Why Do the Most Liberal Cities Have the Highest Wealth Inequality?

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Wealth inequality has long been the cause célèbre of the Left, who are always quick to point the finger at the private interests in our society.

They always blame the corporations and the banks for dominating the economy, and they criticize the government for not doing anything to stop them.

While there is certainly an argument to be made there, it ignores one simple fact that most liberals would rather ignore:

liberals

The cities where they predominately live, have some of the worst income inequality rates in the country.

That’s right. The places where they have the most influence over the laws, often have the widest divide between the rich and the poor. Of course, conservative areas are known for having this problem too, but in their case it’s not across the board. For instance, the South is riddled with income inequality, while the Midwest is fairly equal.

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Once you take a look at our major metropolitan areas though (which are dominated by leftist ideas) you’ll find that problems with wealth inequality are pretty much everywhere, and they are largely rooted in the affordability of housing. At first glance it appears to only affect the richest cities, which isn’t surprising since a community with more wealth always has higher prices for everything. According to a recent article published in The Atlantic:

Among the 100 largest U.S. metros, 63 percent of homes are “within reach” for a middle-class family, according to Trulia. But among the 20 richest U.S. metros, just 47 percent of homes are affordable, including a national low of 14 percent in San Francisco. The firm defined “within reach” as a for-sale home with a total monthly payment (including mortgage and taxes) less than 31 percent of the metro’s median household income.

If you line up the country’s 100 richest metros from 1 to 100, household affordability falls as household income rises, even after you consider that middle class families in richer cities have more income.

However, once you factor in the political beliefs of the population, a new trend emerges.

In a recent article, Kolko divided the largest cities into 32 “red” metros where Romney got more votes than Obama in 2012 (e.g. Houston), 40 “light-blue” markets where Obama won by fewer than 20 points (e.g. Austin), and 28 “dark-blue” metros where Obama won by more than 20 points (e.g. L.A., SF, NYC). Although all three housing groups faced similar declines in the recession and similar bounce-backs in the recovery, affordability remains a bigger problem in the bluest cities.

affordable housing

Curious no? Overall, the average cost per square foot for a house in a “deep blue” city is twice as high as it is for a red city. The places that are brimming with people who claim to care so much about affordable housing, wealth inequality, and homelessness, have the most expensive housing.

While there are other factors that play into wealth inequality, housing is the biggest expense that most families pay on a regular basis, so it’s safe to say that these expensive left leaning cities will have the widest wealth gap. Coincidentally, the data seems to bear that out. Boston, San Francisco, New York, and Detroit are consistently ranked among the top 10 most liberal cities in America, and they are also ranked in the top 10 cities with the worst wealth inequality.

So why is this? It’s probably because of all the regulations that leftists impose on the housing market. Zoning laws, height limits, historical preservation efforts, environmental laws, and even rent control, all work to limit the construction of new homes, as well as the availability of existing homes. The only people these laws truly benefit, are the people who were lucky enough to buy their homes before these laws caused a housing crunch.

Ultimately, this situation serves as a perfect example of what happens when a community only acts with the best intentions, and doesn’t think about the possible consequences. Every time you try to place an arbitrary restriction on the free market, it has the potential to hurt everyone. However, it will hurt the poor and the middle class the most since they don’t have very far to fall.

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