A lottery gives everyone who bothers to sign up an equal chance. But
not everyone has an equal desire or need to live in a particular place.
Some people would be just about as happy to live somewhere cheaper;
subsidize their housing and you may be displacing people who really want
to live here.
Supply and demand is very difficult to short-circuit. When Berkeley
instituted vacancy rent control, large cash bribes became necessary to
rent an apartment in any neighborhood without lots of gunplay. I know;
I tried. The bribes were illegal, of course. Didn't matter. Illegal
subletting was also common. Supply and demand was undeterred. The very
poor and working class people the law was designed to help found renting
an apartment even harder because those are the people least likely to
have a big wad of cash up front (or access to sufficient credit).
Most schemes to subsidize housing in a particular area lead to big
inefficiencies. Subsidize enough housing and it won't be ten minutes
before some of those lucky lottery winners are subletting their housing
units to some Silicon Valley stock option nouveau riche while they take
the profits and buy a stucco box on a cul-de-sac in Tracy.
> By a "monopoly price" I mean a price that is
> limited only by how much someone is willing to pay. This is not
> the same behavior as a commodity price, which is limited by
> the costs of production.
That's a very strange use of the word "monopoly." Housing isn't
strictly an issue of land; it's an issue of units of housing. A piece
of land can support a highly variable number of housing units. More
housing units can be built; we simply choose to limit this for aesthetic
reasons.
Tons more housing would be built in the Bay Area if the government
didn't limit a) which bits of land could be developed for housing and b)
how much housing you can legally build on land where development is
allowed. For a variety of aesthetic reasons -- many of which I agree
with -- severe limits on housing units are imposed. (The proliferation
of live-work units is more proof of my earlier point about supply and
demand being hard to short-circuit, isn't it?) Unable to confront the
implications of such severe development limits (like very high housing
prices) we institute policies (rent control, limits on condo conversion,
banning tenancy-in-common, etc.) that don't contribute to housing
affordability. They benefit or hurt people in a scattershot fashion.
Typical of public policy that springs from a cry to "do *something*".
San Francisco is an incredibly desirable place to live. The weather is
just about perfect, there's lots of culture, it's very pretty, and it's
in the epicenter of a boom economy. Undertaking to keep out rich people
who are willing to pay lots of money to live here -- no matter how noble
the purpose -- is pure conceit. It won't keep them out; it just
requires them to jump through a different set of hoops.
It's reasonable that people who live in a very small, very desirable
place constantly reassess their willingness to do so. I could live much
more cheaply elsewhere, but choose not to. I partake of the local
culture in a big way, so I pay a steep premium to stay here. If I
shopped at a strip mall and spent my evenings watching TV, I'd consider
living somewhere cheaper; you can do that stuff anywhere. Recently, as
my partner and I have weighed buying a house, we've asked ourselves if
it's really worth hundreds of thousands of dollars more to live in a
city we like versus somewhere less pleasing to our taste, like Seattle.
Even longtime homeowners who bought when houses were cheap face this
question. Lots of them ask themselves whether they should sell their
house in San Francisco and take their cash someplace where a half
million is still a lot of money. If we institute "I've got mine, Jack"
policies that subsidize current residents over those who want to move
here, we'll get even less turnover on the part of people who, left to
their own devices, would make a different choice about allocating their
wealth.
Suburbs are themselves a product of severe development limits. Most
suburbs didn't develop organically that way; they are regulated into
existence (check out the book _Home From Nowhere_ for details).
Suburban land use patterns (very low density, ban on transit-friendly
mixed-use development, severe limits on multi-family dwellings, etc.)
are codified by local zoning laws, plus big subsidies for the freeways
necessary to move these folks around, equal an environment where transit
just can't work.
I do believe some regulation of land use is necessary; but I think we
need to accept that there are severe negative externalities to
land-use-as-social-engineering (or economic redistribution) policies.
If the problem is that the poor have too few choices because they don't
make enough money, changing the tax code to shift more of the tax burden
to the rich or providing subsidies for education is a better and more
direct way to deal with it. These are difficult things to do, so we
approach the problem indirectly and find our solutions inadequate. The
patient has appendicitis; maybe a more flattering haircut will help.
Many of Muni's problems stem from all the ways in which it is expected
to be something other than a transportation system. When its roles as a
subsidized jobs program, a community development program, etc. took
over, transportation got left behind. When the federal government
decided Muni should be an instrument in protectionist trade policy,
providing the subsidies to buy American rolling stock, we got those
lovely Boeing Vertol cars. Huge amounts of cash are being squandered on
capital projects that don't make transportation sense because they serve
some other political purpose.
Indirect solutions to problems are like that, I'm afraid.
-- Daniel