Slums and Poverty

Most discussions of the slum problem emphasize factors which increase the relative supply of poor-quality housing. In some, the increase in the supply of slums results from a decline in the demand for good-quality housing in the older, central parts of cities. Age and obsolesence, the fall in transport costs brought about by the automobile, and encroachment of hostile land uses are reasons often given for the decline in demand. In other discussions of slum formation, the increase in poor-quality housing supply is said to result from external diseconomies, market imperfections, or faulty taxation. By limiting the amount of investment in residential real estate, such factors would result in a poorer average quality of the housing stock than is socially desirable.