Matt’s book has prompted a new round of discussion of the nature of housing supply response in generating affordability. There is a general discomfort among many on the left with the idea that sufficient liberalization of housing regulations could lead to enough new supply to make housing affordable for lower income workers. There will always be some need for housing subsidies of one sort or another, they reckon.

Matt’s response, I suspect, would be that if we deem the earnings of lower income workers to be too small to afford the basic amenities to which everyone ought to have access, then the thing to do is to write them checks, and the right level at which to do that is the federal level. I’d say that’s basically right.

If people are bound and determined to have local governments provide wage or housing subsidies, however, then it’s worth noting that the local government will be wanting to raise revenue as effectively as possible in order to make that happen. And a good way to begin is by raising revenue, as much as possible, through increases in the size of the tax base rather than through hikes in tax rates. And a good way to do that, of course, is by allowing lots of residents who’d like to live in the city to live in the city, by permitting the development of sufficient housing capacity to hold them. Even if you doubt that more housing supply will make housing cheap enough for lower income households, you still ought to appreciate that more taxpayers means more revenues and more money for pet social programs.

More residents will also mean more infrastructure needs, of course. A city that begins by addressing congestion through market pricing of scarce road, rail, and parking resources will find that it ends up earning a lot of money in the process. A city that is more willing to use the market to drive housing and infrastructure investment will find that it has more revenue available to allocate to progressive ends.

The rub, of course, is that cities ideologically disposed toward a more market-oriented approach to housing and infrastructure will also be less likely to favor additional progressive spending — and vice-versa. But perhaps, with enough argument and conversation, that can change.