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Suppose the good jobs and services left while the schools went to crap (aka Detroit). Wouldn't people be worse off? Would this be a reduction in poverty? When
by yummyfajitas 11y ago
Suppose the good jobs and services left while the schools went to crap (aka Detroit). Wouldn't people be worse off? Would this be a reduction in poverty?
When someone's home equity has appreciated, they are now living in a more valuable place than they were to start, but they don't have to pay for this. That's income.
- makomk 11y agoYes, they would be worse off. Now suppose the good jobs and services left from a huge swathe of the country and continued to do so, forcing people to move to a smaller number of more expensive urban areas if they wanted work. Since there's only a limited amount of land area, this would force up prices in those urban areas, making people worse off in real terms as they were forced to pour more of their income into a smaller house and had less to spend on everything else, but would show up as a decrease in poverty as their expensive house got more expensive. (And of course schools and services will cost more to run.) This is pretty much what's been happening worldwide, from what I've seen. The idea of treating appreciation in home equity as income is broken, because it means that this kind of mass urbanization and consolidation appears to be an increase in income when in fact it causes a reduction in real income.