This is a less complicated post than I usually write. But, I think this might be a useful visualization for thinking about urban housing supply. I’ve been posting some version of these types of charts for 8 years, but sometimes it’s worth taking a moment to revisit the hits. Nothing here is going to get published in an econometrics journal, but sometimes it doesn’t take anything complicated to see what is obvious.
Good post. There was an article in the Economist about migration trends in California which painted a more sophisticated picture of the "Great Exodus" which corresponds to trends in house prices and house construction across the state--basically what you show in some of the graphs above. California is shedding population from its rural areas like everywhere else. Where these people go is a function of housing affordability.
As an aside, there is a little kerfuffle going on, after Paul Krugman said Americans do not understand how good they have it. Commentators like Matt Taibbi are mocking Krugman.
I think housing must play a large role in this tension between academics saying living standards are higher than ever, and ordinary Americans saying they are not.
When an average house in L.A. costs $1.2 million, and the picture is not much different anywhere along the West Coat, or NYC...and rents reflect housing scarcity....there are large swaths of the population who are not prospering.
Per capita incomes are one measure, and also reflect the rising incomes of post-retirement people, relative to earlier eras.
BTW, young men, adjusted for inflation, make less now than in the 1960s.
And, of course, anyone living in Detroit or similar areas would have qualms about "life is better than ever" narratives. But hey, you can afford housing.
Interesting topic, and housing is at the core of a lot of these problems.
Also, even though from a policy point of view, market rents are the important measure, one reason CPI rents lag market rents is because actual rents lag market rents as leases hit renewal dates, so the CPI could be a reasonable reflection of experienced rent inflation, even if policymakers should look past it.
Good post. There was an article in the Economist about migration trends in California which painted a more sophisticated picture of the "Great Exodus" which corresponds to trends in house prices and house construction across the state--basically what you show in some of the graphs above. California is shedding population from its rural areas like everywhere else. Where these people go is a function of housing affordability.
I understand this less complicated post.
As an aside, there is a little kerfuffle going on, after Paul Krugman said Americans do not understand how good they have it. Commentators like Matt Taibbi are mocking Krugman.
I think housing must play a large role in this tension between academics saying living standards are higher than ever, and ordinary Americans saying they are not.
When an average house in L.A. costs $1.2 million, and the picture is not much different anywhere along the West Coat, or NYC...and rents reflect housing scarcity....there are large swaths of the population who are not prospering.
Per capita incomes are one measure, and also reflect the rising incomes of post-retirement people, relative to earlier eras.
BTW, young men, adjusted for inflation, make less now than in the 1960s.
And, of course, anyone living in Detroit or similar areas would have qualms about "life is better than ever" narratives. But hey, you can afford housing.
Interesting topic, and housing is at the core of a lot of these problems.
Good points.
Also, even though from a policy point of view, market rents are the important measure, one reason CPI rents lag market rents is because actual rents lag market rents as leases hit renewal dates, so the CPI could be a reasonable reflection of experienced rent inflation, even if policymakers should look past it.