Very kind piece, though she doesn’t believe in promoting neighborhood-level socioeconomic diversity at all, but gets the main point:
My favorite part of the book was Yglesias’ discussion of unbundling the supply and demand for land from the supply and demand for buildings. He provides a very clear explanation of the differences between the two, explaining that rising land values benefit land owners, but rising housing prices serve only to decrease everyone’s real income. Under a system where land use is regulated to constrain the supply of buildings,landowners earn long term rents (higher than they would otherwise earn) that cannot be eroded by other landowners building more densely. […]
Compared to similar books on this topic, Yglesias more heavily emphasizes that land use regulations move us toward a Ricardian vision of the economy, where non-land owners pay increasing shares of their income to those who own the most desirable land. This problem can also be viewed from a market process perspective; Kirzner explains in Competition and Entrepreneurship that landowners in a regulated world are not earning entrepreneurial profits on their resources, but rather monopolistic rents because they are shielded from competition.
I’ve come to think that we’re more broadly transitioning into a rentier economy in which metaphorical intellectual property rents, literal land rents (which though not relevant for the purposes of the book also involve natural resources like oil and gas), and the quasi-rents associated with air pollution and too big to fail banking are immiserating both capital and labor. That, obviously, is a longer project for a later time.
