Can more and more affordable housing lead to more widespread prosperity? A critique of the “housing as opportunity” view and its emerging policy discourses

Authors: Michael Storper*, London School of Economics - London, Andres Rodriguez-Pose, London School of Economics
Topics: Urban Geography, Economic Geography, Migration
Keywords: Cities, housing, regulation, urban planning, economic growth, inequality, migration.
Session Type: Paper
Day: 4/5/2019
Start / End Time: 9:55 AM / 11:35 AM
Room: Calvert Room, Omni, East
Presentation File: No File Uploaded

Urban economics and branches of mainstream economics – what we call the “housing as opportunity” school of thought – have been arguing that shortages of affordable housing in dense agglomerations represent a fundamental barrier for economic development. It is suggested that housing shortages limit migration into thriving cities, curtailing their expansion potential, generating rising social and spatial inequalities, and inhibiting national growth. According to this increasingly dominant view within economics, relaxing planning regulations is the most prosperous cities is crucial to unleash the economic potential of cities and nations and to facilitate within country migration. In this article, we argue that the bulk of the claims of the housing as opportunity approach are fundamentally flawed and lead to simplistic and misguided policy recommendations. We posit that there is no clear and uncontroversial evidence that housing regulation is crucial for differences in home availability across cities, for inter-regional mobility, or for spatial variations in income distribution. The housing as opportunity approach has also failed to properly ponder the intra-metropolitan effects of housing supply regulation. Thus, focusing of housing supply is neither the best way to address development bottlenecks in prosperous areas nor a viable way to stem interpersonal and spatial inequalities. Moreover, the policy recommendations derived from this approach are increasingly playing into the hands of politicians launching populist attacks on prosperous regions and their inhabitants.

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