The case for housing is jobs and growth

I don’t have a whole article on this in me, but I did want to take note that after trying to destroy Anthropic’s business over a contract dispute, the White House is apparently now workshopping plans “to get around Anthropic’s supply-chain-risk designation and onboard new models, including its most powerful yet, Mythos.” In other words, the Trump administration — or at least some elements of it — is aware that it screwed this up, but doesn’t want to admit it. Part of the Trump era is that the strong cult-of-personality vibes around Trump mean that he can exit from awkward commitments with an unusual amount of ease. The ability to TACO out of tariff threats and just generally flip-flop gives him a lot of flexibility and is a real source of political strength compared to someone like Joe Biden, who felt like a captive of his own promises and interest group demands. But the flip side of this coin is that you can get situations like this, where there is no pressure on Trump to stand his ground at all, but the president just doesn’t want to admit that he was wrong and now everyone is working around his ego. It’s not a very good way to run the government. Lakshya Jain wrote recently that Democrats aren’t doing as well in the generic ballot as you’d think given Trump’s unpopularity because voters still don’t trust them on a bunch of policy issues. Conversely, conservatives might want to consider that Democrats are about to win back a lot more political power than you’d expect from a party that is considered untrustworthy on key issues purely as a function of Trump’s unpopularity. He’s not doing his job very well, but nobody in the conservative movement wants to talk about this clearly or openly. Theodore: Milan recently wrote: “when it comes to housing specifically, voters simply don’t believe an increase in housing supply will lower prices — in fact, they believe the opposite.” What are the implications of this finding for a YIMBY who believes that more construction would lower housing costs, but also that the Democratic Party needs to be popularist to win elections? I am aware that the supply-skeptics seem to be wrong in most of the empirical literature, but I actually have a great deal of sympathy for them on this specific point. Clearly if more housing exists, it follows that the price of housing has to be lower somewhere because of moving chains. But the geographical scope of the effect is completely ambiguous. To take a specific example, there has been a ton of new housing development in Union Market in D.C. That new housing development has also featured a lot of new retail development. And my intuition is that this has probably made the rowhouses across the street on the other side of Florida Avenue more expensive, since it’s more fun to live three or four blocks away from a thriving retail hub than it is from a semi-derelict warehouse district. Now, conversely, the mere fact that additional dwellings exist must have alleviated housing costs for somebody somewhere. Maybe in another part of town that had reduced demand pressure? Or maybe in the suburbs? Or maybe it means marginally fewer people moving to Charlotte? It’s hard to say. That’s why I’m not so focused on convincing the supply skeptics that they are wrong — specifying exactly what they are wrong about is actually pretty complicated. I also don’t actually believe that conquering supply skepticism is central to winning the argument in housing politics. Homeowners outnumber renters, after all, and they have a higher propensity to vote and they also tend to stick around longer and are more likely to have deep relationships with elected officials. Searchlight framed the question as whether building more housing would have a positive or negative impact on home values, and opinion is pretty evenly split. I think that’s good. You can see below that the argument for more housing that people are most on board with is that it will create jobs. Conversely, they worry about higher crime. I feel like if you could get a person to think about it for five seconds, they would get even more optimistic about the labor market — allowing more construction in your town is clearly going to create more jobs. That is an unambiguous benefit. Environmental concerns can make sense depending on the context, which is why legalizing dense infill in the places where it pencils out is so important. But then people worry that if new people live in the neighborhood, they might commit crimes. This is a part of the politics that I worry about a lot because I do think that for a lot of Americans, a combination of NIMBYism and “never get out of the car” is their de facto solution to crime. Conservatives seem remarkably indifferent to the objectively high level of violent crime in most of the Sun Belt because they feel personally insulated from it in a way they are not when they visit a place like New York or San Francisco where the per capita crime rates are lower. The only way to make infill workable is for people to feel like their streets are going to be safe and pleasant. But this brings me back to the prices issue. The big holistic question about any land use reform is going to be “will this make my life better or worse.” If you’re a renter, then cheaper rent is part of “my life is better.” On the other hand, if the reason the rent gets cheaper is that the neighborhood is overrun with crime and people are constantly honking their horns in traffic jams, that’s not very appealing. Conversely, a reasonable concern a renter is going to have is that any change that makes life in your town better — improved schools, a brand new park, reduced crime, an A.I. start-up taking off like a rocket — is just going to lead to you getting priced out. The benefit of having a construction-friendly policy climate is that if your city becomes a better place to live and more people want to live there, new homes will be built for them instead of them outbidding the residents who already live there. The key thing that you want is to be able to tell a story about how you’re going to deliver a win-win for people with living conditions that are improving and an economy that is growing and where the rising tide lifts all boats. There’s no way to make that happen without a housing market in which supply rises to reach demand. Jeff: When Trump wanted Israel to stop attacking Lebanon to facilitate his failing negotiations with Iran, he just ordered Netanyahu to stop (somewhat rudely and by tweet, naturally), and Bibi just kowtowed and did what he was told without pushing back, dispite this not being in his interest. It was kind of amazing. US presidents have been trying to get Israel to be a good ally for many years now, and Israel hasn’t seemed to care much what we think. How did Trump pull that off? What gives him the power that prior presidents didn’t have? Are there any lessons there for US foriegn pollicy or future presidents? I think this illustrates that it’s important not to get too literal-minded about the question of American leverage. The United States does a lot of things for Israel that are useful, and thus in some sense has enormous leverage over the Israeli government. But is this leverage credible? Early in his administration, Barack Obama pushed hard for a settlement freeze from Israel. What Netanyahu quickly realized was that Obama couldn’t make any credible threats about this. Republicans in Congress would oppose him in a knee-jerk way on anything he did and, while most Democrats in Congress didn’t have strong feelings about Israel-Palestine, at that time the vast majority of congressional Democrats who did have strong feelings about it were pro-Israel. So if he actually tried to impair aid (the way George H.W. Bush had decades earlier), he’d pay a political price and not accomplish anything. Later in his term, though, Obama was very successful at resisting Israeli pressure to get the United States ensnared in a war with Iran and so wa…