In "Price is the Medium Through Which Housing Filters Up or Down" I walked through a description of the filtering process in an attempt to connect its existence in practice with the price and rent patterns that arise in its absence (or reversal). Those patterns are like this:
Exacerbating all of this is the fact that homeowners *like it* when the cost of the existing stock increases rather than decreases over time. Why shouldn't the original owner of a second-tier unit be glad that a rich person will buy their old unit at a premium?
All the pressures build to be greater and greater on the residents with the lowest incomes, and so the difference between being an owner or a renter also gets heightened.
It can only change when the incumbent homeowners are out-voted or out-flanked by the YIMBY cohort. See exhibit A: Montana.
The rich can also make a calculated decision to either support or ignore reforms that work against some of their immediate interests if they want a community where the help can live close by. I'm hoping this happens in a few places in New England, but I'm probably naive.
Kevin, thanks for this beautiful explanation.
Exacerbating all of this is the fact that homeowners *like it* when the cost of the existing stock increases rather than decreases over time. Why shouldn't the original owner of a second-tier unit be glad that a rich person will buy their old unit at a premium?
You bring up a good point.
All the pressures build to be greater and greater on the residents with the lowest incomes, and so the difference between being an owner or a renter also gets heightened.
It can only change when the incumbent homeowners are out-voted or out-flanked by the YIMBY cohort. See exhibit A: Montana.
The rich can also make a calculated decision to either support or ignore reforms that work against some of their immediate interests if they want a community where the help can live close by. I'm hoping this happens in a few places in New England, but I'm probably naive.