Why the American dream no longer moves upward

You know, there's lots of ways to explain the 2024 election, but I think the most parsimonious

explanation is that it was an affordability election. Many Americans felt like the last

four years, and in many ways the last few decades, had just gotten too unaffordable when it came to

the most important parts of their life, especially housing. And you look at this right now, you know

an extremely high share of Americans are spending more than 30 percent of their income on rent or

on mortgages. It was just recently reported a few weeks ago that the average age of the first-time

homebuyer has increased to an all-time high. It's very, very difficult for many Americans to afford

rent, but it's particularly hard for young people to buy into this market. And so I don't think it's

a coincidence that you saw young people, and in particular young men, move sharply away from the

Democratic Party, which has historically been the home of young voters, toward the Republican Party

It was a vote of protest. It was people saying the current status quo is absolutely inexcusable

And the truth is, it is inexcusable. I'm Derek Thompson. I'm a journalist

and I'm the co-author of the book Abundance with Ezra Klein. The failure of liberal housing policy

You know, for a long time in this country, we did a very good job of adding houses in America's most productive places

So a place like San Francisco or Los Angeles or New York would get richer. And then housing supply would meet the demand of people who wanted to move to where the American dream was possible

But something very strange has happened to the American dream in the last few decades

which is that in many cases, Americans are moving to more affordable areas

But these affordable areas aren't as good at social mobility, at helping the lower class

move into the middle class, move into the upper class. So on the one hand, you have these cheaper places

where upward mobility is difficult. And on the other hand, upward mobility is often very high

in places like Boston, New York, San Francisco, Los Angeles. These are productive places where people move

and benefit in many ways from their proximity to innovation and productivity. But these places are so impossible to afford a home in that people

are leaving rather than staying. And so if you think of the American dream as being this idea of

you can choose where you live and wherever you live, you will also have the benefit of upward

mobility, working your way into an affordable middle class, the American dream in the last

few decades has come apart. You can choose affordability or you can choose upward mobility

but you can't have them both together. That's terrible. That's the opposite of the American

dream. That is, you have to choose between the two things that you want. And the reason this

happened, I think, is a really interesting and profound historical story. At some point in the

last 50 to 60 years, something changed in the way these cities treated housing supply. You saw a

proliferation of zoning, for example, single-family zoning. But even more importantly, you had a

revolution of laws and customs that allowed neighbors to decide what could and couldn't

be built around them. This is around the time that you have the rise of the so-called NIMBY movement

not in my backyard. But you know, the NIMBY instinct, this idea that we don't want the places

around us to change, that's an ancient instinct, right? That's a hominid instinct where we all have

familiarity bias. We all have a little bit of fear about change

It was only the last 60 years that a revolution of legal norms outfitted neighbors with the tools to block new development And so they did And they blocked development in San Francisco and Los Angeles and New York and Boston

They found ways to essentially tie up new development projects in so much red tape that

it made it impossible for developers, whether in the private sector or for public housing

to enter markets and say, we're excited about building affordably. And as a result, you just had buildings slow down

If you look at the number of housing units permitted in California over the last, say

40 years, it's basically a staircase down. You have higher permitting in the 1980s than in parts of the 1990s, higher permitting in

the 1990s than parts of the 2000s, and then it eventually just peters away

This is a world in which we've essentially given ourselves the tools to stop the construction

of the most important product in American lives in the places where Americans often most want to move

Another way of thinking about this is that, you know, power is more complicated

than just the way that the rich have it and the poor don't

Sometimes the way that power works is a little bit subtler. So for example, think about why it's difficult

to add apartments in housing-constrained areas, often something that'll happen is there'll be a

city council meeting, and the city council will vote on some new development. And the people who

show up to that meeting tend to be older, they tend to be richer, and they tend to own homes

And so overwhelmingly, what you'll hear at that city council meeting is people saying, don't build it. I have a good reason for you not to build it. I own a home, and I'm concerned about

the construction. I'm concerned about the parking. I'm concerned about the detours. I'm concerned

about the possibility that this is going to interfere with my way of life or even reduce

my housing values. All valid concerns for those individuals. But who's often not represented

at these meetings are the poor and the unhoused and the housing insecure and the young who don't

own homes. And so in a way, you could think this is also an expression of power, not corporate

power of rich companies having power over poorer consumers, but of the gentry, homeowners

having power over non-homeowners. And I think having a sophisticated understanding of how power

works in America requires us to have a broader sense of when minority interests are taking over

from majority interests, right? The power that's exercised by a company lobbying the federal

government to give them a tax cut is a great example of that company using their might to

rest a private profit out of a public system. But that is the exact same thing that happens

when a group of homeowners stops a housing project from being built because it violates their

private interest. I want to be absolutely clear here. Some people read this project and say

Derek, are you just trying to build 10,000-story skyscrapers in Los Angeles and fit the entire

country into like a 10 square mile block in one part of Los Angeles. No, absolutely not

If people want to move to the suburbs, they should be able to move to the suburbs

But if people want to move to cities, they should be able to move to cities

The concept of housing abundance as I see it is very much an argument about freedom It about the freedom to live where you want to live

And if someone wants to live in the suburbs of Plano, Texas, they should live in Plano, Texas

But if someone wants to live in San Francisco, or maybe just as importantly, if someone's born in the Bay Area and they want to stay

but they can't afford to stay because they're a teacher, they can't afford to stay because they're a firefighter

Well, that's not a world that I feel comfortable living in or co-creating

That's a broken world where we're forcing the middle class to leave the places they were born

And that's why I think we need a revolution of housing affordability and abundance in these places that have gotten so good at constricting housing supply in a thicket of rules

So typically when I go on long enough complaining about liberal housing policy

it sounds to some people like I'm just making an argument to be, say, a Texas Republican

to simply say the entire country should just be like Texas. We should all be conservatives

Now, I do think, by the way, that states like California and Oregon

could take a lesson from Texas, just the same way maybe they could take a lesson

from, say, Japan or Madrid when it comes to construction productivity. But fundamentally, what I want is good outcomes, right

The good outcome that I'm looking for is, can we do a better job of adding housing in

the places where people want to live? But there's a deeper story to tell here, I think, which is a story about the tragedy

of good intentions. When I look at the environmental movement in America, and I look at this story as an

80-year story, you know, you go back to the 1940s, 1950s, and the environmental laws that

were created after this period were utterly necessary. Utterly. America was an ugly place

to live in in the 1940s and 1950s. The air was disgusting. The rivers were disgusting. The amount

of pollution that was coming out of our tailpipes was disgusting. In 1943, the residents of Los

Angeles woke up to a smog so thick they thought the Japanese had launched a chemical attack on the

city. They had it. We had launched a chemical attack on ourselves. The Industrial Revolution

of the second half of the 19th century and first half of the 20th century despoiled the environment

And so we responded to that despoliation by passing a set of laws and enacting a set of

customs to stop government and business from building without reserve. We passed a series

of environmental bills, the Clean Air Act, the Clean Water Act, the National Environmental

Protection Act. We passed laws to protected endangered species and migratory birds. We passed

a set of laws that in many ways have made the world better without question. Today, if you're

an environmental critic or even a critic of liberal housing policy like me, and you drink clean water

and you breathe clean air, you are inhaling the benefits of the environmental revolution before

you exhale your criticism of them. But what happens sometimes in American history is that

the solutions to one generation become the problems of the next generation. We solved a set of problems

in the middle of the 20th century, like pollution throughout the country, that have now made it

harder to change the physical world. We created, through NEPA, a way for individuals to sue the

and to sue businesses to stop them from making any change to the physical environment around them

And what that's done is make it harder to build dense housing or add solar panels

or add wind turbines And so ironically now that dense housing is good for the environment and clean energy is good for the environment the very environmental laws past the 1960s and 1970s now make it difficult to be a real environmentalist in the 2020s

Every generation needs to consider the project of institutional renewal. That was the job environmentalists in the 1960s and 1970s when they looked at the problems

of their age and said, let's develop a new set of laws and norms and customs to solve problems

They did. But now we're left with the afterwash. We're left with the legacy of one generation's solutions becoming this generation's disease

The disease is the inability to build. The disease is the fact that liberalism, which used to be an ideology of building, has become an ideology of blocking

And that's why we need a new age of institutional renewal today

We need a new set of laws and customs and rules that make it easier to build densely and to add clean energy

and to allow government to do what government wants to do. build high-speed rail, build bridges, build infrastructure for a cost that isn't eye-watering

but it's us that have gotten in our own way. I think one really fair criticism of our project

is that we're too focused on rules and norms and laws, and we don't talk enough about corporate

power. We don't talk enough about antitrust. We don't talk enough about monopolies. We don't talk

enough about the ways that companies act in illegal ways to violate consumer interest

There's something to that. These issues are not full chapters in our book. But one thing that

we're trying to do here is identify issues that maybe liberals aren't paying close enough attention

to yet. So just because we're criticizing housing rules in cities governed by liberals

And just because we're interested in procurement rules and government processes to make it

easier to build rural broadband doesn't mean that we're not interested in corporate power

and inequality and monopoly and how these issues can be brought to bear in all sorts

of ways that make Americans' lives worse. Those issues all exist. But we also think that if what you want to understand fundamentally is in housing, the most important product and most expensive product in most people's lives, why is Texas building it and California isn't

Why is Utah building it and Oregon isn't? You can't blame oligarchy

You can't really blame monopoly. You can't really explain this with just gesturing to income inequality

What you're looking at fundamentally is different rules leading to different outcomes

And we want liberals, progressives, people who share our priorities to take a good long

look in the mirror and say, yeah, there's a lot of problems in the world that are worth

caring about. But sometimes the bottleneck between where we are and where we want to be are rules that ironically we've co-created

And in a way, that's where we have the most power to change

Because they were often rules that we wrote and instantiated and voted on and kept

And that's why we focus on them