At his must-read blog Future of Capitalism, Ira Stoll points out (reprinted by permission) an instance in which the news-side WSJ uncritically accepts at face value the claims of New York City politicos:
“Council Aids West Side Housing” is the headline over a news article in the Wall Street Journal reporting, “A change to city zoning laws aims to preserve affordable housing for a large swath of the West Side, blocking new development in the Garment District, West Chelsea and Hudson Yards.…The City Council voted on Wednesday to extend a zoning-law amendment that previously has been applied to Clinton, a midtown West area also known as Hell’s Kitchen. It now will also restricts landlords or developers from changing more than 20% of any multi-family building in the additional West Side neighborhoods. Council members say the rules will allow for building renovations but not demolitions.….About 1,500 units in 108 buildings will fall under the new amendment.…The vote on Wednesday was an extension of the 1974 Clinton Special District amendment, which was passed to protect that area’s low-rise character and affordable housing.”
A free-market-oriented economist with some common sense might point out that restricting new high-rise development may preserve “affordable housing” for the lucky few occupants of the 1,500 units now locked into place. But this free-market-oriented economist with some common sense might also point out that by restricting the supply of new housing units, the change in the law won’t “Aid Housing,” as the headline claims, but it will actually hurt housing by making it illegal to build much more of it. People living outside these neighborhoods who would like to move in will have a harder time doing so now that the government has artificially restricted the housing supply. The Journal article doesn’t get into this.
A commenter further points out that the land-use freeze will cut into the property tax base on which the city can draw, meaning that the city will raise funds by taxing someone else — another reason to expect that life for city newcomers will be less affordable in coming years, not more.
