Cost of Housing Is Main Driver of Migration from Superstar Cities

(p. B1) Last month the Census Bureau confirmed a confounding dynamic taking hold across the American landscape: Superstar cities, the nation’s economic powerhouses, hotbeds of opportunity at the cutting edge of technological progress, are losing people to other parts of the country.

For the first time in at least a decade, 4,868 more people left King County, Wash. — Amazon’s home — than arrived from elsewhere in the country.

Santa Clara County, Calif., home to most of Silicon Valley, lost 24,645 people to domestic migration, its ninth consecutive annual loss.

The trend is becoming widespread. Eight of the 10 largest metropolitan areas in the country, including those around New York, San Francisco, Los Angeles and Miami, lost people to other places in 2018. That was up from seven in 2016, five in 2013 and four in 2010. Migration out of the New York area has gotten so intense that its total population shrank in 2018 for the second year in a row.

. . .

(p. B5) Research by Peter Ganong from the University of Chicago and Daniel Shoag of Harvard suggests that housing costs are a principal driver of the change in migration decisions: As the highly educated have flocked to superstar cities, they have pushed housing prices way beyond the reach of people earning less.

. . .

It is not obvious how to turn big cities back into magnets of opportunity for the working class. Many of the jobs that offered a leg up to those without a college background no longer exist and won’t come back. But there are policies that could make a difference. Relaxing zoning regulations to make it easier to build could slow rising rents, ensuring that the housing supply keeps up with demand.

And yet the prospects do not look good. California lawmakers last week shelved Senate Bill 50, which would have forced cities to allow denser housing near public transit and removed density limits in wealthier areas close to job centers and good schools. The bill faced stiff opposition from many municipal governments and residents enamored with low-density living — not to mention rising property values.

The single-family-home ethos may eventually lose its grip on the politics of America’s superstar cities. Until then, it will make sense for those without a degree to look for opportunities elsewhere, in places like Kansas City or Des Moines or Las Vegas.

For the full story, see:

EDUARDO PORTER and GUILBERT GATES. “Why Workers Without College Degrees Are Fleeing Big Cities.” The New York Times (Monday, May 27, 2019): B1 & B5.

(Note: ellipses added.)

(Note: the online version of the story has the date May 21 [sic], 2019, and has the title “Why Workers Without College Degrees Are Fleeing Big Cities.” The print version listed Eduardo Porter as the sole author. The online version adds Guilbert Gates as a co-author.)

The research, mentioned above, by Ganong and Shoag, was published as:

Ganong, Peter, and Daniel Shoag. “Why Has Regional Income Convergence in the U.S. Declined?” Journal of Urban Economics 102 (Nov. 2017): 76-90.

One thought on “Cost of Housing Is Main Driver of Migration from Superstar Cities”

  1. According to what I recall from high-school “social studies”, the underlying worship of real estate was given a big governmental boost following World War I. The idea was that everyone must have, as my teacher read out, “a stake in society”. In essence, nail people down to owning houses in order that they would be less likely to embrace nasty socialist thoughts of the sort being bruited about in Europe. After the income tax had been imposed, we got the mortgage deduction. In 1938 we got Fannie Mae. After World War II, we got massive highway programs, Levittowns, and such.

    It succeeded brilliantly. Unfortunately, it became a something-for-nothing scam for what was called the middle class. Use an array of gimmicks and overregulation to keep housing prices inflating much faster than everything else, and people would feel rich rather than socialist or whatever-ist. Then it would be a piece of cake to duck and weave on issues of “distribution”, as has always been the wont of economists.

    Alas, the policy has proved unsustainable “in the long run”. Despite Keynes correctly instructing us that we’re “all dead in the long run”, the long run has nonetheless managed to arrive. Alas again, population/generational turnover complicates the very meaning of “the long run”. Inevitably, wherever there are decent jobs, housing has become unaffordable.

    So it goes.

    Maybe, “as a society”, we need to instruct our bossy, controlling billionaires, that although they covet prestigious, mega-expensive megacity addresses, nonetheless they must start spreading the wealth around a bit, or else. After all, in the time since liberal (in the European sense) economics came into being, there have been minor inventions like radio, the telephone, and then the internet. It’s not like there’s any longer the slightest need to cram and jam everyone into impossibly hyper-expensive mega-skyscrapers on just a few hundred of our 3.6 million square miles.

    Or we can do what people tend to do – simply proceed blindly as-is. That is, just keep right on giving the middle finger to everyone not in a mega-skyscraper. That will surely come to a bad end, but maybe no one among the controlling elites cares.

    So it goes.

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