Thursday, October 18, 2012
Income Inequality and Housing Prices
It used to be the case that both high and low income workers were better off living in rich states. This article summarizes research which indicates that this is no longer true. Housing prices in rich states have increased faster than housing prices in poorer states. Low income workers cannot afford to migrate to richer states. They have been forced to migrate to poorer states where wages for similar work in rich states are higher. This is not entirely due to market forces. Restrictions on housing development are more prevalent in rich states than in poorer states. Those restrictions have contributed to higher housing costs in rich states.