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Louisville Metro's affordable housing problem demystified

By George Baumler

  The local government of Louisville seems mystified that the surrounding counties are experiencing double digit growth while Metro growth stagnates.  The local liberals lament the building of new housing and throw any roadblocks they can muster to counter these enterprises.  It doesn't take a rocket scientist to figure out that these roadblocks to new housing add to the costs of new housing.   The end result is that the costs of all housing increase. 

  Let's compare the housing market to the automobile market.  If no new cars are allowed into the marketplace or the costs of the new cars due to taxation and regulation are substantially increased, then it would follow that fewer used cars would be offered for sale because their owners would opt to keep them.  Fewer used vehicles offered for sale would drive the price of used vehicles higher.  A similar thing is occurring in the housing market today.  Most new developments are for the upper income buyers, because it makes good business sense to get the most gain possible for a given amount of effort.  Since it is just about as much trouble to get zoning and permits for expensive housing as for less profitable housing, investors try to make the best deals.  Like a luxury sedan, the market for expensive housing is limited to those who can afford to pay the price. 

  It is easy to speculate that if housing projects were easier to undertake that more moderately priced new homes would be built, and used houses on the market would increase driving the price downward.  Much like in the automobile market, people of modest means purchase used, but serviceable cars and housing.  Used houses are the affordable housing for most working class folks.

  So in the proverbial "nut shell", if you want affordable housing, allow new housing to be built with fewer hurtles.  If you want growth in your community, then you must be in favor of allowing people to build homes.  People don't just decide they want to drive miles to work from surrounding counties; housing hassles are fewer there.  Stop driving folks away and then wonder why they are leaving.  Spencer County, Louisville's neighbor, has the 11^th highest growth rate in the nation, and it doesn't even have a professional sports franchise. + 

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