I read through the White House document you referenced, admittedly expecting it to be infused with DEI language and written in a manner that was hostile to developers and landlords. IT WASN'T! It was balanced and measured and focused on the problem at hand. I'm impressed.
Though I still remember the eviction moratorium lasting far, far longer than it should have, I am encouraged the administration is approaching this issue with tangible solutions that could garner bi-partisan support. I hope they are successful.
Chicago has one difference from other cities. Their labor movement is stronger than their NIMBY movement. This has up and downsides. Downside is that property taxes are high AF to pay for public sector pensions. Upside is that stuff gets built because no local person mad about parking is going to have the political muscle to stop a housing construction project.
This is why when going through the loop, you see *residential construction* happening, and you've seen it for 5 years. Same in nearly every other area close to their urban core.
This combination makes home ownership less profitable due to the higher tax burden + no limit on inventory. It also makes politicians less prone to block housing, because housing drives local tax revenue in.IL in a way that it never will in CA with prop 13. Net result is condo rents have barely moved up since 2012 at the high end, maybe 10-20% or so over that span.
I lived there for 20 years, and the nice parts where the housing is being built are not dissimilar from the nice parts of Brooklyn. I'd still live there if the weather wasn't terrible for 5 winter months and 3 summer months.
Housing costs are one of the areas where the normie consensus is just wrong - everyone remembers 2008 and the normie consensus seems to be that house prices go up and down at random. But if you think about it for even a moment, it’s obvious that houses are more valuable in 2022 than they are in 2019 due to remote and hybrid work. Gyms are less pleasant than pre-Covid too (I’m 90% sure I caught my recent Covid infection at a gym, and exercise sucks enough without masking), as are probably a few other activities which would also increase demand for house space.
Here’s how it’s going to go. When the next recession hits the first to go will be remote workers - their positions either eliminated or outsourced to India. As a result the family from SF that paid $250k over asking for a place in Boise is going to get laid off. And then they will find that all else being equal employers prefer folks who can be in the office a few days a week. Fine they think, we can just sell. But millions are on the same boat and prices have plunged (and they paid $250k over). They can’t sell and what few jobs are in Boise pay a lot less than they were making. So foreclosure here they come.
It is so immensely depressing this obvious and unassailably correct statement was so viscerally destroyed. So many people really believe that America is fully irredeemable and not worth putting forth the hard work required to make improvements. Even worse the vast majority of people with this sentiment seem to be the ones who are most involved in politics on my side. If you genuinely believe 2022 America is a horrible place to live by current and historic global standards, I would strongly advise detaching yourself from politics entirely for your own mental health. But we need to crush this sentiment if we are ever going to make the progress these same doomsayers claim to want achieve. The much fabled non-college white woman in her 50s in the suburbs of Grand Rapids MI that we Slowboring heads all know to be the median voter probably does not think America is a sh*thole country. She is probably also horrified by shootings at elementary schools. Shepherding those two sentiments into policy is the hard boards we all know and love. But Idk how that can ever be achieved if so many people think the project itself is morally bankrupt because everything they desire has yet to be achieved already. https://twitter.com/mattyglesias/status/1529234787579355136?s=20&t=7GIPmw5b_ilPobBwoUj23g
I'm curious how conservatives think about mass shootings. I understand they don't want gun restrictions. Are they passionately advocating for more armed guards? Are they just resigned to them?
I checked Breitbart, the top comment there on this story is "They will quickly bury this story because the perp is not a white dude." So for them stopping shootings doesn't seem to be a priority. I'm not sure if that's a good place to get a sense of what conservatives are thinking.
We are at the highest level of multi-unit construction in almost 50 years -- and that previous peak was from a time when the huge Baby Boom generation was first forming households. Single family construction is also higher than it has been in close to 50 years, except for the egregious housing bubble of the oughts when we were building tons of homes which we oughtn't have.
And I'd say this has been driven overwhelmingly by market forces and not policy. It seems that, despite so much land being SFH-only, developers are still finding plenty of places to build multi-family homes. And, I'd argue, that upzoning -- greatly to be desired -- will at best ever be a lagging contributor to new construction, as most places coming on market in SFH neighborhoods will stay just the way they are -- because it's a choice, not a mandate.
So, sure, pursue denser development because over time it will make our cities better places to live. But it's not going to be how we drive lower prices in the short run.
(I'd also like to comment on the chart on lags in construction completion in Matt's post. First, don't compare current construction to the bubble years, when we were busily building worthless single family homes outside Las Vegas and the like, and also don't combine SFH and multi-unit. Nonetheless, I'm not sure how much policy would help relax supply constraints in actual construction, but sure let's pursue that.)
(Oh, and lastly, a bleg: Milan, please don't use very similar colors and lack of markers when chart building (e.g., the rents in the 5 largest metro areas chart). I especially advise the use of different markers to help the reader distinguish which line is which.)
"The Great Recession really did involve prolonged mass unemployment, so I understand this line of thinking, to an extent."
The mis diagnosis of the Great Recession as anything but a colossal failure of the Fed to maintain NGDP growth or even price level growth did enormous damage to Progressives' agenda. They moved away from supply side policies -- greater immigration, freer trade, lower deficits. [Paradoxically, the one place they have moved toward supply side policies -- restricting fossil fuel production -- is exactly where demand side policies, especially a tax on net CO2 and methane emissions -- is appropriate.]
AND it wrong footed them in letting Republicans pin inflation on the COVID relief and infrastructure bills rather than on the Fed.
What's kind of ironic about how Boise is mentioned in this article is that I’ll soon be leaving it for a few days and doing remote work at a smaller town in the state that has its own unique housing boom/supply problems.
What’s behind kids no longer with their parents? Slow wage growth under Obama and Trump, and quicker growth under COVID, plus government transfers? Or what?
“ during Barack Obama’s presidency when it was common to attribute economic problems to an alleged overbuilding of houses during the price boom of the mid-aughts.”
No need to have characterized this as a “Biden Obama” difference.
There was “overbuilding” in the narrow sense that some part of the demand for houses resulted from financial institutions making micro-prudentially bad loans. This was part of what triggered the 2008 crash. That the crash led to a decade of under target inflation and slow growth in real income was the Fed’s fault, not that of the people who made liars’ loans.
Thank you for writing about federal housing policy. You are being way to kind, however, to the lack of scale in this plan to increase supply, particularly vis the GSEs support for manufactured housing. Unfortunately, this isn't going to do much to move the needle.
I read through the White House document you referenced, admittedly expecting it to be infused with DEI language and written in a manner that was hostile to developers and landlords. IT WASN'T! It was balanced and measured and focused on the problem at hand. I'm impressed.
Though I still remember the eviction moratorium lasting far, far longer than it should have, I am encouraged the administration is approaching this issue with tangible solutions that could garner bi-partisan support. I hope they are successful.
Chicago has one difference from other cities. Their labor movement is stronger than their NIMBY movement. This has up and downsides. Downside is that property taxes are high AF to pay for public sector pensions. Upside is that stuff gets built because no local person mad about parking is going to have the political muscle to stop a housing construction project.
This is why when going through the loop, you see *residential construction* happening, and you've seen it for 5 years. Same in nearly every other area close to their urban core.
This combination makes home ownership less profitable due to the higher tax burden + no limit on inventory. It also makes politicians less prone to block housing, because housing drives local tax revenue in.IL in a way that it never will in CA with prop 13. Net result is condo rents have barely moved up since 2012 at the high end, maybe 10-20% or so over that span.
I lived there for 20 years, and the nice parts where the housing is being built are not dissimilar from the nice parts of Brooklyn. I'd still live there if the weather wasn't terrible for 5 winter months and 3 summer months.
Housing costs are one of the areas where the normie consensus is just wrong - everyone remembers 2008 and the normie consensus seems to be that house prices go up and down at random. But if you think about it for even a moment, it’s obvious that houses are more valuable in 2022 than they are in 2019 due to remote and hybrid work. Gyms are less pleasant than pre-Covid too (I’m 90% sure I caught my recent Covid infection at a gym, and exercise sucks enough without masking), as are probably a few other activities which would also increase demand for house space.
Here’s how it’s going to go. When the next recession hits the first to go will be remote workers - their positions either eliminated or outsourced to India. As a result the family from SF that paid $250k over asking for a place in Boise is going to get laid off. And then they will find that all else being equal employers prefer folks who can be in the office a few days a week. Fine they think, we can just sell. But millions are on the same boat and prices have plunged (and they paid $250k over). They can’t sell and what few jobs are in Boise pay a lot less than they were making. So foreclosure here they come.
It is so immensely depressing this obvious and unassailably correct statement was so viscerally destroyed. So many people really believe that America is fully irredeemable and not worth putting forth the hard work required to make improvements. Even worse the vast majority of people with this sentiment seem to be the ones who are most involved in politics on my side. If you genuinely believe 2022 America is a horrible place to live by current and historic global standards, I would strongly advise detaching yourself from politics entirely for your own mental health. But we need to crush this sentiment if we are ever going to make the progress these same doomsayers claim to want achieve. The much fabled non-college white woman in her 50s in the suburbs of Grand Rapids MI that we Slowboring heads all know to be the median voter probably does not think America is a sh*thole country. She is probably also horrified by shootings at elementary schools. Shepherding those two sentiments into policy is the hard boards we all know and love. But Idk how that can ever be achieved if so many people think the project itself is morally bankrupt because everything they desire has yet to be achieved already. https://twitter.com/mattyglesias/status/1529234787579355136?s=20&t=7GIPmw5b_ilPobBwoUj23g
I wrote this on the comment thread from yesterday, Matt, but thanks for the tweets this morning.
The world would be a better place if more people could show some humility and embrace genuine apology. We all screw up.
Nice tweet last night lol
I'm curious how conservatives think about mass shootings. I understand they don't want gun restrictions. Are they passionately advocating for more armed guards? Are they just resigned to them?
I checked Breitbart, the top comment there on this story is "They will quickly bury this story because the perp is not a white dude." So for them stopping shootings doesn't seem to be a priority. I'm not sure if that's a good place to get a sense of what conservatives are thinking.
For housing, should the goal of policy to be to address an immediate crisis or to lay the foundation for improved forms of living in the longer term?
The thrust of this post, and many other things I read, is that both are great but we really need better policy to address the first.
Do we? Or is this a place where really market forces are going to do 95% of the work?
I'm struck by this chart from calculatedrisk.blog: https://www.calculatedriskblog.com/2022/05/april-housing-starts-all-time-record.html
We are at the highest level of multi-unit construction in almost 50 years -- and that previous peak was from a time when the huge Baby Boom generation was first forming households. Single family construction is also higher than it has been in close to 50 years, except for the egregious housing bubble of the oughts when we were building tons of homes which we oughtn't have.
And I'd say this has been driven overwhelmingly by market forces and not policy. It seems that, despite so much land being SFH-only, developers are still finding plenty of places to build multi-family homes. And, I'd argue, that upzoning -- greatly to be desired -- will at best ever be a lagging contributor to new construction, as most places coming on market in SFH neighborhoods will stay just the way they are -- because it's a choice, not a mandate.
So, sure, pursue denser development because over time it will make our cities better places to live. But it's not going to be how we drive lower prices in the short run.
(I'd also like to comment on the chart on lags in construction completion in Matt's post. First, don't compare current construction to the bubble years, when we were busily building worthless single family homes outside Las Vegas and the like, and also don't combine SFH and multi-unit. Nonetheless, I'm not sure how much policy would help relax supply constraints in actual construction, but sure let's pursue that.)
(Oh, and lastly, a bleg: Milan, please don't use very similar colors and lack of markers when chart building (e.g., the rents in the 5 largest metro areas chart). I especially advise the use of different markers to help the reader distinguish which line is which.)
"The Great Recession really did involve prolonged mass unemployment, so I understand this line of thinking, to an extent."
The mis diagnosis of the Great Recession as anything but a colossal failure of the Fed to maintain NGDP growth or even price level growth did enormous damage to Progressives' agenda. They moved away from supply side policies -- greater immigration, freer trade, lower deficits. [Paradoxically, the one place they have moved toward supply side policies -- restricting fossil fuel production -- is exactly where demand side policies, especially a tax on net CO2 and methane emissions -- is appropriate.]
AND it wrong footed them in letting Republicans pin inflation on the COVID relief and infrastructure bills rather than on the Fed.
“I’ve never been to Boise.“
Then you should visit here some time!
What's kind of ironic about how Boise is mentioned in this article is that I’ll soon be leaving it for a few days and doing remote work at a smaller town in the state that has its own unique housing boom/supply problems.
What’s behind kids no longer with their parents? Slow wage growth under Obama and Trump, and quicker growth under COVID, plus government transfers? Or what?
Red-green color blind people are extremely disappointed in those line graphs.
um, guys, different shades of the same color isn't super easy to read in a line chart.
“ during Barack Obama’s presidency when it was common to attribute economic problems to an alleged overbuilding of houses during the price boom of the mid-aughts.”
No need to have characterized this as a “Biden Obama” difference.
There was “overbuilding” in the narrow sense that some part of the demand for houses resulted from financial institutions making micro-prudentially bad loans. This was part of what triggered the 2008 crash. That the crash led to a decade of under target inflation and slow growth in real income was the Fed’s fault, not that of the people who made liars’ loans.
Thank you for writing about federal housing policy. You are being way to kind, however, to the lack of scale in this plan to increase supply, particularly vis the GSEs support for manufactured housing. Unfortunately, this isn't going to do much to move the needle.