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The short-term supply of housing is fixed. Yes, there will be an increase in renovation of houses due to larger loans being affordable, but most of our housing
by tormeh 10y ago
The short-term supply of housing is fixed. Yes, there will be an increase in renovation of houses due to larger loans being affordable, but most of our housing costs are the cost of centrally located floorspace anyway, whose supply moves really slowly. Supply of central floorspace increases due to mass transit buildout, city expansion, and building height, only the last of which depends on average ability to pay for housing. Building height is usually restricted by zoning, in which case average ability to pay doesn't influence supply at all.
- dragonwriter 10y ago> The short-term supply of housing is fixed. Sure, so the immediate-term effect of a change in policy on the deduction would be what you would expect with a fixed supply; but that's hardly the only, or most important, effect to consider with a long-term policy.
- bufordsharkley 10y agoLand-use policy makes it far more attractive to resist growth, enact restrictive zoning laws, and engage in speculation, rather than listen to the signals of demand. This has been the case for the last century, and without a fundamental change in our policy, will almost certainly continue to be the case. A land tax would be the silver bullet here-- it would align the incentives for landowners to listen to rises and falls in demand.