Mayors rehash false explanations for expensive housing

In March, I had an op-ed in the Star Tribune about the shortage of ‘affordable housing’ in the Twin Cities, in which I argued that:

A price is not a problem so much as the indicator of a problem. A high price, which is how our affordable housing crisis manifests itself, acts like a big flashing light, screaming to us that demand is high relative to supply. The price is the symptom, the supply-demand mismatch is the illness.

Attempts to treat the “symptom” of high price without treating the underlying “illness” of inadequate supply — such as St. Paul’s disastrous rent control policy or proposals to pump more money into the housing market by subsidizing buyers and tenants — will only make the problem worse.

To treat the illness we need to figure out what is causing it. 

The causes were, I argued, excessive taxes, fees, and regulations, which make it effectively impossible to build affordable housing here.

A response finally came a month later, with an op-ed titled ‘Cities are part of the solution, not the problem.’ The authors alleged that my article was “not helpful in solving the challenge but continues a misleading narrative that has little to do with actual housing affordability.”

Needless to say, it is rather rich for the people who have given us some of the most expensive housing in America to call anyone “not helpful,” especially when it is they who are peddling “a misleading narrative that has little to do with actual housing affordability.”

They write that:

Market forces, including the cost of land, labor and building materials, are the overwhelming determinants for the sale price of homes. 

If this is true, the question then becomes why this is all so much more expensive in Minnesota than in neighboring states.

When I testified in favor of SF 3259 recently, another testifier — against the bill — made the same argument, that things like high lumber prices were what made our housing expensive. But the question is not why is our housing so expensive, but why is it so much more expensive than elsewhere? It is not the level, but the difference we have to explain. Why does an average home in Lake Elmo, for example, cost $47,000 more than it would in Hudson, WI? Is the lumber more expensive here? Is the weather worse here?

Notably, the next time I went to testify, the gentleman speaking against this bill had jettisoned this argument, but here it is again in the Star Tribune. It is just as fallacious.