While the housing market for high scale apartments and luxury homes continues to grow, millions of Americans are living in housing they cannot afford. According to a study by the National Low Income Housing Coalition, 75% of the low-income population is spending over half of their income on rent or utilities (5). This percentage is much higher than the 30% percent experts suggest utilizing to ascertain financial stability (9). The primary cause of this problem is the lack of affordable housing for the lower class. Statistics show that the national ratio of affordable units to low-income families in the United States is a slightly more than 3:10 ratio (8). This lack of affordable housing in urban areas is primarily responsible for one culprit, land use restrictions. According to Professor Daniel Shaog, 'land use restrictions in high-income locales have created barriers to entry for less-skilled workers, exacerbating inequality and threatening labor mobility-a key component of a healthy economy' (6). Therefore, we can assume that the increase in land use restrictions has caused increased income inequality in the major urban areas and has created a barrier to increased productivity. .
As income inequality continues to rise, it's important to understand how labor mobility, productivity, and land use restrictions fit together. If we think back to the 1700's - 1800's, In US history American workers were moving to the West at an astounding rate. One of the main advantages of the U.S. economy was the high level of labor mobility in the economy. The high degree of mobility allowed people the choice to work wherever they wanted, and created a high level of production (11). If we look at our present situation, labor mobility has reached historic lows. We need to look to the housing market to see the reason behind historically low mobility rates.
It has always been a known fact that "rich places have always had higher housing prices than poor places," (Shoag) notes, "but after 1980, the slope doubles" (6).