Housing and Deservingness

It's not "economics" if prices are just proxies for merit

There’s a conversation I frequently have with people who are skeptical of the “YIMBY”—or just generally build-more-housing—point of view, and who sort of dislike young people complaining about the cost of housing.

It touches on themes of deservingness, entitlement, and work ethic. I’ve written about this a lot—here, for example—and if you have even a passing familiarity with debates over housing, you know what I’m talking about.

Now people aren’t necessarily arguing that this has to do with deservingness per se. I’ve heard the argument that (paraphrasing) “I don’t necessarily think that it has anything to do with deservingness; it has to do with the idea that if you want something, you pay for it. In other words, not do you deserve it but can you afford it? That’s economics, not moralizing.”

Fair point. But in many ways that’s a distinction without a difference. It depends on how you see those prices, and what you think they mean. Because some people aren’t just saying “if you want a nice house you’ll have to afford it.” They seem to be saying, even if they don’t say it outright, something closer to “It would be wrong to take actions to lower housing prices, because that would be giving people something they haven’t earned.” In other words, home prices for many people effectively serve as proxies for deservingness. They effectively view freeing up the housing market or the land-use regime as if it was giving a handout—a fallacy many such critics would readily see in any other context.

Now, some things you do have to earn (or just be very rich)—like a mansion in Beverly Hills. But no serious housing advocate is saying “everybody should be able to live in a mansion regardless of their ability to afford it.” That would be silly. What we are saying is that more affordable types of housing should be allowed in more places; apartments in dense areas near transit, yes, but also “missing middle” housing types like townhomes, duplexes, garden apartments, and similarly scaled housing types.

A little aside on that: it’s interesting that we frequently debate whether these buildings would “fit in,” because we have thousands of built landscapes showing that they fit in just fine: any one of America’s numerous classic small towns. The classic American Main Street is largely appreciated for its aesthetic these days, but it exists for an economic reason.

It’s a complete, diverse neighborhood, within a relatively small and compact space: stores, apartments, often an old hotel and/or boarding house, and just as often detached houses on smaller lots on a grid very close to downtown. It’s more or less the template for New Urbanist-style mixed-use projects. These projects can be lovely, or they can be poorly implemented, but their inspiration is something timeless, not something newfangled, or oriented around the consumptive desires of young people today. This classic pattern of development gives character, texture, and opportunity to places.

So when somebody objects to building naturally less expensive housing types, or conflates the desire to do so with “entitlement,” what are they really saying? They’re not saying “if you want a house, you should be able to afford it.” What they seem to be saying is that if you cannot afford a detached single-family house, there is something wrong with you and you do not belong here. They seem to be saying “The home prices here are high not because they have been engineered by policy or because we have a supply shortfall, but because they reflect our work ethic. To lower the prices here would be to separate work from reward.”

They may or may not mean that, to be clear, and I’m talking not about everyday people who are a little skeptical of development, but about people who invest particular energy into stopping it. But in any case, it’s an attitude that makes our land-use problems worse and forecloses pleasant, time-tested ways of allowing our places to grow.

Now if the here is Beverly Hills, fine. But if the here is the entire Los Angeles metro area, we have a social and economic problem, not a lack of work ethic or deservingness. And that goes for expensive metro areas everywhere in America.

The problem, in other words, isn’t people feeling entitled to live somewhere, but artificial limits on housing supply, and artificially high prices. It borders on nonsensical to view those inflated, artificial prices as some sort of reflection of the merit of the people who were able to afford them. (And, it’s worth pointing out, many did not and could not afford them; appreciation has been so dramatic in some markets that many homeowners are now “house-rich and cash-poor.”)

An analogy might help here. IBM released the IBM PC over 40 years ago (yes, 1981 is over 40 years ago!), and it cost a few grand. Within a few years, other companies had cloned or reverse engineered it, and cheaper and more stripped-down models became available. Maybe they used generic parts that weren’t quite as good. Maybe they were less powerful. (This is all apart from the natural decline in the cost of computing power. Almost any consumer good exists at all different price and quality/performance levels.)

So if somebody who wanted a computer went to a computer store and said, “I can only afford half the cost of an IBM PC, but I want one,” the salesman would say “Nice to want.” But he might also say “We do have this clone over here that might be in your price range.”

What nobody ever said or ever would say (except maybe IBM when it sued Compaq) is “You’re cheating by developing/buying a cheaper version of the PC. Either you can afford an IBM PC or you can leave the store.”

I think this ties into something I’ve begun to realize: that among many conservatives, and also among some old-fashioned liberals (these are human tendencies, more than they’re partisan ones!), there’s an idea that public policy is bad because it shortcuts personal responsibility.

I remember a lunch conversation with some folks back at my old magazine job, and one of my old colleagues declared, “I think it’s a good thing that health insurance is so hard to figure out, because it means you have to take responsibility for your family.”

What a dismal, misanthropic, self-loathing sentiment—and even more so because there are undoubtedly people holding elected office who think this way and act on it. In this view, making people’s lives easier is not only an unnecessary pursuit, but an illegitimate one.

There is a lot of this under the surface in housing discourse. This idea that you shouldn’t whine about not being able to afford a single-family house, but you also shouldn’t want a cheaper type of house; this Gordian knot of moralism tied up with economics, the confusion caused by divergent experiences and preferences between generations.

And, of course, the often-unquestioned assumption that change, growth, and more people are bad things; the idea that housing advocates are asking incumbents to sign onto “destroying their neighborhoods.” These are things I hear, and they’re attitudes many people absorb. Growth can be overwhelming, and it can absolutely be managed poorly. But it can and must be done well: not because anybody “deserves” it, but because people, and places, need it.

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Related Reading:

Apartments, Ownership, and Responsibility

Still Renting After All These Years

About That Avocado Toast

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