The problem is that indexing them at a starting point is key, visually. A long term chart with a log scale sort of helps show that, but it doesn’t have a punch. The problem got especially bad in the mid-1990s, but income growth was very strong then, so it doesn’t show up in this way until about 2000, which is where I indexed figure 1 to.
That's really helpful. And "All those “What Happened in 1971?” charts you see about why wages didn’t keep up with productivity? Rent inflation is responsible for a pretty big chunk of it." is a great framing.
The differences between Figure 1 & Figure 3 are really aggravating because it demonstrates how an entire nation has lost its way on residential real estate. I think it's somewhat fair to say that zoning regulations snuck up on us when it comes to analysis of cause and effect. During the 70's, 80's, and 90's someone like Chip Case could marvel at how his house in the Boston suburbs was increasing in value and correctly ascribe it to demand. He could look at flat or declining property values in downtown and high density suburbs close to the city core to prove his point. The regulatory choices that had been made---with continuing broad support by voters---has in some ways destroyed the supply of land. Peripheral suburbs that have 2 acre lot size minimums for single family homes and other prohibitions on all forms of development throttle urban evolution.
Nice. May I suggest putting Figures 1&3 into a single timeline so you can see where rent inflation starting going wrong?
The problem is that indexing them at a starting point is key, visually. A long term chart with a log scale sort of helps show that, but it doesn’t have a punch. The problem got especially bad in the mid-1990s, but income growth was very strong then, so it doesn’t show up in this way until about 2000, which is where I indexed figure 1 to.
I added a chart that maybe does what you're asking.
That's really helpful. And "All those “What Happened in 1971?” charts you see about why wages didn’t keep up with productivity? Rent inflation is responsible for a pretty big chunk of it." is a great framing.
The differences between Figure 1 & Figure 3 are really aggravating because it demonstrates how an entire nation has lost its way on residential real estate. I think it's somewhat fair to say that zoning regulations snuck up on us when it comes to analysis of cause and effect. During the 70's, 80's, and 90's someone like Chip Case could marvel at how his house in the Boston suburbs was increasing in value and correctly ascribe it to demand. He could look at flat or declining property values in downtown and high density suburbs close to the city core to prove his point. The regulatory choices that had been made---with continuing broad support by voters---has in some ways destroyed the supply of land. Peripheral suburbs that have 2 acre lot size minimums for single family homes and other prohibitions on all forms of development throttle urban evolution.