Why Housing Is Unaffordable in Coastal Cities
It's no secret that cost of living is significantly higher on the coasts than in the middle of the country. This is especially true for housing. But even looking at the coasts themselves, there are cities like Houston that are close to the water but have much lower housing cost than cities like San Francisco, or Boston. Houses in downtown Boston and SF cost several million dollars and even ghettos have gentrified. Houston, on the other hand, still has plenty of cheap housing right in the middle of downtown. In fact, all of east Houston is still cheap by today's standards.
Houston has also been experiencing much higher population and job growth than either of the other two, and yet it's still relatively affordable, whereas the other two markets are not. So what gives?
We've all heard the typical arguments of everyone wanting to be close to downtown or close to the ocean, but if that were true, wouldn't Houston be equally unaffordable? To be fair, Houston is far enough from the waterfront that its downtown doesn't have the same appeal as the other two examples. People are willing to pay a huge premium for scenic views, but that's not the full picture.
When the downtown of a city is located on the waterfront, we only have half the land area to work with. This effect is further amplified by suboptimal transportation and zoning (which is ridiculous legislation in itself that contributes to the scarcity of affordable housing). In fact, if we look at Chicago, which is located on a lake, the downtown prices are higher than those in downtown Houston, despite Chicago losing population for over a decade and a bunch of vacant housing just a couple miles away to the south-west. To add insult to injury, Chicago's waterfront is a miserable place to be in the winter, due to lake effect snow and brutal winters. Even as I write this article, the weather in Chicago is so bad, electric cars are refusing to charge.
And the ironic part is that prices in those luxury skysrcapers in downtown Chicago are unlikely to come down, even if the city continues to lose population. Instead, the nearby areas experiencing depopulation will be bulldozed to be replaced by parks. We've already seen this happen in Detroit. The artificial scarcity of housing will continue, despite cities claiming to do everything in their power to make housing more affordable.