We are short in Austin, San Antonio, and Dallas? If Texas can't build, who can?
Are Pittsburgh and Philadelphia doing better because Pennsylvania has better policies, or because no one wants to live there?
I would think that if any moderately-desirable-to-live-in area had sufficiently permissive zoning and construction approval process, it would clean up in this environment, attracting a huge amount of building and in-migration. Do you agree? Is any decent metro area trying this?
(1) Cities where local land use rules were binding before 2008.
(2) Cities that could make up for over-regulated infill building by building new single-family homes in the exurbs.
Group 2, which includes Texas, was mostly hurt by the mortgage crackdown. They stopped building entry-level single-family homes in the exurbs because federal regulators made it illegal for the buyers to get mortgages. They are better than the coastal cities, but they have enough obstructions to infill construction that it couldn't make up for the huge loss of production in the exurbs.
As we speak, a formerly unimportant market segment - single-family homes built at scale for rental - is now suddenly growing to fill the gap, because rents have finally risen enough to raise the price of rental homes above the cost of construction. That will help the cities in Group 2, though in every city, there are proposals to ban it.
I think there’s also a third category of stable or shrinking places (esp rural and small towns) where mortgage suppression has messed up the market without very large unit shortages. I’d be interested in more of your takes on those places and how the economics of all this work at some point.
Orthodox macroeconomists dislike the word "shortage," except when describing "labor shortages" in the US.
We are short in Austin, San Antonio, and Dallas? If Texas can't build, who can?
Are Pittsburgh and Philadelphia doing better because Pennsylvania has better policies, or because no one wants to live there?
I would think that if any moderately-desirable-to-live-in area had sufficiently permissive zoning and construction approval process, it would clean up in this environment, attracting a huge amount of building and in-migration. Do you agree? Is any decent metro area trying this?
There are two types of cities:
(1) Cities where local land use rules were binding before 2008.
(2) Cities that could make up for over-regulated infill building by building new single-family homes in the exurbs.
Group 2, which includes Texas, was mostly hurt by the mortgage crackdown. They stopped building entry-level single-family homes in the exurbs because federal regulators made it illegal for the buyers to get mortgages. They are better than the coastal cities, but they have enough obstructions to infill construction that it couldn't make up for the huge loss of production in the exurbs.
As we speak, a formerly unimportant market segment - single-family homes built at scale for rental - is now suddenly growing to fill the gap, because rents have finally risen enough to raise the price of rental homes above the cost of construction. That will help the cities in Group 2, though in every city, there are proposals to ban it.
I think there’s also a third category of stable or shrinking places (esp rural and small towns) where mortgage suppression has messed up the market without very large unit shortages. I’d be interested in more of your takes on those places and how the economics of all this work at some point.