A critical component in the rise of market-oriented democracy in the modern era has been the dispersion of property ownership among middle-income households—not just in the United States but also in countries like Holland, Canada, and Australia, where it was closely linked with greater civil and economic freedom. In its early days, this dispersion was largely rural, but after the Second World War, it took on a largely suburban emphasis in the U.S., including within the extended metro regions of traditional cities like New York and Los Angeles. American homeownership soared between 1940 and 1962, from 44 percent to 63 percent.
Today, the aspiration of regular people to own homes—arguably one of the greatest achievements of postwar democracy—is fading. But the dilution of this key aspect of the American dream is not the result of market conditions or changing preferences, but rather the concerted effort of planners and pundits. California offers the most striking example.
Housing affordability was once a hallmark of life in the Golden State, but over the past three decades, and particularly since the imposition of draconian climate policies, stringent land-use regulations have driven up land prices so much that middle-income, single-family housing is now virtually impossible to build, helping make prices of existing homes prohibitive. Median house prices in the state’s coastal metropolitan areas (Los Angeles, San Francisco, San Diego, and San Jose) have risen to nearly 250 percent above the national average, according to the 2017 American Community Survey. Median gross rents, which tend to follow house prices, are more than 75 percent higher than the national average. According to the National Association of Realtors, it takes a household income of $273,000—almost five times the national average—to qualify for the median-priced house in the San Jose metropolitan area. In San Francisco, an income of $208,000 is needed. In San Diego, it’s $138,000, and in Los Angeles, $122,000—both more than double the national average.