Must read

The most gas guzzling states. The sting of higher gas prices depends on where you live, not so much because of the variation in prices, but because in some states, you just have drive a lot more.  The website Quotewizard took a look at federal data from the energy and transportation departments, and calculated the average change in fuel consumption per capita since late last year; it also ranked states on fuel consumption per driver and per person.

In this study, Texans use about 60 percent more gasoline per capita (240 gallons) than people who live in Massachusetts (150 gallons). In general, higher gas prices have reduced consumption since last October by between 5 and 10 percent.  In the short run, people have few options for reducing gasoline consumption, but over time, responses tend to be greater.

Barack Obama:  YIMBY.  In a recent speech to the American Institute of Architects, former President Barack Obama sounds off with strong urbanist and YIMBY arguments, questioning “progressive” housing policies that have hurt affordability and integration.

“Frankly, some very well-intentioned laws and regulations at the local level, often generated from the left and from my own party, sometimes are inhibiting the creation of affordable housing and powering NIMBY attitudes and make it very difficult to integrate communities and allow people to live close to where they work. The most liberal communities in the country aren’t that liberal when it comes to affordable housing”

Official portrait of President Barack Obama in the Oval Office, Dec. 6, 2012. (Official White House Photo by Pete Souza)

He even invokes the classic Jane Jacob/Robert Moses dichotomy on urbanism, with a clear nod to Jane Jacob’s view of the organic nature of urban development.  Obama even decries the ravages of sprawl:

“Sprawl in America is not good for our climate,” he said. “And so we have to think about creating livable density that allows us to take mass transit and take bicycles.”

New Knowledge

Rent control reduces the amount of rental housing. Cities around the world are always trying new variations on rent control, hoping that they can overcome some of the fundamental economic problems with capping rental prices.  In Spain, Catalonia implemented a so-called “second generation” rent control scheme that set reference prices for apartments.

A new study looks at the impact of this rent control on apartment rents and the number of apartments that are rented out.  It has some interesting findings.  The author’s report some reductions in rents, but also find that many apartment rental contracts are set for higher amounts that allowed by the rent control law.  It is invariably difficult to enforce rent controls, as landlords are always looking to get more money, anda in a tight market, some prospective tenants will be willing to bid more than the regulated price. (That’s why you frequently find payments for “key money” in rentals of regulated apartments.

One of the unfortunate assumptions of rent control is that landlords have no choice but to continue to rent their apartments:  That’s not the case.  They can choose to occupy them themselves or sell them to others who will occupy them.  And that’s exactly what this paper finds happened in Catalonia:  The restriction on rental prices led to a reduction in units for rent.  Overall, the authors found that there was a very elastic supply response to rent restrictions:  an estimated elasticity of about four means a one percent reduction in rents led to about a four percent reduction in apartment supply.  The reductions appeared to be in larger units, where the rental regulation constraint was greatest.

Catalonia represents one of the interesting experiments in rent control.  Also, as in Germany, this rent control regime has been ruled unconstitutional after a few years of operation, meaning that scholars will now have the opportunity to observe what happens when rent control is removed.  This should provide additional insights into how housing markets work.

Joan Monràs and José García-Montalvo, The effect of second generation rent controls: New evidence from Catalonia, Universitat Pompeu Fabra,Economics Working Paper Series, Working Paper No. 1836. Updated version: April 2022

In the News

City Observatory director Joe Cortright is quoted in the Portland Business Journal’s reporting on the proposed Interstate Bridge Replacement project.