Google’s daily Doodle and a number of publications are paying their respects to Jane Jacobs’s 100th birthday and to The Death and Life of Great American Cities. There is a lot to say about Jane Jacobs, of course: she mixed correct observations about the drivers of urban decay and renewal with a lot of stuff the intelligentsia, even in the early 60s, just wanted to hear. Her book places blame for creeping ghettoization on the people leaving and the policymakers who abetted their moves rather than on the new inhabitants of ghettos, and is a clear marker in the shift of the Democratic party to the one dominated by urban “creative” professionals and catering to their preferences that is so evident today.
One thing that irritates me, however, is how contemporary observers often ignore one of Jacobs’ key contentions: that the origins of slums come from excess housing supply, not merely from iniquitous Robert Mosesian urban planning. Here is one representative passage from the book, making this point:
Yes, she is attributing this excess supply to racism and an unwillingness to rent to black people, but it is clear that the proximal cause of urban decay, in her model, is having too much housing.
This is, if anything, more true now than in 1961. In our country, with its highly subsidized and highly leveraged housing market, the only way to keep upwardly mobile homeowners in an area is to constrain supply, to some degree or another. The country is full of cities that never had a Robert Moses to blame for dysfunction and disuse: Philadelphia, for example, may have a few highways that urbanist liberals can point fingers at, but is basically the same physical city that it was before its great fall-off of in population, only now with a lot more vacant land. Many Philadelphia neighborhoods retained much of their same picturesque housing stock– exactly the kind Jane Jacobs endorses– even as they became more and more dangerous and economically depressed. (My entirely pleasant block in West Philly had one dilapidated house with the same wooden sign in an upstairs window, advertising, in spray-painted letters, “For Sale: No Down Payment,” from 1998, when I lived there, till the last time I walked by in 2010.)
As in Trenton, though, the supply of housing in Philadelphia never fell fast enough to keep pace with the people who left. It’s a vicious cycle that liberals discuss often, under the heading of “White Flight,” but it’s almost never admitted how affordable housing subsidies and developments accelerate the process, by never allowing the market to clear and distorting the incentives for upwardly mobile homeowners to hold onto property and develop their neighborhoods. Supercharged economies like New York and San Francisco can absorb the limited supply that affordable housing programs make available– and then limit the production of more– but the nation’s poorer and less functional cities never catch up with the depredations that good intentions leave in their wake.
This is of more than historical interest- about more than just explaining the collapse of various cities from 1950 to 2000– because liberal intellectuals and local politicians continue to champion for always building more affordable housing, no matter how much excess supply remains. Just yesterday, Matt Yglesias wrote in Vox of a paper that found that a new affordable housing development lowers crime and increased local property values in low-income neighborhoods. No longer does a shift outwards in supply cause a decrease in price!
I don’t doubt that the researchers (Rebecca Diamond and Timothy McQuade of Stanford Business School) are reporting accurately a short-term increase in price: in the short-term, new, pleasant-looking housing can make a neighborhood more appealing. But in the long run, the demand curve has to slant down: in the long-run, building new low-income housing in a low-income area (where, almost inevitably, the local economy can only support so many workers and residents) will almost always lead to a decrease in price, which in a highly-leveraged housing market incentivizes default and abandonment. As Jane Jacobs could tell you, in the long run, there’s no better way to build a slum than to make sure that there’s too much housing to go around.