Dr. Doom weighs in on the debate about housing supply versus demand at Pacific Standard magazine.
Theme: Housing affordability geography.
Subject Article: "San Pedro project illustrates a cause of limited housing affordability."
Other Links: 1. "Fleeing New York and San Francisco for ‘Cleveland’."
2. "Supply Side Economics: Do Tax Rate Cuts Increase Growth and Revenues and Reduce Budget Deficits ? Or Is It Voodoo Economics All Over Again?"
3. "Nouriel Roubini: Professor of Economics and International Business Stern School of Business, New York University."
Postscript: Supply-side economics (e.g. Laffer curve) make intuitive sense, thus appealing to politicians who are pursuing some other agenda. Theoretically, everything is a go. Practically, when academic scrutiny is applied to practice, the suggested benefits disappear. The journey from abstraction to on-the-ground change is a perilous one. The main disconnect I see is taking Glaeser's work (which establishes a link between supply restrictions and housing prices) and assuming that the practice of upzoning (one of many supply-side avenues) will deliver affordable housing. Dr. Doom's cautionary tale teaches us to beware of such claims "about the magnitude of these effects". Glaeser is today's Laffer.
2 comments:
Good stuff as always, Jim. Public policy isn't always going to have the impact desired.
Do you read Garth Turner at greaterfool.ca? I love his take on the rising real estate prices in Canada.
Policy - whether it's free post secondary school or reduced capital gains tax does not make a measurable difference in the short run. There are far too many other variables for it to do.
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