As another analogy. Europe currently has an energy shortage, particularly natural gas. The Guardian proposed a "windfall" tax on gas producers, and subsidies for energy users. So in the face of a shortage, they want the government to act to *reduce supply* and *increase demand*.
People have very counter-productive reactions to shortages of goods.
It would increase the cost of consumption, and thus reduce some demand, without that increase in cost going to the producer to justify the cost of production, and thus the producer would reduce his production thus adding to the supply shortage.
In South Australia both left and right governments provided tax incentives for renewable energy. Now on most days they get more than 100% of their energy from wind and solar (selling the rest interstate), have a 500% clean energy target and plan on being a clean hydrogen producing state.
I agree. Did I say something to make you think I do not? :) I do regret that we allowed employers to pay for health insurance as a way around WW2 wage controls instead of just giving people tax credits for purchase of health insurance.
:) Of course for me "Neoliberal" is a term of praise, not opprobrium and most of what you say is SSP I'd call "Neoliberal." Some of the other sounds to me like arguing over the filioque.
One place I at least disagree is on climate change. Massive investments in zero carbon energy production and carbon capture will be necessary, but I in name of neoliberals prefer that it be mainly private investment incentivized by a tax (a tax trajectory, actually) on net CO2 and methane emissions.
I can't remember who it was who said that the archetypical Trump voter was someone who thought that owning a local car dealership franchise should give him droit de seigneur in a five-county radius, but I think it's not inaccurate.
And you are not alone in your insanity. If you ask me, the one area where the Democratic party should make a public show of being on side with Elon Musk is in trying to get the franchise laws overturned, and then after that to make a big push against MLM and "nutritional supplement" companies. Insane billionaires like the Mercers get all of the press, but at the end of the day the person funding your local neofascists is probably just a car dealership, gym or athletic supplement franchise owner.
I live in upstate Manhattan as it happens. Sadly not doing public gatherings or bars/restaurants at the moment for the obvious annoying reasons, but this too shall pass and hopefully there will be a Slow Boring meetup one NYC at some point after. Rain check! :)
When I think about car dealers and corruption, another venue I think of often is college football. Whenever there's some "scandal" of a booster paying players under the table (because the schools won't do the right thing and pay the players directly despite the millions they're generating off broadcast rights), car dealers are often the primary suspects.
It's funny, because when you think of professions that people tend to associate with sleazy, car dealers would seemingly be on that list. But the amount of political power that they're able to wield in spite of that is relatively massive.
Anyone with an older car has at least occasional car issues, which cause them to miss work (when I was a kid, no one got away with questionable behavior like guys who knew how to fix cars, because people knew they’d likely need his help at some point). Hourly workers don’t get paid when that happens, and will eventually (or quickly, depending on the type of boss) be fired for that sort of thing.
The new car, and its warranty, has become almost irresistible now that almost anyone can get one. It makes sense and obviously reduces a lot of headaches, even though most people know that they’re being hosed financially. Plus, obviously, having a new car is nicer than the alternatives.
The financial math on buying a new car to avoid downtime just doesn't work out. There's not going to be enough reliability difference between a 2 or 4 year old car and a new car to make up the cost difference.
To be honest, I kind of doubt most people buying new cars are doing galaxy brain takes like this (except maybe as post rationalization) and are instead seeing the new car and the "only $169/month" and forking it over the next six or seven years and regretting it for the last 4 or 5.
Nowadays, a 3 or 4 year old Toyota or whatever is *really* reliable!
I have a credit score well into the 700s and I chose a 72-month loan last time I bought a car so I could have a lower monthly payment (yes, I know it's more total interest -- the relevant point for budgeting is the monthly cost of ownership), so I'm not really getting the point there.
Hectic work day ahead but just wanted to say I love this analogy and will use it. My friends who are not land use policy nerds (ie, most of them) tend to find left-NIMBY arguments persuasive, and this framing device is a great way to think through the issues.
This substack greatly interferes with my productivity, but I love it anyway...
That Noahpinion piece is a classic! Totally agree, but having "a lot of space" is a thing in MI so in my experience a surprising number of people like being out in the mile-road hinterlands despite what I would consider the poorer quality of life...
Another aspect of this story is that automakers are doing the rational thing during the chip shortage and prioritizing the production of the most expensive models. VW Group not only makes Jettas, but also the marques Porsche and Bentley:
"Bentley sold 14,659 cars last year, an increase of 31% from the year before and a record for the company. Porsche, also owned by VW, sold 301,915 cars, an increase of 11% world-wide."
BMW is had a good year as well, but has ensured that no Rolls Royce falls victim to the chip shortage:
"Rolls-Royce, owned by Bayerische Motoren Werke AG BMW -2.02% , whose tailor-made superluxury cars have starting prices of more than $300,000, sold a record 5,586 cars last year, up 49% from the year before."
Good luck finding a new Jetta at a reasonable price (or at all) at the moment, but look on the bright side: In a few years the world will be awash with pre-owned Bentleys, Porsches, and Rolls Royces.
I'm just going to remark that this should be one of your public posts. We need concise statements of how _dumb_ left-NIMBY housing talking points are that can be shared out regularly, to help immunize low-info people who aren't bought in to any political line yet.
"In the housing context, left-NIMBYs often deride the idea that adding supply of new upscale housing will impact the affordability of older units as “trickle-down economics.”
I have a self-awarded PHD in debating left-NIMBYs on this topic. And the explanation above is wrong in that it attributes some rational disagreement. There is none... and the real explanation for the basis of the left-NIMBY position on housing growth transcends this topic and explains almost everything else.
Left-NUMBYs are elites. They are the most insecure and selfish people in the community that, given the astounding quality of our education system and economic opportunity, have manged to rise to positions of high economic and social status. They then use their education achievement to manufacture a web of face-saving virtue-signaling excuses for their positions that are always 100% based on their own selfish interests.
They block housing because it keeps their real estate values high and they also like their exclusive white gated communities.
Literal vanguardists, who believe that they are the socialist elite and should get the nice houses because they made the revolution happen or something like that.
Socialism is great in theory until you meet the kind of people drawn to socialism.
I live in a town with an engineered housing shortage - in that almost all of the land the town intends to use for residential construction is zoned for single family and is built, so the ability to add more housing (measured in terms of humans with roofs) is basically nil.
Housing prices keep going up, which isn't astonishing, and one of the side effects is that people keep super-sizing their houses. My neighbor is doubling his square footage by turning ihs 50's 3-bedroom ranch into a two story house - it's a total redo, so this will be close to creating "new" housing stock.
I'm still scratching my head on how to think about this economically. Clearly the root problem is a shortage of plots zoned for adequate occupancy - if we don't do one of (1) allow duplexes and apartments or (2) build in the town's preserved forests/wetlands or (3) somehow wreck demand prices will go up.
But the secondary effect is that the buildings _on_ the plots are steadily being upgraded, to the point where there won't be any starter homes left if trend continues.
I guess to put this in the car analogy, if the automotive shortage went on long enough, would the used car market be "mostly BMW's" because, in face of a shortage, that's where production has focused to maximize profit on limited input resources? If the automotive shortage lasted that long and then ended normalized, that would be a weird place to be, where the old car stock, which is supposed to be affordable, would be "overbuilt."
Is it possible to reach a point where housing prices can't be normalized because the structures themselves have become too expensive due to past land prices being too high? Given how unpopular a political agenda to crater housing values would be, the whole question seems almost too hypothetical to reason about.
This is London. Almost every street has a skip from someone doing extensions or converting their loft (which costs $100,000 for one or two rooms ). In the wealthier neighbourhoods, people dig out basements, which is even more expensive.
Google indicates it is called a debris box in American English. A big box for dumping construction waste that can be moved onto a truck and taken to the landfill.
It's actually Dumpster™ as it was trademarked by the Dempster Brothers for their Dempster-Dumpster system. But much like Kleenex it's morphed into a generic term.
1. I was sure so it'd fail I didn't even bother checking the details. The opposition here is even stronger than in America. Many British baby boomers plan to fund their retirement by selling their homes (and downsizing). So the opposition to anything that lowers those value is iron clad. The view among my generation is the system can't be reformed until most of the boomers die
I think I agree with the other commenters - people close to liquidating may care MORE about the price they can sell at, but anyone who owns is subject to the "this is a valuable asset" logic - in the US where homes are financed, "house prices came down 20%" is the same as "I lost all my equity and am underwater." I don't see there being any reset.
A house is the one asset Americans use leverage to invest in. Great if the price goes up, not so great if it goes down. The federal government has had a huge role in encouraging this leverage, but be aware when you buy a house with 5% down, you’re both getting a place to live and making yourself a mini hedge fund. Sleep well and good luck!
Yep. People say we're all born long housing but why not go _really_ long housing. :-). That leverage is what makes me think it may be impossible to unwind California prices. :-(
No. We'll need to build more. That's currently being prevented by the boomers. The next generation, even most of those who've inherited, know the damage home shortages cause. The Boomers didn't experience that. The next generation is also trying to save for retirement, it won't bet everything on their home. I don't expect people to rush out in favour of upzoning but at least when a government with a large majority tries to do it, they can make some progress instead of stopping immediately like happens now.
I think you’re wrong about housing prices. I’m a boomer, and my first house cost 10x (in nominal dollars) what my parents’ first house cost. This is nothing new, is a pure supply/demand issue. It’s true if we euthanized all boomers tomorrow you might get a great deal on your dream apartment, but they aren’t the cause of your problem.
Certainly not the first good SB article I've read, by a long shot, but I think this is the first one that had me actually laughing out loud multiple times through the read.
Most SB subjects would not take well to this tone, but when one does, I appreciate the occasional shift.
Adding onto the crowd loving this analogy and I plan to use it frequently in the future. Just yesterday, I let a friend know about a nice multifamily development announced just a few blocks away from where she's renting in a neighborhood that she really wants to buy property in some day--and she was ambivalent about it, at best, even as I was trying to explain how it could possibly help in her goal. I don't think she'd ever go full NIMBY but it is telling how easy people can be allured into their talking points. I'll have this article in mind the next time things like this come up anywhere.
So as someone who is pre-sold on the YIMBY side of this debate, I think you need to do a bit of (sigh, I hate this term) steelmanning here. It’s a good analogy as far as it goes, but it doesn’t anticipate a really obvious objection: building a Mercedes for your neighbor does not require demolishing your Prius and leaving you car-less or forcing you to drive a substantially worse car for an indefinite amount of time.
And I think that really is the ugly part of the housing argument: at least in our big cities, we’ve dug ourselves a hole that is genuinely difficult to fill in. Coming back to the car analogy, it’s also pretty clear that if the supply shortfall goes on for another few years, when the chip shortage does finally ease, production lines will concentrate on the highest-margin models: if they’re guaranteed to sell every Lexus they make because of pent up demand, why would Toyota build any Corollas in 2023?
The nice thing about cars is that we don’t really have to care: people will grumble about having to nurse their old cars along for another couple of years, but for most people it won’t be felt as a major disruption. Whereas having your rental razed to the ground to be redeveloped into units your family can’t afford is the sort of thing that people notice and get understandably surly about.
Incidentally this is one of the reasons why I think Matt’s suggestion to shift large parts of the federal government out of DC and into sparsely populated states is a really good one: since we’re not China, we really can’t just mandate that the country build entirely new cities and force companies and people to relocate there. But the federal government is huge, and it can absolutely relocate the Dept of Agriculture to Kansas City to spur some growth there.
Trust me I am very sold on that argument. But "it's okay, we just need 15-20 years of aggressive redevelopment in order to bring the housing market back to a point of useful functionality" has the twin disadvantage, as a _political_ argument, of being both completely true(and that's really bad in a country that struggles with any project longer than six months) and absolutely no help to someone being forced out of their home today.
I made this point (which is really Matt’s point) elsewhere in this comments section, but a bigger issue than how much we build is that we’re building houses where they aren’t most needed due to zoning constraints.
The focus on job quantity (which I assume is what is meant by “jobs proposal”) makes little sense given David’s primary observation that working class wages have stagnated. Matt makes a compelling case in Rent is Too Damn High that, in the context of the modern service economy, an important cause of this stagnation is that service providers can’t afford to reside in the areas where their wages can be maximized (i.e. proximal to lots of people who can afford to bid up the price of the service provided).
Liberal progressives, as a species, are anxious scarcity mindset people. They are really quite broken in that they never can walk the full fact pattern on the consequences of their policy actions. They stop at the point that the policy makes them feel less anxious, and then demand the action to enact it. Then the consequences are ugly, and they just do the same thing... come up with the next scarcity idea to try and address the problems caused by the previous.
So it is the uncontrolled anxiety of the liberal species that results in this constant spiral downward into dystopia.
The correct mindset is one of abundance.
Let's use an example. There are some that say we should tax the crap out of wealth people to reduce the wage and wealth gap. That is scarcity policy.
The abundance policy would be tax incentives for small business and start-ups, and incentives for capital holders to make investments in industries with high paying jobs.
Global Warming is a giant scarcity policy enabler. It gives the anxious liberal progressive backing to push even more scarcity policy.
COVID has been a scarcity policy enabler.
Liberal progressives are made anxious with change and progress. They don't feel that they can compete well in the abundance space. It is not virtue that causes them to push scarcity, it is their own selfish interest to wreck the abundance and progress train to hobble the free competitive world and slow it down so they, the anxious liberal progressive, can feel more confident in their ability for looting more resources.
I don't typically comment but I liked this a lot. One way to think about housing is the only truly scarce resource w/r/t housing is land in built-up cities. Lumber isn't typically scarce, nor concrete, nor steel, nor appliances. Skilled and unskilled labor might be. The constraints like permitting and NIMBYs and land use requirements. You can buy cheap cookies from a grocery store bakery or cheaper cookies from shelves at Dollar General, or you can buy expensive bougie cookies from a gourmet bakery or Milk Bar, or you can make cookies at home, but because cookie production isn't limited by quotas or caps, there's fundamentally a tether there that cookie costs don't have to exceed the input costs.
Off topic, but it's worth pointing out that IF the Fed had already credibly established that it was NOT going to allow the supply shock of the pandemic to lead to insufficiency of demand, automakers would not have cut back their demand for chips. What the Fed DID was pretty close to optimum (sooner would have been better, of course) but this was a huge surprise. Markets still expected a (possibly mitigated) repeat of the 2008-2000 disaster. [Look at the fall in inflation expectations in March 2020. If markets had expected the Fed to maintain aggregate demand, inflation expectations would have risen.]
Possibly so. Although in retrospect not so much. Republicans never have a problem with deficits when a Republican is in the WH.
AND in my (still minority) view, fiscal "stimulus" although mostly good for transferring income to worthy people and causes did not "simulate", did not affect macroeconomic aggregates. The Fed could have bought more private sector and less treasury debt.
I really think that a nontrivial amount of This Here Mess can be attributed to unintended blowback from the Robert Moses era. When your experience of "development" is someone leveling your entire neighborhood to run a freeway through it, it's _really_ easy for "developers are evil" to become a shibboleth, which it 100% has.
(It doesn't help of course that many developers _are_ scummy and are definitely prone to trying to back-room their deals with local politicos. Of course part of the problem is that no one trusts them and therefore backroom deals are the only way to get stuff built...)
Thinking about this car analogy a bit more, I'm intrigued about comparing it to *parking* for cars, and that is striking me as the inverse of the housing analogy. There is a genuine scarcity of parking on on-street public corridors, the consensus typically is overwhelming that that scarcity is bad, and the standing policy to address this is not to artificially reduce demand by *banning* production of more cars so there's more space for the incumbent car owners, but to artificially increase the supply by *requiring* parking to be build off-street.
Now, I wouldn't make this observation outside this site, because it would be an easy way to try to justify mandatory parking minimums (which are very bad!), but it struck me as another example as to how people don't clearly think through aspects of scarcity and supply/demand.
Parking is not a good analogy becasue it's just an example of failure to price a scarce good: urban street space (like CO2 absorption capacity of the atmosphere).
As another analogy. Europe currently has an energy shortage, particularly natural gas. The Guardian proposed a "windfall" tax on gas producers, and subsidies for energy users. So in the face of a shortage, they want the government to act to *reduce supply* and *increase demand*.
People have very counter-productive reactions to shortages of goods.
As backward as this proposal may be, a windfall tax on gas producers should not reduce the supply of gas.
It would increase the cost of consumption, and thus reduce some demand, without that increase in cost going to the producer to justify the cost of production, and thus the producer would reduce his production thus adding to the supply shortage.
Or alternatively, it discourages producers from working to increase the supply.
The Grauniad is my favorite pre-Norman British epic.
"Supply side progressive" (I assume that has room for some tax and transfer) is what I mean by "Neoliberal."
In South Australia both left and right governments provided tax incentives for renewable energy. Now on most days they get more than 100% of their energy from wind and solar (selling the rest interstate), have a 500% clean energy target and plan on being a clean hydrogen producing state.
I agree. Did I say something to make you think I do not? :) I do regret that we allowed employers to pay for health insurance as a way around WW2 wage controls instead of just giving people tax credits for purchase of health insurance.
:) Of course for me "Neoliberal" is a term of praise, not opprobrium and most of what you say is SSP I'd call "Neoliberal." Some of the other sounds to me like arguing over the filioque.
One place I at least disagree is on climate change. Massive investments in zero carbon energy production and carbon capture will be necessary, but I in name of neoliberals prefer that it be mainly private investment incentivized by a tax (a tax trajectory, actually) on net CO2 and methane emissions.
> Nobody blames “speculators” even though it’s true that there are middlemen who make a living buying and selling used cars.
Honestly, we should take this opportunity to blame the legally mandated dealership sales model.
I can't remember who it was who said that the archetypical Trump voter was someone who thought that owning a local car dealership franchise should give him droit de seigneur in a five-county radius, but I think it's not inaccurate.
And you are not alone in your insanity. If you ask me, the one area where the Democratic party should make a public show of being on side with Elon Musk is in trying to get the franchise laws overturned, and then after that to make a big push against MLM and "nutritional supplement" companies. Insane billionaires like the Mercers get all of the press, but at the end of the day the person funding your local neofascists is probably just a car dealership, gym or athletic supplement franchise owner.
Admittedly I am also known to be a little cuckoo.
I live in upstate Manhattan as it happens. Sadly not doing public gatherings or bars/restaurants at the moment for the obvious annoying reasons, but this too shall pass and hopefully there will be a Slow Boring meetup one NYC at some point after. Rain check! :)
When I think about car dealers and corruption, another venue I think of often is college football. Whenever there's some "scandal" of a booster paying players under the table (because the schools won't do the right thing and pay the players directly despite the millions they're generating off broadcast rights), car dealers are often the primary suspects.
It's funny, because when you think of professions that people tend to associate with sleazy, car dealers would seemingly be on that list. But the amount of political power that they're able to wield in spite of that is relatively massive.
Just to get Matt's alliance with you on the record:
https://twitter.com/mattyglesias/status/1484364894891757568
If you can't be right (and I'm not saying you aren't, just open to the possibility), at least be entertaining. I enjoyed this post a lot.
Consumer auto debt is a huge problem and sucks buying power out of the middle/working class.
“For those with [credit] scores of 500 or lower, the average loan length climbs to just over 72 months.”
https://www.creditkarma.com/auto/i/car-loan-term
Anyone with an older car has at least occasional car issues, which cause them to miss work (when I was a kid, no one got away with questionable behavior like guys who knew how to fix cars, because people knew they’d likely need his help at some point). Hourly workers don’t get paid when that happens, and will eventually (or quickly, depending on the type of boss) be fired for that sort of thing.
The new car, and its warranty, has become almost irresistible now that almost anyone can get one. It makes sense and obviously reduces a lot of headaches, even though most people know that they’re being hosed financially. Plus, obviously, having a new car is nicer than the alternatives.
The financial math on buying a new car to avoid downtime just doesn't work out. There's not going to be enough reliability difference between a 2 or 4 year old car and a new car to make up the cost difference.
Maybe.
To be honest, I kind of doubt most people buying new cars are doing galaxy brain takes like this (except maybe as post rationalization) and are instead seeing the new car and the "only $169/month" and forking it over the next six or seven years and regretting it for the last 4 or 5.
Nowadays, a 3 or 4 year old Toyota or whatever is *really* reliable!
I have a credit score well into the 700s and I chose a 72-month loan last time I bought a car so I could have a lower monthly payment (yes, I know it's more total interest -- the relevant point for budgeting is the monthly cost of ownership), so I'm not really getting the point there.
Hectic work day ahead but just wanted to say I love this analogy and will use it. My friends who are not land use policy nerds (ie, most of them) tend to find left-NIMBY arguments persuasive, and this framing device is a great way to think through the issues.
This substack greatly interferes with my productivity, but I love it anyway...
That Noahpinion piece is a classic! Totally agree, but having "a lot of space" is a thing in MI so in my experience a surprising number of people like being out in the mile-road hinterlands despite what I would consider the poorer quality of life...
"...housing prices in far out suburbs took a steeper hit than closer suburbs or cities"
I think that was largely (or entirely) reversed during the pandemic.
Another aspect of this story is that automakers are doing the rational thing during the chip shortage and prioritizing the production of the most expensive models. VW Group not only makes Jettas, but also the marques Porsche and Bentley:
"Bentley sold 14,659 cars last year, an increase of 31% from the year before and a record for the company. Porsche, also owned by VW, sold 301,915 cars, an increase of 11% world-wide."
BMW is had a good year as well, but has ensured that no Rolls Royce falls victim to the chip shortage:
"Rolls-Royce, owned by Bayerische Motoren Werke AG BMW -2.02% , whose tailor-made superluxury cars have starting prices of more than $300,000, sold a record 5,586 cars last year, up 49% from the year before."
https://www.wsj.com/articles/rolls-royce-bentley-bmw-sales-surge-as-cheaper-brands-lag-behind-11642415402?mod=Searchresults_pos1&page=1
Good luck finding a new Jetta at a reasonable price (or at all) at the moment, but look on the bright side: In a few years the world will be awash with pre-owned Bentleys, Porsches, and Rolls Royces.
There's no more expensive car than a cheap Porsche!
if only they would build more Camrys, the prices would magically come down!
Oh god... 50 more years of this and the housing market will start to make sense...
They stopped making the Prius C
This is heartbreaking news.
As a prius owner i am sad.
In a truly just society, Matt would be paying a tax on the unrealized gain in the value of his 2014 Prius.
And if I understand correctly, this would only exacerbate the issue, since car owners would have less incentive to sell
I'm just going to remark that this should be one of your public posts. We need concise statements of how _dumb_ left-NIMBY housing talking points are that can be shared out regularly, to help immunize low-info people who aren't bought in to any political line yet.
"In the housing context, left-NIMBYs often deride the idea that adding supply of new upscale housing will impact the affordability of older units as “trickle-down economics.”
I have a self-awarded PHD in debating left-NIMBYs on this topic. And the explanation above is wrong in that it attributes some rational disagreement. There is none... and the real explanation for the basis of the left-NIMBY position on housing growth transcends this topic and explains almost everything else.
Left-NUMBYs are elites. They are the most insecure and selfish people in the community that, given the astounding quality of our education system and economic opportunity, have manged to rise to positions of high economic and social status. They then use their education achievement to manufacture a web of face-saving virtue-signaling excuses for their positions that are always 100% based on their own selfish interests.
They block housing because it keeps their real estate values high and they also like their exclusive white gated communities.
Literal vanguardists, who believe that they are the socialist elite and should get the nice houses because they made the revolution happen or something like that.
Socialism is great in theory until you meet the kind of people drawn to socialism.
The housing cartel 😔
I live in a town with an engineered housing shortage - in that almost all of the land the town intends to use for residential construction is zoned for single family and is built, so the ability to add more housing (measured in terms of humans with roofs) is basically nil.
Housing prices keep going up, which isn't astonishing, and one of the side effects is that people keep super-sizing their houses. My neighbor is doubling his square footage by turning ihs 50's 3-bedroom ranch into a two story house - it's a total redo, so this will be close to creating "new" housing stock.
I'm still scratching my head on how to think about this economically. Clearly the root problem is a shortage of plots zoned for adequate occupancy - if we don't do one of (1) allow duplexes and apartments or (2) build in the town's preserved forests/wetlands or (3) somehow wreck demand prices will go up.
But the secondary effect is that the buildings _on_ the plots are steadily being upgraded, to the point where there won't be any starter homes left if trend continues.
I guess to put this in the car analogy, if the automotive shortage went on long enough, would the used car market be "mostly BMW's" because, in face of a shortage, that's where production has focused to maximize profit on limited input resources? If the automotive shortage lasted that long and then ended normalized, that would be a weird place to be, where the old car stock, which is supposed to be affordable, would be "overbuilt."
Is it possible to reach a point where housing prices can't be normalized because the structures themselves have become too expensive due to past land prices being too high? Given how unpopular a political agenda to crater housing values would be, the whole question seems almost too hypothetical to reason about.
This is London. Almost every street has a skip from someone doing extensions or converting their loft (which costs $100,000 for one or two rooms ). In the wealthier neighbourhoods, people dig out basements, which is even more expensive.
Google indicates it is called a debris box in American English. A big box for dumping construction waste that can be moved onto a truck and taken to the landfill.
Dumpster
It's actually Dumpster™ as it was trademarked by the Dempster Brothers for their Dempster-Dumpster system. But much like Kleenex it's morphed into a generic term.
I thought a dumpster was one of those big bins on caster wheels that they have outside, like, restaurants, for general waste?
The ones that are lifted up by arms and flipped upside down above the truck to empty them.
Skips lie flat on the ground, are used for rubble and stuff, and are only moved using a lift with chains from a truck.
1. I was sure so it'd fail I didn't even bother checking the details. The opposition here is even stronger than in America. Many British baby boomers plan to fund their retirement by selling their homes (and downsizing). So the opposition to anything that lowers those value is iron clad. The view among my generation is the system can't be reformed until most of the boomers die
I think I agree with the other commenters - people close to liquidating may care MORE about the price they can sell at, but anyone who owns is subject to the "this is a valuable asset" logic - in the US where homes are financed, "house prices came down 20%" is the same as "I lost all my equity and am underwater." I don't see there being any reset.
A house is the one asset Americans use leverage to invest in. Great if the price goes up, not so great if it goes down. The federal government has had a huge role in encouraging this leverage, but be aware when you buy a house with 5% down, you’re both getting a place to live and making yourself a mini hedge fund. Sleep well and good luck!
Yep. People say we're all born long housing but why not go _really_ long housing. :-). That leverage is what makes me think it may be impossible to unwind California prices. :-(
I'm not saying it's guaranteed. Just that it'll be easier. New Zealand passed a massive upzoning law this year. Change is possible.
https://www.theguardian.com/world/2021/oct/19/sweeping-housing-legislation-could-reshape-new-zealand-cities-for-decades-to-come
How does that solve the problem? Their kids and heirs will suddenly dump the inherited flat on the cheap for the betterment of you and yours?
No. We'll need to build more. That's currently being prevented by the boomers. The next generation, even most of those who've inherited, know the damage home shortages cause. The Boomers didn't experience that. The next generation is also trying to save for retirement, it won't bet everything on their home. I don't expect people to rush out in favour of upzoning but at least when a government with a large majority tries to do it, they can make some progress instead of stopping immediately like happens now.
I think you’re wrong about housing prices. I’m a boomer, and my first house cost 10x (in nominal dollars) what my parents’ first house cost. This is nothing new, is a pure supply/demand issue. It’s true if we euthanized all boomers tomorrow you might get a great deal on your dream apartment, but they aren’t the cause of your problem.
Downsizing to what exactly? Britain builds even fewer “starter/ender homes” than the US.
Certainly not the first good SB article I've read, by a long shot, but I think this is the first one that had me actually laughing out loud multiple times through the read.
Most SB subjects would not take well to this tone, but when one does, I appreciate the occasional shift.
Adding onto the crowd loving this analogy and I plan to use it frequently in the future. Just yesterday, I let a friend know about a nice multifamily development announced just a few blocks away from where she's renting in a neighborhood that she really wants to buy property in some day--and she was ambivalent about it, at best, even as I was trying to explain how it could possibly help in her goal. I don't think she'd ever go full NIMBY but it is telling how easy people can be allured into their talking points. I'll have this article in mind the next time things like this come up anywhere.
So as someone who is pre-sold on the YIMBY side of this debate, I think you need to do a bit of (sigh, I hate this term) steelmanning here. It’s a good analogy as far as it goes, but it doesn’t anticipate a really obvious objection: building a Mercedes for your neighbor does not require demolishing your Prius and leaving you car-less or forcing you to drive a substantially worse car for an indefinite amount of time.
And I think that really is the ugly part of the housing argument: at least in our big cities, we’ve dug ourselves a hole that is genuinely difficult to fill in. Coming back to the car analogy, it’s also pretty clear that if the supply shortfall goes on for another few years, when the chip shortage does finally ease, production lines will concentrate on the highest-margin models: if they’re guaranteed to sell every Lexus they make because of pent up demand, why would Toyota build any Corollas in 2023?
The nice thing about cars is that we don’t really have to care: people will grumble about having to nurse their old cars along for another couple of years, but for most people it won’t be felt as a major disruption. Whereas having your rental razed to the ground to be redeveloped into units your family can’t afford is the sort of thing that people notice and get understandably surly about.
Incidentally this is one of the reasons why I think Matt’s suggestion to shift large parts of the federal government out of DC and into sparsely populated states is a really good one: since we’re not China, we really can’t just mandate that the country build entirely new cities and force companies and people to relocate there. But the federal government is huge, and it can absolutely relocate the Dept of Agriculture to Kansas City to spur some growth there.
The externality aspect comes up in the street parking argument. Your neighbor's 3rd car will compete with your family's 3rd car.
However, an engineered supply crisis allows someone with three cars to prevent their neighbor from even adding a first.
Trust me I am very sold on that argument. But "it's okay, we just need 15-20 years of aggressive redevelopment in order to bring the housing market back to a point of useful functionality" has the twin disadvantage, as a _political_ argument, of being both completely true(and that's really bad in a country that struggles with any project longer than six months) and absolutely no help to someone being forced out of their home today.
I made this point (which is really Matt’s point) elsewhere in this comments section, but a bigger issue than how much we build is that we’re building houses where they aren’t most needed due to zoning constraints.
The focus on job quantity (which I assume is what is meant by “jobs proposal”) makes little sense given David’s primary observation that working class wages have stagnated. Matt makes a compelling case in Rent is Too Damn High that, in the context of the modern service economy, an important cause of this stagnation is that service providers can’t afford to reside in the areas where their wages can be maximized (i.e. proximal to lots of people who can afford to bid up the price of the service provided).
Liberal progressives, as a species, are anxious scarcity mindset people. They are really quite broken in that they never can walk the full fact pattern on the consequences of their policy actions. They stop at the point that the policy makes them feel less anxious, and then demand the action to enact it. Then the consequences are ugly, and they just do the same thing... come up with the next scarcity idea to try and address the problems caused by the previous.
So it is the uncontrolled anxiety of the liberal species that results in this constant spiral downward into dystopia.
The correct mindset is one of abundance.
Let's use an example. There are some that say we should tax the crap out of wealth people to reduce the wage and wealth gap. That is scarcity policy.
The abundance policy would be tax incentives for small business and start-ups, and incentives for capital holders to make investments in industries with high paying jobs.
Global Warming is a giant scarcity policy enabler. It gives the anxious liberal progressive backing to push even more scarcity policy.
COVID has been a scarcity policy enabler.
Liberal progressives are made anxious with change and progress. They don't feel that they can compete well in the abundance space. It is not virtue that causes them to push scarcity, it is their own selfish interest to wreck the abundance and progress train to hobble the free competitive world and slow it down so they, the anxious liberal progressive, can feel more confident in their ability for looting more resources.
I don't typically comment but I liked this a lot. One way to think about housing is the only truly scarce resource w/r/t housing is land in built-up cities. Lumber isn't typically scarce, nor concrete, nor steel, nor appliances. Skilled and unskilled labor might be. The constraints like permitting and NIMBYs and land use requirements. You can buy cheap cookies from a grocery store bakery or cheaper cookies from shelves at Dollar General, or you can buy expensive bougie cookies from a gourmet bakery or Milk Bar, or you can make cookies at home, but because cookie production isn't limited by quotas or caps, there's fundamentally a tether there that cookie costs don't have to exceed the input costs.
Off topic, but it's worth pointing out that IF the Fed had already credibly established that it was NOT going to allow the supply shock of the pandemic to lead to insufficiency of demand, automakers would not have cut back their demand for chips. What the Fed DID was pretty close to optimum (sooner would have been better, of course) but this was a huge surprise. Markets still expected a (possibly mitigated) repeat of the 2008-2000 disaster. [Look at the fall in inflation expectations in March 2020. If markets had expected the Fed to maintain aggregate demand, inflation expectations would have risen.]
The Fed AND Congress - I would argue the fiscal stimulus was even more unprecedented and unexpected than the monetary stimulus.
Possibly so. Although in retrospect not so much. Republicans never have a problem with deficits when a Republican is in the WH.
AND in my (still minority) view, fiscal "stimulus" although mostly good for transferring income to worthy people and causes did not "simulate", did not affect macroeconomic aggregates. The Fed could have bought more private sector and less treasury debt.
"Unearthing a huge cache of unused homes in in-demand areas would have the same effect. Of course, we are very unlikely to find such a cache."
In Canada, Mike Moffatt has a suggestion to add rental housing quickly in expensive markets: Build more student residences. https://www.tvo.org/article/the-quick-fix-part-1-how-ontario-can-improve-its-housing-situation-now
I really think that a nontrivial amount of This Here Mess can be attributed to unintended blowback from the Robert Moses era. When your experience of "development" is someone leveling your entire neighborhood to run a freeway through it, it's _really_ easy for "developers are evil" to become a shibboleth, which it 100% has.
(It doesn't help of course that many developers _are_ scummy and are definitely prone to trying to back-room their deals with local politicos. Of course part of the problem is that no one trusts them and therefore backroom deals are the only way to get stuff built...)
Hard agree from an exasperated urban planner.
When it makes sense, please let’s plan an NYC SB meetup, maybe with a housing policy theme?!
The Globe and Mail seems to be on the right track. https://www.theglobeandmail.com/opinion/editorials/article-canada-needs-a-lot-more-rental-housing-vancouver-is-leading-the-way/
Thinking about this car analogy a bit more, I'm intrigued about comparing it to *parking* for cars, and that is striking me as the inverse of the housing analogy. There is a genuine scarcity of parking on on-street public corridors, the consensus typically is overwhelming that that scarcity is bad, and the standing policy to address this is not to artificially reduce demand by *banning* production of more cars so there's more space for the incumbent car owners, but to artificially increase the supply by *requiring* parking to be build off-street.
Now, I wouldn't make this observation outside this site, because it would be an easy way to try to justify mandatory parking minimums (which are very bad!), but it struck me as another example as to how people don't clearly think through aspects of scarcity and supply/demand.
Boisean? Most big cities don’t have a button for a free 20 minutes of street parking, that’s for sure.
Indeed. I doubt I can hold a candle to Rory on best and most unique insights coming from here, though.
And I'll be curious to see how much longer those buttons can be tenable.
Parking is not a good analogy becasue it's just an example of failure to price a scarce good: urban street space (like CO2 absorption capacity of the atmosphere).
Which is why I said there's a genuine scarcity of it. Wasn't trying to truly analogize, if anything it was to "de-analogize", if that's a thing.
Fair enough. I guess I was unfairly using your message as a vehicle for my remark.
And it was a good remark!