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  1. Cities should not be involved in social engineering experiments. They are using other people’s money (OPM) to make them feel good about themselves. They are also introducing more children into the school systems with less than supporting tax revenues. Who pays?

  2. While the letter may have good intentions, the policy perspective advocated here are largely useless and, probably, do more harm than good.

    If prices are rising in Northbrook, it’s because demand for housing exceeds supply. Compelling one particular developer to build more affordable housing will loser his return on those 15% of the properties deemed “affordable housing.” A certain number of low cost units will enter the market, but the developer will have to sell the other 85% of the units at a higher price in order to counteract the lost revenue on the 15%. In general, the average price is not likely to change. Worse yet, the “affordable” units are going to have less expensive features and build quality. Over time, subsequent owners – looking to capitalize on pricing disparities – will improve the properties to sell them at a higher rate of return… thus increasing prices more rapidly on the “affordable” properties.

    I’m skeptical there is a crisis, but let’s assume its true. The city’s best solution is to use the time-tested rules of supply and demand. A more effective means of lowering prices is to increase supply. The city should enact policies to encourage the construction of new housing: Reduce zoning restrictions, lower permit costs, etc. Developers, lured by high prices in Northbrook will be anxious to build new properties under these rules. Supply will increase and, in turn, prices will fall.

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