[MLUG - DISCUSSION] interesting article on the effect of regulation on real estate prices.

["Jonathan King" <EMAIL:PROTECTED>]

OK, so many of you won't find this a page turner, but the dude they
profile here (Glaeser) really is the bomb in this field:

http://www.nytimes.com/2006/03/05/magazine/305glaeser.1.html?_r=1&pagewanted=print

Glaeser is essentially my kind of guy.  He goes out and gets data,
writes what he believes, and doesn't pull punches.  From his point of
view, it's basically okay for places like Detroit, St. Louis, and
Cleveland to empty out since we just don't cities like that any more. 
This doesn't mean that we should ignore the pople there, however. 
Similarly, he points out that re-building New Orleans as it was is a
really bad idea.  On the other side, he finds that the regulatory and
zoning climate that has made (say) California so ludicrously expensive
is self-defeating in the long-run, although he expects that the cowboy
development pattern of Texas is a bad idea, too.  My favorite of his
findings (since I've read the paper) has to do with why cities that
start to decline take so long to go down.  It boils down to the
housing stock: people might leave Pittsburgh in droves to find
brighter opportunities elsewhere, but since their houses remain, they
will become cheap, and somebody even poorer will move in until the
houses themselves collapse.  On the other hand, renewal in a situation
like that is impossible, since prices are so low that you can't build
replacement housing stock that is price competitive.  It's unclear
what you can do to fix a situation like that.  (Note that I understand
his message as being not that there no decent places in St. Louis,
just that the places that have fallen down hard enough will likely
never get up again fast enough to matter.)

Anyway, it's fascinating stuff...for people like me.

jking

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