Cities Create Growth, But Regulation Holds Us Back

March 13th, 2012

Ezra Klein:

The different authors focus on various ills. Yglesias’s pulse is quickened by height restrictions, like the ones here in Washington. Avent takes aim at the local coalitions who band together to fight new real estate development for all manner of parochial reasons. Glaeser is particularly eloquent about the way ordinary buildings get designated “historical” to impede new development. But all make basically the same point: Because we don’t fully appreciate how important cities are in stoking economic development, we dismiss the economic costs of regulations that make them too expensive for many to live in.

It makes sense that cities—and the concentration of people that results—leads to a higher level of productivity. When you’re surrounded by more people, doing a variety of things, there’s more opportunity to learn, because it’s right out your front door. You’re exposed to more things and when you find something that grabs you, it’s a lot easier to get started.

That’s even more important now, because most of our big gains this century will come from combining two disparate ideas that no one thought were connected before—seeing connections where no one else saw them. Concentrating people is a very effective way to allow that to happen.

We should make it as easy as possible, then, to allow people to move to cities. But it’s not. Living in many cities tends to be very expensive, and as Klein points out, it’s not due to inherent economic reasons. It’s due to public policy, and that’s absurd. We’re holding back our potential by doing so.