Monday, April 18, 2016

Cities That Do Not Expand Their Land Area See Much Higher Home Price Increases Than Cities That Have Room To Grow

From The Wall Street Journal, Real Time Economics, "Why the Great Divide Is Growing Between Affordable and Expensive U.S. Cities" by Laura Kusisto:
Source: The Wall Street Journal
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"If you don’t let the city grow, you’re going to get prices going upward…and see the middle class being pushed out," Mr. [Issi] Romem said.
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Mr. Romem said ideally cities would relax regulations and build upward rather than outward. But, he said, promoting development on empty fields is more politically feasible than building apartment towers in single-family neighborhoods, and thus likely to ease affordability pressures more quickly.

Many of the more expensive cities are prevented from growing outward by natural barriers, such as oceans or mountains. Those cities are unlikely to grow significantly upward or outward in the next couple of decades, he said, and thus the price divide is likely to continue to widen.

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