In a previous post, I walked through some of the value that comes with the consumption package we call “housing” in a given metropolitan area, in an effort to understand the peculiar price patterns that are caused by inadequate building. What are we buying when we buy a house? It includes:
"Unfortunately, all American cities are looking more like Los Angeles now. They all have increasingly downward sloping price/income lines. Housing everywhere is becoming less like a neutral normal good and more like a necessity good. And, predictably, as a result, the calls for limiting financing, lowering nominal incomes, and blocking market rate (“luxury”) housing have ironically increased with it."--KE
People wonder why Americans feel so bad. A big question, but one part of the answer is housing.
There is little chance for young people to buy a house and start a family anywhere along the West Coast, the NYC-Boston axis, and now Austin, Miami etc. Rents are murder.
And where rents are affordable, you are likely in the Rust Belt, hardly a place that inspires dreams of pending better lives.
What's left? Well, Missouri has affordable housing.
All sorts of social tensions magnified by this basic housing affordability problem.
Yet the national conversation among orthodox macroeconomists seems stuck---inflation, inflation, inflation. Per capita incomes. Trade deficits are not so bad. Immigration is good.
Even the national debt---somehow the Bank of Japan has bought half that nation's national debt, and they have a modest inflation problem, and that only after the C19 economy.
But housing is a real, everyday and immediate problem for hundreds of millions of Americans.
The simple solution is tons more supply, and enforced immigration laws.
"Unfortunately, all American cities are looking more like Los Angeles now. They all have increasingly downward sloping price/income lines. Housing everywhere is becoming less like a neutral normal good and more like a necessity good. And, predictably, as a result, the calls for limiting financing, lowering nominal incomes, and blocking market rate (“luxury”) housing have ironically increased with it."--KE
People wonder why Americans feel so bad. A big question, but one part of the answer is housing.
There is little chance for young people to buy a house and start a family anywhere along the West Coast, the NYC-Boston axis, and now Austin, Miami etc. Rents are murder.
And where rents are affordable, you are likely in the Rust Belt, hardly a place that inspires dreams of pending better lives.
What's left? Well, Missouri has affordable housing.
All sorts of social tensions magnified by this basic housing affordability problem.
Yet the national conversation among orthodox macroeconomists seems stuck---inflation, inflation, inflation. Per capita incomes. Trade deficits are not so bad. Immigration is good.
Even the national debt---somehow the Bank of Japan has bought half that nation's national debt, and they have a modest inflation problem, and that only after the C19 economy.
But housing is a real, everyday and immediate problem for hundreds of millions of Americans.
The simple solution is tons more supply, and enforced immigration laws.
Doesn't seem on anyone's radar....