To lower housing prices, look at Chicago

[w¡n9Nµ7 §£@¥€r 123]

Median condominium prices in Chicago, notes Harvard urban economist Edward Glaeser, are $232,000. That's very low, even a shade under those in Trenton, N.J. (The King County median price for condos is $285,000.) What do those smart urbanists in Chicago know about affordability?

The answer, according to this interview with Glaeser,director of Harvard's Taubman Center for State and Local Government, is that Chicago is extremely pro-growth. Instead of layering on more and more land-use and design controls, Chicago has a pro-growth environment, and all those new housing units help keep the prices down. Glaeser explains:

Over the past two years, Chicago has permitted around 14,000 units per year. Los Angeles permitted less than 10,000 units in 2007 and 14,500 units in 2006. Yet Los Angeles has almost twice the land area and over 50 percent more population. It is substantially less dense than Chicago, and there is substantially more demand for Los Angeles, yet Chicago is building more.

Bringing more units to market — think of all those cranes along the lake — explains in some part of why Chicago is more affordable. The absence of land-use controls [means] prices for condos will tend towards construction costs. After all, you can always build taller buildings.

Similarly, Glaeser points to four of the fastest-growing areas in the nation, Atlanta, Dallas, Houston, and Phoenix, which "offer an astonishing high standard of living for ordinary Americans." These cities are comfortable serving the demand for big houses on the edge of urban areas, in effect trading sprawl for an ample supply of homes that keep the average price low.

http://www.crosscut.com/blog/real-estate/1...ook+at+Chicago/

[Trompe le Monde 1,107]

Over the past two years, Chicago has permitted around 14,000 units per year. Los Angeles permitted less than 10,000 units in 2007 and 14,500 units in 2006. Yet Los Angeles has almost twice the land area and over 50 percent more population. It is substantially less dense than Chicago, and there is substantially more demand for Los Angeles, yet Chicago is building more.

I wonder how much of this "available land" is in the Santa Monica mountains? There are good reasons why there aren't houses there. I don't think most of the city can deal with being more densely populated without mass transit (not buses).

[mendeleev 69]

That tolerance of urban sprawl in Atlanta, Dallas, Houston, etc. driver high consumption of gasoline and contributes to the high prices we see at the pump. Really, this is an instance of market failure. By encouraging sprawl and providing the illusion of a high standard of living, these cities fail to incorporate the costs of sprawl into these exurb housing projects. Chicago, encouraging an increasingly dense urban population, rationally encourages the opposite.

[w¡n9Nµ7 §£@¥€r 123]

That tolerance of urban sprawl in Atlanta, Dallas, Houston, etc. driver high consumption of gasoline and contributes to the high prices we see at the pump.

If that were true, we'd be justified in expecting a steady increase in gas prices over the last few decades as urban sprawl continued unabated.

In fact, we saw a long period of stable - and at times, even declining - prices... with a very recent period of drastic increase.

If what you say is true, why is there no demonstrable correlation?