This week, Nick and Goldy are joined by journalist and historian Yoni Appelbaum to discuss his forthcoming book, Stuck: How the Privileged and the Propertied Broke the Engine of American Opportunity. They explore how decades of failed economic policies and zoning regulations have restricted mobility, stifled economic growth, and worsened inequality—revealing the historical roots of our current housing and economic inequality crises. Appelbaum argues that the decline in housing affordability isn’t just a housing problem but a mobility problem, as many Americans are increasingly unable to afford to move to areas of the country where they can pursue better opportunities for themselves or their children.

Yoni Appelbaum is a deputy executive editor of The Atlantic and a social and cultural historian of the United States. Before joining The Atlantic, he was a lecturer on history and literature at Harvard University.

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Further reading:

Stuck: How the Privileged and the Propertied Broke the Engine of American Opportunity.

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Goldy:

The rising inequality and growing political instability that we see today are the direct result of decades of bad economic theory.

Nick Hanauer :

The last five decades of trickle-down economics haven’t worked, but what’s the alternative?

Goldy:

Middle-out economics is the answer because the middle class is the source of growth, not its consequence. That’s right.

Speaker 3:

This is Pitchfork Economics with Nick Hanauer, a podcast about how to build the economy from the middle out. Welcome to the show.

Goldy:

America’s housing crisis affects us all differently, Nick. For example, in your case, you’re one of those people who suffers from the plight of the home-full.

Nick Hanauer :

Yes.

Goldy:

It must be really difficult having to travel from home to home to home.

Nick Hanauer :

Yes.

Goldy:

Where are you today?

Nick Hanauer :

I’m in London. Very old London. Very old England. Yeah.

Goldy:

Yeah. I’m actually on the road too. I’m visiting my daughter in Los Angeles.

Nick Hanauer :

Excellent.

Goldy:

I don’t want to make my problem sound like they’re severe because I’m one of the winners in all this from this shortage. I bought a house in Seattle in 1997. I thought it was stupidly expensive back then. It is way more stupidly expensive now. So I’m one of the winners, accident of timing and location, but a lot of other people aren’t as lucky, and in fact couldn’t have done what I did, which was just uproot and move to Seattle to where the opportunities are because it’s just way more expensive to live in Seattle.

Nick Hanauer :

Yeah. And way more expensive to live in all the places where there are a lot of opportunities in the country.

Goldy:

That’s right. To put that in comparison, I moved from New York, which was stupidly expensive. I moved there in 1988 and I was paying about $950 a month for a fourth-floor walk up in Brooklyn in what is now a really fancy neighborhood. But back then was working-class Italian. And when we moved to Seattle, we moved into this amazing 14th floor, two-bedroom, two-bath, thousand-square-foot floor-to-ceiling windows in downtown Seattle with a parking spot and a concierge at the desk and all that. And it was exactly what we were paying in Brooklyn, and it seemed outrageously expensive to all of our friends and family in Seattle, but that would be three times the price today in inflation-adjusted dollars than what we paid back then. That’s happened all over the country.

Nick Hanauer :

Yeah. The differential in housing costs across the country though today are really, really extraordinary. I mean, you can buy a house in some neighborhoods for 150 bucks a square foot, and in another neighborhood, it’s $2,000 a square foot. It’s just astounding. And our guest today, who’s an amazing journalist and historian named Yoni Appelbaum has just written a book called Stuck, how America ceased to be the land of opportunity, which traces the history of mobility in America. And the basic thesis of the book is that we don’t so much have a housing crisis, but a mobility crisis.

Goldy:

Well, it’s a housing crisis, but it’s artificially created.

Nick Hanauer :

Yes. And I think you and I on the podcast have talked at length-

Goldy:

Ad nauseum.

Nick Hanauer :

About the housing crisis in America, but it’ll be really interesting to get Yoni’s take on this and where the problem came from, and how to fix it.

Yoni Appelbaum:

I’m Yoni Appelbaum. I’m the deputy executive editor at the Atlantic Magazine, and I’m the author of Stuck: How the Privileged and the Propertied Broke the Engine of American Opportunity.

Nick Hanauer :

What inspired you to write the book and what is the book’s core thesis?

Yoni Appelbaum:

I started thinking about this book when I had kids living in Cambridge, Massachusetts. I was a grad student and a historian, and I looked around my neighborhood, which I knew for a century had been a neighborhood of people on their way up. It had been filled with the kids of immigrants from one generation after another after another, and they’d climbed the ladder of opportunity. They had moved on, their kids had done better than they had, and that’s what the neighborhood was. But as I looked around the neighborhood, I saw that wasn’t happening anymore. It was instead filling up with young professionals. And I thought something has gone badly wrong here. And I wanted to know what it was. Why had a neighborhood that had been this launch pad for 100 years stopped being a launch pad? And the more I looked, the bigger that question got. It wasn’t just Cambridge, it wasn’t just the East coast. This is happening all over America. There aren’t really the places anymore that people can move to and get ahead.

Yoni Appelbaum:

And that became the thesis of the book that America really built itself into this remarkable society by giving people the chance to move, to take control of their lives and destinies to give their children a better future than they had had. And Americans moved it an astonishing rate, and we’re not doing it anymore. And the fact that we’re not doing it anymore has left people feeling embittered and disempowered and stuck.

Nick Hanauer :

You’re a historian. So let’s start with the roots of this because I think a lot of people look at the housing crisis we have now and the current climate of the emphasis on home ownership and the lack of mobility. I think that’s normal because it has been normal for the past 30 years. What was it really like over most of American history and when did it start to change?

Yoni Appelbaum:

For most of American history, Americans moved more than anyone else on Earth, and it was one of the things that made America really distinctive. It was pretty much the first thing anyone who came over here from Europe noticed when they got here. In the 19th century, probably a third of Americans were moving every year. As late as 1970, it was still one in five. The census just told us a month ago that it’s now only one in 13. So it’s been an astonishing very sharp drop. And the thing that mobility gave us … And I don’t think we actually have a housing crisis in this country. There are a lot of houses out there. What we’ve got is a mobility crisis. The houses are not in the right places. They’re not giving people the chance to move toward regions and cities and rural areas that offer them and their children opportunity and so that they remain stuck where they are.

Nick Hanauer :

I was really struck by a number you just used. So in 1970, one in five American families moved?

Yoni Appelbaum:

Yes.

Nick Hanauer :

And by moved, do you mean moved cities or do you mean moved to a different house?

Yoni Appelbaum:

I mean, moved to a different house. But the funny thing about moving to a different house, this stuff gets tough to measure.

Nick Hanauer :

Yeah.

Yoni Appelbaum:

If you are moving from a house on one side of the tracks, the wrong side of the tracks, up to a house on the right side of the tracks, that’s a move within a city but it’s life-changing. And what we know is that when Americans relocate from one residence to another, all sorts of things about their lives start to change. I’m talking about all moves.

Nick Hanauer :

Wow. And the latest figures are one in 13?

Yoni Appelbaum:

Yeah, it’s really an astonishing drop.

Nick Hanauer :

Well, that’s really interesting,

Goldy:

Right. I mean, you think about it, Nick. I mean, even our generation, maybe you’re a little exceptional in some ways economically, Nick, I think you admit. But I look at my own experience and I’ve been pretty privileged where after college, I moved around a lot in Philadelphia, but then to New York and then to Seattle, and then once my daughter was born from downtown Seattle to a house in South Seattle, and man there, I’ve been since 1997, I haven’t moved again. And nowadays, I know my friends, their kids, most of them have gone to school here and have stayed. Nobody’s leaving. It’s like everybody hangs around. It’s very different because everybody I grew up with moved all over the place.

Nick Hanauer :

So explain more about how mobility connects to prosperity, if I may. You’re making a claim or an implied claim that the more physical mobility there is, the more opportunity and prosperity there is. There’s a big deep connection there. Yes. I’m not putting words-

Yoni Appelbaum:

Yeah. You’ve got it exactly right.

Nick Hanauer :

Okay. So explain why these things are connected so deeply.

Yoni Appelbaum:

There’s a great study. I think a lot of us know that immigrants to this country, their children do really well. This is part of the American dream. It’s been true for as far back as we have data, but there’s a great study that tried to figure out why that is. Why do the kids of immigrants do so well compared to their parents? Why do they move ahead in social class, in earnings, and wealth? And it looked at education. Maybe their parents instill a certain set of values. What it came down to in the end was actually location. 100% of the kids of immigrants are the children of people who have moved somewhere new. If you match them against Americans of similar educational background and social class, you adjust for everything else. And you look at the Americans who move to the same cities that those immigrants move to, the kids of the native-born Americans do just as well.

Yoni Appelbaum:

What really drives this kind of success is being in the right place for opportunity. If you’re in a place which has a thriving industry, where you’re lucky enough to land in Seattle, as Amazon is taking off, you’re in Silicon Valley during the dot-com boom, the opportunities are all around you. You switch from one job to the next. If you’re in a place where the steel plant has closed and there aren’t enough jobs to go around and everybody’s hanging on to what they have, you’re not only not moving around, you’re probably stuck. Maybe you’re one of the workers, you didn’t lose their job with the steel plant, but you’re in a declining industry that’s not giving the same kind of expansionary opportunities. And so relocation helps that way.

Yoni Appelbaum:

And the other thing it does is it really shakes up our habits. So it’s really hard if you’ve got a job to resign your job and switch to another job, it’s uncomfortable. When you move from one place to another, you have to do that. And you’re very likely not to find exactly the thing you were doing in the previous place, but to look around and see who’s hiring and the places that are hiring are the places that are growing. So you end up moving from a stable job one place to a job in an expanding industry someplace else. So it’s also about shaking up habit and getting people to try new things. And that comes involuntarily as part of moving.

Nick Hanauer :

Do we dare use the economic term efficiency in this conversation to talk about how mobility is more efficient because it allows people to use their skills where they’re needed?

Yoni Appelbaum:

It is a lot more efficient, but I want to be a little cautious there. There’s a lot of pain that comes with relocation. It’s not easy to move. And when people move, they’re leaving a lot behind. And so this is not a case for forcing people to relocate, but we know is that when Americans have had the opportunity to do that, they’ve historically done it in large numbers and you can see it. Sometimes that opportunity emerges suddenly and you get a huge shift in behavior. So when World War I hits, immigration to the US stops and suddenly northern factory owners are willing to do what they’ve never been willing to do before. They’re willing to hire Southerners, including black Southerners, and you get the Great Migration because those economic opportunities open up in the North and 20 million white Southerners and 8 million black Southerners are going to move out of the South over the course of the 20th century, chasing those jobs as suddenly become available to them.

Yoni Appelbaum:

Nobody forced them to move, but once that opportunity was available, they chose to go and build better lives for themselves and their children. So yes, there’s an efficiency to it, but the nice thing about mobility is, is not the way efficiency is often used, which is you’re not going to like this, but I’m going to make you do it. But it’s actually about restoring agency to individuals.

Nick Hanauer :

Yeah. It’s funny you raise a point by the way, which a lot of people I think are unfamiliar with, that Great Migration wasn’t just African-Americans fleeing Jim Crow in the South. It was Southerners fleeing poverty to these opportunities in the north. And there were many more white Southerners that moved north than black Southerners.

Yoni Appelbaum:

And it reshapes the whole country in the process. But what they’re chasing is the chance to do better. They had not been able to get those jobs prior to World War I. They stopped moving largely in the 1930s during the Great Depression when the jobs go away. It’s not the conditions in the south got any better. It wasn’t pleasant to be a black person in the South in 1890, and it wasn’t pleasant to be a black person in the South in 1930. But people move when there’s a good chance of building something better and they’re pretty savvy about it.

Nick Hanauer :

So what went wrong?

Yoni Appelbaum:

Here’s where we get to the interesting part of the argument, which is that for most of American history, the richest places and the poorest places in this country were on a divergent path. And that was because if you were a janitor working in the rural south and you relocated to a place with a thriving economy, even if you didn’t switch jobs, even if you got the same job in that city, you’d earn a lot more. Your cost of living would go up a little and your earnings would go up a lot, and that was a good bet. And so Americans continually relocated. That’s why you get these extraordinary rates. It’s a third, a fifth of Americans moving every year.

Yoni Appelbaum:

What happens is that we impose a set of regulatory changes on the built environment, which is a fancy way of saying we make a lot of rules that make it really hard to build. We give individuals the power to veto new development in their neighborhoods. And as we do that, housing in the places where people want to live, where they want to move to gets more and more and more expensive until it cancels out the gains. If you’re a janitor living in Alabama today and you move to San Francisco, you’ll lose. You’ll earn more in San Francisco. But your cost of living, specifically your cost of housing, will more than cancel out those gains. You’ll have less in your bank account at the end of the year than you would’ve if you stayed home. And so people stay.

Yoni Appelbaum:

The only people in America can really still afford to move are the really prosperous but that’s not true. They can still get ahead or break even by moving to really prosperous places. But it’s only the winners who are moving now and that is destroying this path of upward mobility for the great majority of Americans.

Nick Hanauer :

Yoni, is there data around mobility by income decile or something like that?

Yoni Appelbaum:

Yeah, there is. And what we see is it’s now linked to income and education. And so we’re seeing sort of really big gaps open up. Interestingly, mobility has not historically been hugely racially linked, but it is down even more among African-Americans now than it is among the public at large. So we’re seeing this really drive a lot of American inequality where the people who can afford to move and go to the places which have a lot of good opportunities, they’re doing even better. And the people who can’t afford to move because they’ve been priced out of the places where the jobs are available, which I think we sort of take as natural. Like, of course, you can’t afford to live in New York or San Francisco or Austin or Northwest Arkansas or any other place that’s growing rapidly, economically.

Yoni Appelbaum:

But that wasn’t true. For 200 years when a place thrived economically, it threw up lots of new housing and people could move in. So it’s a really sharp divide. Starts around 1970 with a set of regulatory changes where we make it really, really hard to move. And you do see that it’s the affluent who are moving now and not the great majority of Americans.

Nick Hanauer :

When were the worst decisions made and who made them?

Goldy:

Well, white people. That’s who made them.

Yoni Appelbaum:

This is the awkward part of the argument for me, which is that it was three generations of progressives each responding to a problem they saw in their world. And the layering of those three sets of changes really change is what it means to be American. So the first generation are looking around at a world with tons of immigrants and a lot of social disorder, and they want rules. They want to bring-

Nick Hanauer :

And when was this? When was this?

Yoni Appelbaum:

Yeah. So you get the first zoning in America happens in 1885 in Modesto, California, and it is intended to push the Chinese out of Modesto. They invent this thing that’s never been done before in America. They say some things that you can do on your land are perfectly fine in this part of town and not in the other parts of town. And if you look at the map of where they’re saying this, the only place you can still operate a laundry in Modesto under this ordinance is Chinatown. It’s a way of pushing the Chinese back into Chinatown because they’re upset that they’ve been moving in and integrating neighborhoods. They’re very explicit about it. They know what they’re doing, they leave it out of the law, but they talk about it in the hearings.

Yoni Appelbaum:

And you get zoning. And zoning then gets used by the original progressives in the progressive era in order to keep immigrants in their place. It gets adopted citywide New York to push Jewish garment workers back into the Lower East Side. It gets adopted in Baltimore to keep black migrants to Baltimore out of the white neighborhoods. So you can see it getting adopted by progressive [inaudible 00:17:55] reformers who are trying to bring order to the chaos of cities. But their preferred way of doing this because constitutionally, you can’t pass a law which says the Chinese can’t live here, but you can pass a law which says, I’m regulating land use. So this is the first era of this is the invention of zoning and the imposition. But zoning doesn’t stop Americans from moving. It just means that moving doesn’t pay off quite as well as it did before.

Yoni Appelbaum:

The second wave you get is the New Deal. And FDR has got a big problem to solve in the New Deal. His problem isn’t the chaos of cities. His problem is that everyone’s defaulting on their mortgages. And so he wants to find ways to stabilize the market. And that puts the federal government in the business of home ownership for the first time where a nation of renters, at that point, most Americans rent their houses and they do it deliberately because renting lets you move more often. It lets you chase opportunity. But if you’re going to refinance these mortgages, you can’t risk default.

Nick Hanauer :

Can I stop you there?

Yoni Appelbaum:

Yeah.

Nick Hanauer :

So today about two-thirds of Americans own their own homes.

Yoni Appelbaum:

Yeah.

Nick Hanauer :

In the ’30s, that was not true.

Yoni Appelbaum:

Yes. Like 53% I think are renters. A majority of Americans are renting. That’s true in agricultural reasons as well as urban ones, right? In some cities, it’s 80 to 90%.

Nick Hanauer :

So who owned the homes? Who owned the homes?

Yoni Appelbaum:

It’s a really interesting mix. In immigrant neighborhoods, it was often immigrant landlords. So people who had arrived 10, 15 years before. One of the things you could do as an immigrant, you often faced tremendous discrimination, but you could get into the real estate business. If you could scrap together the capital from your friends, you could put up a four-unit, a ten-unit building and rent it out to newer immigrants. And this is where a lot of the housing stock in these cities was coming from, was from immigrants with one foot up on that ladder, pulling other people up behind them. And the rents stay relatively affordable in these neighborhoods. And it was driving the established elite Americans kind of nuts. This is what they hated. They hated the advent of apartments. They hated that immigrants were taking over as landlords in the city. They hated watching the strange culture enter their cities and they were trying to push it back. They were very explicit about trying to ban apartments and keep the immigrants confined where they were. So you get to the New Deal, right?

Nick Hanauer :

Yeah.

Yoni Appelbaum:

And we’re changing into a nation of homeowners. And today you can’t find a politician who doesn’t think we should be a nation of homeowners, but it comes with certain costs. And one of the costs is that the federal government’s going to be on the hook if anyone defaults on their mortgage. And it wants to get its money back. FDR has told them to solve this, but not to generate a loss, right? There’s no subsidy here. The way they do this is stretching mortgages over 20 and then over 30 years instead of three to five years, which was the norm. Going with small down payments instead of large payments. They make the math work so that your monthly mortgage payment works out about the same price as a rental.

Yoni Appelbaum:

It’s a magic trick. It’s really cool. But what you don’t want to do is see that home lose value over the course of 30 years. It’s really hard to know what’s going to happen in a neighborhood 30 years time. And so the federal government says, we’re only going to give these loans where you impose zoning and you impose racial covenants. Without those two things, we won’t loan to you. And so this is the second step, is that-

Nick Hanauer :

With racial covenants?

Yoni Appelbaum:

Yeah. It’s an explicit requirement from the Federal Housing Administration. They say you can’t change the racial character of the neighborhood. Covenants need to guard against that.

Goldy:

We know this, Nick. We had that conversation with Dorothy Brown.

Nick Hanauer :

Yeah. Yeah, yeah, I forgot that it was the federal government.

Goldy:

When a neighborhood turns, when you get a certain percentage of African-Americans in it, property values start going down.

Nick Hanauer :

Yeah. It’s why it’s [inaudible 00:21:32].

Yoni Appelbaum:

Yeah. They’re worried about the losses. Yeah, that’s exactly right. And they’re redlining it, right? They draw these maps and they say, these neighborhoods we won’t loan to. And so what you get is, unfortunately, the New Deals sort of takes these rules nationwide. And even that doesn’t stop Americans from moving, right? If your image of the 1950s and ’60s, it’s on the road, right? Everyone is going places. It doesn’t totally shut it down yet, although it is widening the gaps. And it really breaks in the 1970s. And what happens is that a lot of liberal reformers are looking at the fruits of the New Deal, and New Deal does a lot of good, but they’re worried that big business is capturing the government. And they’re right to be worried, right? So, Rachel Carson is writing Silent Spring. The environmental regulators are asleep at the switch. Ralph Nader is writing Unsafe at Any Speed that the automotive highway regulators are not doing their jobs.

Yoni Appelbaum:

And they want the public to be able to check private interests. They want the public to come in and challenge government rules so that if the government is not enforcing the public interest. I should have the right to file a lawsuit and say, “Hey, you’re a regulator. Do your job. Don’t let these people get away with it.” But what you’re doing is you’re distributing a veto to every individual who can file a lawsuit. Anyone with enough time, money, and resources can now challenge a government decision. And this is a set of legal changes in the 1970s. And what that does is it takes the first two things which have made every possible building in America subject to government approval. And then you let anyone who’s rich enough block the government approval. And when you put those two things together, you get something really powerful. For the first time in American history, it becomes almost impossible to build.

Nick Hanauer :

Right. Certainly in some places.

Yoni Appelbaum:

You can still build in red states where there tends to be a little bit more emphasis on the rights of private property. They’re not doing this because they’re chasing diversity or aspirational mobility. But that wards us off to some extent. The data here is a little uncomfortable. Every 10 points more California city votes for Democrats, the number of housing permits it drops, drops by 20%.

Nick Hanauer :

Wow. That’s incredible.

Yoni Appelbaum:

And Democrats are killing themselves this way because the population in America is shifting to the red where the housing’s cheap.

Goldy:

Until they can’t afford insurance.

Yoni Appelbaum:

There are some wrinkles here, and the jobs aren’t in the red states. It’s blue cities that are growing fast. But people for the first time in American history, instead of moving where the jobs are, they’re moving where the houses are cheap.

Goldy:

I brought up Dorothy Brown a little earlier, and one of the points she makes in her book, the Whiteness of Wealth is that home ownership isn’t usually a great investment for African-American families because they either have to live in overwhelmingly white neighborhoods and live with everything that goes with, or they live in mixed neighborhoods, black neighborhoods where there isn’t much appreciation.

Goldy:

I’m wondering whether home ownership isn’t such a great deal for everybody or for a lot more people than we think, how much this emphasis on home ownership in the United States, just home ownership itself is part of the problem because it inevitably creates more friction and makes it … It’s stickier. It makes you stuck. It’s harder to move when you own a home. It’s much more expensive.

Yoni Appelbaum:

When the Commerce Department in the 1920s under Herbert Hoover starts promoting single-family home ownership as a government policy goal, they write caveats into the pamphlets they’re distributing that say, Hey, this isn’t actually for everyone. For a lot of you, this is going to cost you more than it’s worth. And that is a caveat that sort of drops out over the subsequent decades. But there is no question that home ownership is a great bargain for some Americans, particularly Americans who start off with a lot more. And the math has worked really differently for Americans toward the bottom of the packing water. And too often in our history, people have bought into neighborhoods which slide down and destroy their equity, or they bought a home and gotten locked into where they are.

Yoni Appelbaum:

This was something I saw really dramatically reporting this book from Flint, Michigan. Walking the streets of Flint and talking to the people I’m met and meeting with community leaders and real estate developers, over and over again, I heard from people who are kind of locked in a place in Flint. Even if they sold their house, they couldn’t pull enough equity out to buy any place else. And they own the home. And when they looked at other places, they couldn’t imagine getting enough to buy someplace where there are more economic opportunities. And so they stayed. Moving to Flint in 1920 was a terrific bet. Moving to Flint in 2020 is not a terrific bet. And so the same place can offer opportunity to one generation and not to another, but to the extent that you’re tied to your home, you can feel kind of trapped.

Nick Hanauer :

And also when you think of the following generations in the US where the quality of the local schools, they’re mostly funded by local property taxes. As property values go down, the schools go down. So your kids are trapped as well.

Yoni Appelbaum:

Schools go down. I mean, this is something we know about parenting, which is we obsess a lot over lots of things like breastfeeding, sleep training, do you read to your kid? The single most important parenting choice that anyone can make is the neighborhood in which they’ll raise their child. The research bears this out. It has a much larger impact on their life chances because of the schools, because of the peer group, because of the social connections they’ll get to the extent that you can only get into those good neighborhoods by buying a home, by having the down payment, by qualifying for credit, you’re screening out huge parts of the population from the get-go.

Nick Hanauer :

Right. There’s that great Raj Chetty study about low-income families that move into high-opportunity neighborhoods and the impact on their children. The younger the kids are, when they move into these higher-opportunity neighborhoods, the better their life outcomes are just across the board.

Goldy:

So, Yoni, what should we do?

Yoni Appelbaum:

What should we do? We should get moving.

Goldy:

So fix it.

Yoni Appelbaum:

Yeah. This is actually a pretty easy one. There’s lots of problems in America which require tremendous sacrifice in order to fix. This is one that really doesn’t require that. What we need to do is to roll back some of the rules that we’ve changed over the last 100 years so that people no longer have the right to block other people from trying to climb the ladder opportunity behind them. And so all you got to do is let people build again. And if you make it easier to build, people will naturally build. They’ll build because people want to buy and rent the housing that they’re erecting. People will move to it because they want better lives for themselves and their children. And you can restore a nation where mobility, literal, physical, geographic mobility is the key to social and economic mobility.

Nick Hanauer :

If you were in charge, get rid of all zoning.

Yoni Appelbaum:

Well, zoning is sort of a big category, and I don’t think we’re going to entirely eliminate it. You can really simplify the rules. You can do three things. You can simplify the rules so that the rules are not a patchwork quilt of … New York by the time you get all its overlays has more than 200 zoning designations. It’s insane. If you have relatively simple rules that apply across cities, across states, with a few broad categories, you can actually still allow local communities to shape their fabric without seriously constricting opportunity. The second thing you can do is you can tune a lot of your programs so that instead of encouraging home ownership, you encourage mobility so that instead of trying … Most of our housing support programs are actually about if you’re lucky enough to qualify for a Section 8 voucher, a rent control department somewhere, or even public housing, you’re never given that up. You got an off the wait list, you’re never going to move.

Yoni Appelbaum:

A lot of our programs are really tuned as if we have an affordable housing crisis as opposed to having a mobility crisis. That’s the second thing we can do. We can emphasize mobility over trying to just address affordability. And then the third thing we can do, and this is really important, is abundance. We can build not just a little housing, but a lot of it. And if you really build a lot of housing, we know this because we did it for 200 years and it worked, then you can restore a lot of opportunity in the process.

Nick Hanauer :

Do you think the private market is capable of addressing this on its own? If you just lifted all these restrictions, we would not suddenly because obviously, it takes time to build, we would eventually have a huge supply of affordable housing and a lot more mobility, or is there a larger role for government in this?

Yoni Appelbaum:

It’d be a wonderful world if the private market could solve all of our problems, but that is seldom the case. So no, there’s obviously a large role for government in this. The problem is we’re making it really hard for government to do its job. So we have housing vouchers that we give people to be able to rent things on the private market. Big government program costs a lot of money. The problem is that the more expensive housing becomes in an area, the more those vouchers cost. So as long as you’re playing the game of musical chairs and-

Nick Hanauer :

It’s a death spiral. Yeah.

Speaker 3:

Yeah.

Nick Hanauer :

Right.

Speaker 3:

You end up spending more and more chasing the same limited supply of housing, and you can’t spend it-

Nick Hanauer :

Serving fewer and fewer people.

Yoni Appelbaum:

Right. Exactly. If you make the housing abundant, the government requirements get cheaper and cheaper, and plugging that gap left by the private market gets more and more possible.

Goldy:

A lot of people don’t understand the way vouchers work. They’re administered through local housing authorities and they’re given a sum of money, not a number of vouchers. And so the cost of housing goes up within that housing authority’s district then there’s just fewer people who can get those vouchers.

Yoni Appelbaum:

Yeah, that’s exactly the problem.

Nick Hanauer :

I mean, what do you do? I think where we live in Seattle, I think we’re addressing this certainly not perfectly, but more aggressively and better than many other cities. There’s an apartment building going up on virtually every corner of the city.

Goldy:

Where it’s zoned. But they’re not going up-

Nick Hanauer :

[inaudible 00:32:11].

Goldy:

In your neighborhood, they’re not going up directly in my neighborhood.

Nick Hanauer :

Yeah. But a lot. I mean, there’s just a ton going up, but I mean, you’re leading me to the point, Goldy, which is there are these fancy downtown neighborhoods, and those folks definitely don’t want apartment buildings replacing old homes. And the politics of that is really tough. What’s your view on that, Yoni?

Yoni Appelbaum:

Yeah, the politics are hard, and what we’ve seen is if you give local communities the tools to pass these sorts of judgments, two things happen. One is the communities that are best educated and have the most resources will use those tools most effectively. So you can say, oh, this community is trying to defend itself against gentrification. It should be able to demand lots of affordable units in this new development or this community is fighting against displacement, it should be able to veto the new housing development. So if you create those tools, what you have is exactly the situation you’re describing, which is that it’s the really affluent neighborhoods that use those tools most effectively. And that leads me to think we shouldn’t give people those tools. As tempting as it is to think that you can give these kinds of distributed vetoes, you can let people challenge these decisions and end up with good outcomes, that’s not what typically happens.

Yoni Appelbaum:

We need to create state-level decision-making. All local zoning was delegated down from the states. They all had the pass in the 1920s, these enabling statutes to let local communities pass zoning. Local affluent towns are not on their own going to say, yeah, please come to my community, build an apartment building so that immigrants … so that people from other parts of the country can move to my rich community and use our schools. That’s not going to happen.

Yoni Appelbaum:

What you can do is have a state government take a look at the problem on a regional basis and say, God, we’re choking off our growth here. We’re losing the service sector workers, the firefighters and the police officers can no longer afford to live within community distance of the communities they’re serving. We need to create state-level change and restrict the ability of local communities to exclude people they don’t like from their backyards. And so part of it is about getting rid of the legal challenges and the other tools that people are using to stop these housing developments. And part of it’s going to take state-level reform because local communities are incentivized not to do it.

Nick Hanauer :

Well, I think we have most definitely covered the benevolent dictator question, Goldy.

Goldy:

Yes. So you want to get to the final one?

Nick Hanauer :

Yeah. Why do you do this work, Yoni?

Yoni Appelbaum:

I do this work because I’ve been really lucky. I have a great life. I’ve moved repeatedly in my life. I’ve got two kids. I want them to grow up in a country where they and their peers have the same kinds of opportunity that I’ve had. And I’m really worried. I can see a country that is increasingly embittered and divided. I can see a country which is increasingly unequal. And I think we hit on, there were lots of flawed things about America, but this was the one damn thing we got right. This was the thing that enabled us to be diverse, tolerant, prosperous, by mixing the population, by letting people move toward opportunity. And if we could go back to that, then my kids and their kids can have the kinds of opportunities that I’ve been fortunate enough to enjoy.

Nick Hanauer :

Yeah. I’ve long joked, Yoni, that the only way my daughter will ever own a house in Seattle, like the one she grew up in, is if I die in it.

Yoni Appelbaum:

But it’s not a joke, right? A lot of us feel that way.

Nick Hanauer :

It’s not a joke. And this gets to another point is that is the entirety of my estate planning. Because of the way our tax laws are, it just makes more sense for her doing her at that this house than me pay capital gains on selling it.

Yoni Appelbaum:

Wow. Wow.

Nick Hanauer :

Because it’s all capital gains. I bought it in ’97 when she was six months old.

Yoni Appelbaum:

That is such a terrific illustration of the problem. I wish I’d had it for the book.

Nick Hanauer :

Yeah. It’s a bizarre bit of … I mean, just the tax system is set up to say, don’t ever sell the house.

Goldy:

Well, Yoni, thank you so much for being with us. It was a terrific conversation. And you cannot but be at least mostly right.

Yoni Appelbaum:

I would take mostly right.

Goldy:

Yeah.

Yoni Appelbaum:

This was tremendous fun. Thank you both.

Nick Hanauer :

One of the most interesting parts of this conversation for me was the drop from the ’70s to today in how mobile people in America are. Going from one in five families moving yearly to one in 13, that’s an incredible change. And when I think about it, and you probably remember. There were always all the new kids. Do you know what I mean?

Goldy:

Uh-huh.

Nick Hanauer :

In school, there was this churn, at least where I lived, which was very middle-class of people moving into the neighborhood and then leaving and moving … Somebody’s dad would get transferred. It was very, very common. But my dad was transferred, so he would go someplace else or my dad got a new job or blah, blah, blah, blah, blah. It was just this churn of new kids all the time.

Goldy:

Or just, I look at my own story, and we discussed this on a previous episode. I was born in the Kensington neighborhood of Philadelphia, which was really on a decline back then. It’s the neighborhood where my mother’s family had been from. And we moved out across the city line into the suburbs, into an affluent suburban neighborhood with some of the best public schools in the country. We were still in Philadelphia. My father didn’t switch jobs. We just moved into a better neighborhood because we could. And my whole life unfolded from that as opposed to what it might’ve been like had we stayed in Kensington.

Nick Hanauer :

No, for sure. I mean, I more or less grew up … Well, I was born in New York City, and then we moved when I was five to Bellevue, Washington, which is a suburb, suburb, and stayed there until I went off to college. But although we did move house one time, we moved from a smaller house to a larger house in the neighborhood because my family grew. But anyway, the whole thing is fascinating, and Yoni is certainly right that these ridiculous rules that allow any whiny asshole to stop the development of anything. That has to change, right? It’s just a shit show.

Goldy:

I agree. But I want to put a little perspective on that. And this is not my own opinion. I think we should make it much easier to build more densely and even in my own neighborhood. But I want to put a little perspective because my life is very different from yours and my friends and neighbors, we own houses that are 800, 900 million-dollar homes if they went on the market. And for the rest of the country, you might think, “Oh, you’re rich,” but we don’t feel rich. Even those of us who have paid off our homes, we don’t feel rich because in America, because of this emphasis on home ownership as a wealth-building tool, that’s where the bulk of my neighbor’s wealth is, is in that house. And the only way to tap into that wealth is either to borrow against it, in which case you’re increasing your monthly costs or to sell it.

Goldy:

Now again, I’m not asking for anybody to feel bad for me to have had this opportunity to build all this wealth by buying a house 28 years ago. In Seattle, that increased in value, but we don’t feel wealthy. So this idea, when you have homeowners and homeowners vote, this sense of protecting their property values comes from a place of desperation because the costs of getting old in the US are really expensive and increasingly uncertain, and we don’t have a lot of other opportunities. Middle-class Americans don’t have pensions anymore. We’re being told that Social Security and Medicare could be taken away from us at any time. And this nest egg, this home, that’s your security. And so I understand why people resist anything they think might decrease their property values because if their property values go down, they have nothing, Nick. These people have nothing after working a lifetime.

Nick Hanauer :

No, for sure. For sure. Yeah. You can’t forfeit people from being pretty emotional about that.

Goldy:

Right. But I think the conversation … What Yoni talks about this idea of mobility, it exposes this real tension in terms of housing, and that is mobility is opportunity. We talk about this opportunity, the American dream to own your own home. Everybody deserves the opportunity to own their own home, but we also want this opportunity to move to where the opportunities are.

Nick Hanauer :

And those two things are obviously in conflict.

Goldy:

They are in tension with each other. We know that to have a home is to lay down roots in a community, to build this life amongst family and neighbors, and everybody wants that to be part of their community. Jane Jacobs talked about that in her books about how important that is to maintaining a neighborhood you want … for the young and the old to be able to age in place. It’s just so important. On the other hand, you want to be able to move to where the opportunities are, and so it’s that tension between laying the down roots and having mobility. We want to have both of those and whatever you think the solution is, I personally think that the emphasis on home ownership is a big part of the problem. We need to have more opportunities for affordable, stable renting.

Goldy:

But whatever you think the solution is, it’d be nice to have, try to build that, a housing market where we can have both where you can, if you want to choose to lay down roots, you can have stable housing in the places where you want to live. If you want to choose to move to where the opportunities are, you should be able to find affordable and stable housing there.

Nick Hanauer :

Yep.

Goldy:

I don’t think that’s too much to ask for.

Nick Hanauer :

It may be too much to ask for, but I appreciate the sentiment.

Goldy:

In any case, if you want to learn more about this, we will provide links in the show notes, and of course, you can buy Yoni’s book at your favorite online monopolist or your favorite local bookstore. It is Stuck: How the Privileged and the Propertied Broke the Engine of American Opportunity.

Speaker 5:

Pitchfork Economics is produced by Civic Ventures. If you like the show, make sure to follow rate, and review us wherever you get your podcasts. Find us on other platforms like Twitter, Facebook, Instagram, and Threads at Pitchfork Economics, Nick’s on Twitter and Facebook as well @Nick Hanauer. For more content from us, you can subscribe to our weekly newsletter, The Pitch over on Substack. And for links to everything we just mentioned, plus transcripts and more, visit our website, pitchforkeconomics.com. As always, from our team at Civic Ventures, thanks for listening. See you next week.