• How to Make Michigan Grow
• Did the Death of Distance Hurt Detroit and Help New York? | NBER

00:00 – 00:32

Dr. Daniel Kling

Welcome to conversatio. The Belmont Abbey podcast. This podcast aims to form and transform our community so that each of us can reflect God’s image. I’m Doctor Daniel Kling, assistant professor of finance at Belmont Abbey College and I’m your host for today’s episode. And today I’m joined by Doctor Hanna Kling, one of my favorite economists, and my wife, and she’s the assistant professor of economics and data analytics at Belmont Abbey College.

 

00:32 – 00:57

Dr. Daniel Kling

And we’re excited to talk about the dynamics of state population growth based on some research, Hanna recently published with the Mackina Center, a state based think tank in Michigan. But before we dive in, I’ll let Hannah introduce herself. Hannah. 

 

Dr. Hannah Kling

Yeah. So I’m assistant professor of economics and data analytics here at Belmont Abbey College. And we’ve been here together for five years now, which is crazy to think about.

 

00:57 – 01:24

Dr. Hannah Kling

Yeah. I got my PhD in economics from George Mason University in 2017, and my primary areas of research are, regional economics, studying the flow of people and economic goods across space. And, think about the role of place and also think about the interplay of politics and economics, which in economics we call public choice economics. Great.

 

01:24 – 01:43

Dr. Daniel Kling

So you wrote a paper, what research can tell us about population growth and states, and you’re working with an organization in Michigan. And they’re concerned there because the population has been declining. But it’s sort of a broadly applicable topic because we all care about whether, you know, where we live, if it grows or shrinks, how it changes over time.

 

01:44 – 02:06

Dr. Daniel Kling

And, and so there’s some interesting parallels, especially here in North Carolina where we’ve had significant population growth. And so to sort of set up the topic, can you summarize your research, what were the main factors that affect population growth? Yeah. So people care about population growth both because economic well-being comes from a lot of people being together and interacting a lot.

 

02:06 – 02:33

Dr. Hannah Kling

But so population growth can be helpful in making, you know, more job opportunities and, and, you know, having enough demand to have cool restaurants and things like that. But also just if people are coming into your area, that’s sort of an indicator that you have a nice, appealing place. So it’s both helpful, but also kind of an indicator that you’re doing something right.

 

02:34 – 03:01

Dr. Hannah Kling

And when we talk about population growth, there are kind of four main sources of population growth. There are births. So, you know, we’ve got three kids. So we’ve done our part to help North Carolina’s population, there’s deaths, there’s domestic migration. So people are moving here from elsewhere in the United States. So other states and then international migration as well.

 

03:01 – 03:28

Dr. Hannah Kling

So people coming here from other countries. So each of those four sources of population growth are influenced by a number of different factors. 

 

Dr. Daniel Kling

And so I think in most places there’s more births than deaths, although that’s sort of a broad concern of what’s the replacement rate and how many kids are people having. And, then I guess from state to state, the bigger difference is the domestic migration, whether people are moving into your state or moving out of your state.

 

03:28 – 03:51

Dr. Daniel Kling

And so what if that’s the same situation in Michigan, what you found was that migration was the big driver there. 

 

Dr. Hannah Kling

Yeah. So the birth rate, the death rate and international migration don’t vary as much as domestic migration does, although certain states tend to have more older people, so their death rates tend to be higher and birth rates tend to be lower.

 

03:52 – 04:15

Dr. Hannah Kling

But also when you think about policies that are aimed at increasing or having population growth, there is some research and literature, and I reviewed that in my paper on, you know, things that can impact the birth rate or the death rate or, international migration isn’t something that states have as much control over since it’s more federal policy.

 

04:15 – 04:36

Dr. Hannah Kling

So when people talk about increasing population growth in their state from a policy perspective, most of the time they’re thinking about how to make your place more appealing to attract people from other states. 

 

Dr. Daniel Kling

And that’s really familiar to me. So I grew up in Missouri, in a small town, and there wasn’t a lot, you know, there was always a constant thing.

 

04:36 – 04:54

Dr. Daniel Kling

How can we revitalize downtown? How can we make this place, you know, grow again like it did when I was a, you know, when my grandparents were kids or whatever, and the Rust Belt and the northeast, sort of the dust. It’s sort of a familiar story of a declining population. And so it’s not a new thing that states are dealing with.

 

04:54 – 05:13

Dr. Daniel Kling

But so, so what are some policies that people have tried to foster growth, to help get people to move back to this area or not move away from this area from a given area. 

 

Dr. Hannah Kling

So a lot of the things people think of is they try to think of places that are thriving and growing, and they want to mimic that in their particular area.

 

05:13 – 05:32

Dr. Hannah Kling

So, oh, you know, this town that’s so cool, this city that’s so cool. And all the young people want to go there. It has all these places where the shops are on the bottom floor. There’s a bunch of apartments above there. So you know what we need to do? We need to just make our town look like this.

 

05:32 – 05:49

Dr. Hannah Kling

And it’s sort of like, you know, in high school when it’s, oh, how do I get the cool kids to come sit at my table? Like, what are things like at their table? And you try to make it look like that. You try to be cool, but I don’t know what your experience was, but I mean, it was very cool.

 

05:49 – 06:13

Dr. Daniel Kling

And high school. That’s right, that’s right. Don’t ask any of my high school friends that don’t check. 

 

Dr. Hannah Kling

That’s right. I mean, you can be, you know, your mother, I’m sure, told you that you can be a first rate version of yourself or a second rate version of somebody else. So copying what’s successful is really appealing. But that doesn’t tend to work super well about policy areas called placemaking.

 

06:13 – 06:34

Dr. Hannah Kling

There’s a lot of research into that.

 

Dr. Daniel Kling

 So we’re going to lure the cool kids here by looking at if you feel like you have some places in mind with that. 

 

Dr. Hannah Kling

Oh yeah. You know, your Austin’s your Boston’s 

 

Dr. Daniel Kling

I guess Nashville and like places where they like, oh we got to Instagram things. So maybe we really need some cool murals.

 

06:34 – 06:49

Dr. Daniel Kling

That’s right. Because people come here and look at the cool murals. So yes, if we get murals we’ll get people. That’s right. And so that that doesn’t that doesn’t work, you’re saying. 

 

Dr. Hannah Kling

Well, let’s give it a try. Okay. Maybe this is never what’s our takeaway? Okay. Okay. Murals. Yeah I’m going to just make this look cool.

 

06:49 – 07:14

Dr. Daniel Kling

So what happens when people try to do that or why is that not successful? Or do we know. 

 

Dr. Hannah Kling

Right. So one of the things as economists that and as you know, makes people dislike economists is whenever somebody has a good idea and we we’ve got a good reason why it’s not going to work and it’s going to be not worth it, and that it not being worth it, I think, is what the economists always bring to the table is there’s a trade off, there’s a cost to everything.

 

07:15 – 07:42

Dr. Hannah Kling

If we’re investing resources, you know, at the governmental level, on doing a particular thing, we’ve got fewer resources to do something else. Okay. And especially if we’re investing resources in making a particular place more appealing to outside residents, that means that we are taxing or imposing on the original residents in order to make things more attractive for the cool kids, okay?

 

07:42 – 07:58

Dr. Daniel Kling

And they get to choose wherever they want to go. It may not. Why do we? Why would we subsidize them? Yeah, okay. But it kind of reminds me of how cities, like again, where I was growing up, it was always sort of like, oh, we can just get this company to build a factory here. And that’s lured some corporate investment here.

 

07:58 – 08:26

Dr. Daniel Kling

That’s another way they kind of try to bid for growth is, is we’ll give a tax break to this developer or that developer sort of industrial policy at the state level. Does that tend to be successful or how does, what are the dynamics there? Well, as we know from our experience in Wisconsin, whenever there’s a company that says, oh, hey, we’re going to, you know, open a factory, it’s going to employ 5000 local people who wants us to come there?

 

08:26 – 08:52

Dr. Hannah Kling

Everyone’s like, oh, you know, you should come here. Well, how do localities compete for that company to locate there? They compete through providing subsidies, tax incentives and all kinds of things to lure that company. There. And whoever is the highest bidder, you know, spends almost as much as the factory is going to bring in in order to get that company to come there.

 

08:52 – 09:16

Dr. Hannah Kling

And then, you know, sometimes the company is successful, but sometimes it, you know, goes belly up shortly after coming and, you know, reorganizing everything and taking a bunch of subsidies. And sometimes, in fact, it never even opens. 

 

Dr. Daniel Kling

So that was yeah, that’s I mean, right, take the money run. Thanks for going to all that trouble. We’re just, you know, we’re going to see you later.

 

09:16 – 09:37

Dr. Hannah Kling

We should figure out how to do this. 

 

Dr. Daniel Kling

Yeah. It seems like good business to me. And it’s got some subsidies and don’t even show up. That’s right. I guess probably. We’ll see. We’ll talk about it off. Yeah. So. Right. So okay. So those that aren’t, those don’t, haven’t tended to be successful. What about things like, I remember there a while ago, Google had Google Fiber and they’re going to have really fast internet service.

 

09:37 – 09:56

Dr. Daniel Kling

And I mean, if you’re our age, the economic story of our lifetime has kind of been this giant tech boom, that, you know, Apple and Microsoft and Google, all of these companies, Silicon Valley, Washington, kind of up and down the Pacific coast have been very successful. Lots of jobs, lots of growth in those areas.

 

09:56 – 10:16

Dr. Daniel Kling

And so Google had we’re going to bring fast internet and countries, our cities all across the country, states all across the country where we’re, we’re trying to lure Google there, not with necessarily subsidies, but the thing I remember from it was Topeka changed their name to Google Kansas for a week. And they didn’t even go to Topeka, so how about that?

 

10:16 – 10:43

Dr. Daniel Kling

But like, chasing something that’s working in the economy, like getting more tech jobs or tech incubators or startups and that kind of stuff. 

 

Dr. Hannah Kling

Well, the research shows that trying to chase whatever is the fastest growing industry nationally is not as important or successful as doing what you do better than anybody else. And sometimes that’s going to require a big change.

 

10:43 – 11:10

Dr. Hannah Kling

You know, Michigan traditionally auto manufacturing, you know they’ve got to branch out and do something else really well. But , the tech, the tech thing is, you know, always on everyone’s mind is the big growth area. But to use a Pacific Coast analogy, it’s sort of like you’re out there waiting on your surfboard. You see the wave go by.

 

11:10 – 11:47

Dr. Hannah Kling

That’s the big wave of the future. And by the time you see that it is big and that a bunch of other surfers are on the wave, it has passed you by. So, yeah, the research shows that, yeah, chasing highly successful industries as a state. And this is thinking about trying to do that as a state, not as an entrepreneur, but as a state changing something about your infrastructure, your tax code, your regulations in order to try to attract a particular kind of business that just does not tend to be super successful.

 

11:48 – 12:06

Dr. Daniel Kling

So I think another trend we’ve seen is sort of we need to teach all of our kids how to code, right? Education is another policy that might affect this. If we teach all of our kids how to code, we could be it. It could be the next Silicon Valley that you’re saying that’s not necessarily going to work, because the chance to do that was 20 years before you knew you were supposed to do it.

 

12:06 – 12:28

Dr.Hannah Kling

I mean, if people want to teach kids how to code, I’m sure that would be great. But also math, you know, math and reading skills also, super important, right? And this could be value. So no matter what you’re doing. Yeah. So the research shows that having high quality education is a big draw for people to move into a particular state.

 

12:29 – 12:53

Dr.Hannah Kling

But also, on the other hand, high taxes are a deterrent. Okay. So really what we’re looking for is not spending a lot on education per se, but getting a large return on whatever amount we spend on education. So spending wisely, whether we spend a lot or little, is really the goal with education. And that’s a whole different level.

 

12:53 – 13:19

Dr. Hannah Kling

How to do education right is not this simple. 

 

Dr. Daniel Kling

Just do everything right and don’t. That’s for money. Okay. That’s right. Okay. Just like parenting or something. Very simple. Yeah. Just don’t make wrong decisions and never have if you just don’t plan to. So I guess that’s interesting though, because you. So I guess there’s also a link that we, we sort of know from research, that just spending money on education, regardless of the tax impact, may not actually improve the education.

 

13:19 – 13:33

Dr.Daniel Kling

Right. That it’s that it’s difficult to know and sort of hearing you say that it’s sort of like, well, yeah, you want to spend your money. Well, regardless of the effect on population growth, you kind of just want to be doing that well in the first place. And if it was that easy, then you’d be great.

 

13:33 – 13:53

Dr.Daniel Kling

It’s not like, oh, if not for population growth, I’d want to waste my money. And so it’s sort of that public choice economics that is not easy I suppose. So I mean, have there been any strategies that have been successful in fostering sustainable growth, or thinking about sort of new growth versus revitalization?

 

13:53 – 14:12

Dr. Daniel Kling

Is there about, you know, why? Why was Detroit right? Why are these now struggling cities, why were they so big in the first place? Or is there I don’t know, how does that all relate? 

Dr. Hannah Kling

Yeah. So what makes a place successful is a huge area of economic study of urban economics, which is a sub of regional economics.

 

14:12 – 14:34

Dr. Hannah Kling

So part of what I do, and that’s one of our big questions. But the, the kind of notion behind the city thriving is that there’s something called agglomeration economies, where when you get a bunch of people together, they’re more productive than, you know, when they’re far apart from each other 

 

Dr. Daniel Kling

The whole is greater than just the sum of the parts, correct?

 

14:34 – 15:03

Dr. Hannah Kling

Yeah, yeah. So they share knowledge and ideas and things grow. Silicon Valley is a great example of this, and one of the best urban economists, Ed Glaeser has written quite a few papers on this. So my paper that I wrote was a review of all the current literature on the idea of state population growth. And one of his articles is why the death of distance helped New York and hurt Detroit.

 

15:03 – 15:26

Dr. Hannah Kling

So what’s the depth of distance? The depth of distance is that, you know, especially now. But this was written, I think, post pre-COVID. But, you know, you can telecommute. The economy is global, communication is global and extremely cheap. I mean, when we were growing up, long distance calls were expensive, right?

 

15:26 – 15:44

Dr. Hannah Kling

You know, and when we got cell phones, it was like, well, long distance calls are free, like in the evening. Yeah. Right. Yeah. 

 

Dr. Daniel Kling

You really need to tell grandma you love her before 7 p.m.. You know? 

 

Dr. Hannah Kling

Yeah, yeah. So communication has gotten extremely cheap, even though we tend to think of it as having been free forever but

 

15:44 – 16:09

Dr.Hannah Kling

It’s a very recent thing. So the death of distance is that idea that there’s nothing to say that two people on opposite sides of the country can’t collaborate just as easily as people next door to each other. But instead we find that some cities are growing larger, that being in proximity to other people has gotten more important and more economically beneficial than it used to be.

 

16:09 – 16:49

Dr.Hannah Kling

If you’re in certain types of industries related to service innovation and, you know, technology and things like that. Okay, so those types of things helped cities based on certain industries, like New York’s industries, whereas manufacturing Detroit and other cities were hurt by the death of that distance, super cheap to ship stuff all over the world. 

 

Dr.Daniel Kling

So that sort of if you’re doing finance or advertising or politics or media or whatever in New York, there’s a benefit to being out with all of those people, and you can hire people from different companies, and the expertise is there.

 

16:49 – 17:05

Dr.Daniel Kling

But in Detroit, the ability to have a factory here and a factory there, I don’t need to be physically close to your factory over there to manage it if I the way I would if you needed to back from long distance calls were a thing, as opposed to just pick up the phone or an email or whatever.

 

17:05 – 17:28

Dr.Hannah Kling

Right? So the challenge for all the Rust Belt cities is finding something else to do that’s there, what we call in economics their comparative advantage. Right? Right. You don’t have to be absolutely better than somebody else, but you have to be comparatively better. And I guess listeners can, you know, audit our intro econ class to learn more about that.

 

17:28 – 17:48

Dr.Hannah Kling

But yeah, the basic idea is everybody does better if all areas and all people are focusing on the things that they do best. 

 

Dr.Daniel Kling

So grow, grow wheat where it’s good to grow wheat or, or mine where there’s, you know, mountains and minerals or wood. I don’t know much about mining, I suppose, but yeah, presumably there’s places that are better for it than others.

 

17:49 – 18:07

Dr.Hannah Kling

Make furniture in North Carolina for some reason. 

 

Dr.Daniel Kling

Well, that’s interesting that some reason you mention because it’s sort of like I’ve, you’ve told me about this, how a lot of early development was basically around rivers and railroads and like, how far up the river can you get? Because trade meant putting stuff on a boat. And that’s less.

 

18:07 – 18:28

Dr.Daniel Kling

I mean, we still do a lot of shipping, you know, on, on, on ships, I suppose. But it’s, I guess it’s less important to be on a river or at a crossroads of rivers, like than it would have been a hundred years ago. And so if a city’s original growth was from that, then I guess it’s an interesting thing to think about.

 

18:28 – 18:53

Dr.Daniel Kling

Well the reason you’re, you know, Cleveland or I don’t, I don’t know which cities are river based necessarily is Chicago as opposed Saint Louis. Like if that reason is no longer as dominant as it was like you almost have to invent something new. If you want the city to be big and to grow, would you say, yeah. 

 

Dr.Hannah Kling

So there’s this idea in economic history which is another mind, right, about persistence, what makes cities persist?

 

18:53 – 19:20

Dr.Hannah Kling

And part of it is once you get kind of a critical mass of people there for originally reasons of river access and stuff like that. Once you get a bunch of people together, then you have those agglomeration economies kicking in where people interacting and working together become more productive. And you don’t, you know, if the river dried up and went away like you’d still have that critical mass of people interacting with each other.

 

19:20 – 19:50

Dr. Hannah Kling

So it just depends on whether the city can continue to pursue what works for them. But you had asked what policies tend to Work. And the really tough thing with that is there’s no magical thing that’s going to guarantee that your city is young and hip and thriving and innovative. What you can do is use policies to make pretty sure that’s not going to happen.

 

19:50 – 20:33

Dr. Hannah Kling

Right. So you can prevent it from happening but you can’t make it happen. So it’s the only, the best thing that cities can do is, you know, help entrepreneurs be able to open there so reduce regulations that prevent people from starting businesses and just, basically set up, a good environment for things to grow, you know, lower crime, you know, good rule of law and things like that, which most, most states in the US don’t have a huge struggle with that with, you know, corruption and fraud.

 

20:33 – 20:53

Dr.Hannah Kling

But, I mean, we do, but not not zero. The difference between states and how well they use their money and. Right. So, yeah, you want low taxes, low barriers to entry. You know, let people come in and try new businesses and, and make that more possible and you’re going to get more innovation, that way.

 

20:53 – 21:17

Dr.Hannah Kling

But it’s sort of like, you know, it’s like being a gardener. You can make the ground as perfect as you can. You know, you water, you fertilize and all those things. But sometimes the seeds grow and sometimes they don’t. Right, right. Yeah. Yeah. Our son Matthias, just the other day there was a daffodil that was about to bloom.

 

21:17 – 21:32

Dr.Hannah Kling

And he’s like, can I make it bloom? He’s looking to open the bud and it’s you can’t fix it, right. You can’t force it all you can, but you can prevent it from blooming if you rip it open. 

 

Dr.Daniel Kling

Yeah. Okay. And so I guess sometimes we see that. Right. That the cities in the states are sort of blocking development.

 

21:32 – 21:51

Dr.Daniel Kling

But they could at least not stop doing that. Right. But that doesn’t guarantee that now it will. Yeah. Okay. So I guess sort of I want to kind of bring this all a little bit closer to home because here in North Carolina is a different story. And I was looking at the numbers and, and our state’s grown about 50% faster than the US average, about 1% a year.

 

21:51 – 22:10

Dr.Daniel Kling

And there’s and then there’s still we have more births and deaths in North Carolina. And there’s some international migration, although a little less than average. But the big driver is that people are moving here from other states in 2019, you know, the North Carolina population increased by about 110,000 people, and two thirds of that was from domestic migration.

 

22:10 – 22:27

Dr.Daniel Kling

So including us, you know, right when we moved here with our then two year old son and and and so why is the situation in North Carolina so different from Michigan? Is it the weather? I mean, I like not having to shovel snow, but yeah. 

 

Dr.Hannah Kling

So the research actually shows that weather doesn’t matter quite so much.

 

22:27 – 22:56

Dr.Hannah Kling

And also to the extent weather does matter, people seek more temperate areas. So North Carolina’s summers I wouldn’t describe as temperate, but so the weather of a particular place just falls into a broad category of draws or attractors that we call amenities. There are natural amenities such as, you know, mountains and beaches and rivers and good weather.

 

22:56 – 23:29

Dr.Hannah Kling

And then there are, you know, consumption amenities, cultural identity, cultural amenities. So theater and, and symphony and things like that. And then there’s, you know, retail and restaurant amenities, transportation infrastructure can be seen as kind of an amenity. So it’s just like, what are nice things? What goes in the pros column about living someplace other than the job opportunity and the monetary compensation.

 

23:29 – 23:46

Dr.Hannah Kling

So most people move for a job. Right. But, you know, is it worth it to us to move to San Francisco? Like you got to look, you know, cost of living amenities, you’re thinking about all those things, not just the money, but how nice is it to live in a particular place, and Belmont North Carolina’s pretty nice.

 

23:46 – 24:07

Dr.Daniel Kling

It is very, very nice. Yeah, but I guess it’s sort of interesting because there’s a sense that some people would prefer not to have so much population growth. Right? You, you bring up San Francisco and it’s extraordinarily expensive there. And if someone announced oh were hiring a thousand new workers here, everyone would groan and say, oh, there’s going to be more, more competition for our housing and rents just going to go up and housing prices will go up.

 

24:07 – 24:23

Dr.Daniel Kling

And so how can we kind of reconcile that desire for we want our state to be growing. We don’t want to be shrinking at least. But we also, you know, people are conflicted when they have, you know, they’re going to build a new subdivision just down the street. How do we kind of balance those?

 

24:23 – 24:45

Dr.Hannah Kling

Yeah. So there’s always I mean, we’re we’re, you know, people who’ve recently and so we can’t as people who have recently moved here, how do you feel about people who move here. Right, exactly. But that people very quickly put themselves in the other column, they’re like, oh, I’m, I’m here now. So, you know, okay, I’m playing with the bouncy ball.

 

24:45 – 25:05

Dr.Hannah Kling

You can’t have it right. 

 

Dr.Daniel Kling

I got it first. So therefore I have a right to it. I’ve heard that somewhere before. 

 

Dr.Hannah Kling

That’s right. We might hear that when we go home. Yeah yeah yeah. Or children playing. So you know, nicely with each other. Right. But no. So there’s the, the current residents are always like, I just slipped in before housing prices rose.

 

25:05 – 25:34

Dr.Hannah Kling

And, you know, now I want to freeze everything because I like my neighborhood the way it is. I like everything close to me the way it is. Although I do wish, you know, there were more people who wanted an Ethiopian restaurant in downtown Belmont would be lovely. Yes. Yeah. Let’s make it happen. So if there’s more people, you’ve got more demand for the things that you want and more tax base for things that you want your local government to do and supply.

 

25:35 – 25:56

Dr.Hannah Kling

But also, yeah, people are like, I don’t, I don’t want the single family house next door turning into a duplex or, you know, small apartment or giant skyscraper or who knows. Yeah, yeah, yeah. So. 

 

Dr.Daniel Kling

Well, so it’s interesting. So you’re kind of talking about some of the benefits of, of having more people that move in here move near you.

 

25:56 – 26:17

Dr.Daniel Kling

Right. Better, more tax base, more just demand for things you might like. And then we think about the externalities. Right. What are the drawbacks to having more people come and I guess higher prices. It’s kind of a mixed blessing move. You bought a house then I wouldn’t mind higher prices. But then what other externalities are affected by population growth?

 

26:17 – 26:44

Dr.Daniel Kling

Or how does more people coming in kind of affect us negatively? 

 

Dr.Hannah Kling

I mean, the two big ones are the strain on the traffic infrastructure and the strain on other infrastructure of, you know, electricity and water, and the utilities. So, infrastructure and then I guess social services might be a thing like the schools are so crowded, presumably you could build another school, but sometimes that’s easier said than done.

 

26:44 – 27:12

Dr.Daniel Kling

It takes longer than you’d like it to. And and so I guess how do we how do we sort of one of the things that I think we want to talk about on, on this podcast is sort of the Benedictine hallmarks and the idea of, of stewardship and hospitality and community, and some bigger questions about like, what does it mean to be a good place or what should be the goal of local governance in terms of balancing people who are here, people who might want to come here?

 

27:12 – 27:35

Dr.Daniel Kling

How do you sort of put all those together? 

 

Dr.Hannah Kling

Yeah. So sometimes those can seem a little bit in conflict sometimes, you know, hospitality you should, you know, welcome everyone in and and you give them as much surplus and extra as you can. But then, oh we want to keep our community kind of the same maybe.

 

27:35 – 28:05

Dr.Hannah Kling

But we want to be good stewards of the space that we have, you know, we don’t want to cut down all the trees, and things like that. But I think, I think the hospitality and the community are really, you’ve got to think about what, like you were saying, what makes the people that are currently there more important than the people who might come into a particular area and change is inevitable.

 

28:05 – 28:29

Dr.Hannah Kling

You know, if we don’t build any additional housing, the single family houses in our neighborhood are going to become too expensive for families and young kids to live in. And it’s going to be, you know, groups of, you know, single people who work in Charlotte, who, you know, live in the house in the suburbs and have their Maseratis in the driveway.

 

28:29 – 28:52

Dr.Hannah Kling

And, yeah, where are all the families with the kids? You’re going to price the people that you’re used to having. They’re out of the market and, yeah, there’s inevitably going to be change. And, but yeah, there can be kind of a sense that these hallmarks can be a little bit, a little bit hard to think about.

 

28:52 – 29:06

Dr.Daniel Kling

Yeah. Yeah. I mean, it’s sort of, when you were talking about that, I was reminded of the, The Lorax, the Doctor Seuss book, where they, you know, cut down all the trees in the sort of dystopian Metropolis thing, and it sort of sometimes feels like, oh, that’s what development is going to be. Everywhere is going to be skyscrapers and highways.

 

29:07 – 29:26

Dr.Daniel Kling

But there’s a sort of a balance, and that doesn’t seem like it’s stewardship of the  land or the environment. But then there’s sort of an inevitably to it that if you can’t build some apartments and skyscrapers somewhere, then they’ll  just keep sprawling out and. Yeah. So now four people have to share a house instead of just four people living in four apartments.

 

29:26 – 29:46

Dr.Daniel Kling

And so it’s an interesting I mean, it’s sort of an interesting balance. I don’t know, it’s it’s I guess there’s not an answer. I guess that’s kind of what my, sort of would be my, my next question there. Sort of how should you address that? I mean, there’s the sort of the democracy angle of, of like, well, the people there should have a say in it, but also the fairness to, you know, I’m first isn’t, isn’t the end.

 

29:46 – 30:08

Dr.Daniel Kling

Do you have any thoughts on sort of how you would sort of what, how you, how you address that or, or how I don’t know how you can weigh those costs and benefits. 

 

Dr.Hannah Kling

Right. So, I mean, as economists, we were sometimes taught to say that we don’t make should statements. We only say what is and leave other people to make judgment calls.

 

30:08 – 30:39

Dr.Hannah Kling

But but you and I are also very good at making judgments about things. We always have opinions about everything. So, we can do that. I think if left to their own devices, people will buy and sell in a way that will make sense. Like if I have a neighbor who just isn’t using their house and somebody that house would be really valuable to them, they would offer money to that person in that house and that transaction would take place.

 

30:39 – 31:10

Dr.Hannah Kling

So when local governments are restricting, oh, this person who has a two acre farm, former farm, they want to sell to a development, but the people around them are like, oh no, no, no, no, I only want one dwelling. Not a multi-family dwelling on this property that’s using the force of local government to prevent a transaction that would be mutually beneficial from taking place.

 

31:10 – 31:27

Dr.Hannah Kling

And of course, there are spillover effects on the people around, which is an economic challenge we call externalities. But this is, you know, that’s another thing to consider.

 

Dr.Daniel Kling

Sort of letting my opinions affect your property and what you can do versus right, putting your money where your mouth is if you care so strongly about it.

 

31:27 – 31:49

Dr.Hannah Kling

Right. But we also have this sense that democracy, especially at the local level, makes things happen. The way that the local people want but democracy is just 51%. I mean, in our neighborhood, we currently have a big hullabaloo about whether there should be a fine for not bringing your garbage can in the same day that there’s garbage pick up. 

 

31:49 – 32:18

Dr.Hannah Kling

And, you know, some people are team that’s ridiculous and some people are team oh, we wouldn’t want people to leave their garbage can out an extra day, you know? And so it’s not that everyone is of the same mind in a particular community when they get their local government to restrict building and things like that. And the big thing for economists is when you prevent building from taking place that people would want to have happen, how do we know they’d want to have it happen?

 

32:18 – 32:55

Dr.Hannah Kling

People are willing to pay for that. When you restrict that, you’re increasing the cost of housing and you’re restricting the supply available and you know, preventing people from pursuing their own goals in the best way that they can. If we restrict people from entering into North Carolina, which is our biggest source of population growth. Right. We’re going to be cutting out the innovation, the economic benefit, as well as the, you know, amenities, benefits of being around other people.

 

32:56 – 33:16

Dr.Hannah Kling

You know, as much as we may complain about being around other people in general, human beings, right now tend to want to be around other people, both for economic reasons and for, you know, restaurants and social things and, and all of that to enrich our lives. 

 

Dr.Daniel Kling

That’s right. Well thank you. This has been very informative and enlightening.

 

33:17 – 33:37

Dr.Daniel Kling

And it’s fun to talk to you about some of these things. And, as I conclude, I wanted to say thank you to our audience for joining us and and thank you to Hannah for taking the time to do this episode. And it’s for this episode and for this wonderful conversation. If you enjoyed this episode, please subscribe and tell your friends that conversatio is available on Spotify, Apple, and Google Podcasts.

 

33:37 – 33:43

Dr.Daniel Kling

And until next time, God bless.