Matt Yglesias responds to a reviewer who wonders how poor folks housing will differ from rich folks housing in the post-regulatory utopia.
If you imagine a city with fewer regulatory constraints on building, then in dense neighborhoods you would have a blend of newish buildings with the most modern amenities and older buildings that are structurally sound but a bit unfashionable, a bit more likely to be suffering from plumbing problems, and lacking in some of the latest features. What’s more, since society gets wealthier over time the older buildings will probably have smaller units on average. Within tall buildings you’d also expect to see meaningful price differentials based on vertical location. I am a density advocate, but there are obviously some downsides in terms of noise and light that are mitigated on higher floors.
The most likely differentiation is size. If you look at the housing habits of current rich people in areas not constrained by land prices you get things like this
So think about it like this. Suppose NYC living costs go into complete regulatory free fall. Prices on housing and office space collapse, bringing down labor costs, and so on. We might expect prices to hit levels where land is not constraining. Indeed, because productivity is presumably higher in a dense area we might expect them to fall below that level but lets hold off on that.
The builders here in North Carolina say that it costs them about $200 a square foot to put up high-rise construction.
Average home price in Manhattan is $1.4 Million, which implies that the current – mostly wealthy – residents of Manhattan would move into apartments that were on average 7000 sq ft. That is slightly bigger than what you expect to see in upscale new Southern neighborhoods where the stereotypical number is 5000 sq ft.
It also means that some folks will own $20 million apartments which would buy you 100,000 sq ft – about in line with the Gilded Age Newport, RI mansions.
Though, if you are in the market for a 100,000 sq ft apartment one imagines that you intend to actually gild it with gold toilets and such. Those amenities would bring the turnkey cost significantly north of the pure price of living space.