On a different topic, it is interesting to note that cities with greater affordability (those at the top of the chart) show a much lower share of income going to transportation. Not coincidentally, those cities also have the most effective public transit systems. The lower transportation costs seem to offset higher housing costs in some cases (NYC), but most cases seem to indicate that lower transportation costs are associated with higher incomes relative to housing. There is likely something in there we can work with.
One topic I have yet to see discussed is that “the high cost of housing” and “protecting property values” are two sides of the same coin. ANY measure to reduce the actual cost of housing will cause current homeowners to eat a loss, perhaps unrealized, perhaps not. Any solution that actually works, but doesn’t solve both sides of that coin is doomed to fail. There are lots of ideas, and many will have an effect, and most are required simultaneously, but none of them address the loss in wealth implied by good results. Any ideas?
That's a very valid point. For example, if construction costs were to drastically fall (due to new technology, even though unlikely), all current housing stock could significantly lose value. The only thing protect the value would still be "access to the labor market" which can keep the value of housing still high.
However, theoretically, your point stands - the economic shock to individuals of large decline in house prices would be politically painful (and economically too).
We destroyed unions, and pensions, and housing became a lottery ticket for a pension. Separately, we exempted real estate from money-laundering rules, and allowed real estate to be a flight-to-safety asset for foreigners.
If we don't face these realities, housing will continue to inflate.
On a different topic, it is interesting to note that cities with greater affordability (those at the top of the chart) show a much lower share of income going to transportation. Not coincidentally, those cities also have the most effective public transit systems. The lower transportation costs seem to offset higher housing costs in some cases (NYC), but most cases seem to indicate that lower transportation costs are associated with higher incomes relative to housing. There is likely something in there we can work with.
One topic I have yet to see discussed is that “the high cost of housing” and “protecting property values” are two sides of the same coin. ANY measure to reduce the actual cost of housing will cause current homeowners to eat a loss, perhaps unrealized, perhaps not. Any solution that actually works, but doesn’t solve both sides of that coin is doomed to fail. There are lots of ideas, and many will have an effect, and most are required simultaneously, but none of them address the loss in wealth implied by good results. Any ideas?
That's a very valid point. For example, if construction costs were to drastically fall (due to new technology, even though unlikely), all current housing stock could significantly lose value. The only thing protect the value would still be "access to the labor market" which can keep the value of housing still high.
However, theoretically, your point stands - the economic shock to individuals of large decline in house prices would be politically painful (and economically too).
We destroyed unions, and pensions, and housing became a lottery ticket for a pension. Separately, we exempted real estate from money-laundering rules, and allowed real estate to be a flight-to-safety asset for foreigners.
If we don't face these realities, housing will continue to inflate.
Bernie had a solution. Look it up!