THE FUTURE OF CITIES
A Series of Essays on the Urban Future
TOBIAS PETER AND EDWARD J. PINTO
Capital will always go where it’s welcome and stay where it’s
well treated. Capital is not just money. It’s also talent and
ideas. They, too, will go where they’re welcome and stay where
they are well treated.
—Walt Wriston1
From the end of World War II until 1970, owner-occupied housing was broadly affordable across the entire country. The standard measure for measuring affordability—the price-to-income ratio—was at about 2.8 in 1950, 2.5 in 1960, 2.6 in 1970, 3.4 in 1980, and 4.2 in 2020.2 This meant that, to a large extent, factors other than housing, such as climate, amenities, and job and economic opportunities, drove migration, which builders were in a position to respond to. However, as shown in Table 1, a number of metros on the coasts now have much higher ratios today, evidence that supply has not kept up with demand.
This ought not to be the case. The United States, unlike many other developed countries, has an abundance of habitable land—even in many coastal areas—and high levels of internal mobility. However, a variety of past and present policy mistakes—chief among them restrictive land-use policies—have driven up both the cost of land and new construction, as reflected in higher home prices. Fourteen of the 15 severely unaffordable major metros in the United States as defined by Demographia are located on the East and West Coasts, where land-use constraints are especially strong.
