How Affordable Housing Can Improve the American Economy

By on February 11, 2019
From CityLab:  Housing is a big part of America’s story of innovation, productivity, and economic growth. For much of the industrial 20th century, housing helped to drive the economy by stimulating demand. Building more housing—especially in the suburbs—stoked the demand for more cars, washing machines, and other durable goods from America’s factories, creating good jobs for American workers and setting in motion a virtuous circle of economic growth.

But housing plays a very different role in today’s knowledge economy, where innovation and growth stimulate the clustering of knowledge, talent, and ideas. As a growing chorus of economists point out, the problem today is that we do not have enough housing—especially affordable housing—in the expensive and productive locations that drive the economy. The economic consequences often mean unskilled workers are unable to access good jobs in these cities, which costs the economy a huge amount in lost productivity.

A new study by The Hamilton Project at the Brookings Institution documents the dimensions of the housing-productivity nexus today and outlines a variety of possible solutions for all three levels of government, informed by innovative initiatives forged in places within and outside of the United States.

The chart below details the scope of the problem. For much of the 20th century, economic outcomes were converging across the United States. But that began to change by the 1970s, with the decline in manufacturing and the onset of the knowledge economy, as the economies of U.S. regions began to diverge.

The big problem today is not just economic inequality, but growing geographic inequality. The study arrays some startling statistics on the scope of this geographic divide.

  • Nearly 60 percent of adults between the ages of 25 and 34 in Boston have graduated from college, compared to less than 20 percent in Lakeland, Florida.
  • The obesity rate is nearly 40 percent in West Virginia versus 22.6 percent in Colorado.
  • There’s a life expectancy gap of ten years between residents of Gadsden, Alabama (72.9 years of age) and those in San Jose, California (82.7 years of age).

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About Dede Hance

One Comment

  1. Steve

    02/12/2019 at 10:24 AM

    The NEW Extreme Radical Socialist Left (as opposed to the standard Radical Socialist Left) are the NEW and Improved Nazi Party. Believing that the State is your religious, moral and social authority has been tried. Genociding White Europeans and redistributing their wealth is their plan.

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