In which I review Matt Yglesias’ The Rent is Too Damn High

I caved last week and downloaded a Kindle App for my iPhone. It kind of killed me. I really love books–the bound, paper kind. I’ve been fighting the Kindle/iPad/tablet/Nook/e-reader thing for years now, and imagined I could still hold out for several more years. At least one publisher probably figured out that the best way to get me (and other holdouts like me) to convert was to offer certain desirable pieces solely on e-readers. I may be one of the few they got with this book, but surely there are others coming this way.

Matt Yglesias was a fellow at Think Progress and now writes a blog about economics for Slate. He’s thoughtful, smart, and perhaps even more important, concise. I’d followed him on twitter and through his various blog posts for awhile. When he released this e-book–too long for a magazine piece (still my favorite form of journalism) and too short to really be a book, book–called The Rent is Too Damn High, I felt like I had to read it.

I read the book (ebook, Kindle, whatever it is) in about an hour an a half when I arrived at a friend’s condo on Friday evening. I spent the entire next day talking about it and subsequently lent it to my ski buddy, who also devoured it in an evening. The skiing was terrible, might as well talk about economics, right?

Matt’s argument is fairly simple and straightforward. He argues that much of our housing and societal woes could be addressed–partly, certainly not entirely–by relaxing restrictions on building height and density and reducing implicit and explicit subsidies for single-family homes in the far-flung suburbs.

It’s a very convincing argument. Letting more people live in desirable places means more efficient transportation and other public services, reducing long average commute times, increasing the number of people walking and taking public transportation, increasing availability and variety of service providers, and more. Most importantly, perhaps, increasing density would reduce upward pressure on housing prices, which pushes people out of their homes, reduces variety and profitability of businesses, and likely contributed in some ways to the housing bubble.

At the center of the story is a profound disconnect in the way we think about houses. Hoping that a house will appreciate in value and constitute a sound investment is rather silly. Houses are made of wood and concrete and stone and steel, physical materials that will only degrade with time. The land a house sits on is an investment, and can appreciate based on the values of proximate amenities. But when housing prices increase rapidly, as they did prior to crashing a few years ago, they lose predictive power of the true value of the land and incorporate speculation. That’s how we get a bubble.

What I love about Matt Yglesias is that he is skilled at taking rather complicated topics in economics and making them perfectly accessible. He has a deep understanding of economic theory and relates those ideas in a clear, concise, and readable way. This book is no exception. It’s easy to read and clearly well thought-out.

My only real complaint is that I wanted more. Though there were places I wasn’t sure where he was going, it quickly came back to the point. The repeated discussion of elevators as technology was a bit amusing, but nothing more than a slight distraction. What I would have liked is to have seen additional discussion on the policy problems that additional density would create. No policy, regardless of how enticing it sounds, can change a rather significant trend in demographics without significant adjustment. This doesn’t mean that the costs aren’t worth it, but they are worth enumerating and discussing.

Water, for instance. While it’s cheaper per capita to get water to people who live in denser areas, it also means that pipes need to be replaced more often, and at least one person writing a book tells me NYC’s sewer system is in dire need of repairs. Direct re-use plants, increased sanitation, etc, are all things that belong in this discussion. Higher density housing also necessitates a stronger commitment to building more schools and park and hospitals. The ease of spreading diseases, access to sunlight, etc, etc.

There’s more, surely. In sum, though, read it. It’s quick, straightforward, and you might just learn something.

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Author: ekfletch

I am an independent researcher on issues of gender, labor, violence, education, and children.

4 thoughts on “In which I review Matt Yglesias’ The Rent is Too Damn High”

  1. I haven’t read the book, so I’ll ask you my question instead of looking it up myself. Does Yglesias make a convincing argument that there’s demand for apartments in high rise buildings? Even without various subsidies, the low population density in this country means that land is always going to be cheap in many areas. Like Yglesias I’d be happy in a more densely populated environment, but most people, I think, are easily seduced by the idea of the single family home with the big yard and are willing to pay the price of a long commute to work.

    1. He definitely goes there. This doesn’t preclude letting people buy houses on lots of land if they want to, but rather reduces incentives to do that if it’s not part of your “American Dream”. High rents in places like New York and LA are at least partly indicative of high demand to live in those places. There’s likely a general equilibrium issue in that if we build higher buildings, does that decrease prices just because we’re splitting land value among many renters or additionally because it’s less desirable to live in a high-rise?
      My memory fails me as to how explicitly he addresses ‘demand’, but there’s also this from today: http://www.slate.com/blogs/moneybox/2012/03/20/apartment_construction_is_surging.html

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