4 ms·

Paraphrasing the classics. It is the housing market stupid. Really, Even living in a place with very low population density(Rural Mass/NH). Rents are high (and

by huherto 11y ago

Paraphrasing the classics. It is the housing market stupid. Really, Even living in a place with very low population density(Rural Mass/NH). Rents are high (and scarce), you need at least 250K to buy a small house. Houses are old, Lot's are big, big distances, very few new houses are built every year. I can't even image how blue collar families do it. If you think about it, it even makes local companies less competitive, since they need to pay more so people can barely survive. This resonated a lot with me. https://medium.com/the-ferenstein-wire/a-26-year-old-mit-graduate-is-turning-heads-over-his-theory-that-income-inequality-is-actually-2a3b423e0c#.iljcrro5m https://medium.com/the-ferenstein-wire/a-26-year-old-mit-gra...

maxerickson 11y ago
Our keystone national housing policy focuses on appreciating prices. A sensible national housing policy would focus on improving the characteristics of the housing stock (improving energy efficiency, removing lead, etc). Of course the building code moves forward over time and new housing generally beats older housing on metrics like that, and there are occasionally tax incentives for making improvements. but none of that comes close to the mortgage interest deduction in scope. It would also focus on affordability. It's clear enough that with 40 or 50 years for the policy to work and ~1/2 of the nation not having much of any wealth that home equity is not the path to universal prosperity.
- Futurebot 11y ago
  This is one of the reasons that Germany housing policy is so successful: http://www.forbes.com/forbes/welcome/#1ef0063ebb2d http://www.forbes.com/forbes/welcome/#1ef0063ebb2d In the US, housing is treated as an asset, which is a huge mistake. In place like Germany, most people are renters because: rents stay fairly low, the government reassesses population periodically to allow more houses to get built, and renters have plenty of rights. Here, we allow houses to act as a hybrid place to live, ATM, and stock.
  - Terr_ 11y ago
    Living in your investment is a bit like having your 401K funds invested in your employer: If something goes wrong, you're doubly-screwed.
pc86 11y ago
I'm not sure the northeast, particularly any part of Massachusetts, is the best place to talk about the housing market. You will still have basically all the upward pressure on prices that you do in Boston et al with the exception of the large population. If you look at a place without the statewide tax climate of a MA/NY/CA it's easy if not trivial to find ~$100k houses that are practically mansions.
cylinder 11y ago
Houston is one of the most economically segregated cities and they are always building new cheap houses and apartments there, especially in the exurban developments where they build tract homes endlessly and sell them for $150k.
- sremani 11y ago
  For a city without zoning, Economic segregation is hard, and believe Houston is not the most economically segregated City. The Houston suburbs, I completely agree, no where are gated communities more fashionable than Houston suburbs.
knightofmars 11y ago
Read the comments in this article which is linked to in the Medium article. You'll see some very in-depth and (correctly) critical analysis of the theory that housing is the root cause of inequality. http://www.economist.com/blogs/freeexchange/2015/03/wealth-inequality?fsrc=scn/tw/te/bl/ed/nimbysinthetwentyfirstcentury http://www.economist.com/blogs/freeexchange/2015/03/wealth-i...
branchless 11y ago
You got it. Efficient rent extraction via the banks. And if productivity goes up then disposable income goes up and guess what? You qualify to borrow more my friend. Up go land prices and all that gain flows to the rentier. It's not about houses built it's about loose credit BTW, primarily.

by huherto 11y ago

maxerickson 11y ago

Our keystone national housing policy focuses on appreciating prices. A sensible national housing policy would focus on improving the characteristics of the housing stock (improving energy efficiency, removing lead, etc). Of course the building code moves forward over time and new housing generally beats older housing on metrics like that, and there are occasionally tax incentives for making improvements. but none of that comes close to the mortgage interest deduction in scope. It would also focus on affordability. It's clear enough that with 40 or 50 years for the policy to work and ~1/2 of the nation not having much of any wealth that home equity is not the path to universal prosperity.

Futurebot 11y ago
This is one of the reasons that Germany housing policy is so successful: http://www.forbes.com/forbes/welcome/#1ef0063ebb2d http://www.forbes.com/forbes/welcome/#1ef0063ebb2d In the US, housing is treated as an asset, which is a huge mistake. In place like Germany, most people are renters because: rents stay fairly low, the government reassesses population periodically to allow more houses to get built, and renters have plenty of rights. Here, we allow houses to act as a hybrid place to live, ATM, and stock.
- Terr_ 11y ago
  Living in your investment is a bit like having your 401K funds invested in your employer: If something goes wrong, you're doubly-screwed.

pc86 11y ago

I'm not sure the northeast, particularly any part of Massachusetts, is the best place to talk about the housing market. You will still have basically all the upward pressure on prices that you do in Boston et al with the exception of the large population. If you look at a place without the statewide tax climate of a MA/NY/CA it's easy if not trivial to find ~$100k houses that are practically mansions.

cylinder 11y ago

Houston is one of the most economically segregated cities and they are always building new cheap houses and apartments there, especially in the exurban developments where they build tract homes endlessly and sell them for $150k.

sremani 11y ago
For a city without zoning, Economic segregation is hard, and believe Houston is not the most economically segregated City. The Houston suburbs, I completely agree, no where are gated communities more fashionable than Houston suburbs.

knightofmars 11y ago

Read the comments in this article which is linked to in the Medium article. You'll see some very in-depth and (correctly) critical analysis of the theory that housing is the root cause of inequality. http://www.economist.com/blogs/freeexchange/2015/03/wealth-inequality?fsrc=scn/tw/te/bl/ed/nimbysinthetwentyfirstcentury http://www.economist.com/blogs/freeexchange/2015/03/wealth-i...

branchless 11y ago

You got it. Efficient rent extraction via the banks. And if productivity goes up then disposable income goes up and guess what? You qualify to borrow more my friend. Up go land prices and all that gain flows to the rentier. It's not about houses built it's about loose credit BTW, primarily.