Like most things in life, Cities cannot have it all - when it comes to strong economy, high quality of life and affordability.
Every city wants to have a strong
local economy, high quality of life and housing affordability for its
residents. Unfortunately these three dimensions represent the Housing Trilemma.
A city can achieve success on two but not all three at the same time. Underlying
all of these tradeoffs are local policies as well.
The reason
these tradeoffs exist is mostly, but not entirely, due to market forces. People
want to live in cities with a strong economy and high quality of life.
Increased demand for housing leads to higher prices and lower affordability.
Nice places to live get their housing costs bid up due to strong demand. The opposite is true as well. Regions with
under-performing economies and lower quality of life do have better
affordability.
Clearly a
few patterns emerge. In particular the popular metropolitan areas stand out,
not least because their eroding housing affordability is constantly discussed.
What you could call the cool city profile is seen in the Denver’s, Portland’s
and San Francisco’s of the world. In a way, they are victims of their own
success. Their strong regional economy
and high quality of life do come as the cost of lower housing affordability.
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