If you've been dying to know how someone who hates urban planning would allocate blame for the housing bubble, this is your lucky day. Randal O'Toole has been giving this matter some serious thought, and he's come to the conclusion that this disaster, like most others, was caused by urban planners and their bizarre insistence on "growth management."
The first thing you need to understand is that while there are actually several contributing factors -- including a sad failure "to properly assess the risks of subprime mortgages" -- most of them were in effect across the country, and can therefore be ignored. Once you've tuned out distracting issues like predatory lending, criminal negligence, unrelenting greed, deregulatory fanaticism, and the quasi-religious faith that overpriced houses will continue to appreciate in value forever, it's much easier to spot the really salient point, which is that some areas were harder hit than others. Since there's no obvious reason for people with easy access to unfeasibly large loans to prefer coastal California to Fort Stockton, TX, higher prices in California can only be the result of manipulation by some tweedy cabal of urban planners.
The most important factor that distinguishes states like California and Florida from states like Georgia and Texas is the amount of regulation imposed on landowners and developers....And yet, California still has a larger population than Texas and Georgia combined. Since market forces explain everything in life that's worth explaining, the conclusion is obvious: Either people prefer to live in states that impose more regulations on developers, or O'Toole is overlooking other real or perceived factors that make California more attractive than Texas or Georgia, any of which may affect the prices people are willing to pay (or try to pay) for a house.
Granting that it's insane to take out a gigantic ARM on a house in Antelope Valley, the fact that so many people were willing to do it can't really be blamed on smart growth advocates...especially since the multi-decade housing boom in this dreary, bone-dry area is pretty much the antithesis of everything they've ever recommended.
But O'Toole doesn't see it that way. To him, California's sprawl-crazed, foreclosure-blighted, politically conservative Central Valley is apparently the outcome of a vast experiment in New Urbanist central planning, while Atlanta -- where homes are currently sitting on the market for about 20 percent less than in June of 2007 -- is a glibertarian promised land.
And as usual, O'Toole's pejorative definition of "growth management" applies primarily to the policies and concepts he lives to oppose. If you fill a given area with single-family homes on double-wide lots, you're effectively limiting the number (and type) of people who can live there; in other words, you're managing growth. Sprawl tends to be more land-intensive and car-dependent than the higher-density growth typically favored by the planners O'Toole demonizes, which means it's likely to be more exclusive. And of course, that's no accident; it's the outcome of planning, as surely as a greenbelt or subsidized housing is. But like a lot of libertarians, O'Toole tends to depict plans (and public subsidies) that allocate resources "properly" as the impersonal working of natural forces. It's usually when people question the wisdom or fairness of business as usual -- or suggest that a given resource is not, in fact, infinite -- that they become "planners," in O'Toole's sense.