These patterns are extreme. Just since 2000, among the bottom half of households, by income, there has been more than a 10% shift away from highly dense urban neighborhoods. These are essentially passively imposed forced relocations. This is the interpretation that deserves the benefit of the doubt. To explain it any other way would be like noting how the Super Bowl (where tickets now cost thousands of dollars) is overwhelmingly attended by rich people, and concluding that there has been a shift in preferences. For some reason, lower income fans just seem to lose interest in football after the regular season ends. Maybe we need to do an anthropological study about why poor fans don't care about championships as much as they care about pre-season exhibitions.
There is a lot of discussion these days about increasing market power of corporations. Larry Summers has an article out on this. I think I will save a more detailed response for another post. He concludes that increasing market power is important because all the other explanations for apparent patterns of income stagnation and inequality are mysteriously incompatible with the evidence. But, he doesn't consider this housing issue. It's housing that has the increased market power. And, this power, ironically, comes mostly from "Affordable Housing" policies in the big blue cities.
The frustrating thing about discussing the economy in terms of market power, is that it sets the discussion up in a satisfying "us vs. them" framing, which is really wrong about everything. It sets us up to look for confiscatory and obstructionist policies that we expect to level the playing field. It leads us to spread all of the policies that have created the problem to an even broader set of agents.
We are the 100%. The solution to all of these problems is building. That means developers making profits on new buildings. It means letting cities grow. Like no other issue I have studied, this housing problem highlights the damage of "us vs. them" thinking, and the shared benefits of an open society and a free economy.
I try to avoid tribal politics, but it is really distasteful to me to see the class warfare and anti-market rhetoric that imbues so much of the anti-building activism. Then, when those policies make refugees out of a sizeable portion of the working class households of those cities, the response is more class warfare. The corporations have too much power! Taxes on the rich are too low! We must be subsidizing those gauche suburbs too much! Raise the minimum wage so corporations that have too much market power have to pay poor workers enough to pay their exorbitant rents!
"The business model of Wall Street is fraud." And, what was "Wall Street's" big sin? Building houses in Riverside, and Phoenix, and Atlanta for those refugees. And we put a stop to it. We are nearly unanimous in our support for the housing bust. Nothing unites America these days like our agreement on this.
The policy impositions of urban activists have turned their cities into a post-modern dustbowl and the jalopies are lined up on I-10, now moving back east. How extreme does this have to get before we can expect a little introspection? Unfortunately, I'm afraid that