Can We Safely Deflate the Housing Bubble?

"The 70-year period that began with the widespread diffusion of the automobile—during which one could get nearly anywhere in a typical metropolitan area in half an hour or less—is over. Before there was widespread automobile ownership, land prices depended on location, and proximity to the central city or to the local railroad station carried a premium.

"Now, with serious congestion slowing traffic in major cities to a crawl, the land gradient in housing prices is steep once again. Perhaps this steepening of the location gradient could be delayed for a decade if we were willing to shift to denser residential patterns. We could, for example, tear down San Francisco’s row houses and replace them with buildings more like those of New York’s Upper West Side. But we aren’t willing to do that."

Thanks to Michael Dudley