Go to the Midwest, young man? – Ecolib

Julius Probst sent me to this interesting map:

When looking at a chart, I often find it helpful to consider more than one factor. In this case, I see evidence that three independent factors are at work:

1. Densely populated places are more expensive.

2. Fast-growing places are more expensive.

3. Highly regulated places are more expensive.

Let’s look at these one by one. California and the Northeast Corridor (DC to Boston) are both well above average in median home prices. But there are also some anomalies, such as above-average prices in much of the western mountain region. Even sparsely populated states like Nevada and Montana are relatively expensive, at least compared to Midwestern states like Illinois, Michigan and Ohio, which are much more densely populated.

In recent years, the Mountain West has experienced significant population growth, while the industrial Midwest has seen a stagnant population. This likely explains why the sparsely populated West is more expensive than the Midwest, as well as some other interesting state pairs, such as Texas/Oklahoma, Tennessee/Kentucky, and Georgia/Alabama, where in both cases the faster-growing state is more expensive. duration.

But again there are some anomalies. Some of America’s fastest population growth is now happening in the Southeast (Florida to the Carolinas), Texas and Tennessee. And yet these states are still significantly cheaper than the Western Mountains, despite having denser population densities. What explains that difference?

I suspect that the legal barriers to building are stricter in many parts of the western mountain region. This may partly reflect differing attitudes toward zoning, but also the fact that much of the land in the West is owned by the federal government. Even cities like Las Vegas and Phoenix, which seem to have borderless land borders on their borders, are somewhat landlocked by federally owned land or Indian reservations.

It is common knowledge that regulations in California drive up housing costs, pushing people to seek places with a lower cost of living. Since the mountain grows quite well in the west, you might be tempted to assume that these states don’t face the same problems as California. But the fact that places like Colorado, Utah, Montana, and Washington are much more expensive than Texas or the Carolinas makes me believe that housing policies in western states are reducing population growth. Many younger Americans are likely to choose Charlotte, Nashville or Jacksonville over places like Denver, Salt Lake City or Seattle, not because they prefer those locations, but because housing costs make the desired location unaffordable. In a truly free market where the federal government has sold off its land, I suspect the mountain in the West would grow even faster than Texas and the Southeast.

P.S. The Mountain West may also have newer housing stock than the Midwest, which may explain some of the discrepancy.