For anyone out there who still subscribes to the idea that overbuilding caused the Great Recession, then the trend towards all cities as closed access is a solution, not a problem---and these idiots seem to be the ones who set mortgage policy (I'm guessing you'll touch on this in your next post). This madness of induced scarcity has also had the effect of inverting the depreciation effect for older housing stock--junk houses command prices that exceed their replacement cost. Granted, wealthy people will make improvements to old houses and developers will do tear-downs for new build flips, but this is an arms race that is concentrated in desirable neighborhoods. The housing constraints in Metro Boston tend to raise the price of junk houses in marginal cities and towns off the ring highways.
The same thing is happening in Australia. Not enough supply, and they are cranking up rates...cutting off supply (and causing housing-cost inflation, btw).
OK, tin-foil hat time:
In the developed world, the way to expand or contract the money supply is executed through the commercial banking system. This is a premise, although why it is a premise appears rooted in sacred history, not intelligent design.
Commercial banks are loath to lend without collateral, and largely that means property.
You see what is going on here? If you want to goose the economy, it is done through the property sector, and cool off...
This set of circumstances is accepted...but who would actually design such a system (besides Rube Goldberg)?
Add on property zoning to the witches' brew...
So to the present day...in the US (and most of the developed world) we "fight inflation" by beating up on property lending (which helps tighten housing markets).
There is a better way, likely money-financed fiscal programs. Which also would free up taxpayers from ever-mounting layers of debt.
For anyone out there who still subscribes to the idea that overbuilding caused the Great Recession, then the trend towards all cities as closed access is a solution, not a problem---and these idiots seem to be the ones who set mortgage policy (I'm guessing you'll touch on this in your next post). This madness of induced scarcity has also had the effect of inverting the depreciation effect for older housing stock--junk houses command prices that exceed their replacement cost. Granted, wealthy people will make improvements to old houses and developers will do tear-downs for new build flips, but this is an arms race that is concentrated in desirable neighborhoods. The housing constraints in Metro Boston tend to raise the price of junk houses in marginal cities and towns off the ring highways.
The same thing is happening in Australia. Not enough supply, and they are cranking up rates...cutting off supply (and causing housing-cost inflation, btw).
OK, tin-foil hat time:
In the developed world, the way to expand or contract the money supply is executed through the commercial banking system. This is a premise, although why it is a premise appears rooted in sacred history, not intelligent design.
Commercial banks are loath to lend without collateral, and largely that means property.
You see what is going on here? If you want to goose the economy, it is done through the property sector, and cool off...
This set of circumstances is accepted...but who would actually design such a system (besides Rube Goldberg)?
Add on property zoning to the witches' brew...
So to the present day...in the US (and most of the developed world) we "fight inflation" by beating up on property lending (which helps tighten housing markets).
There is a better way, likely money-financed fiscal programs. Which also would free up taxpayers from ever-mounting layers of debt.
And a 10-year moratorium on property zoning...