The good news on property tax reform failure in TexasThe Marginal Revolution blog has an interesting post today on housing economics based on a NY Times article. Three scary facts come out of it:
- Europeans on average pay seven times their income for half as much housing as Americans, who spend 3.5 times their income. This could mean rising home prices longer term in the US if we start to match Europe, especially on the coasts.
- "Toll agrees with Glaeser et al. that the key force driving up prices is zoning and growth regulations. In New Jersey it now takes Toll Brothers up to two million dollars in legal fees and ten years in time to get the permits necessary to build. " Ouch.
- "Susan Wachter, a housing economist at the Wharton School at the University of Pennsylvania, has an interesting public choice insight about why zoning is worse in Europe.
This implies that towns in states that reduce their reliance on the property tax - often done, as in CA, in order to "equalize" school funding or other expenditure - will soon restrict development."
European towns also have less incentive to encourage development, Wachter says, because they generally do not, unlike their American equivalents, depend on their local tax base to pay for education and services, which tend to be federalized.