built many apartment complexes. Renters tend to be Democrats, and Hispanics too especially in California after Proposition 187.

posted at 1/07/2005 2:54 AM