Monday, August 25, 2014

Concluding Remarks About Housing Affordability and Supply Restricitions

Forget supply issues. The wages are too damn low at Pacific Standard magazine.

Theme: Labor markets and housing affordability.

Subject Article: "The Affordable Housing Shortage: Considering the Problem, Causes and Solutions."

Other Links: 1. "Why Is the Rent Too Damn High in New York? Don’t Blame Housing Supply."
2. "Recent Owners’ Equivalent Rent Inflation Is Probably Not a Blip."
3. "Zoning and Market Pricing of Housing."
4. "Federal Reserve Bank of Minneapolis: Banking and Policy Working Paper 02-2."

Postscript: All roads take me back to the exceptional real estate demand case of Vancouver:

At the same time, there's a vein of thought that Vancouver's recent focus on rezoning land to provide places to live-especially a downtown condo forest that has become the city's defining feature-has left it with a dearth of office buildings and factory sites where all those new residents might actually be able to find work.

I rarely encounter a description of the tension between residents and businesses over dear urban land. Residents have to work somewhere in order to pay rent. In terms of housing affordability, the Minneapolis Fed study concludes that income (i.e. demand) matters more than supply restrictions. The considerable time I've spent studying this issue, that conclusion makes sense, in a fundamental supply-demand kind of way. To date, everyone who has taken issue with my position argues a point I have conceded. No one has taken aim at the demand side of the equation and the work of scholars such as David Ley (see above article about Vancouver's real estate market). Yes, less restrictive zoning makes land and homes less expensive. That's not a counter-argument to the many posts I've written on the subject.

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