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Author(s): Kroll, Cynthia A; Landis, John D | Abstract: Housing prices in the coastal United States have increased sharply since the mid-1970s. On the one hand, high or increasing housing prices are indicative of a strong and grow ing economy. On the other hand, housing prices that are "too high" (relative to prevailing wage levels and cost struc tures) make cities and region less attractive to businesses look ing to expand, and may even encourage some businesses to leave. This paper describes the resul13 of a recent survey of firms in a selected set of high-priced, moderately-priced, and low-priced metropolitan areas throughout the United States. In undertaking the survey, special attention was focused on the role of housing prices in business location and expansiondecisions. Unlike previous SUI'Ve)'S of the determinanl3 of business location, this one was designed to distinguish between the factots (including housing) that influence a firm's: (1) decision to choose a new site or location; (2) deci sion to leave an old site or location; and (3) ability to recruit newemployees. Highhousingpricesandalackofaffordable housing were found to be a significant deterrent to the ability of firms to recruit qualified labor, but did not, by themselves, either attract businesses to new sites; or cause them to leave existing sites. |
