Raw Data: Rental Prices in Orange County

Here’s another chart that makes a point I didn’t have room for in this morning’s post on urbanization. It’s an example of why I consider urbanization per se a modest problem compared to everything else on the progressive agenda. It’s a little busy (sorry) but here it is:

The blue line at the top shows median household nationwide. The dotted line shows what household income would look like if it had grown at a steady, modest annual rate of 1 percent.

The red line at the bottom shows median rents in Orange County. I chose Orange County because it’s not a huge outlier like San Francisco or New York, but it’s still a very expensive place to live. It’s semi-urban, and places like OC house way more of the US population than the two or three big cities that are always the focus of urbanization articles. I did my best to be fair here, combining two different series that showed different rent levels and then deflating by an index that doesn’t itself contain rental inflation. I couldn’t find a single good long-term series, so the dotted part of the line is an assumed rental increase of 20 percent from 2000-2006.

Finally, the gray bars show rent as a percent of income: since 2000 it’s gone up from 28 percent to 34 percent.

That’s not actually outrageous, but it’s still an increase. However, the real reason for the increase isn’t rental inflation, it’s wage stagnation. The dotted black line shows rent as a percent of income based on household income increasing 1 percent per year. In that scenario, rent as a percent of income is flat.

So this is what I’m talking about when I say that I view urbanization through a political lens. As a progressive, what’s my real issue?

  • Development barriers are raising rents in big cities.
  • Bad economic policies have caused incomes to stagnate all over the country.

It’s the second one by a mile. Sure, there will still be a few insane places like San Francisco and the Bay Area that would have housing issues anyway. Nothing is perfect and no policy change solves every problem. But in this case, doing something about median wages fixes the rent problem and lots of other other problems besides. If I’m going to put my political energy into something, that’s it.

POSTSCRIPT: This all comes with my usual caveat. As a local issue, urbanization is fine. Fighting zoning and land-use rules that have run amok is a great thing to do. Educating people about transit is God’s work and pressing for more and better transit options is a good idea in practically every city. It’s just not, in my opinion, a major national issue, that’s all.