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Monday, November 30, 2015

Paul Krugman, "Inequality and the City": Establish a New Federal Agency?

In a New York Times op-ed entitled "Inequality and the City," Paul Krugman praises the amenities of New York City, while deploring the rising price of housing, which is becoming unaffordable for the less affluent. Krugman writes:

"New York, New York, a helluva town. The rents are up, but the crime rate is down. The food is better than ever, and the cultural scene is vibrant. Truly, it’s a golden age for the town I recently moved to — if you can afford the housing. But more and more people can’t.

And it’s not just New York. The days when dystopian images of urban decline were pervasive in popular culture — remember the movie 'Escape from New York'? — are long past. The story for many of our iconic cities is, instead, one of gentrification, a process that’s obvious to the naked eye, and increasingly visible in the data."

Krugman's concludes:

"New York City can’t do much if anything about soaring inequality of incomes, but it could do a lot to increase the supply of housing, and thereby ensure that the inward migration of the elite doesn’t drive out everyone else."

Okay, New York City has grown expensive, but what about Detroit? In a July 30, 2015 CNBC article entitled "Detroit: A tale of two housing markets," Diana Olick writes:

"Bidding wars, more competition, better listings—Detroit housing is having a banner summer, Detroit suburban housing that is. Unlike so many other major metropolitan markets, Detroit's downtown is seeing no renaissance at all, at least not yet.

. . . .

The comparison is stark: The median home price in downtown is just $21,102 versus a median price of $162,900 in the suburbs, according to Realcomp, the area's multiple listing service."

Or stated otherwise, Detroit bears no resemblance to New York City.

And Baltimore? Whereas the crime rate is down in NYC, Baltimore was more akin to a warzone in April of this year, following the death of Freddie Gray.

But more to the point, if we take Krugman's argument one baby step further: Should a new government agency monitor the ebb and flow of real estate prices and mandate the construction of low income housing where the more prosperous reside, e.g., in the suburbs of Detroit, thereby bringing the less affluent closer to those same employment opportunities being offered by General Dynamics, Delphi and BorgWarner?

Just asking.

[On the subject of Krugman and income inequality, you might be interested in having a look at a July 1, 2015 Daily Caller article entitled "Paul Krugman Sticks It To Poor People With $225,000 Salary To Study Income Inequality" by Eric Owens.]

1 comment:

  1. Might be more affordable housing in NYC without the estimated 800,000 illegal immigrants.

    New York is so corrupt. No one dares to require Building Managers and Managing Agents to have any certification that they know anything about building repair and maintenance.. All those jobs require is a Real Estate License. and the ability to lie and intimidate.

    My (now former) Managing Agent bribed a very well known engineering company to issue a false report...
    my anger has no outlet