A recent report by the Harvard University and the University of California, “The Economic Impacts of Tax Expenditures: Evidence from Spatial Variation Across the U.S.” has been getting a lot of attention in the press (check out Paul Krugman’s take on the study) lately for a report with such a wonky title.
For those of us in the various theaters of the land use war in Seattle there is one paragraph in the summary of the study that should get special attention:
In particular, areas with a smaller middle class had lower rates of upward mobility. In contrast, a high concentration of income in the top 1% was not highly correlated with mobility patterns. Areas in which low income individuals were residentially segregated from middle income individuals were also particularly likely to have low rates of upward mobility.
At first reading, this might seem to bolster the argument that some make for something called “inclusionary zoning,” a requirement that private developers should build price controlled units into their market rate projects. The basis of that argument is that greater mixing of income levels should be required and achieved through setting and controlling housing prices of a set aside number of housing units.
Notwithstanding the questionable nature of this strategy—that controlling the prices of a few hundred units of housing is the way to achieve economic diversity and upward mobility for the poor in a neighborhood or city—the study should be carefully considered for its implications on this discussion of normative housing price in Seattle.
Some might argue that this is “proof positive” that lowering housing prices in new development will result in greater economic integration and thus result in greater upward mobility for people with lower incomes. But let’s reverse the logic of that argument; gentrification (a term that stubbornly resists a quantitative definition) itself is a kind of inclusionary strategy. Why not move people with higher incomes into lower income neighborhoods? Wouldn’t that also be a salve for economic pain in low income neighborhoods? And gentrification or displacement is a watchword in any discussion of the so called impacts of light rail in the Rainier Valley.
However, the argument cuts two ways: if we demand that developers build price controlled units into their housing in rapidly growing neighborhoods because it supports upward mobility of people with lower incomes, then we must also consider the reverse—putting more people with higher incomes into neighborhoods with lower incomes— might have the same effect.