The Anti-Abundance Critique on Housing Is Dead Wrong

Summary

The sharpest criticisms of the book Abundance have sometimes come from the antitrust movement. This group, mostly on the left, insists that the biggest problems in America typically come from monopolies and the corruption of big business.In housing, for example, Ezra Klein and I write that a key bottleneck to homebuilding in the last few decades has been legal barriers to construction, including zoning laws and minimum lot sizes. This is a mainstream view supported by economists and scholars who have studied the issue for decades. The antitrust left, however, claims that the more significant factor is that big homebuilders abuse their power by holding back construction to juice their profits. “Big homebuilders withhold housing supply,” the antitrust advocate Matt Stoller has claimed. In their paper “Post-Neoliberal Housing Policy,” the law professors Christopher Serkin and Ganesh Sitaraman criticize market concentration in homebuilding and call for “tools from anti-monopoly policy.”At a high level, I have never found these arguments persuasive. One hallmark of a monopolistic market is rising profits. But researchers have found that developer profits have remained steady. According to the National Association of Home Builders, profit margins as a share of overall home-sale prices actually declined slightly between 2002 and 2024.Still, I wanted to spend more time engaging with the arguments of the antitrust housing folks. One of the most detailed articles in this space is an analysis of the Dallas, Texas, housing market by the lawyer and writer Basel Musharbash. In “Messing With Texas: How Big Homebuilders and Private Equity Made American Cities Unaffordable,” Musharbash writes that housing in the Dallas metro, like many other cities, has become much more expensive in the last few years. He also points out that homebuilders in Dallas, as in many other cities, have gotten bigger in the last few years. Musharbash claims that these things are connected: Large builders ar...