Rognlie then makes an interesting insight; housing prices are going up because of artificial scarcity caused by land-use regulation. Put another way, the concentration of wealth is not an issue of the “1 percent” winning while the rest of us lose—it’s an issue of homeowners benefitting from government restrictions on property rights that prevent a free market in homebuilding, restricting supply and driving up prices.
If Rognlie is correct (and the data suggests he is), then the liberal prescription to address growing wealth inequality misses the mark. Further, it complicates the Left’s attempt to capitalize on Occupy populist outrage. Going after homeowners is a much different electoral and rhetorical proposition (especially if you’re still living in your parent’s basement) than going after the vilified “1 percent.