Why is housing supply so generous in Georgia and Texas? It isn’t land. Harris County, Tex., which surrounds Houston, has a higher population density than Westchester County, N.Y.
A rich body of research shows that regulation, which is intense in the Northeast and California but lax in the Sun Belt, explains why housing is supplied so readily down South. The future shape of America is being driven not by quality of life or economic success but by the obscure rules regulating local land use.
In a sense, the anti-regulation crowd is right that the laissez-faire attitude of the South and West explains their recent growth. But the usual argument focuses on the wrong regulations.
Housing regulations, more than those that bind standard businesses, explain the Sun Belt’s population growth. If New York and Massachusetts want to stop losing Congressional seats, then they must revisit the rules that make it so difficult to build. High prices show that the demand would be there if the supply is unleashed.