Escape From Pianosa

This sentence sums up why the idea of ‘affordable housing’ in affluent communities will never be anything more than an empty buzzword in the political game:

“Affordable housing is a tough sell among some residents who say it brings down property values… said Sherman Howell, a member of the county’s affordable housing task force.”

That quote comes from yesterday’s Baltimore Examiner article about affordable housing in my hometown, Columbia, MD.

You see, there’s this inconvenient reality known as supply and demand. If you want housing to become cheaper, you have to increase the supply or lower the demand. Now with the great public schools in Howard County and the proximity to Washington and Baltimore, we all know that the demand isn’t going anywhere.

On the other hand, supply could go up… And really, it’s very simple. All you have to do is build more houses. Or more apartments. Or whatever. As the supply goes up, prices will fall and thus housing will become more affordable.

But wait—-did you say prices will fall? Does that mean that my $600,000 colonial will go down in value!?

By now you’ve probably figured it out-—people who already own houses in Howard County sure as hell don’t want their values to go down. And can you really blame them? Nobody wants their biggest asset to lose value. So when faced with a choice between affordable housing for others, and maintaining their property values, it’s easy to see why people will always choose the latter.

Nevertheless, such a choice can create the occasional pang of guilt.

And politicians are the greatest entrepreneurs when it comes to filling gaps in the conscience market.

That’s why we have buzzwords like inclusionary zoning, which are ostensibly indended to force developers into creating affordable housing for middle or lower-income residents.

The genius of inclusionary zoning is that it helps everyone to feel better about themselves (“look at these laws we made to help the working poor!”), while actually making it more difficult to develop new housing.

The specially designated affordable units have to be sold below market prices, meaning less profit for developers, meaning developers look elsewhere to build, and ultimately the community ends up with less housing.

Voilá! Homeowners feel better about themselves, home values continue to rise, and politicians get reelected.