EMERGENCE CAN NOT BE NUDGED.

Regular readers know why.  I never lack for opportunities to riff on that phenomenon, though, particularly when people who think they have the answers neglect the laws of conservation in economics.  "For decades, a misleading narrative about mental illness among the unhoused obscured the true source of the crisis: hyper-commodified housing."  That's Ben McCarthy in The (Misnamed) Progressive.  As is often the case, the problem is not too much "commodification," it is too little.

[E]lected officials and the coalition of policy advocates behind them argue that untreated mental illness and substance use are a core cause—if not the core cause—of skyrocketing homelessness in the United States. Unhoused people, the narrative goes, are primarily homeless because they have failed to accept treatment and can no longer be easily forced into it. In fact, the primary cause of homelessness is a nationwide shortage of affordable housing. Millions of units of government-subsidized housing from decades past have been lost even as market-rate housing grows astronomically more expensive.

In casting the problem as an epidemic of individual pathology rather than one of political economy, these leaders have ignored the obvious economic reality: The rise of homelessness has resulted primarily from the hyper commodification of housing. In New York City and much of the United States, urban studies scholars Peter Marcuse and David Madden write in their book In Defense of Housing, “housing is becoming ever less an infrastructure for living and ever more an instrument for financial accumulation.”

The truth is that [New York mayor Eric] Adams’s and others’ rhetoric surrounding mental illness and homelessness stems from a decades-old misleading narrative that has fundamentally distorted the public discourse around both housing and mental illness alike. As private equity firms have purchased hundreds of thousands of rent-stabilized apartments in New York City over the past twenty-five years, this false narrative has served the interests of a political class beholden to the entire real estate industry. In doing so, it has caused real harm to some of the most vulnerable New Yorkers by attempting to decouple their material conditions from the economic and political forces that shape them.

Look, this is not difficult.  Note, there is no shortage of housing per se, there is what the authors refer to as a shortage of "affordable housing," and they persist in their delusion that if you pass a law that makes housing "affordable," there will be affordable housing.  Sorry, no.  On Manhattan, and in San Francisco, and anyplace else where there are serious agglomeration economies favoring high-value-added work, the real estate on which those rent-stabilized apartments sit will be seriously expensive.

Two principles of land use immediately emerge.  First, [the highest value added activities]have a ceteris paribus advantage in bidding for any parcel of land.  Second, activities that encounter higher transportation costs lose advantage at greater distances.  Thus, in the two-century old model, dairy products command a high price and spoil (we're before mechanical refrigeration or railroads, recall) quickly, thus those will be closest to the city, but dairies will be out-bid by timbering or cornfields or ranching.

Introduce mechanical refrigeration and railroads and motor trucks, and the highest bidders for land might be factories or restaurants or households.  The principle is the same, though, the value of a parcel of land will be one at which a householder is indifferent between locating there, or locating somewhere else.  The model as modified still predicts falling land values at distances from the city center.  Thus, we'll see additional margins along which people might substitute, such as suffering the transportation costs but being able to live in a bigger house: easier for a faculty member at Cornell than it might be at Northwestern or at Stanford, where faculty qualify for housing subsidies.  The underlying principle is the same: in equilibrium a householder will be indifferent among the bundles of location and housing type offered.  Because that equilibrating tendency leads to similar houses clustered together, providing temptations for builders to put down cookie-cutter developments, Wise Experts think they can dictate neighborhood form with zoning codes.  That works until new price incentives emerge.

But will we ever see a central business district that generates so much in the form of locational rents, in the presence of so small a transportation cost, for knowledge or financial industries (and there are reasons to suspect that it will be knowledge or financial industries, not manufacturing) that the service businesses get priced out, and the only land devoted to housing of any kind is at a distance, as appears to be happening in San Francisco, but not yet in Chicago?

If I remember correctly, New York's "rent stabilized" apartments stabilize the rents for the duration of the tenancy or until the property changes hands.  Thus, the current residents of those apartments might be people who landed on Central Park West and thought they were Aaron Judge, and they're making a good living in finance or broadcasting or entertainment, squatting, if you will, on the affordably priced rentals.  The logic of the land rent gradient, though, suggests that at the passing of those tenants, or at sale, those properties are worth a lot more than the capitalized value of those stabilized rents.

Isn't rent control marvellous?  In stabilizing the rents in the face of locational agglomeration economies, public policy makes the buildings themselves so valuable that only private equity can buy them.

Wait long enough, and even Progressive propagandists might stumble on reality.

New York City, which spent much of the twentieth century building and maintaining public and affordable housing units for poor and working-class people, has now allowed the majority of its housing stock to become a commodity whose price is dictated by the real estate market. Between 1996 and 2017, the city lost 1.1 million units of affordable housing, while wages stagnated and both rents and home prices surged. A 2025 National Low Income Housing Coalition report found there were only thirty-four “affordable and available homes” for every 100 extremely low-income households in New York City; vacancy rates for units costing $2,400 or more a month were 3.39 percent, while vacancy rates for units costing less than $1,100 a month were 0.39 percent. The math is clear: In New York City, like most major metropolitan areas where homelessness is surging, there is simply not enough affordable housing to meet the growing demand.

[New York corona tyrand governor Kathy] Hochul and Adams have acknowledged the lack of housing and advocated for private development to fill the gap. They have pushed for the state and city to relax zoning laws and bring back tax breaks for private developers, to allow them to build hundreds of thousands of new private housing units. But they refuse to acknowledge that the primary driver of homelessness in New York City is the hyper-commodification of housing and the lack of government regulation of the private market—not just a lack of overall supply, but a specific lack of affordable or decommodified units.

Burn your urban and regional economics textbook if it suggests that there might be people with non-stagnating incomes who are willing to pay market prices for that commodified housing.  We call them New Urbanists.

As cities compete globally for talent in an increasingly dominant idea economy that faces a growing workforce shortage, investment and jobs follow talent to vibrant, walkable, mixed-use places—supported by sufficient density. Compact communities that offer walkable, amenitized density are building an economic future for themselves and their regions—and in the process creating better economic futures for the workers across the skills and education spectrum.

More gentrification for the so-called progressives to whine about!  Investment, jobs, walkable places with good eateries and coffee houses, "amenitized" density!  Commodification, forsooth!  But that puts the fifteen-minute-cities types at odds with the advocates for more cheap dwellings.

Demographics are unlocking the ability to get density right. Over the next 20 years, 70- 80 percent of net new households will be singles and couples—many seeking multifamily, higher-density living in mixed-use, walkable, urban places. Yet, 62 percent of US housing stock remains single-family detached, underscoring an historic mismatch and a massive urban opportunity.

Yes, and that's why we all ought be grateful that rent gradients generate incentives and housing is enough of a commodity for people to respond thereto.  "Maybe after everything else has failed, the Political Masters will relax the constraints."  Not if the New Urbanist types have anything to say about it.

A compact block of townhouses may outperform sprawling subdivisions, but financing systems still tilt toward single-family homes. Retailers, schools, and transit providers each impose their own thresholds, calibrated to their needs. Meanwhile, even when citizens clamor for affordability or walkability, fears about traffic, parking, or neighborhood change can stall reform. We need to work together to plan to get density right.

No.  You might not be interested in the rent gradient, but you'll wind up sliding down it all the same.  "Affordability Crisis Sends Americans Packing From Big Cities."

For much of the past century, in both the United States and elsewhere, the inexorable trend has been for people to move from rural areas and towns to ever larger cities, particularly those with vibrant downtown cores such as New York, Chicago, San Francisco, Seattle, and dozens of other iconic American cities. Most visions of the future still view urban cores as the uncontested centers of production, consumption, and culture, with rural areas, small cities, and suburbs relegated to the backwaters of modernity.

A RealClearInvestigations analysis has found that we may be on the cusp of a new era. Urban cores have started to shrink, losing first to the suburbs, then to ever further exurbs, and now to small towns and even rural areas. For the first time since the 19th century, America’s growth pattern favors smaller metros – Fargo, North Dakota, as opposed to Portland, Oregon – many of which once seemed out of favor.

Well, yeah.

Perhaps, though, in addition to relaxing the constrains on relocation to those cities, there are unexploited gains from trade in working around those constraints.   For instance, might a company based in Rockford, Illinois, be better off paying a compensating differential to get people to locate there, rather than paying a higher salary that reflects Chicago or San Francisco or New York costs of living?

Those laws of conservation in economics are a pain, aren't they?   Maybe the best thing for all the planners, advocates, and people who make "commodity" an epithet ought best go away. "Perhaps the best way to 'create' might be to offer fewer guidelines and zoning restrictions, not more."