In her latest Atlantic column, former reason chief Virginia Postrel delves into the various reasons why Dallas is cheaper to live in than L.A.:
[The] right [to build] costs much less in Dallas. There, adding an extra quarter acre ran about $2,300-raw land really is much cheaper-and a quarter acre minus the cost of construction was about $59,000. The right to build was nearly a quarter million dollars less than in L.A. Hence the huge difference in housing prices. Land is indeed more expensive in superstar cities. But getting permission to build is way, way more expensive. These cities, says Gyourko, "just control the heck out of land use."
The unintended consequence of these land-use policies is that Americans are sorting themselves geographically by income and lifestyle-not across neighborhoods, as they used to, but across regions. People are more likely to live surrounded by others like themselves, creating a more-polarized cultural map. In the superstar cities, where opinion leaders congregate, the perception is growing that the country no longer has a place for middle-class life. Yet the same urban sophisticates who fret that you can't live decently on less than $100,000 a year often argue vociferously that increasing density will degrade their quality of life. They may be right-but, like any other luxury good, that quality commands a high price.
Last year, reason calculated "The Politics of Sky-High Housing Prices."