RI Housing Regulation Serves Minorities Poorly

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The opening paragraph of a Wendell Cox article in New Geography could apply to many, many more issues than housing:

America’s most highly regulated housing markets are also reliably the most progressive in their political attitudes. Yet in terms of gaining an opportunity to own a house, the price impacts of the tough regulation mean profound inequality for the most disadvantaged large ethnicities, African-Americans and Hispanics.

When government makes something more expensive to achieve progressive goals, it inevitably puts that thing disproportionately beyond the reach beyond demographic groups that are disproportionately less wealthy.  This is a very simple concept.

Not surprisingly, the Providence metropolitan area does very poorly.  Cox’s metric is the ratio of the median house price to the median annual income — basically, the number of years the household at the exact middle of the area’s income distribution would have to save all of its income in order to buy the house at the exact middle of the area’s real estate market.  He then provides tables showing how many more years black and Hispanic households would have to save than the average.

Black families in the Providence area have to save for an extra 2.12 years (above an average of 4.26 years).  That’s 19th worst out of 52 metro areas reviewed.  For Hispanics, the Ocean State’s ranking is even worse, at 4th worst out of 53.

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The obvious thing to do with housing, as with all economic activity, is to ease up government’s thumb so that it can become more affordable.  That strategy works on the other side of the scale, too, loosening government’s stranglehold on the economy so that opportunity can flourish and incomes rise.

The difficulty, here, is that progressives want to impose burdens, in this case on the housing market, based on their ideological preferences.  When those proclamations have adverse consequences, they blame external, often fictitious factors like institutional racism and avaricious landlords.  As a remedy, they then propose to alleviate the consequences in a way that gives them power and makes the subjects of their condescension dependent on their good political graces.

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