Why the Rent Is Too Damn High Even Off the Coasts

A blog about business and economics.
Oct. 3 2012 11:03 AM

Why the Rent Is Too Damn High Even in the Heartland

I've lived all my life in big northeastern cities, and, in the course of things, travel more frequently takes me to big cities or other parts of the Northeast rather than to small and medium cities in the heartland. But it turns out that a version of "the rent is too damn high" exclusionary zoning phenomenon exists there, too.

In this case, the issue isn't so much restrictions on large multi-family structures, since the land simply isn't crowded or valuable enough for there to be good reasons for large numbers of people to live in tall buildings. Instead it's that per-square-foot construction costs for manufactured houses ("trailers" or "mobile homes" to their detractors) are much lower than for site-built houses, and yet many jurisdictions have a lot of discriminatory rules against their placement. On the one hand, this is an affordable housing disaster. On the other hand, in economic terms, it's an odd way of stifling a potentially promising manufacturing industry. I think we can say pretty confidently that having living space isn't going out of style, and the logistics of transporting whole houses makes house-manufacturing an unlikely candidate for outsourcing to China. And yet there are a bunch of reasons to think that manufactured houses (and the related sector of modular houses) is a more dynamic sector with more prospects for productivity increases and wage gains than is conventional single-family homebuilding.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.