This doesn’t match my own experience nor any I’ve observed.
When I’m buying I want my housing to be cheap. Restricting mortgage lending helps me because I’ve got a down payment and good credit and I can get a loan. If people without down payments and good credit can’t get a loan, there will be fewer bidders for my house, and the price will be lower.
I feel the same way about the 30 year mortgage. If we didn’t have it prices would come down and I could afford the same house paid off in 15 years instead of 30.
That’s how 2008 played out for me. I bought my first condo in 2012 or something like that for 1/2 what it went for years ago. I could never have afforded it in 2008, in 2012 I could. I imagine the person that sold it to me wasn’t happy, but I was.
If 2008 never happened I don’t know if I ever would have been able to get into housing ownership.
I guess as an individual I want my credit to be loose and everyone else’s to be tight, though even then not really. I’m a conservative person financially and I don’t like being on edge with my payments. I’m fine with it being tight for everyone.
Cheap lending might induce more building, but it feels like the housing stock is mostly fixed at any given time and even new building extra credit can just bid up fixed assets (land, etc). When I got the bill for the house I built in 2020 variable costs like materials and labor were less than 50%.
As an owner I want prices to go up. I don’t know a single person in 2008 that wanted the price of their home to go down! Your story here makes no sense to me at all!
I do think people felt that reckless borrowing had destabilized the housing market and they didn’t want to bail people out of their poor choices.
With zoning I don’t think price factors in at all. It’s just quality of life stuff. Quality of life may indirectly impact home values on a long enough timeline, but that’s not the driver.
If you want people to exclude the poors less you need to make the poors behave better. That’s how Singapore does it. “You will live next to junkies and assholes and like it” is not going to be a winning message on zoning. Disentangling property from education would help too.
There must be a fascinating book out there somewhere about the change in social geography that happened when services transitioned out of the household. It used to be that some people had maids and other people plucked their own chickens and scrubbed their own dishes. Now we all have preplucked chickens and dishwashers - which is all for the best.
The maids, butlers, and hired hands lived on the same property as their employers. Now the dishwasher assemblers and chicken pluckers live in their own neighborhoods. It surely has had an effect on how people distribute ourselves across cities that it is difficult to appreciate.
"...investors started stepping in where mortgage lenders were forbidden..."
I couldn't help but recognize the parallel with the banking industry where overregulation of banks has led to the "shadow banking" industry -- companies who can no longer turn to banks for financing are increasingly turning to alternative sources like private credit who fall outside the traditional regulatory environment. The markets want what the markets want, they will find a way.
In this case, investors stepped in (much like private lenders in private credit) to rent housing to excluded families. I can't help but also find the irony in seeing many of the same institutional names (Blackstone, etc.) in the private credit industry also being villainized for purchasing single family homes or building out entire neighborhoods with a "build-to-rent" model.
Can you explain what you mean by homeowners caring what their home would rent for?
I escape the whole problem by living where housing is still cheap. And I’m a low-paid person who owns two (cheap) homes. So my experience is atypical, I realize.
I mean it from the consumer side of the equation. They want to live in neighborhoods that are nice enough that they would fetch a rent fitting for families with at least as much financial resources as they have. Of course, in neighborhoods that are largely owner-occupied, that largely feeds into home prices relative to other nearby neighborhoods.
So would most people. It's more of an emergent phenomenon. There is, for instance, a level of crime I would be willing to put up with. That can be lower for me than it is for someone with less resources.
If my kid is searching for an apartment, that is going to be one of the margins we choose on, and we are privileged to choose with some level of discernment. It's not classist of him to avoid moving into neighborhoods that are less safe. It's a reasonable preference.
But the collective action of everyone making that reasonable decision aggregates into a sort of socio-economic segregation. It's easy to argue that it's unfair. I'm not here to judge the fairness of emergent phenomenon. I'm here to judge using the apparatus of the state to enforce even worse outcomes than those that naturally emerge. The policy choices I discuss here are tricky political negotiations. The phenomenon of natural segregation is more of a paradox of human community in a free society, which is a much harder nut to crack.
Right. Decriminalize housing construction, and push-cart vending too.
This doesn’t match my own experience nor any I’ve observed.
When I’m buying I want my housing to be cheap. Restricting mortgage lending helps me because I’ve got a down payment and good credit and I can get a loan. If people without down payments and good credit can’t get a loan, there will be fewer bidders for my house, and the price will be lower.
I feel the same way about the 30 year mortgage. If we didn’t have it prices would come down and I could afford the same house paid off in 15 years instead of 30.
That’s how 2008 played out for me. I bought my first condo in 2012 or something like that for 1/2 what it went for years ago. I could never have afforded it in 2008, in 2012 I could. I imagine the person that sold it to me wasn’t happy, but I was.
If 2008 never happened I don’t know if I ever would have been able to get into housing ownership.
I guess as an individual I want my credit to be loose and everyone else’s to be tight, though even then not really. I’m a conservative person financially and I don’t like being on edge with my payments. I’m fine with it being tight for everyone.
Cheap lending might induce more building, but it feels like the housing stock is mostly fixed at any given time and even new building extra credit can just bid up fixed assets (land, etc). When I got the bill for the house I built in 2020 variable costs like materials and labor were less than 50%.
As an owner I want prices to go up. I don’t know a single person in 2008 that wanted the price of their home to go down! Your story here makes no sense to me at all!
I do think people felt that reckless borrowing had destabilized the housing market and they didn’t want to bail people out of their poor choices.
With zoning I don’t think price factors in at all. It’s just quality of life stuff. Quality of life may indirectly impact home values on a long enough timeline, but that’s not the driver.
If you want people to exclude the poors less you need to make the poors behave better. That’s how Singapore does it. “You will live next to junkies and assholes and like it” is not going to be a winning message on zoning. Disentangling property from education would help too.
So, in a nutshell: We want to avoid "...uncomfortable socio-economic mixing." Sad.
There must be a fascinating book out there somewhere about the change in social geography that happened when services transitioned out of the household. It used to be that some people had maids and other people plucked their own chickens and scrubbed their own dishes. Now we all have preplucked chickens and dishwashers - which is all for the best.
The maids, butlers, and hired hands lived on the same property as their employers. Now the dishwasher assemblers and chicken pluckers live in their own neighborhoods. It surely has had an effect on how people distribute ourselves across cities that it is difficult to appreciate.
"...investors started stepping in where mortgage lenders were forbidden..."
I couldn't help but recognize the parallel with the banking industry where overregulation of banks has led to the "shadow banking" industry -- companies who can no longer turn to banks for financing are increasingly turning to alternative sources like private credit who fall outside the traditional regulatory environment. The markets want what the markets want, they will find a way.
In this case, investors stepped in (much like private lenders in private credit) to rent housing to excluded families. I can't help but also find the irony in seeing many of the same institutional names (Blackstone, etc.) in the private credit industry also being villainized for purchasing single family homes or building out entire neighborhoods with a "build-to-rent" model.
Can you explain what you mean by homeowners caring what their home would rent for?
I escape the whole problem by living where housing is still cheap. And I’m a low-paid person who owns two (cheap) homes. So my experience is atypical, I realize.
I mean it from the consumer side of the equation. They want to live in neighborhoods that are nice enough that they would fetch a rent fitting for families with at least as much financial resources as they have. Of course, in neighborhoods that are largely owner-occupied, that largely feeds into home prices relative to other nearby neighborhoods.
Sounds judgy and classist to me. :)
But then, I suppose many of those folks would consider a low-paid writer like me to be so much trash.
I'm happy to share a neighborhood with any quiet person who takes decent care of their property.
I don't think I'm THAT unusual in this view.
So would most people. It's more of an emergent phenomenon. There is, for instance, a level of crime I would be willing to put up with. That can be lower for me than it is for someone with less resources.
If my kid is searching for an apartment, that is going to be one of the margins we choose on, and we are privileged to choose with some level of discernment. It's not classist of him to avoid moving into neighborhoods that are less safe. It's a reasonable preference.
But the collective action of everyone making that reasonable decision aggregates into a sort of socio-economic segregation. It's easy to argue that it's unfair. I'm not here to judge the fairness of emergent phenomenon. I'm here to judge using the apparatus of the state to enforce even worse outcomes than those that naturally emerge. The policy choices I discuss here are tricky political negotiations. The phenomenon of natural segregation is more of a paradox of human community in a free society, which is a much harder nut to crack.