Suburban Subsidies... Hidden Power of High Level Policy

• Yesterday I listened to [[Devon Zuegel]] on [[The North Star]] here
  • She is obsessed with cities, specifically [[Singapore]] and [[San Francisco]]. But what I ended up finding most interesting was not the podcast, but her writing on how the US Government Created the Suburbs
    • Off the bat, she claims "suburban homeowners are the single biggest recipient of housing subsidies", which was really surprising to me. I had never heard of this. That's because she later explains they are are hidden subsidies, produced at such a high level of policy people never realize it
    • Also, American homeownership rates are double that of [[Sweden]], [[Germany]], [[Switzerland]], [[France]], [[Great Britain]], and [[Norway]]
    • Suburbs were the result of policy implemented by the Federal Housing Administration. They offered full insurance for specific loans. Those loans were meant for houses that met certain criteria, here are some that Devon lists:
      • Large, new homes were given a higher score, because they increased demand for labor and materials. Older homes with small spaces didn’t create demand for new furniture. Features like long hallways and steep staircases lowered the rating, because they prevented easy moving of furniture.
      • Homogeneity of neighboring housing stock was believed to indicate stable housing prices. To get the max score on the FHA evaluation, the manual preferred that a house be a part of “a sparsely developed new neighborhood … completed over the span of very few years.”
      • The guidelines favored auto- rather than transit-oriented development. The idea was that this would increase demand for cars, which were a growing part of American manufacturing.
    • There are many more as well, but from these three you can see how the effect of what the FHA did led to Suburbia.
    • This is a great example of how much influence the government has on our way of life. And how dangerous our naive assumptions can be
      • I bet if I asked half my friends why the suburbs got popular, they would say because Americans like suburban life more. It must have been a choice the people made themselves.. well maybe not
      • Turns out, the government made suburban life the path of least resistance, and the only viable option for many people
      • So we had the full illusion of choice, but we were ultimately being herded by policy
        • Not that this policy was malicious (well that would be ignoring racist housing policies). Many people are happy in the burbs
    • This sums up well what I find so interesting about this:
      • "The US is the most suburban country in the world. Most assume this is the organic result of individual preferences, because there’s little visibility into the ways that policy has shaped incentives. The reality is that government intervention played a huge role. Because these subsidies are complex and technical, it’s easy to forget their long history, but if we want to begin to understand the current state of the housing market, we have to first understand how we got here."

My Linked Notes

• 2020-11-01
  
  • Hidden Suburban Subsidiaries [[2020-10-26]]
    • Looking to read the next post in this series
    • My favorite part of this post is how it challenges my assumptions. I would have confidently told you some made up answer about why suburbs became so popular here, and I would have been dead wrong. My suspicion is a lot of people would be dead wrong. Where else is this happening? How can I use this example to find other high level influences that explain so much of our culture and lives.

One last thing

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