Not the exurbs vs the urban core, the inner suburbs vs the outer suburbs - e.g., 80 percent of Arlington being single-family houses while huge developments of townhouses mostly go up much further out.
The population density of Reston and Leesburg is less than half of that of Arlington.
I don't know if that plays out across the board or not. My gutt feeling is that core cities and core city neighborhoods are denser in the US because they're on smaller lots _AND_ they just don't have open space. Maybe. That's speculation on my part.
I was thinking about this a lil while ago. You find all sorts of multi unit housing in the burbs. Like this one below. You see the new 200-300 units going up on the south side of CoRd 42. And in the distance you see a couple buildings, maybe 500 units or more.
What else do you see? Everything's more spread out. They haven't filled in the wetlands to squeeze in more thanks. And there's just more open space, even when accounting for land not yet developed.
It would be a lot easier to build at a density of 10,000 / sq mile with greenfield development than in Minneapolis. But it's not happening in Prior Lake. And I'm not so sure it's going happen anywhere anytime soon.
In China, it is quite common for cities to be surrounded by ghost high rise while the center remains fairly intact. To my mind, the silhouette of American cities looks somewhat like a fried egg, with a higher skyline where the yolk is, whereas Chinese cities have the skyline of a collapsed soufflé.
It's about Neoliberal Governments abandoning building (any) affordable housing since the 80s (Thanks Ronald Regan & the myth of Trickle Down Economics)
It's about allowing privatization of public land
Its about unrestricted hoarding of housing as an "investment" that eats up every bit of affordable "supply"
Its about "seeing" housing not a housing but AS an investment
Its about a banking & finance system that gives more "leverage" to "housing as an asset" holders
It's about the exponential feed back loop of wealth aggregation that leaves regular folk at the bottom of the bidding block...
It's all these thing, but definitely not zoning... this has been shown repeatedly as SFH zoning is removed there is near zero % uptick in building.
Building rates positively coorelate only profitability...
As long as you have a speculative profit motive in housing you won't have affordability.
I lived in Vancouver in the early 80s visited most recently in July 2023. It's the one Canadian city that reminds me of American cities in that there is definitely a right (West End) and wrong (East End) side of the tracks (Burrard Street). Housing has always been expensive in Vancouver and Toronto, but the housing situation in Vancouver seems to be particularly difficult. Even if you have money, finding rental accommodation in the centre is nearly impossible. It's an issue that came up in every conversation I had with friends, relatives, Uber drivers, and just about everyone I met.
The only rational and equitable housing models are based on REducing or REmoving land speculation. Models such as perpetual land trusts, land leases (investors & banks hate those) and housing coops where the "improvements" such as buildings and infrastructure on the site,, are the true measures of marginal value increases - offset against the cost of the improvements and the future depreciation baked into the value calculus. Whereas, with "private" land ownership the land speculators become parasitical creatures, holding private lands and "feeding off" the productive improvements of the neighbour's investments to increase their "unearned" value, until such time as the "host" contributes sufficient value to the surrounding that the land speculators can extract that extra value from the neighbors - creating a tragic feedback loop that raises local prices for land, and thus housing, while making the land speculators rich and the locals pay more to the speculators.
Removing the incentive for mega speculation leads to a more organic model of growth, gentrification, and less concentrated extraction of unearned profits.
The key is to have a structured legal public trust (not governments, who can be hijacked by special interests) which reinvests the land rent back into the expansion of this more stable "housing as housing" model, rather than seeing land as an asset class from which unearned income can be extracted.
Also see New Zealand where, as I understand it, we have among the most expensive, if not the most expensive, rents and house prices relative to income in the world. It suits a generation that bought houses when they were affordable (say, 30 years ago). Tax regulations (no capital gains or inheritance tax) and the ability to borrow from the bank to leverage investments in property encouraged New Zealanders who were in a position to do so to put all their eggs in the property basket. That generation (my generation) is in power and is more likely to vote than younger voters and non-property owners. It's a famine if you can't afford bread, but it's a feast if you own a bakery. Those with wealth and power (and bread) have no incentive to change a system that works very much to their advantage.
This is a provocative and interesting framing. My only twist would be to specify that it’s the sort of famine that occurs in a war, when food supplies are cut off by human choices; rather than the sort of famine that arises from drought or other natural causes.
Land use policy is indeed a big part of the cause. Before the early 20th century, urban land was largely unregulated. People built small houses, large tenements, cheap hotels -- and everything in between -- which meant that there were a lot of ugly, crowded neighborhoods, but very few people lived on the street or had to leave a city entirely due to its “cost of living”. After WWII, suburban growth took the pressure off cities for two generations. But now we are seeing the consequences of a century of urban distortion by zoning. While planning reform was needed in the Industrial era, this end point is an absurdity of the opposite extreme.
Also interesting: nobody seems to question how (where?) the influx of millions of economic migrants will be housed, in an already bursting housing market that is too regulated to respond to population growth.
I think this is an underappreciated part of the problem. We have put ourselves into a Malthusian context. Escaping the Malthusian limit was a boon to human ethics because the option of shared growth became widely available. Under a resource limit, every birth necessitates a death, and this is devastating to ethical norms. We take for granted that our norms allow for good things. For progress. Our received ethics demand progress. Capping our housing stock has pushed us back into this barbarian state, and you can see the effects everywhere - anti-immigrant and anti-growth positions that essentially treat fundamentally good things as bad things. It is so twisted, to the ear of our modern ethics, that, for instance, city leaders will "blame" corporations for having created well-paying jobs in their region.
Famine is close to being a complete framework, but it has problems insofar as famines are temporary, sudden shocks, when this is a permanent and institutional problem in nature. Famines are crises too.
You might be interested in Janos Kornai's framework of the 'shortage economy' as applied to the former Eastern Bloc as an alternative that captures this chronic nature of our housing problem and its political origins: https://www.centreforcities.org/publication/planning-for-the-future/
When I first started reading this piece I thought wow, the use of "famine" is bit hyperbolic. But by the time I got to the end I kind of agree. Where the metaphor does break down is in your closer, that it is a mess of our own making. Given the opposing forces that govern supply (the need for housing scarcity to keep prices high since it's such an integral part of our economy and that more people need affordable housing), I really wonder if it will every end? I think sadly that the stasis between the two forces is so strong, it will only end organically if demand (ie population) decreases and that outcome has a whole set of problems on its own. So, yeah, long term famine.
I don't think that breaks the analogy - famines, at least in modern times, are generally matters of bad policy, not absolute shortages but more matters of distribution, or shortages induced by policy. I think the mainstreaming of housing as a political issue is a sign that we might be able to greatly fix things. I hope.
You are more optimistic than I... There will be - and there have been - pockets of change but I don't think it's going to make an appreciable difference at a macro scale. Let's hope I'm wrong.
In other words, density increases as you leave the urban core.
It was a very strange feeling I had when someone brought up to me that Cobb County, GA has a higher population density (slightly) than the city of atlanta
Yes, but you are falling into the same category of catastrophizing. Zoning limits are a HUGE issue, with property owners protecting their perceived higher property values by guarding one-acre zoning, protesting multi-family housing, etc. Massachusetts, California, and other states are having to create laws that supercede local zoning restrictions due to the need for more housing. At the same time, housing is more and more investment vehicles and less constructed by people who need to live in the housing they are building. So what is built is increasingly "luxury" condos or homes with high price tags. And developers are often not helping with the loads they will place on infrastructure even though there are ways to build more energy- and water-efficient buildings. At the same time, the housing demand is driven by 3 trends (among others): Huge population increase in the U.S. (no, it is not all immigrants), the trend predicted in the 1990s that half the world will live in cities, another 1990s-forecasted trend that half the U.S. will live on the coasts, and, again, the commodification of shelter. Let's look to more strategic higher density building areas, lower-impact building, and owner-occupied building (so fewer of the empty houses owned by offshore investors as we see in California). It will have to be strategic and precise. Lifting zoning alone can create more problems.
I agree with a lot of this, but not that homeowner resistance to land use and building code reforms is mainly based on protecting their property values.
It is
1. Externalities like access to unpriced street parking
2. Distaste for people perceived to reside in newly developed properties.
3. Status quo bias
4. Not seeing or not valuing the benefits to the new residents and to city coffers from the taxes they will pay and generate.
Good points but pay attention next time a multi-family housing development is resisted in your town/city or elsewhere. Ultimately, you will hear the property value points.
I wouldn't say it is progressive or conservative. I was part of a housing justice group supporting a proposed law that would lift single-family zoning in my Silicon Valley city in California.
In America, you can see this happening because older neighborhoods closer to the city, built decades ago in a different time, frequently oppose the continuation of natural, organic urban growth
"
Heard a story about a buddha statue in Oakland CA the other day ( old 99% podcast ). It's just 1 1/2 from the heart of downtown Oakland. A lot of old SFHs mixed with quads and 12-plexes. Is it really the zoning in Oakland that's prevented these changes? Or has the the costs of building - which go far beyond zoning - made it difficult to build these smaller buildings and make money?
There's no housing shortage in the United States or Britain or anywhere else in the developed world, so that's where the famine analogy breaks down.
Unaffordable housing and housing inequality are entirely political and due to deliberate restrictions on the supply of Federal funding for high risk consumers. Approximately 60% of Americans live paycheck to paycheck and are therefore high risk consumers.
The belief that there's a housing shortage is simply false. In the United States in 1970, there were approximately 60 Million Households and approximately 70 Million Housing Units. In 2022 there will be approximately 127 Million Households and approximately 143 Million Housing Units. The normalized Households to Housing Ratio has fluctuated around the middle of the range. This suggests that the availability of housing units relative to households has been quite stable over time.
The normalized Rent to Household Income Ratio, on the other hand, has shown a clear upward trend, suggesting that rent has become a steadily increasing proportion of household income over time. This indicates a trend towards decreasing housing affordability.
Zoning has nothing to with the real problem which is Neoliberalism and the false assumption that the private market can solve allocation problems without direct competition from the public sector.
Since 1980, when Progressives jumped on the private market bandwagon, necessary goods and services such as shelter, healthcare, childcare and education have been privatized and the risk pool reduced to include only those that win the birth lottery and are able to establish a credit rating above 700 early in their working life. The result is rapid inflation in these sectors. The solution is to break up the private banking, real estate, healthcare, childcare and education cartels that dominate these sectors. The only lasting way to do that is for the Federal government to underwrite high risk consumers of necessary goods and services by direct funding of of such necessary goods and services in every community.
As the primary currency issuer and treasurer of all future output of the nation, the federal government could achieve affordable housing for all Americans in a matter of a few years. (Same with health care, childcare, and education). Sweden did this in the 1960s, ’70s, and ’80s. It’s very straightforward, but Conservatives and Libertarians have internalized an ideology that defines anything outside their narrow definition of markets as “Socialism.” They ignore the historical performance of the Swedish stock market, the fact that rates of innovation are higher in Sweden than in the U.S. and that thriving Swedish capitalism is a historical fact.
Instead of allowing incomplete markets and real estate speculation to destroy communities, local governments should hold referendums on population limits and growth, seek Federal funding for housing cooperatives, buy private market properties, set aside a certain percentage of the housing stock for local residents, and lease that residential and commercial housing to local residents with proven seniority at an affordable percentage of the local median household income.
The belief that we will be able to build our way to housing affordability is disconnected from reality, and there is no private market solution to high housing costs. There is no private market solution to equitable housing allocation because housing is a financial asset. The private market will never provide enough supply to increase vacancy rates to the degree required to make housing affordable for all members of society
It's tragic that good people have become so indoctrinated by Libertarian propaganda that they confuse potatoes with financial assets such as housing. Every famine in history was caused by government failures and regulations such as the Corn Laws in Britain. The lack of access to housing is not caused by government rules such as zoning regulations. It's caused by a woefully incomplete private market that will protect rental yields at all cost. Government is the answer, not the problem.
No they are not. Your "point of view" is based on an ultra simplistic understanding of math and finance derived from Libertarian ideology. Housing units in a modern economy are not potatoes. They are financial assets.
Supply and demand have not stopped working in housing markets; the confusion is about which demand is instrumental. Investment demand is instrumental in modern housing markets, not shelter demand. The confusion is compounded by failing to account for the massive global demand for rental yields relative to the potential supply of private-sector housing units. The demand for financial assets dwarfs any potential supply the private sector will ever produce. Investment demand (not composed of corporate demand alone, but all private demand for financial assets such as housing) at epsilon above the prevailing rental yield is effectively infinite. “Epsilon” in the context of housing is the always limited quantity that is available above the prevailing market rental yield.
The belief that we will be able to build our way to housing affordability is disconnected from reality, and there is no private market solution to high housing costs. There is no private market solution to equitable housing allocation because housing is a financial asset. The private market will never provide enough supply to increase vacancy rates to the degree required to make housing affordable for all members of society.
I recommend not trying to speculate about the origin of my point of view. It's sufficient to just disagree.
You have very strong beliefs about what would (not) happen with less restrictive land use regulations and building codes. Do you have any objection to less regulation to soo how far that gets us?
I understand financial theory and math, and that housing is a financial asset, not a commodity. These are not "beliefs", "opinions" or "points of view" anymore than gravity is a belief. So unless you have discovered a previously unknown mechanism by which the unregulated private market will supply financial assets at a rate that is sufficient to drive down asset yields towards zero, we are not simply disagreeing about points of view. Rather we are disagreeing about how markets and the financial system works on a fundamental level.
And if you expect me to treat you with respect, do not take my words out of context.
"Unaffordable housing and housing inequality are entirely political and due to deliberate restrictions on the supply of Federal funding for high risk consumers."
My "misquotation" had the intent of highlighting a difference in point of view. I agreed with almost all the word s your sentence, except for the end. Obviously my intend was not well realized in your case. I regret the misunderstanding.
The belief that there's a housing shortage is simply false. In the United States in 1970, there were approximately 60 Million Households and approximately 70 Million Housing Units. In 2022 there will be approximately 127 Million Households and approximately 143 Million Housing Units. The normalized Households to Housing Ratio has fluctuated around the middle of the range. This suggests that the availability of housing units relative to households has been quite stable over time.
I really like the framing of it as a famine.
Question - Of the 100 largest US metros, where do we see more density on the outside than inside? THat feels like at best a speculative claim.
Not the exurbs vs the urban core, the inner suburbs vs the outer suburbs - e.g., 80 percent of Arlington being single-family houses while huge developments of townhouses mostly go up much further out.
The population density of Reston and Leesburg is less than half of that of Arlington.
I don't know if that plays out across the board or not. My gutt feeling is that core cities and core city neighborhoods are denser in the US because they're on smaller lots _AND_ they just don't have open space. Maybe. That's speculation on my part.
I was thinking about this a lil while ago. You find all sorts of multi unit housing in the burbs. Like this one below. You see the new 200-300 units going up on the south side of CoRd 42. And in the distance you see a couple buildings, maybe 500 units or more.
What else do you see? Everything's more spread out. They haven't filled in the wetlands to squeeze in more thanks. And there's just more open space, even when accounting for land not yet developed.
It would be a lot easier to build at a density of 10,000 / sq mile with greenfield development than in Minneapolis. But it's not happening in Prior Lake. And I'm not so sure it's going happen anywhere anytime soon.
https://www.mapillary.com/app/?pKey=332197553124824
In China, it is quite common for cities to be surrounded by ghost high rise while the center remains fairly intact. To my mind, the silhouette of American cities looks somewhat like a fried egg, with a higher skyline where the yolk is, whereas Chinese cities have the skyline of a collapsed soufflé.
It's not a "crisis" if it is systemic.
It's not about zoning...
It's not about supply...
It's about affordability...
It's about Neoliberal Governments abandoning building (any) affordable housing since the 80s (Thanks Ronald Regan & the myth of Trickle Down Economics)
It's about allowing privatization of public land
Its about unrestricted hoarding of housing as an "investment" that eats up every bit of affordable "supply"
Its about "seeing" housing not a housing but AS an investment
Its about a banking & finance system that gives more "leverage" to "housing as an asset" holders
It's about the exponential feed back loop of wealth aggregation that leaves regular folk at the bottom of the bidding block...
It's all these thing, but definitely not zoning... this has been shown repeatedly as SFH zoning is removed there is near zero % uptick in building.
Building rates positively coorelate only profitability...
As long as you have a speculative profit motive in housing you won't have affordability.
See Vienna & Singapore
I lived in Vancouver in the early 80s visited most recently in July 2023. It's the one Canadian city that reminds me of American cities in that there is definitely a right (West End) and wrong (East End) side of the tracks (Burrard Street). Housing has always been expensive in Vancouver and Toronto, but the housing situation in Vancouver seems to be particularly difficult. Even if you have money, finding rental accommodation in the centre is nearly impossible. It's an issue that came up in every conversation I had with friends, relatives, Uber drivers, and just about everyone I met.
The only rational and equitable housing models are based on REducing or REmoving land speculation. Models such as perpetual land trusts, land leases (investors & banks hate those) and housing coops where the "improvements" such as buildings and infrastructure on the site,, are the true measures of marginal value increases - offset against the cost of the improvements and the future depreciation baked into the value calculus. Whereas, with "private" land ownership the land speculators become parasitical creatures, holding private lands and "feeding off" the productive improvements of the neighbour's investments to increase their "unearned" value, until such time as the "host" contributes sufficient value to the surrounding that the land speculators can extract that extra value from the neighbors - creating a tragic feedback loop that raises local prices for land, and thus housing, while making the land speculators rich and the locals pay more to the speculators.
Removing the incentive for mega speculation leads to a more organic model of growth, gentrification, and less concentrated extraction of unearned profits.
The key is to have a structured legal public trust (not governments, who can be hijacked by special interests) which reinvests the land rent back into the expansion of this more stable "housing as housing" model, rather than seeing land as an asset class from which unearned income can be extracted.
“Housing as housing”. What a radical idea. Next thing, you’ll be advocating that freedom from hunger would be a good idea.
Also see New Zealand where, as I understand it, we have among the most expensive, if not the most expensive, rents and house prices relative to income in the world. It suits a generation that bought houses when they were affordable (say, 30 years ago). Tax regulations (no capital gains or inheritance tax) and the ability to borrow from the bank to leverage investments in property encouraged New Zealanders who were in a position to do so to put all their eggs in the property basket. That generation (my generation) is in power and is more likely to vote than younger voters and non-property owners. It's a famine if you can't afford bread, but it's a feast if you own a bakery. Those with wealth and power (and bread) have no incentive to change a system that works very much to their advantage.
It's a crisis regardless of what created it.
This is a provocative and interesting framing. My only twist would be to specify that it’s the sort of famine that occurs in a war, when food supplies are cut off by human choices; rather than the sort of famine that arises from drought or other natural causes.
Land use policy is indeed a big part of the cause. Before the early 20th century, urban land was largely unregulated. People built small houses, large tenements, cheap hotels -- and everything in between -- which meant that there were a lot of ugly, crowded neighborhoods, but very few people lived on the street or had to leave a city entirely due to its “cost of living”. After WWII, suburban growth took the pressure off cities for two generations. But now we are seeing the consequences of a century of urban distortion by zoning. While planning reform was needed in the Industrial era, this end point is an absurdity of the opposite extreme.
Also interesting: nobody seems to question how (where?) the influx of millions of economic migrants will be housed, in an already bursting housing market that is too regulated to respond to population growth.
Great post.
I think this is an underappreciated part of the problem. We have put ourselves into a Malthusian context. Escaping the Malthusian limit was a boon to human ethics because the option of shared growth became widely available. Under a resource limit, every birth necessitates a death, and this is devastating to ethical norms. We take for granted that our norms allow for good things. For progress. Our received ethics demand progress. Capping our housing stock has pushed us back into this barbarian state, and you can see the effects everywhere - anti-immigrant and anti-growth positions that essentially treat fundamentally good things as bad things. It is so twisted, to the ear of our modern ethics, that, for instance, city leaders will "blame" corporations for having created well-paying jobs in their region.
Famine is close to being a complete framework, but it has problems insofar as famines are temporary, sudden shocks, when this is a permanent and institutional problem in nature. Famines are crises too.
You might be interested in Janos Kornai's framework of the 'shortage economy' as applied to the former Eastern Bloc as an alternative that captures this chronic nature of our housing problem and its political origins: https://www.centreforcities.org/publication/planning-for-the-future/
When I first started reading this piece I thought wow, the use of "famine" is bit hyperbolic. But by the time I got to the end I kind of agree. Where the metaphor does break down is in your closer, that it is a mess of our own making. Given the opposing forces that govern supply (the need for housing scarcity to keep prices high since it's such an integral part of our economy and that more people need affordable housing), I really wonder if it will every end? I think sadly that the stasis between the two forces is so strong, it will only end organically if demand (ie population) decreases and that outcome has a whole set of problems on its own. So, yeah, long term famine.
I don't think that breaks the analogy - famines, at least in modern times, are generally matters of bad policy, not absolute shortages but more matters of distribution, or shortages induced by policy. I think the mainstreaming of housing as a political issue is a sign that we might be able to greatly fix things. I hope.
You are more optimistic than I... There will be - and there have been - pockets of change but I don't think it's going to make an appreciable difference at a macro scale. Let's hope I'm wrong.
In other words, density increases as you leave the urban core.
It was a very strange feeling I had when someone brought up to me that Cobb County, GA has a higher population density (slightly) than the city of atlanta
The population density of the city of Atlanta is 50% higher than Cobb County.
My bad
It was Cobb County (2194 pop density) has more than Fulton County (1940 pop density)
May I add building codes to the list of causes?
Matt Yglesias has a nice piece on how the two-fire escape rule makes it difficult to build a family friendly, larger apartments.
Yes, but you are falling into the same category of catastrophizing. Zoning limits are a HUGE issue, with property owners protecting their perceived higher property values by guarding one-acre zoning, protesting multi-family housing, etc. Massachusetts, California, and other states are having to create laws that supercede local zoning restrictions due to the need for more housing. At the same time, housing is more and more investment vehicles and less constructed by people who need to live in the housing they are building. So what is built is increasingly "luxury" condos or homes with high price tags. And developers are often not helping with the loads they will place on infrastructure even though there are ways to build more energy- and water-efficient buildings. At the same time, the housing demand is driven by 3 trends (among others): Huge population increase in the U.S. (no, it is not all immigrants), the trend predicted in the 1990s that half the world will live in cities, another 1990s-forecasted trend that half the U.S. will live on the coasts, and, again, the commodification of shelter. Let's look to more strategic higher density building areas, lower-impact building, and owner-occupied building (so fewer of the empty houses owned by offshore investors as we see in California). It will have to be strategic and precise. Lifting zoning alone can create more problems.
Housing demand has also been driven by rising usage- the average living space per person has doubled since the 1960s.
Interesting
I agree with a lot of this, but not that homeowner resistance to land use and building code reforms is mainly based on protecting their property values.
It is
1. Externalities like access to unpriced street parking
2. Distaste for people perceived to reside in newly developed properties.
3. Status quo bias
4. Not seeing or not valuing the benefits to the new residents and to city coffers from the taxes they will pay and generate.
Good points but pay attention next time a multi-family housing development is resisted in your town/city or elsewhere. Ultimately, you will hear the property value points.
I agree that could be a hidden motive that Progressives are careful not to state.
I wouldn't say it is progressive or conservative. I was part of a housing justice group supporting a proposed law that would lift single-family zoning in my Silicon Valley city in California.
I meant that Progressives might be reluctant to VOICE "tanks my property value" as a reason for opposing zoning or building code reform.
"
In America, you can see this happening because older neighborhoods closer to the city, built decades ago in a different time, frequently oppose the continuation of natural, organic urban growth
"
Heard a story about a buddha statue in Oakland CA the other day ( old 99% podcast ). It's just 1 1/2 from the heart of downtown Oakland. A lot of old SFHs mixed with quads and 12-plexes. Is it really the zoning in Oakland that's prevented these changes? Or has the the costs of building - which go far beyond zoning - made it difficult to build these smaller buildings and make money?
https://maps.app.goo.gl/nRZqanpQpNpQgLPv6
There's no housing shortage in the United States or Britain or anywhere else in the developed world, so that's where the famine analogy breaks down.
Unaffordable housing and housing inequality are entirely political and due to deliberate restrictions on the supply of Federal funding for high risk consumers. Approximately 60% of Americans live paycheck to paycheck and are therefore high risk consumers.
The belief that there's a housing shortage is simply false. In the United States in 1970, there were approximately 60 Million Households and approximately 70 Million Housing Units. In 2022 there will be approximately 127 Million Households and approximately 143 Million Housing Units. The normalized Households to Housing Ratio has fluctuated around the middle of the range. This suggests that the availability of housing units relative to households has been quite stable over time.
The normalized Rent to Household Income Ratio, on the other hand, has shown a clear upward trend, suggesting that rent has become a steadily increasing proportion of household income over time. This indicates a trend towards decreasing housing affordability.
Zoning has nothing to with the real problem which is Neoliberalism and the false assumption that the private market can solve allocation problems without direct competition from the public sector.
Since 1980, when Progressives jumped on the private market bandwagon, necessary goods and services such as shelter, healthcare, childcare and education have been privatized and the risk pool reduced to include only those that win the birth lottery and are able to establish a credit rating above 700 early in their working life. The result is rapid inflation in these sectors. The solution is to break up the private banking, real estate, healthcare, childcare and education cartels that dominate these sectors. The only lasting way to do that is for the Federal government to underwrite high risk consumers of necessary goods and services by direct funding of of such necessary goods and services in every community.
As the primary currency issuer and treasurer of all future output of the nation, the federal government could achieve affordable housing for all Americans in a matter of a few years. (Same with health care, childcare, and education). Sweden did this in the 1960s, ’70s, and ’80s. It’s very straightforward, but Conservatives and Libertarians have internalized an ideology that defines anything outside their narrow definition of markets as “Socialism.” They ignore the historical performance of the Swedish stock market, the fact that rates of innovation are higher in Sweden than in the U.S. and that thriving Swedish capitalism is a historical fact.
Instead of allowing incomplete markets and real estate speculation to destroy communities, local governments should hold referendums on population limits and growth, seek Federal funding for housing cooperatives, buy private market properties, set aside a certain percentage of the housing stock for local residents, and lease that residential and commercial housing to local residents with proven seniority at an affordable percentage of the local median household income.
The belief that we will be able to build our way to housing affordability is disconnected from reality, and there is no private market solution to high housing costs. There is no private market solution to equitable housing allocation because housing is a financial asset. The private market will never provide enough supply to increase vacancy rates to the degree required to make housing affordable for all members of society
"Unaffordable housing and housing inequality are entirely political and due to deliberate restrictions on the supply."
Yes. And what restrict supply? Land use restrictions and inflexible building codes.
It's tragic that good people have become so indoctrinated by Libertarian propaganda that they confuse potatoes with financial assets such as housing. Every famine in history was caused by government failures and regulations such as the Corn Laws in Britain. The lack of access to housing is not caused by government rules such as zoning regulations. It's caused by a woefully incomplete private market that will protect rental yields at all cost. Government is the answer, not the problem.
Exactly. Land use restrictions and building codes are the "Corn Laws" of our day. :)
No they are not. Your "point of view" is based on an ultra simplistic understanding of math and finance derived from Libertarian ideology. Housing units in a modern economy are not potatoes. They are financial assets.
Supply and demand have not stopped working in housing markets; the confusion is about which demand is instrumental. Investment demand is instrumental in modern housing markets, not shelter demand. The confusion is compounded by failing to account for the massive global demand for rental yields relative to the potential supply of private-sector housing units. The demand for financial assets dwarfs any potential supply the private sector will ever produce. Investment demand (not composed of corporate demand alone, but all private demand for financial assets such as housing) at epsilon above the prevailing rental yield is effectively infinite. “Epsilon” in the context of housing is the always limited quantity that is available above the prevailing market rental yield.
The belief that we will be able to build our way to housing affordability is disconnected from reality, and there is no private market solution to high housing costs. There is no private market solution to equitable housing allocation because housing is a financial asset. The private market will never provide enough supply to increase vacancy rates to the degree required to make housing affordable for all members of society.
I recommend not trying to speculate about the origin of my point of view. It's sufficient to just disagree.
You have very strong beliefs about what would (not) happen with less restrictive land use regulations and building codes. Do you have any objection to less regulation to soo how far that gets us?
I understand financial theory and math, and that housing is a financial asset, not a commodity. These are not "beliefs", "opinions" or "points of view" anymore than gravity is a belief. So unless you have discovered a previously unknown mechanism by which the unregulated private market will supply financial assets at a rate that is sufficient to drive down asset yields towards zero, we are not simply disagreeing about points of view. Rather we are disagreeing about how markets and the financial system works on a fundamental level.
And if you expect me to treat you with respect, do not take my words out of context.
"Unaffordable housing and housing inequality are entirely political and due to deliberate restrictions on the supply of Federal funding for high risk consumers."
I was highlighting the key difference in our points of view.
No you were misquoting what I said
My "misquotation" had the intent of highlighting a difference in point of view. I agreed with almost all the word s your sentence, except for the end. Obviously my intend was not well realized in your case. I regret the misunderstanding.
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The belief that there's a housing shortage is simply false. In the United States in 1970, there were approximately 60 Million Households and approximately 70 Million Housing Units. In 2022 there will be approximately 127 Million Households and approximately 143 Million Housing Units. The normalized Households to Housing Ratio has fluctuated around the middle of the range. This suggests that the availability of housing units relative to households has been quite stable over time.
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