Why have housing costs skyrocketed in the past few decades? To what extent do these costs keep people from moving to prospering cities in search of opportunity? And how can we combat this issue through both local and state policy? Daniel Shoag explores these questions in his recent policy analysis for the Hamilton Project, “Removing Barriers to Accessing High-Productivity Places.”

Daniel is an associate professor of public policy at Harvard Kennedy School, a visiting professor at Case Western Reserve University, and an affiliate of the Taubman Center for State and Local Government. He was selected as one of Forbes magazine’s 30 under 30 in 2012. Daniel has worked as a visiting scholar at the Federal Reserve Bank of Boston, a visiting professor at Tel Aviv University, and was selected as a rising new scholar by the Stanford University Center on Poverty and Inequality.

Learn more: Tech hubs and the labor market: A long-read Q&A with Enrico Moretti | The power of economic freedom, in pictures and words | California has a housing crisis, and Californians seem confused about how to solve it

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  1. CarolJoy, Above Top Secret Coolidge
    CarolJoy, Above Top Secret

    California has no incentive to create new housing. Its Prop 13 means that  home owners who own  the more expensive houses in many locales are not paying their share of property taxes, but rather paying taxes on what their house  was worth the day they bought it.

    One of the first thing that a Gavin Newsom staff stated after Gavin’s election to the governorship, was that the state had provided only 80% of the housing needed to keep up with population demands since 2008. So for 11 years the homes and condos and apartments needed to accommodate young families and young single people do not exist. (Yet for some reason, libs  here want more and more immigrants!)

    So what happens is that as rents go up and up, people have to work more and more to pay not only rent, but the tax burden on the cost of their housing. No one gets a tax deduction for rent, except for the joke of a single $ 60 a year rental deduction from the State of Calif’s tax collector.

    If more housing was built, it is likely that the cost of housing would drop, if sensible immigration policies were in place. So then rents would stabilize and people could work less. (In my case, I could fully retire, instead of semi-retire.) But then the state would realize less money in taxes, right?

    BTW, the rents are high everywhere except perhaps Death Valley. After all,  landlords are  evicting people to generate a 40% increase in rents.

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