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How strict land-use rules keep poor people in Mississippi

For much of the 20th century, the US labor market presented unrivaled opportunity for low-income workers to move to greener economic pastures. If the economy sucked in Oklahoma, Colorado, or Mississippi, you could move to California, Connecticut, or New York. Though certain barriers to moving, like racial discrimination, have since lessened, new ones have risen to block low-income Americans' access to thriving cities.

Image by Peretz Partensky on Flickr.

This is the second in a series of posts on the social and economic costs of unusually strict land-use regulation. You can find the first post here.

According to a recent working paper by economists Peter Ganong and Daniel Shoag, it's getting harder for low-income and less-educated Americans to move to prosperous places. They find that, on net, these workers are trickling out of expensive cities, and stranded in poorer states. The reason, they argue, is restrictive land-use policies that price lower-wage workers out of economically-vibrant areas. This isn't just rough for a few individuals in Mississippi and other low-wage states; the authors find that the falling migration rates of lower-income workers might have increased US inequality by as much as 10% over the last three decades.

Let's back up to Ganong and Shoag's first observations. During the mid-20th century, average per capita incomes in poorer states grew faster than per capita incomes in richer states, closing the gap in average incomes between the two by about 1.8% per year.

This happened because in the 40s, 50s, and 60s, people migrated from poorer states to richer states. This migration increased the supply of labor in richer states, which caused local wages to rise more slowly. Conversely, cross-state migration decreased labor supply in poorer states, and helped buoy wages and incomes there.

Drawings by Jonathan Neeley.

But something happened in the last few decades. Fewer people were moving from poor to rich states.

The graphs below show the relationship between average state income and state population growth in 1940-1960 (left panel) and 1990-2010 (right).

Let's look at California in these graphs as an example. In 1940, people in California had high incomes (the state had a high "logged per capita income"). So from 1940-1960, California also had high population growth rate--people moved there to earn those high incomes themselves.

In 1990-2010, people living in California still had high incomes relative to people in other states. But its population growth rate had fallen dramatically--fewer people were moving to California. Why the change? The authors' argument is that restrictive land-use policies have kept people out.

All charts from Ganong and Shoag's paper.

And, as you might expect, this fall in migration slowed the rate at which incomes in rich and poor states came together. Between 1990 and 2010, income convergence was less than half what the authors observed before; just before the Great Recession, it had slowed to a crawl.

The graphs below show this. The left panel plots the relationship between initial state income in 1940 ("log income per capita"), and state income growth in 1940-1960. As we'd expect, the richer the state was initially, the lower its income growth--because lots of workers moved to those rich states, increasing their labor supplies, which tempered wage growth. Conversely, the lower the state's starting per capita income, the faster its income grew.

But this stopped happening in the 1990-2010 period, shown in the right panel. Both states that were rich and poor in 1990 experienced similar income growth in the 20 years that followed.

Mississippi is a good example of this. You can see that Mississippians had low incomes in 1940, but per capita income grew rapidly between 1940 and 1960, compared to other states. In other words, Mississippi was part of a broader trend during this period: a shrinking gap between rich and poor states. In 1990, the state still had the lowest per capita income of all states but its income growth rate was relatively worse--posting a growth rate barely better than already-wealthy Massachusetts. The result? More inequality across rich and poor states.
The role of land use regulations

To get at the role of land-use law, the authors created a way to measure how intense a state's land use regulations are. They track the number of local appeals court records that mention the phrase "land-use," scaled by the size of each metro. Unsurprisingly, the frequency of mentions has increased over time:

The authors show that, even accounting for the amount of available land, rich metros that developed more-restrictive land-use rules built less new housing, reduced migration among lower-income people, and curbed existing state trends towards per capita income convergence. This not only shunted the poor into low-wage states, it also exacerbated US inequality because the wealthy and educated are still streaming into rich areas. Migration is still worth it to them, as they are able to pay high rents and mortgages. As the authors write,

Had convergence continued apace through 2010, the increase in hourly wage inequality from 1980 to 2010 would have been approximately 10% smaller. The US is increasingly characterized by segregation along economic dimensions, with limited access for most workers to America's most productive cities and their amenities.
In other words, allowing for more housing (and more affordable housing) in places like suburban Washington could lower US inequality to levels seen in the mid-twentieth century. That seems worth the effort, or at least worth considering.


High costs are a big reason people move away from cities. But sometimes, they just want to live somewhere else.

A lot of writing about housing in DC says minorities, immigrants, and low-income people are being pushed out of the city due to high housing costs. That's true for many. But even if the District were more affordable, some may not choose to live there. And that'd be okay.

A street festival in Long Branch. As suburban communities become immigrant hubs, more people move there by choice. All images by the author.

People decide where to live based on a variety of reasons, like housing costs, where they work, the type and style of housing they want, or schools. Another factor is cultural or ethnic ties: people may choose to locate near family or friends, faith communities, or shops and hangouts that serve their community.

This trend isn't new in the DC area. Long before the District's economic boom, the area's minority and immigrant communities had established roots throughout the region: Blacks in Prince George's County; Central Americans in Langley Park; Ethiopians in Silver Spring, Vietnamese in Seven Corners, and so on.

Like many DC-area immigrant communities, Ethiopians have moved out of the District.

As these communities developed a critical mass, immigrants to the region bypassed the District altogether. Some minority and immigrant groups have even moved farther away from the District: for instance, the Korean community in Annandale is shifting to Centreville, 15 miles west.

That may have something to do with lower housing costs. But it also may have to do with the desire to live in a suburban place. I've seen this firsthand as a first-generation American from a Guyanese immigrant family. Many members of my mother's generation, who emigrated to and grew up in Columbia Heights and Petworth during DC's worst days, left even as the city improved.

Our family isn't wealthy; my relatives are cab drivers, mechanics, and shop owners. But they didn't leave because DC was too expensive. It was that my relatives wanted to live in communities like Hyattsville and Fairfax, where they could get a house with a yard and a car while remaining close to the neighborhoods they already had social ties to.

However, that doesn't mean that non-white communities have no interest in urbanism. As a professor at the University of Maryland ten years ago, Dr. Shenglin Chang found that Latino and Asian immigrants to the United States wanted to live in suburban communities like what they saw in American popular culture, but with walkable, compact places where they could be close to family and friends. That's a big opportunity for communities like Rockville, which has a large Chinese population and is building a town center around its Metro station.

It's great that people in the District and other close-in communities are thinking about rising housing costs. Making it more affordable to live closer-in, near transit, jobs, and shopping, means stronger neighborhoods, less traffic congestion, and less environmental damage. It also means that more kinds of people can live in the District. But it's not a guarantee that the District will become more diverse.

After all, the District contains about 10% of a region with nearly 6 million people. People have lots of choices on where to live, and many of them are taking advantage.


Endorsements for Maryland ballot questions

This election, Maryland voters face several ballot questions, ranging from civil rights to gambling. These are important issues which will have consequences for the quality of life far beyond Election Day.

Photo by aka_lusi on Flickr.

Greater Greater Washington recommends Maryland voters support questions 3 (removing elected officials), 4 (Dream Act), and 6 (same-sex marriage), and reject the legislature's redistricting plan by voting against question 5.

We did not consider questions 1 or 2, which would require judges serving on the Orphans' Court in Prince George's (question 1) and Baltimore County (question 2) to be members of the Maryland Bar in good standing. We are also not endorsing a position on question 7 (gambling expansion) because our contributors were divided on the issue.

Question 3 (removing elected officials): We recommend voting FOR Question 3.

This question will amend the Maryland Constitution to make it easier to remove elected officials from office once they've been convicted of or plead guilty to certain crimes.

Two recent cases involving officials have resulted in situations that hurt government and left some residents without representation. When Leslie Johnson was convicted on corruption charges in Prince George's, she refused to resign, and Maryland's laws only allowed her ouster upon sentencing. For several months, her council district in Prince George's was effectively without representation.

This change may not stop corruption. But it will make it easier to recover when an elected official does wrong.

Question 4 (Dream Act): We recommend voting FOR Question 4.

Education is a fundamental building block of our democracy. Allowing undocumented immigrants who were brought as children to the United States to attend state universities as residents will create more opportunities for these young people to join our society.

The Dream Act will allow those undocumented immigrants who grow up in Maryland to attend a state university at the in-state tuition rate if they get good grades in high school and spend 2 years in a community college. Opening up this opportunity for our neighbors will grow the Maryland economy and will open up new paths for immigrants who had no say in where they grew up.

Question 5 (redistricting): We recommend voting AGAINST Question 5.

Marylanders are being asked to approve or disapprove a Congressional redistricting proposal. The legislative maps drawn by the Maryland legislature are horribly gerrymandered. For proof, take a look at Maryland's 3rd District, which Comedy Central named the "ugliest congressional district in the nation."

Maryland's 3rd Congressional District. Map from the Maryland Department of Planning.

The authors of this map create what would likely be a new Democratic seat by drawing oddly-shaped districts to divide more conservative voters. This kind of gerrymandering is bad when Republicans do it, and it's bad when Democrats do it.

To make matters worse, it also splits minority groups, making it harder for them to participate effectively in the democratic process. It splits communities, so that members of a single community have multiple disparate representatives who also serve voters of very distant communities with very different needs.

Question 6 (same-sex marriage): We strongly urge you to support marriage for all families by voting FOR Question 6.

In the legislative session earlier this year, the General Assembly courageously passed a bill to allow same-sex couples to marry in the Free State. While we oppose the idea that civil rights should be subject to a popular vote, opponents of gay marriage gathered enough signatures to put this issue on the ballot.

Gay couples deserve the same rights as their heterosexual counterparts. Maryland's expansion of marriage equality will not affect religious institutions, because protections were specifically written into the bill. Equality will mean stronger homes and stronger families for the 17,000 same-sex couples living in the state.

A vote upholding the law will also send a message to gay, lesbian, bisexual, and transgender teens in the state that they are full members of society, too. Their fellow citizens support them and their right to love whomever they want.

Maryland's LGBT families share the same values as the straight couples in the state. They deserve the same legal recognition of their relationships from the state as well.

Question 7 (gambling expansion): Our contributors split evenly on this issue, and therefore we are not endorsing any position.

Replenishing the education trust fund could provide Maryland with the money it needs to move ahead with projects the Purple Line. However, gambling has adverse social consequences, and would be unlikely to promote sustainable economic development in Prince George's County. Voters should weigh these and others factors themselves in deciding how to vote.

These are the official endorsements of Greater Greater Washington, written by one or more contributors. Active contributors and editors voted on endorsements, and any endorsement reflects a strong majority in favor of endorsing for or against each issue.


Metro crash roundup: Second draft of history

Press coverage of the Metro crash has evolved from blaming Metro officials for the crash to blaming local, state and national leaders for chronically underfunding the Metro system.

Photo by just_a_name_thingie.

Robert McCartney harangues elected officials for saying Metro needed more money, but not having pushed harder for more money. He also points out that Barack Obama's budget left out the promised $150 million in federal matching funds.

This morning, Metro announced its intention to move the 1000-series cars to the centers of trains (where possible). Many of you suggested this same measure. Majority Leader Steny Hoyer plans to ask for $3 billion in federal assistance to replace the 1000 Series rail cars.

Many immigrant-hating nutcases have been calling the family of crash victim Ana Fernandez, claiming that the family is exploiting the tragedy to get legal status. In fact, Fernandez was a legal immigrant, and her six children were born in the U.S. DCist shares our outrage.

Public Spaces

What's wrong with empowering cities?

Discussing the National Popular Vote Interstate Compact, Illinois Republican and NPV supporter Kirk Dillard said, "I've studied a myth among some Republicans that this empowers cities. The statistics do not bear that out."

Wait, Kirk, what's wrong with empowering cities? Do all Republicans, or even Illinois Republicans, feel that cities should not be empowered? For that matter, Hinsdale, Dillard's hometown, looks awfully close to Chicago. Does suburban Chicago not benefit from increased empowerment by the engine of the region's economy?

Dillard was specifically rebutting rural Republican state legislators' claims that the National Popular Vote would hurt rural areas. The bill, which would give the Electoral College victory in the Presidential election to the person who receives the most votes nationwide as soon as enough states sign on to form a majority, would end the undue emphasis on a small number of states and, since more small rural states vote Republican, possibly hurt Republican electoral efforts, or so some think.

But the merits of NPV aside (I support it), Dillard's choice of words illuminates two very interesting and subtle biases here. First, as I've written before, praise of the agrarian society, or our frontier history, or the fact that American children grow up reading farmhouse stories like Charlotte's Web or Mrs. Frisby and the Rats of NIMH (whose titular rats eschew the mechanized, urban life for a simpler one in a distant valley). Just look at the way commentators are fawning over Mike Huckabee's homespun Midwestern charm.

In the 1950s, many middle-class white Americans saw cities as the past: dirty, crowded, crime-ridden, full of scary dark-skinned immigrants. The shopping mall, The Economist tells us, was "bringing urbanity to the suburbs" by recreating the city center's feel in a suburban setting. But today, malls are dying: none will be built in 2008, and all new malls under development will be of the open-air variety, the Economist article tells us. Ironically, malls are increasingly filled with ethnic minorities who are themselves immigrating to suburbs rather than cities; Indian and Asian immigrant families today vastly prefer, and can afford, suburban homes with good schools and a scale of open space unavailable in their crowded home countries.

Meanwhile, the renaissance of America's cities, and the lasting strength of Europe's, is economic proof that more and more people like living there and that they will continue to grow and thrive. Republicans, and many Democrats, scorn them at their own peril.

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